9-115.100
Management and Disposal of Seized Assets
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The United States Marshals Service (USMS) has primary
authority over the management and disposal of seized assets in
its custody that are subject to forfeiture or are forfeited under
laws enforced by agencies within the Department of Justice as
well as certain other federal agencies by agreement. Arrangements
for property services or commitments pertaining to the management
and disposition of such property are the responsibility of the
USMS. The authority of the Attorney General to dispose of
forfeited real property and warrant title has been delegated to
the USMS director by 28 C.F.R. § 0.111(I).
Management and disposal of assets seized by agencies within
the Department of Treasury and other agencies included by
agreement (including certain agencies moved from Treasury to the
Department of Homeland Security) are handled by property
custodians (generally contractors) operating under Treasury
guidelines. The Treasury agency case agent is generally the
initial point of contact for issues relating to seized property
custody, management, and disposal.
Prior to taking any action (e.g., in a settlement or plea
agreement) concerning the management or disposition of property,
the United States Attorney or agent in charge of the field office
responsible for an administrative forfeiture case should consult
with the United States Marshals Service in cases involving
Department of Justice seizing agencies, or Treasury in cases
involving Treasury seizing agencies, to discuss management or
disposition issues. Such discussions shall address the impact
that such proposed action may have on the United States Marshals
Service or other custodial agency in undertaking, continuing, or
terminating custody of the property. If the interests of
claimants are to be satisfied in whole or in part by payments
from the proceeds of a sale of the property by the Marshals
Service or other custodial agency, the proposed forfeiture order
should provide specific guidance for the Marshals Service or
other custodial agency concerning such payments. In the case of
any settlement or plea agreement that requires the payment of a
specific amount, rather than an amount up to the proceeds of sale
received in liquidation of forfeited property, approval must be
obtained from the United States Marshals Service prior to the
execution of the settlement or plea agreement. See
Chapter 5 of the Asset Forfeiture Policy Manual ("Management
and Disposal of Seized Assets"). The Asset Forfeiture
and Money Laundering Section (AFMLS) shall resolve any disputes
that may arise in the event that the United States Attorney and
the United States Marshal cannot agree on the appropriate
resolution.
[updated May 2010]
9-115.200
Use of Seized Property by Department of Justice Personnel
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Property under seizure and pending forfeiture may not be
utilized for any reason by Department personnel, including for
official use, until such time as the final order of forfeiture is
issued.
Likewise, Department personnel may not make such property
available for use by others, including persons acting in the
capacity of a substitute custodian, for any purpose prior to
completion of the forfeiture. However, court authority may be
sought for use of seized property, after consultation with the
United States Marshals Service, in situations such as the seizure
of a ranch or business where use of equipment under seizure is
necessary to maintain the ranch or business. See Chapter
5 the Asset Forfeiture Policy Manual ("Use of Seized Property by
Department of Justice Personnel").
[updated May 2010]
9-115.202
Use of Seized Property Where Custody is Retained by the State or Local Seizing Agency
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To minimize storage and management costs incurred by the
Department of Justice, state and local agencies which present
motor vehicles or other property items for federal adoptions may
be asked to serve as substitute custodians of the property,
pending forfeiture, at the discretion of the United States
Marshals Service or Treasury, and upon consultation with the
United States Attorney in judicial forfeiture cases. In
addition, the United States Marshals Service may enter into a
storage and maintenance agreement with state and local agencies
covering such property. Such agreements are contractual in
nature, and do not require district court approval. Under such
an agreement, the state or local agency has a responsibility to
provide adequate storage, security, and maintenance for all
assets in their custody.
Any use of such vehicles, including official use, by state
and local law enforcement officials or others is prohibited by
Department of Justice and Department of Treasury policy until
such time as the forfeiture is completed and the equitable
transfer is made. See Chapter 5 of the Asset Forfeiture
Policy Manual ("Use of Seized Property Where Custody is Retained
by the State or Local Seizing Agency").
[updated May 2010]
9-115.203
Use of Seized Real Property by Occupants
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As a general rule, occupants of real property seized for
forfeiture should be permitted to remain in the property,
pursuant to an occupancy agreement pending the final order of
forfeiture, after consultation with the United States Marshals
Service or Treasury and the United States Attorney. For
additional information on this topic, see Chapter 5 of the Asset
Forfeiture Policy Manual ("Use of Seized Real Property by
Occupants").
