It's rather common, yes, if we are to believe the idea of Asset forfeiture. http://en.wikipedia.org/wiki/Asset_forfeiture
This applies, but is not limited, to terrorist activities, drug
related crimes, and other criminal and even civil offenses. ... The
purpose of asset forfeiture is to disrupt criminal activity by
confiscating assets that potentially could have been beneficial to the
individual or organization.
It may not apply to all states, but it happens. Also, it may not be "automatic", because the cops can choose not to enforce it. But regarding sex trafficking, where money is the core reason, cash is almost guaranteed to be confiscated as it's earned in illegal matters. Again, though, it may depend on state/where you live.
This also leaves the image to be false, as cops seem to be able to confiscate almost anything, including jewelry.
Federal and most state laws allow both civil and criminal asset
forfeitures. In civil asset forfeiture, action is taken against a
person’s property or assets, not against an individual. A person’s
property is the target of the legal proceeding, and the owner is
secondary. The owner does not have to be arrested or convicted of a
crime to have his property taken. By contrast, criminal forfeitures
occur against a person after conviction for an underlying criminal
Quote source: http://www.ij.org/part-i-policing-for-profit
Additional sources I found regarding this: