Newsgroups: alt.society.resistance
From:
[email protected] (Ray Kiddy)
Subject: Forfeiture Info from BJA, III
Date: Fri, 7 May 1993 02:13:13 GMT
BTW, for more info send mail to
[email protected]
body of msg:
help
send /publish/Index
i have some GAO reports (not many :-<) and am putting on this series
of 14 pamphlets on Forfeiture for police.
ps: i am not selling anything, this is all free info.
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ASSET FORFEITURE
The Management and Disposition of Seized Assets
Prepared by:
Police Executive Research Forum
G Patrick Gallagher
November 1988
Reprinted January 1992
U.S. Department of Justice
Office of Justice Programs
Bureau of Justice Assistance
U.S. Department of Justice
William P. Barr.........................Attorney General
Office of Justice Programs
Jimmy Gurule............................Assistant Attorney General
Bureau of Justice Assistance
Gerald (Jerry) P. Regier................Acting Director
Elliott A. Brown........................Deputy Director
James C. Swain..........................Director, Policy Development
and Management Division
Curtis H. Straub, II....................Director, State and Local
Assistance Division
Pamela Swain............................Director, Discretionary Grant
Programs Division
William F. Powers Director..............Special Programs
Division
Bureau of Justice Assistance
633 Indiana Avenue NW., Washington, DC 20531
(202) 514 6278
The Assistant Attorney General, Office of Justice Programs, coordinates
the activities of the following program Offices and Bureaus: Bureau of
Justice Assistance, Bureau of Justice Statistics, National Institute of
Justice, Office of Juvenile Justice and Delinquency Prevention, and the
Office for Victims of Crime.
U.S. Department of Justice
Office of Justice Programs
Bureau of Justice Assistance
Office of the Director Washington DC 25031
Dear Colleague:
Illicit drug traffic continues to flourish in every part of the country.
The cash received by the traffickers is often converted to assets that
can be used by drug dealers in ways that suit their individual tastes.
Since 1981, federal authorities have increased their attack on these
assets through both criminal and civil forfeiture proceedings with
remarkable success. The recent passage and use of state asset forfeiture
laws offers an excellent means for state and local jurisdictions to
emulate the federal success.
The Bureau of Justice Assistance (BJA), in the Office of Justice
Programs, has funded a nationally focused technical assistance and
training program to help state and local jurisdictions facilitate
broader use of such laws. BJA selected the Police Executive Research
Forum to develop and administer this program because of its history of
involvement in practical problem-oriented research to improve police
operations and the Forum's central role in developing training materials
for use by police agencies and chief executives.
As part of this project, the Forum has contracted with experts in the
area of asset forfeiture and financial investigations to prepare a
series of short manuals dealing with different concerns in the area of
asset forfeiture. We hope these manuals help meet the rapidly unfolding
needs of the law enforcement community as more and more agencies apply
their own forfeiture laws and strive to learn from the successes and
problems of their peers.
I welcome hearing your comments about this program. We have this project
so that most requests for information or assistance can be handled
through the Forum staff in Washington, D.C., by calling 202/466-7820.
Sincerely yours,
Gerald (Jerry) P Regier
Acting Director
Table of Contents
Introduction
Background on Seized Assets
Major Issues in the Management of Seized Assets
Disposition Issues
Methods for Handling Common Problems
Liability Issues
Resource Directory: Roster of Persons Interviewed
Introduction
From March to May, 1987, the Police Executive Research Forum (the
Forum), surveyed seven law enforcement agencies on how they manage and
dispose of seized assets, and the liability issues involved in asset
seizure and forfeiture.
The agencies covered in the study are the U.S. Marshals Service; the
U.S. Customs Service; the Florida Department of Law Enforcement; the
Broward County, Florida SheriffUs Department; the Metro-Dade, Florida
Police Department; the Fort Lauderdale, Florida Po,ice Department; and
the Detroit, Michigan Police Department. These agencies were chosen
because they have been dealing with large volumes of seized assets over
an extended period and the non-federal agencies, in particular, have
acquired a reputation for sophisticated management of those assets.
The July, 1985, National Institute of Justice, Research in Brief
entitled "Use of Forfeiture Sanctions in Drug Cases, " provides an
overview of the forfeiture provisions on a state-by-state basis.
Regarding the disposition of forfeited property, that brief notes that:
more than half the states provide that confiscated property goes to the
State or local treasury, or part to each. In some States, however, law
enforcement agencies may keep the property for official use. If the
property is sold or if it is cash, then the money goes to the State or
local treasury. In eight States, law enforcement agencies can keep all
property, cash, and sales proceeds (p. 5).
Some federal agencies have been actively involved in managing seized
assets. The state of Florida, pushed by its proximity, and in response
to substantial, drug traffic, has responded to the point that many of
the state's law enforcement agencies have developed smoothly operating
forfeiture processes under the State forfeiture statute, and high-
quality management procedures for handling and disposing of seized
assets. While this should be the response of any advanced and
professional agency, in Florida the agencies' expertise has developed
out of necessity. Innovative procedures must be used to take the
offensive against the drug trade. Moreover, the agencies literally would
be inundated with seized assets if they had not learned to process them
expeditiously, and turn the newly acquired properties into valuable
resources in the fight against drug trafficking.
Background On Seized Assets
When asked what were the most commonly seized assets, the seven
agencies' responses were remarkably similar: the two top assets were
cash and cars, followed by boats, planes, jewelry and weapons. Those
items made up 95 percent of all seized assets. Local agencies rarely
become involved in seizing businesses or real property (although this
seems to be changing as more and more state forfeiture laws are used to
seize so-called derivative assets). State and federal agencies, in
contrast, conduct such seizures frequently.
One reason local agencies usually did not target real property for
seizure is because they recognize the attendant difficulties in managing
them (Detroit made this very clear: " . . . if at all possible do not
get involved in seizing property"). Under the Florida Contraband
Forfeiture Act, authorities can seize only that property that is an
instrumentality of the crime--that is, cars, cash, and the Rolex watch
mentioned below. Property seizable under federal law and special
provisions of the Florida statutes are property and assets acquired by
using financial resources accruing (derived) from illegal activities.
Therefore, under Florida Racketeer Influenced and Corrupt Organizations
(RICO) statutes, law enforcement agencies may be aggressive in seizing
real estate acquired with drug or other racketeering proceeds.
The U.S. Marshals Service generally does not seize assets, except for
judicial seizures conducted pursuant to a federal court order. However,
the marshals do manage assets seized by other federal agencies, such as
the Federal Bureau of Investigation, the U.S. Immigration and
Naturalization Service, and the Drug Enforcement Administration (DEA),
with DEA accounting for 90 percent of seized items.
Among the more unusual items seized or turned over to the Marshals from
other agencies are a bank, a horse ranch, a golf course, gas stations,
flower shops, a drug store, a recording studio and a brass foundry. The
U.S. Customs Service lists elephants and kangaroos among the noteworthy
items seized, while local agencies reported gymnastic equipment,
Kruggerands, pill machines for making quaaludes, and even a Rolex watch
(noted earlier) used to set the time for a drug deal.
Most of the survey respondents, as local agencies, operate independently
of the U.S. Marshals Service, although Detroit currently is trying to
establish a working relationship with the Service. The Broward County
SheriffUs Department has probably the closest arrangement with the
Service, for their county's personnel are named special U.S. Deputy
Marshals for enforcement purposes, and they operate under their legal
umbrellaQtraveling cross country to serve subpoenas, gaining access to
selected Service intelligence, and receiving information on federal
investigations in their area. In short, this cooperative arrangement
provides a major boost to furthering the Broward County Sheriff's
Department's objectives.
In pursuing forfeiture action against such property, local agencies have
not been deterred by the need to track assets to other states: The
Broward County Sheriff's Department, for example, seized sixty-four
Arabian horses and autos
on a farm in Michigan where marijuana was being grown. The Detroit
Police Department went far afield to seize a farm in Tennessee.
Major Issues In The Management Of Seized Assets
When Detroit personnel were asked about how they maintain and preserve
the value of such assets as cars, real estate, farms, and businesses,
their answer was precise: "prompt disposal." The issues of maintenance
and preservation were of major concern to all seven agencies, or they
remained sensitive to the requirement to responsibly manage the asset
while it was in their possession.
In Florida, local departmental use of the most frequently seized
property, cars, requires approval from local courts. Then, the agency
can use the autos in investigations or hold them for auction with the
proceeds going to the asset forfeiture Law Enforcement Trust Fund
(LETF). This type of account can be set up in Florida jurisdictions to
hold seized proceeds, pending approval of city or county commissions for
its expenditureQexclusively for additional investigative activity.