[updated May 2010]
9-115.300
Disposition of Forfeited Property
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The disposition of property forfeited to the United States
is an executive branch decision and not a matter for the court.
Consequently, orders of forfeiture should be drafted broadly to
direct forfeiture of the property to the United States "for
disposition in accordance with law." In addition, orders of
forfeiture should specifically address any third party claims
against the forfeited property that are recognized by the United
States. If the interests of the claimant are to be satisfied in
whole or in part by payments from the proceeds of a sale of
property by the United States Marshals Service or Treasury, the
proposed forfeiture order should provide specific guidance
concerning such payments and, where possible, specify that such
claims shall be paid only after the costs of the United States
are recovered, and shall be paid only up to the amount realized
from the proceeds of the forfeited property. The Attorney
General has been given the authority to dispose of forfeited
property "by sale or any other commercially feasible means"
without subsequent court approval. See 21 U.S.C.
§§ 881(e), 853(h), and 18 U.S.C. § 1963(f). This
is generally called a "forfeiture sale" of the property.
Forfeiture sales do not require judicial confirmation pursuant to
28 U.S.C. § 2001. See Chapter 5 of the Asset
Forfeiture Policy Manual ("Disposal of Forfeited Property").
[updated May 2010]
9-115.310
Disposition of Forfeitable Property by Interlocutory Sale
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If before forfeiture, an interlocutory sale is necessary
because the property is declining in value, and the interlocutory
sale is contested, the procedures contained in
28 U.S.C. § 2001 should be followed requiring judicial
confirmation of such interlocutory sales. When property is sold
in this manner, it is called a "judicial sale." If the sale is
not contested, the provisions of 28 U.S.C. § 2001 need not
be followed. Further information on this topic is available in
A Guide to Interlocutory Sales and Settlements, AFMLS,
July 2007.
[updated May 2010]
9-115.400
Attorney General's Authority to Warrant Title
Section 2002 of the Crime Control Act of 1990, which amends
28 U.S.C. § 524(c), gives the Attorney General the authority
to warrant clear title upon transfer of forfeited property.
Section 524(c)(9)(A) reads as follows:
Following the completion of procedures for the forfeiture of property
pursuant to any law enforced or administered by the Department, the
Attorney General is authorized, in her discretion, to warrant clear
title to any subsequent purchaser or transferee of such
property.
The authority to execute deeds and transfer title has been
delegated to chief deputies or deputy U.S. marshals by 28 C.F.R.
§ 0.156. The section 0.156 authority predates the asset
forfeiture program and applies to all court-ordered sales of
property, not just forfeited property.
The preferred means to transfer forfeited property is by
special warranty deed executed by the United States Marshal. The
special warranty deed assures the grantee/buyer that the United
States, as the current seller, has done nothing to encumber the
property, nor has it conveyed any right, title, or interest in
the property while the government was the owner of the property.
In effect, the special warranty deed warrants the forfeiture
process. Under appropriate circumstances, a quitclaim deed may be
used to transfer property. The quitclaim deed makes no warranty
representations. It serves only to convey whatever right, title
and interest that the Government had as of the execution date.
Finally, property may be transferred by a general warranty deed.
It is Department policy to use general warranty deeds only in
exceptional circumstances. As used in this policy, the terms
"general warranty deed" and "special warranty deed" are not
intended to be limiting in their application. In some states,
warranty deeds are not used (e.g., in California a "grant deed"
provides limited statutory warranties). The use of such state
variations equivalent to a general warranty deed is satisfactory
for purposes of this policy. See Chapter 5 of the Asset
Forfeiture Policy Manual ("Attorney General's Authority to
Warrant Title").
[updated May 2010]
9-115.412
Indemnification Agreement in Addition to Special Warranty Deed
It is suggested that the language of the special warranty
deed be as follows, with the insertion of the specifically
applicable circumstances as required:
The grantor covenants to specially warrant the title to the
property hereby coveyed against any claim arising from ...
[insert the specifically applicable circumstances
here.]
