|9-111.110||Seizure—General Pre-Seizure Planning Policy Guidelines|
|9-111.120||Net Equity Values|
|9-111.123||Avoiding Liability Seizures|
|9-111.125||Trustees and Monitors in Forfeiture Cases|
|9-111.130||Pre-Indictment and Other Forfeiture Coordination|
|9-111.250||Obtaining Criminal Forfeiture Seizure Warrants for Property Located Outside Districts|
|9-111.400||Contaminated Real Property Policy|
|9-111.600||Seized Cash Management|
9-111.110 - Seizure—General Pre-Seizure Planning Policy Guidelines
What follows are broad pre-seizure planning policy guidelines for all agencies participating in the Asset Forfeiture Program. Variations to these guidelines are permitted only after consultation with the Money Laundering and Asset Recovery Section (MLARS).
The United States Attorney, or in administrative forfeiture cases, the agent in charge of a field office, is responsible for establishing specific procedures to be followed to ensure that proper and timely pre-seizure planning occurs prior to seizing or restraining real property, commercial enterprises, or other types of property that may pose potential problems of maintenance and/or disposition (e.g. animals and aircraft) within that federal judicial district. All pre-seizure planning meetings will include, at a minimum, as applicable, the Assistant United States Attorney or investigative agent in charge of the forfeiture matter (and, if applicable, the Assistant United States Attorney in charge of the related criminal matter), investigative agents, and the appropriate United States Marshals Service representative (which should include a representative from the district where the property is to be seized if different than the district where the action is to be filed). A federal regulatory agency representative may also attend in forfeiture cases involving federal regulatory matters as appropriate. Assets in cases where a Department of Justice investigative agency is not the lead agency may be handled by independent contractors employed by non-Department of Justice agencies rather than the USMS (e.g., the Department of the Treasury or the Department of Homeland Security), and those independent contractors should participate in preseizure planning as appropriate.
For asset forfeiture cases involving more than one federal judicial district, the United States Attorney instituting the forfeiture action has the primary responsibility to ensure that all Asset Forfeiture Program participants are notified, and that proper and timely pre-seizure planning occurs in those districts where assets will be seized as a result of that asset forfeiture matter.
Further information on this topic is available in Chapter 1 of the Asset Forfeiture Policy Manual
[updated January 2020] [cited in JM 9-119.010]
9-111.120 - Net Equity Values
Whether a property should be seized must be documented during the pre-seizure process. The following guidelines set minimum net equity levels that generally must be met before federal forfeiture actions are instituted. The net equity values are intended to decrease the number of federal seizures, thereby enhancing efforts to improve case quality and to expedite processing of the cases we do initiate. The thresholds are also intended to encourage state and local law enforcement agencies to use state forfeiture laws. These thresholds are to be applied in direct and adoptive cases. In general, the minimum net equity requirements are:
- Residential Property and vacant land —minimum net equity must be at least 20 percent of the appraised value, or $20,000, whichever is greater. As a general rule, the Department of Justice does not seize or adopt contaminated real properties. See Contaminated Real Property Policy, at JM 9-111.400.
- Vehicles—minimum net equity must be at least $5,000. The value of multiple vehicles seized at the same time may be aggregated for purposes of meeting the minimum net equity. If the person from whom the vehicle was taken was or is being criminally prosecuted by state or federal authorities for criminal activities related to the property and there is justification for a low value seizure (such as the vehicle being used to facilitate criminal activities), the minimum net equity is $2,000. The arrest of the person from whom the property is taken, for an offense related to the illegal use or acquisition of the property for which a forfeiture action may be brought, satisfies the condition of criminal prosecution. This restriction does not apply in the case of seizures by the United States Immigration and Customs Enforcement of vehicles used in the smuggling of aliens or in the case of vehicles modified or customized to facilitate illegal activity.
- Cash - minimum amount must be at least $5,000, unless the person from whom the cash was taken was criminally prosecuted or is being prosecuted by state or federal authorities for criminal activities related to the property, in which case, the amount must be at least $1,000.
- Aircraft—minimum net equity must be at least $10,000. Note that failure to obtain the log books for the aircraft will reduce the aircraft's value significantly.
- Vessels—minimum net equity must be at least $10,000.
- All Other Personal Property—minimum net equity must be at least $1,000 in the aggregate. Exceptions from the minimum net equity requirement should not be made for any individual item if it has a value of less than $1,000. Such exceptions can be made if practical considerations support the seizure (e.g., 20 items of jewelry, each valued at $500, might be seized, as the total value of the items is $10,000 and the cost of storing 20 small items of jewelry is not excessive).
Heads of investigative agencies may continue to establish higher thresholds for seizures made by their agencies. If an investigative agency head establishes higher monetary thresholds than those set out in the directive, the Asset Forfeiture and Money Laundering Section must be advised in writing of the change.
Each United States Attorney may institute higher district-wide thresholds for judicial forfeiture cases. In doing so, United States Attorneys should confer with the seizing agencies affected by the change and develop, in concert with those agencies, written district-wide guidelines for implementation. Written notice of such higher thresholds must be provided to MLARS. Any threshold higher than those identified in the directive shall not be the basis for failing to assist in seizing property when requested to do so by another district with lower monetary thresholds where the requesting district intends to file the judicial action.
