JUSTICE MANUAL 9-116.000 – Equitable Sharing And Federal Adoption
9-116.100 – General Equitable Sharing Policies and Procedures
Department of Justice policies and procedures governing the equitable sharing of federally forfeited property, including administration of and participation in the Department of Justice Equitable Sharing Program, application for transfer of federally forfeited property to State and local law enforcement agencies, determination of equitable sharing distributions, and permissible uses of transferred property by State and local law enforcement agencies, are set forth in Department of Justice publications, including A Guide to Equitable Sharing of Federally Forfeited Property for State and Local Law Enforcement Agencies, The Attorney General’s Guidelines on Seized and Forfeited Property, and The Asset Forfeiture Policy Manual.
In accordance with the Crime Victims’ Rights Act (18 U.S.C. § 3771) and the Attorney General’s authority, the Department of Justice gives priority distribution of forfeited assets to valid owners, lienholders, federal financial regulatory agencies, and victims (in that order) through remission or restoration. After losses to the above parties have been satisfied, any remaining proceeds can be shared with state and local law enforcement agencies.
9-116.110 – Federal Adoption
The adoption policies and procedures are intended to ensure consistent review and handling of state and local seizures presented for federal adoption. See Chapter 1 of the Asset Forfeiture Policy Manual.
All state and local seizures presented for adoption must be reported on a form entitled “Request for Adoption of State or Local Seizure.” A copy of this form is in the Asset Forfeiture Policy Manual, Appendix H. The form must be completed by the requesting state or local agency, but Federal personnel may, in their discretion, complete the form for the requesting state or local agency. Depending on the jurisdiction, state or local agencies may also be required to submit a declination letter from the state court waiving the state’s authority to conduct forfeiture proceedings along with the Request for Adoption of State or Local Seizure form.
Information concerning any state forfeiture proceedings instituted against the property must be detailed in the request for adoption form. A federal agency must not adopt a seizure while the property remains subject to the jurisdiction of a state court. The state or local agency also may be required to complete the Federal agency’s standard federal asset seizure form as part of the adoption request. All information provided must be complete and accurate. An estimate of fair market value must be provided for each item of seized property presented for adoption and any liens and lienholders must be identified. Copies of any investigative reports and of any affidavits in support of warrants pertinent to the seizure must be attached for review. State or local agencies may redact from investigative reports information which may disclose the identity of a confidential informant. See Chapter 1 of the Asset Forfeiture Policy Manual.
9-116.120 – Federal Law Enforcement Agency Review of Adoption Requests
The adopting federal agency must consider adoption requests promptly. Property management issues must be addressed in consultation with the U.S. Marshals Service prior to an adoption. The request for adoption must be accepted prior to the transfer of the property to federal custody unless exceptional circumstances exist.
Only an attorney outside the chain-of-command of operational officials (e.g., the seizing agency’s office of chief counsel or other legal unit) may approve a request for adoption unless:
the seizure was based on a judicial seizure warrant; or
an arrest was made in connection with the seizure; or
drugs or other contraband were seized from the person from whom the property was seized.
Federal law enforcement agencies may expand the circumstances requiring attorney approval. Any attorney review shall verify that:
the property is subject to federal forfeiture;
there is probable cause to support the seizure;
the property is not within the custody of a state court; and
there is no other legal impediment to a successful forfeiture action.
For more information on this topic, see Chapter 1 of the Asset Forfeiture Policy Manual.
9-116.150 – Judicial Review Favored
Whenever practicable, Department of Justice officials should obtain ex parte judicial approval prior to seizing personal property. See Chapter 1 of the Asset Forfeiture Policy Manual.
9-116.160 – 30-Day Rule for Presentation for Federal Adoption
A federal law enforcement agency may be required to commence administrative forfeiture proceedings by sending written notice “not more than 90 days after the date of seizure by the state or local law enforcement agency.” In order to allow ample time for federal agencies to process adoptive seizures, state and local agencies must request federal adoption within 30 calendar days of seizure. Any waiver of the 30-day rule must be approved in writing by a supervisory-level official of the adopting agency where the state or local agency requesting adoption demonstrates the existence of circumstances justifying the delay. See Chapter 1 of the Asset Forfeiture Policy Manual.
9-116.170 – United States Attorney Recommendation For Adoption of Seizure
A United States Attorney may recommend in writing that a federal law enforcement agency adopt a particular state or local seizure or category of seizures for federal forfeiture. If the federal agency declines to adopt the seizure but has no objection to the direct adoption of the seizure by the United States Attorney for judicial forfeiture under federal law, the United States Attorney may adopt the seizure and pursue the forfeiture civilly or criminally. On the other hand, if the federal agency declines to adopt the seizure and believes that it should not be adopted for federal forfeiture and the United States Attorney disagrees, the United States Attorney may refer the matter to the Money Laundering and Asset Recovery Section (MLARS). After consulting with the headquarters office of the seizing agency, MLARS may authorize direct adoption of the seizure or category of seizures by the United States Attorney where a compelling law enforcement purpose justifies such action. See Chapter 1 of the Asset Forfeiture Policy Manual.