After seizure, an item should be appraised in order to document its
value at the time of seizure, and to identify encumbrances and liens
(especially those affecting autos and real estate parcels) that might
make an item a financial liability to the seizing agency. Detroit even
has second appraisal done if they must go to court, so that they have a
record that the property did not decrease in value while in their
possession.
Some agencies (e.g., the U.S. Marshals Service and the Florida
Department of Law Enforcement) report that they try to determine if an
item will be a financial liability prior to deciding whether to seize
it. In fact, the Marshals Service participates with the local U.S.
AttorneyUs Office and the investigating federal agency in a "pre-seizure
planning" process to avoid having to assume responsibility for high
financial liability items.
Storing conveyances (including planes, boats and automobiles) often
requires an enclosed space to preserve the items in optimum condition.
This requires either owning or renting storage space. Often the dollar
value of the conveyance will determine how it is held in storageQfor
example, a Rolls Royce in good condition warrants an enclosed storage
facility, while an old model automobile in poor condition could be
stored in an open-fenced area. Broward County processes older and less
valuable cars (with book values of $500 to $1000) by allowing owners to
repossess them for a fee of $250 to cover the agencyUs legal costs. Ft.
Lauderdale places a $250 service charge on seized rental cars, or those
with legitimate liens.
In addition to storage, mechanical maintenance must be provided, and
that requires either using staff skills within the agency or hiring
qualified contractors. If a conveyance such as a boat or plane is
expected to be stored for an extended period, experienced mechanics must
be hired to specially prepare ("pickle") the engine and other mechanical
parts for long-term storage.
Autos are comparatively simple to maintain, and some agencies use their
own people (in many cases sworn personnel) to handle servicing. In other
agencies, civilians assigned to city or county maintenance yards care
for cars. Planes and boats present a more difficult task, for their
maintenance requires much more technical knowledge and skill. Most
agencies that deal with planes and boats use contracted maintenance
servicesQexcept for Broward, which assigns the boats permanently to the
Marine Interdiction Unit of the Organized Crime Bureau. The planes are
assigned to their own Aviation Section.
Usually, the boats and planes are first stripped of valuable electronic
equipment. This is either used by the agency (for, in many cases, the
hardware is better and more sophisticated than the agencies current
equipment) or, in Florida, sold with the proceeds going into a Law
Enforcement Trust Fund (LETF). Every agency commented on the
extraordinary expense of maintaining boats and planes.
Seized cash is immediately placed in interest bearing accounts. In
Florida, upon receiving court approval through the receipt of title, the
account with the cash is transferred to the appropriate LETFQlocal or
state, depending upon the seizing agency. Ft. Lauderdale's arrangement
with a local bank and the state's attorney allows the bank to use its
machines to count and simultaneously photograph every bill, and then
deposit the funds in the agencyUs account.
Florida's Law Enforcement Trust Fund (LETF) program merits special
mention. Seized money and the proceeds from sales and auctions are
placed in such accounts, subject to certain state statutory provisions.
A local department must apply to the locally maintained Fund to use the
money; a state agency applies to the state fund. A request from a
particular division or bureau in a locality is passed through the chain
of command to the chiefs office and, if approved, is forwarded to the
respective city or county council for consideration. Ft. Lauderdale has
to submit monthly reports on all seizures and trust fund activity to the
city manager, and along with other Florida agencies, another complete
list to FDLE.
As an example of concrete activity in Florida's trust fund program,
Metro-Dade recently requested and received funds to rent a large airport
hangar as an enclosed space for a large number of seized vehicles
managed by the department. Previously, the vehicles were housed in an
open-fenced lot. In addition, Ft. Lauderdale funds five staff positions
out of this fund: an attorney, three forfeiture specialists, and a
secretaryQall of whom work directly on forfeiture legal proceedings and
the preservation and maintenance of seized assets.
Most agencies use a combination of in-house expertise, such as sworn
personnel who are pilots or auto mechanics, and hired consultants,
including aircraft mechanics and marina staff, to manage the various
types of conveyances seized. Following a competitive bidding process,
the U.S. Customs Service hired a general management consultant who is
responsible for all custody, management and disposition of seized
conveyances. The general contractor is responsible for hiring
subcontractors to deal with specific mechanical and storage requirements
of seized assets.