When special circumstances exist, the buyer may also request
that the United States provide certain indemnifications in order
to obtain title insurance. These indemnification agreements
establish affirmative measures to be taken by the United States,
beyond the basic terms and obligations of its warranty deed, in
the event that claims are later made against the property. The
indemnification agreement may be included either in the terms of
the special warranty deed or in a separate document which
incorporates the deed by reference. In either form,
indemnification agreements will be limited to the following
terms:
- The United States will specially warrant its title against
defects or clouds arising out of the forfeiture process, and
hold the buyer harmless as a result of such defects in title
or clouds involving the propriety of the forfeiture of the
property.
- In the event that a court in a final judgment rules that the
United States did not acquire valid legal title to the real
property through the forfeiture process and, therefore, was
not able to convey clear title to the buyer, the United
States will refund to the buyer the amount of the purchase
price of the property, plus the value of any improvements
made to the property by the buyer. The amount will be paid
out of the Assets Forfeiture Fund, plus interest on the
total amount at the current rate as provided in 28 U.S.C.
§ 1961 from the date of the purchase of the property
by the buyer to the date of the final judgment.
- The United States, by its special warranty deed, does not
warrant the title of the prior owner of the property who
acquired title before the forfeiture. See Chapter 5
of the Asset Forfeiture Policy Manual ("Use of a Special
Warranty Deed and Indemnification Agreement").
[updated May 2010]
9-115.420
General Warranty Deed
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If the buyer of the forfeited property is unable to procure
a title insurance policy with a special warranty deed and
indemnification agreement, then the United States Marshal may be
authorized to execute a general warranty deed. Any determination
to transfer property by a general warranty deed must be approved
by the United States Marshals Service Asset Forfeiture Office.
It is the policy of the Department that the Attorney
General's discretion to warrant clear title, through the use of a
general warranty deed, will be exercised only in compelling
circumstances where the financial advantage of offering a general
warranty deed in the particular case, compared to the available
alternatives, far outweighs both the potential cost of honoring
the warranty in that case and the potential effect of increased
purchaser demand for general warranty deeds in future sales of
other forfeited properties. The United States Marshals Service
Asset Forfeiture Office, in the exercise of sound business
judgment, shall also consider the cumulative potential liability
which will accrue over time as a result of each successive use of
a general warranty deed. See Chapter 5 of the Asset
Forfeiture Policy Manual ("Use of a General Warranty Deed").
[updated May 2010]
9-115.430
Dispute Resolution
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The Asset Forfeiture and Money Laundering Section (AFMLS)
will resolve any disputes that may arise in the event the United
States Attorney and the U.S. Marshal cannot agree on the
appropriate form of deed to be used.
9-115.500
Purchase or Personal Use of Forfeited Property by Department Employees
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Department of Justice employees are prohibited from
purchasing, either directly or indirectly, or using any property
if the property has been forfeited to the government and offered
for sale by the Department of Justice or its agents. In addition,
Department of Justice employees are prohibited from purchasing or
using such property that has been purchased, directly or
indirectly, by a spouse or minor child. A written waiver to the
aforementioned restrictions may be granted by the agency designee
upon a determination that, in the mind of a reasonable person
with knowledge of the circumstances, purchase or use by the
employee will not raise a question as to whether the employee has
used his or her official position or nonpublic information to
obtain or assist in an advantageous purchase or create an
appearance of the loss of impartiality in the performance of the
employee's duties. A copy of the waiver must be filed with the
Attorney General. See Chapter 5 of the Asset Forfeiture
Policy Manual ("Purchase or Personal Use of Forfeited Property by
Department Employees").
[updated May 2010]
9-115.600
Review of Official Use of Forfeited Property Valued at over $50,000
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Part IV, D of The Attorney General's Guidelines on Seized
and Forfeited Property (July 1990)
(USAM Chapter 9-118.000)
requires notification to the "Executive Office for Asset
Forfeiture ... at the time property valued at $50,000 or
greater is placed into official use." Although this requirement
may be satisfied by post-transfer notification, the FBI and U.S.
Marshals Service provided the then Executive Office for Asset
Forfeiture with advance notice of and an opportunity to review
such decisions. Such notification should now be made to the
Asset Forfeiture and Money Laundering Section (AFMLS), Criminal
Division.
AFMLS should be given advance notice of and an opportunity to
review official use actions involving federal forfeited property
valued at $50,000 or more. AFMLS will endeavor to act on all
such notifications within two weeks of receipt. See
Chapter 5 of the Asset Forfeiture Policy Manual ("Review of
Official Use of Forfeited Property").
[updated May 2010]
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