9-116.190 – Retention of Custody by State or Local Agency
To minimize storage and management costs to the Department of Justice, the state or local agency requesting adoption of a conveyance should serve as the substitute custodian of the property pending forfeiture. The United States Marshals Service (USMS) may authorize a state or local law enforcement agency requesting adoption of other personal property, except cash and other financial instruments, to serve as the substitute custodian where appropriate. Use or disposition of the property during this period by state or local law enforcement officials or others is prohibited. See Chapter 1 of the Asset Forfeiture Policy Manual.
9-116.195 – Use of Anticipatory Seizure Warrants
If a state or local law enforcement agency commences a forfeiture action under state law, no federal forfeiture action may be commenced as long as the state court has jurisdiction over the subject property. If, however, the state or local authorities determine, for whatever reason, that the state action will be terminated before it is completed, and that the property will accordingly be released, or a federal seizing agency otherwise learns that the state court is about to order the release of property that is federally forfeitable, a federal agency may arrange to seize the property by obtaining an anticipatory seizure warrant from a federal judge or magistrate. The anticipatory seizure warrant must provide that it will be executed only after the state court has relinquished control over the property.
For purposes of the notice requirements in section 983(a)(1), property seized pursuant to an anticipatory seizure warrant in these circumstances is considered the subject of a federal seizure such that the period for sending notice of the forfeiture action is 60 days, commencing on the date when the anticipatory seizure warrant is executed. See Chapter 1 of the Asset Forfeiture Policy Manual.
9-116.210 – Equitable Sharing Decisions
If the total appraised value of all the assets forfeited in a single administrative forfeiture order is less than $1 million, the head of the investigative agency (or designated agency headquarters official), for each asset, determines the appropriate equitable share, completes section II of the DAG-72, and enters the decision in the Consolidated Asset Tracking System (CATS).
If the total appraised value of all the assets forfeited in a single judicial forfeiture order is less than $1 million, the head of the investigative agency (or designated agency headquarters official), for each asset, makes a recommendation as to the appropriate equitable share, completes section II of the DAG-72, enters the recommendation in CATS, and forwards the DAG- 71 and DAG-72 to the United States Attorney’s Office. For each asset, the United States Attorney (or designee) determines the appropriate equitable share, completes section III of the DAG-72, and enters the decision in CATS. Any authorization to determine equitable sharing on behalf of the United States Attorney must be reduced to writing and maintained with other delegations.
In multi-district cases, in cases involving the equitable transfer of real property, and where the total appraised value of all the assets forfeited in a single administrative or judicial forfeiture order is $1 million or more, the head of the investigative agency (or designated agency headquarters official), for each asset, makes a recommendation as to the appropriate equitable share, completes section II of the DAG-72, enters the recommendation in CATS, and forwards the DAG-71 and DAG-72 to the United States Attorney’s Office. For each asset, the United States Attorney (or designee) makes a recommendation as to the appropriate equitable share, completes section III of the DAG-72, enters the recommendation in CATS, and forwards the DAG-71 and DAG-72 to the Chief of MLARS, who also makes a recommendation. The Deputy Attorney General, or designee, determines the appropriate equitable share.
9-116.310 – Equitable Sharing Payments
The USMS issues equitable sharing payments after the sharing request appears in the CATS Equitable Sharing Payments Authorization Report. A request will not appear in the report unless the information permitting payment has been entered in CATS by the investigative agency, the United States Attorney’s Office, and the USMS. Consequently, each component’s timely processing ensures expeditious sharing payments.
The USMS transfers all equitable sharing payments to state and local law enforcement agencies electronically. The payment is deposited directly into a bank account designated by the recipient agency. The recipient agency also receives a confirmation of the deposit by e-mail. Known as E-SHARE, this program provides a fast, efficient, and secure method to make equitable sharing payments. Participation in the program is mandatory. In order to receive equitable sharing payments electronically, state and local agencies must submit a completed Form USM-391 to the E-SHARE Help desk. The form, and additional information about the E-SHARE program, may be obtained online at http://www.usmarshals.gov/assets/eshare/index.html or by e-mail to [email protected] (link sends e-mail). See Chapter 6 of the Asset Forfeiture Policy Manual.