When businesses are seized, it must be determined whether to continue
operating the business or close down its activity. Experiences among
agencies has varied. Obviously, Broward County did not choose to
continue to operate a seized porno theatre, on the rare occasion when it
seized a business. If it is projected to be cost-effective to continue
operation of a seized business, the U.S. Marshals will employ a business
manager to oversee the business. The Florida Department of Law
Enforcement has never had occasion to continue operating any business
seized, and the U.S. Customs Service and local agencies usually avoid
seizing businesses.
When hiring consultants to appraise the value of a conveyance or a
business, provide mechanical maintenance, store items or actually manage
a business, the seven agencies reported using a variety of methods to
locate reputable contractors. Typically, local trade associations and
professional groups are contacted for referrals, advertisements are
placed in appropriate trade journals and newspapers, and other law
enforcement agencies may be contacted for assistance. Metro-Dade uses
the countyUs current list of approved vendors. References are requested
and checked to assure that the contractors are competent and reputable.
The U.S. Marshals Service maintains a list of vendors in each of its
thirteen regional offices, while the other agencies surveyed stated that
they do not maintain approved lists but can easily retrieve the names of
reputable contractors with whom they have dealt in the past.
Disposition Issues
All agencies stated that they are allowed to convert seized equipment to
departmental use. Although a state or federal agency may on its own
decide to use a vehicle which has been seizedQusually in a district or
region outside the one where it was seizedQa local agency is more likely
to sell the seized vehicle. In Florida, an agency may in turn request
money from the Law Enforcement Trust Fund to purchase another needed
vehicle. By selling assets, a local agency avoids any appearance of
seizing an item specifically for agency use. Broward County has even
"traded" one piece of seized equipment for another. On one occasion,
because its regular radios did not have enough channels, the
and those of its membership to address law enforcement groups and to
make sure that those groups are familiar with all of the requirements of
the pertinent statutes. All agencies reported that, if at all possible,
each asset is evaluated before seizure to be sure that it actually
belongs to the suspect.
The Marshals use a system of "pre-seizure planning," in which targeted
assets are evaluated to ascertain ownership and the existence of any
encumbrances or liens. The Marshals stated that they have had difficulty
with mortgage lenders and title insurance companies recognizing the
Marshal's title to a piece of seized real estate. Such companies are
concerned that owners may claim their constitutional rights have been
violated, and that the property is still theirs. For example, has a
fugitive received the notification required by law regarding the pending
disposition of his property?
The Marshals Service has never been sued directly, but they reported a
suit has been brought challenging the constitutionality of a particular
seizure. The Marshals also noted that they would hesitate to seize an
asset deemed a financial liability because of encumbrances or liens that
summed to an amount greater than the propertyUs assessed value.
Asset seizure and forfeiture lawsuits have focused almost exclusively on
the perceived slowness of the process for returning a seized asset to
the rightful owner. However, on the bright side, when jurisdictions have
been sued, their actions have been upheld in every case (such as Ft.
Lauderdale and Detroit).
With the reasonable burden of proof and the preponderance of the
evidence burden in civil cases, the above agencies reported few
reservations about pursuing a case or deciding to attempt the seizure.
After seizure, however, other troublesome situations may arise. Broward
wrestled with the problem of what to do with a load of maple wood that
was surrounded by a load of hashish. Could they donate it to a shelter
facility? They eventually destroyed it, feeling that they could not
justify returning it, or giving it away.
Resource Directory:
Roster Of Persons Interviewed
1. U.S. Marshals Service
Joseph Enders, Chief
Operations Support
(703) 285-1271
2. U.S. Customs Service
Gary George
Seized Property Officer
(202) 566-5435
3. Metro-Dade Police Department
Major Art Nehrbass
Executive Officer
Special Investigations Division
(305) 592-7323
George Aylesworth, Esq.
Supervisor
Police Legal Unit
(305) 547-7404
4. Ft. Lauderdale Police Department
Robert Wennerholm, Esq.
Legal Advisor
(305) 761-5626
5. Broward County SheriffUs Department
Captain Carl Parrott
Assistant Commander
Organized Crime Unit
Commander William Dunman
Director
Organized Crime Centre
(305) 492-1810
6. Detroit Police Department
Inspector Terry Ford, Esq.
Director
Forfeiture Unit
(313) 224-4490