It is understood that in some circumstances the overriding law enforcement benefit will require the seizure of an asset that does not meet these criteria. In individual cases, these thresholds may be waived where forfeiture will serve a compelling law enforcement interest (e.g., forfeiture of a "crack house," a conveyance with hidden compartments, a computer or Internet domain name seized to disrupt a major fraud scheme, or assets connected to a child pornography ring or a terrorist organization). Any downward variations from the above thresholds must be approved in writing by a supervisory-level official and an explanation of the reason for the departure noted in the case file. A copy of this approval, in either a written memorandum or an e-mail, must be provided to the United States Marshals Service district office that will take custody of the assets(s). See Chapter 1 of the Asset Forfeiture Policy Manual ("Asset-Specific Net Equity Thresholds").
[updated January 2020] [cited in JM 9-119.010]
9-111.123 - Avoiding Liability Seizures
When residential and commercial real property and businesses are targeted for asset forfeiture, the potential net equity must be calculated. See Chapter 1 of the Asset Forfeiture Policy Manual. If the financial analysis indicates that the aggregate of all liens (including judgment liens), mortgages, and management and disposal costs approaches or exceeds the anticipated proceeds from the sale of the property, the USAO, or in administrative forfeiture actions, the seizing agency, must either (1) determine not to go forward with the seizure, or (2) acknowledge the potential financial loss and document the circumstances that warrant the seizure and institution of the forfeiture action.
In rare instances where preseizure planning is not possible, the seizing agency may be responsible for custody and maintenance of the property until the USMS has had an opportunity to conduct an analysis of the assets. The USMS must complete a preseizure planning questionnaire within 5 business days after the seizure or as soon as practicable given the nature of the information required. If the financial assessment indicates that the aggregate of all liens, mortgages, and management and disposal costs approaches or exceeds the anticipated proceeds from the sale of the property, the USAO must either (1) take action to dismiss the forfeiture action and to void any expedited settlement agreements (if any have been entered into), or (2) acknowledge the potential loss and document the circumstances that warrant the continuation of the forfeiture action.
In deciding how to proceed with the seizure and forfeiture of potential liability seizures during the preseizure phase in judicial forfeitures, the USAO in consultation with the seizing agency and the USMS (and in administrative forfeitures, the agent in charge of the field office responsible for the administrative forfeiture, or designee, in consultation with the USMS) must evaluate and consider the forfeitable net equity and the law enforcement purposes to be served in light of the potential liability issues and estimated costs of post-seizure management and disposition. See Chapter 1 of the Asset Forfeiture Policy Manual ("Net Equity Worksheet").
9-111.124 - Business Seizures
Due to the complexities of seizing an ongoing business and the potential for substantial losses from such a seizure, a United States Attorney's Office must consult with MLARS prior to initiating a forfeiture action against, or seeking the seizure of, or moving to restrain an ongoing business. For additional information on this topic see Chapter 1 of the Asset Forfeiture Policy Manual ("Business Seizures").
The AUSA (or the agent in charge of the field office responsible for an administrative forfeiture case) is responsible for ensuring that all preseizure planning, questionnaires, and net equity worksheets (including those prepared by the USMS) are complete and placed in the case file.
If the net equity worksheet indicates that the property targeted for forfeiture has marginal or negative anticipated net sale proceeds, the USAO (or agency field office conducting an administrative forfeiture) must document a plan to protect innocent lienholders and to dispose of the property in a manner that will minimize potential loss to the Government (e.g., an immediate motion of interlocutory sale or stipulated sale of the property, thereby minimizing asset management costs). A copy of this plan, along with the net equity worksheet, is to be sent to MLARS.
9-111.125 - Trustees and Monitors in Forfeiture Cases
The purpose of the trustee and monitor policy is to provide guidance for the appointment of trustees and monitors in Department of Justice federal forfeiture cases involving complex assets or business enterprises. The key distinction between a monitor and a trustee is that only a trustee has the authority to manage an enterprise. A monitor observes and reports. A receiver is a fiduciary who is responsible only to the court, and a custodian takes actual custody of the assets and may be recommended where a number of assets are located in a foreign country.
A trustee or monitor should be appointed only when absolutely necessary, all other alternatives have been considered and rejected, and there is clearly sufficient net equity in the asset to cover the total estimated cost of the trustee or monitor and necessary staff. The Government generally should not seize or forfeit businesses which require such aggressive action, capital investment to remain competitive, or the assumption of considerable risk. In some cases, compelling law enforcement or policy considerations may warrant appointing a trustee or monitor even though there is not sufficient equity in the enterprise to cover the cost.
In cases involving the appointment of trustees and monitors, comprehensive preseizure planning with the USMS is mandatory; absent unusual circumstances, no less than 3 months before the services of a trustee or monitor are required. Trustees and monitors are subject to federal acquisition regulations. The procurement process to select and contract with a trustee or monitor may require a minimum of several months.