9-116.312 – Role of Law Enforcement Coordinating Committees
Pursuant to The Attorney General’s Guidelines on Seized and Forfeited Property, July 1990 (JM Chapter 9-118.000), the Law Enforcement Coordinating Committees (LECCs) “shall promote and facilitate the Department of Justice forfeiture program with federal, state and local law enforcement agencies.” By memorandum dated June 15, 1990, to all United States Attorneys, the Associate Deputy Attorney General directed LECC Coordinators to “serve as a clearinghouse for state and local inquiries about the status of pending sharing cases.” LECC Coordinators should regularly consult CATS to ascertain the status of equitable sharing payments and transfers to state and local agencies. United States Attorneys Offices and federal investigative agencies must work together to ensure proper coordination of all equitable sharing activities. See Chapter 6 of the Asset Forfeiture Policy Manual.
9-116.400 – International Sharing of Forfeited Assets
It is the policy of the United States to encourage international asset sharing and to recognize all foreign assistance that facilitates U.S. forfeitures so far as consistent with U.S. law. International sharing is governed by 18 U.S.C. § 981(i), 21 U.S.C. § 882(e)(1)(E), and 31 U.S.C. § 9703(h)(2), and is often guided by standing international sharing agreements or the subject of a future case-specific forfeiture sharing arrangement to be negotiated by MLARS and approved by the Department of State. The decision to share assets forfeited to the United States with a foreign government is a completely discretionary function of the Attorney General or the Secretary of the Treasury. It requires the concurrence of the Secretary of State, and, in certain circumstances, it is a decision that can be vetoed by Congress. The 1992 international sharing memorandum of understanding between the Departments of State, Justice, and Treasury expressly prohibits investigators or prosecutors from making representations to foreign officials “that assets will be transferred in a particular case, until an international agreement and commitment to transfer assets have been approved by the Secretary of State and the Attorney General or the Secretary of the Treasury.” Prosecutors and federal law enforcement agencies always should be mindful that any domestic sharing occurs after all international sharing is completed, and that the domestic sharing of assets located abroad will occur from and come out of the federal share, which is the amount of money that the United States has available after completion of the international sharing process. Thus, federal prosecutors and investigators should take care not to make any representations about the sharing of forfeitable assets located abroad or forfeited domestically with the assistance of a foreign government to either representatives of the foreign government or any of the domestic law enforcement partners whose assistance may have contributed to the seizure and ultimate forfeiture of the assets in question.
Foreign governments are not required to follow a specific process to submit a sharing request to the United States. They may do so pursuant to a treaty, a sharing agreement, or even via other diplomatic or law enforcement channels. Prosecutors and law enforcement agencies can and should make spontaneous sharing recommendations whenever they receive foreign assistance that facilitated the forfeiture of an asset in a U.S. case, particularly when that asset is located in the United States. When the United States forfeits assets in a judicial forfeiture case with the help of a foreign state and the seizing agency is a Department of Justice component or participant in the Department of Justice Assets Forfeiture Fund, it is the responsibility of the federal prosecutor assigned to the case to send a formal sharing recommendation to MLARS. In an administrative forfeiture matter, the seizing agency is responsible for the recommendation. In cases that implicate the Treasury Forfeiture Fund (TFF), the seizing agency, e.g., Internal Revenue Service, U.S. Secret Service, Customs and Border Protection, or Immigration and Customs Enforcement, has the responsibility to send a sharing recommendation to the Treasury Executive Office for Asset Forfeiture (TEOAF). However, the seizing agency should consult the prosecutor on the case first. For Department of Justice Assets Forfeiture Fund international sharing recommendations, MLARS prepares the sharing recommendations for approval by the Deputy Attorney General. For Treasury Forfeiture Fund international sharing recommendations, the director of TEOAF approves the sharing recommendations. MLARS and TEOAF also obtain State Department and each other’s concurrence for each proposed transfer to a foreign government after it is approved by their respective designees. This interagency process can be lengthy. To avoid delays, it is advisable to make the international sharing recommendation as soon as is practicable, or immediately after the final order forfeiting the foreign assets is obtained. At the earliest possible time, the seizing agency should note in CATS, or the tracking system for a particular TFF agency, that a particular asset might be, is, or will be subject to an international sharing request or recommendation—and definitely before that asset has been liquidated. See Chapter 10 of the Asset Forfeiture Policy Manual.
9-116.500 – Transfer of Forfeited Real Property Pursuant to Weed and Seed
The goal of Weed and Seed is to help local communities restore order and provide assistance in neighborhoods afflicted with high crime rates or other serious problems. The proposed use of any property to be transferred must support community-based drug treatment, crime prevention, education, improving housing, enhancing job skills, and other activities that will substantially further the Weed and Seed strategy. The property must be suited to the proposed use and the use must be consistent with all applicable federal, state, and local laws and ordinances.
Any proposed transfer must have the potential for significant benefits to a particular community and these benefits must outweigh any financial loss or adverse effects to the Department of Justice Assets Forfeiture Fund.
All requests for sharing of real property pursuant to the Weed and Seed Initiative must be submitted on the DAG-71 and must follow the established sharing procedures outlined in The Attorney General’s Guidelines on Seized and Forfeited Property (JM Chapter 9-118.000). The appropriate official in the federal investigative agency and the United States Attorney in the judicial district where the property is located must concur with the request. Where real property is forfeited in one judicial district by a United States Attorney from another district, the United States Attorneys in both districts should recommend the transfer. Final approval authority for a transfer of forfeited real property rests with the Office of the Deputy Attorney General.
In addition to the forms DAG-71 and DAG-72, a request for a Weed and Seed transfer requires the submission of the following to MLARS: (1) a written request from the United States Attorney or the U.S. Marshal recommending the transfer, explaining the factual and procedural history of the case and the proposed use of the property by the requested Weed and Seed recipient; (2) a draft Memorandum of Understanding to be signed by the United States Attorney and authorized representatives of the federal agency that processed the forfeiture, each state or local agency that would otherwise receive sharing were it not for the Weed and Seed transfer, and the organization that is contemplated to be the ultimate recipient of the transferred property, whether that recipient is a sharing agency or a qualified public or private non-profit organization; and (3) a Lead-Based Paint Declaration. Both the written request and memorandum should fully describe the entity to which the property is proposed to be transferred and the use to which that entity intends to put the property. See Chapter 6 of the Asset Forfeiture Policy Manual.
9-116.530 – Mortgages and Ownership Interests in Weed and Seed Transferred Real Property
Mortgages on real property transferred pursuant to the Weed and Seed initiative are not payable from the Department of Justice Assets Forfeiture Fund. Liens and mortgages are the responsibility of the recipient state or local sharing agency or non-profit entity that ultimately takes title to the property pursuant to the Memorandum of Understanding. The payment of any such mortgages should be specifically addressed in the Memorandum.
Any secured debts or other qualified interests owed to creditors on such real property are not payable from the Department of Justice Assets Forfeiture Fund. Satisfaction of these interests is the responsibility of the recipient state or local agency or non-profit entity. As with mortgages, the payment of qualified third-party interests should be addressed in the Memorandum of Understanding. See Chapter 6 of the Asset Forfeiture Policy Manual.
9-116.540 – Asset Seizure, Management and Case-Related Expenses
Other expenses incurred in connection with the seizure, appraisal, maintenance, or security of Weed and Seed property before transfer of the property are payable from the Assets Forfeiture Fund, as are case-related expenses incurred in connection with normal proceedings undertaken to protect the United States’ interest in the property until the entry of a judgment or order of forfeiture. See Chapter 6 of the Asset Forfeiture Policy Manual.
9-116.550 – Law Enforcement Concurrence
Any state or local law enforcement agency that would otherwise receive an equitable share of proceeds from the sale of forfeited real property must voluntarily agree to forego its share before a Weed and Seed transfer is authorized. See Chapter 6 of the Asset Forfeiture Policy Manual.
9-116.600 – Tansfer of Property Forfeited under the Magnuson Fisheries Conservation and Management Act from the Department of Justice to the National Oceanic and Atmospheric Administration
Under the Magnuson Fisheries Conservation and Management Act, 16 U.S.C. §§ 1801-1882, the Department of Justice may transfer to the National Oceanic and Atmospheric Administration (NOAA) funds forfeited by the Attorney General for violations under the Act. Assets seized for forfeiture under the Act should be deposited in the Seized Asset Deposit Fund administered by the USMS. After forfeiture, the funds may be transferred by the USMS to NOAA, less any expenses incurred by the USMS and less ten percent of the net proceeds of forfeiture, which is deposited into the Assets Forfeiture Fund. See Chapter 6 of the Asset Forfeiture Policy Manual.
9-116.700 – Permissible Use Policy
The permissible use policy states that a state or local law enforcement agency may use not more than 15 percent of its shared monies for the costs associated with drug abuse treatment, drug and crime prevention education, housing and job skills programs or other nonprofit community-based programs or activities, which are formally approved by the chief law enforcement officer (i.e., chief, sheriff, or prosecutor) as being supportive of and consistent with a law enforcement effort, policy, and/or initiative.
The United States Attorney in the district where an applicant for benefits under the permissible use policy, or one of its principals, is located, or where it or one of its principals is operating, shall determine whether the applicant or principal currently is the subject of grand jury proceedings or other prosecutorial scrutiny in that district, and the United States Attorney shall notify the federal investigative agency of the findings, and also shall notify the chief law enforcement officer involved (unless non-disclosure is required by federal law or to safeguard a federal investigation in progress). See A Guide to Equitable Sharing of Federally Forfeited Property for State and Local Law Enforcement Agencies.
[new May 2010]