The selection and appointment of a trustee or monitor is a joint decision of the USAO and USMS, regardless of the stage of the case. Prior to entry of a final order of forfeiture, the USAO has final decisionmaking authority as to the selection and scope of appointment of a trustee or monitor. Following entry of a final order of forfeiture, the USMS has final decision making authority on these matters.
Prior to entry of a final order of forfeiture, the Department of Justice Assets Forfeiture Fund (AFF) is authorized under certain circumstances to pay trustee and monitor fees in cases where a Department of Justice agency is the lead law enforcement agency. See 28 U.S.C. § 524(c). After entry of an order of forfeiture, fees charged by a trustee or monitor ordinarily will be paid from the proceeds of the business unless compelling law enforcement or policy considerations warrant payment from the AFF. Charges to the AFF for trustees and monitors must be recovered, as a cost, from the proceeds of sale before payment of restitution and equitable sharing.
The USAO must consult with MLARS before seeking the appointment of a trustee or monitor. The USMS field office must notify the USMS headquarters when it becomes aware that a trustee or monitor may be appointed. The USAO or the USMS must notify MLARS when either learns that a business is losing money, has insufficient equity, or will be sold at a loss. For additional information on this topic see Chapter 11 of the Asset Forfeiture Policy Manual ("Appointment of Trustees and Monitors").
[updated January 2020] [cited in JM 9-119.010]
9-111.130 - Pre-Indictment and Other Forfeiture Coordination
In criminal forfeitures, the United States Attorney will ensure proper and timely pre-indictment coordination with the United States Marshals Service to prepare for and assess the property management and financial needs of those assets subject to criminal forfeiture. The United States Attorney should consult with the United States Marshals Service prior to the submission of any proposed orders to a court that impose any restraint, seizure, property management, or financial management requirements relating to any property that is or will be in the Marshals Service's custody.
Further guidance on pre-seizure activity is available in Chapter 1 of the Asset Forfeiture Policy Manual
9-111.150 - Dispute Resolution
In instances where a dispute concerning whether or not certain property should be seized for forfeiture cannot be settled between the concerned agencies or other components, alternatives to seizure should be utilized until the issue is resolved. Dispute resolution may be sought from MLARS. Timely resolution of disputes is critical.
9-111.250 - Obtaining Criminal Forfeiture Seizure Warrants for Property Located Outside Districts
A seizure warrant for property subject to criminal forfeiture may be issued in the district where the property is located, or it may be issued by the court in the district where the criminal indictment is pending.
9-111.400 - Contaminated Real Property Policy
It is the policy of the Department of Justice that real property that is contaminated or potentially contaminated with hazardous substances may in the exercise of discretion be subject to forfeiture only upon determination by the U.S. Attorney, in the district where the property is located, in consultation with the seizing agency and the USMS, that such action is fiscally sound or necessary to advance a law enforcement purpose. If the U.S. Attorney chooses to delegate this authority to an AUSA, provision must be made for review by a supervisor. As part of the consultation with the seizing agency and the USMS, due consideration must be given to the disposal alternatives that may be available after forfeiture, and the impact of any cleanup costs to the AFF. Furthermore, such real property that is forfeited will only be transferred or sold with notice of the potential or actual contamination. Notice must be based on information that is available on the basis of a complete search of agency files. This notice will be included in the contract of sale and the deed.
This policy is applicable regardless of the type or source of the hazardous substance(s). This policy is applicable to all cases referred to the Department of Justice by any agency of the United States.
Forfeited real property that is marketable but is contaminated, or potentially contaminated, with hazardous substances due to activities of a prior owner may be transferred or sold as is and an environmental assessment and/or remediation of the contamination need not be undertaken. Whenever possible, the USMS will obtain a commitment from the buyer to clean up the property as a part of the contract of sale.
However, the United States may bear additional responsibility and liability if the real property becomes contaminated with a hazardous substance after the United States becomes the owner. This situation normally will arise when the United States operates a business or activity on the property that results in the storage, release, or disposal of hazardous substances (e.g., gasoline stations, metal plating shops, dry cleaners, printers, etc.) Under this circumstance, the United States is responsible for (1) all costs of hazardous substances removal and/or remedial action, (2) providing notice of the hazardous substance to a subsequent transferee or purchaser, (3) a warranting covenant to a subsequent transferee or purchaser. Because of the potential resulting liability and expense, the USMS's Asset Forfeiture Office shall approve the operation of such a business or activity only in unusual circumstances.
This policy envisions U.S. Attorneys exercising discretion in undertaking forfeiture action against real property that is contaminated where the use of the property indicates contamination or where there is the potential of contamination with hazardous substances. If such circumstances are disclosed within the period of time that the forfeiture action is being pursued, the U.S. Attorney must reevaluate the decision to continue the forfeiture. Such properties must not be forfeited unless the defendant's net equity in the property clearly exceeds the estimated cost of cleanup. Furthermore, such properties are not to be forfeited when there is reason to believe that the property is substantially contaminated with hazardous substances and that such contamination will render the property unmarketable. Cleanup costs can be considerable, particularly when the water table is involved. In making this determination, the USMS may order an environmental assessment that will be paid from the AFF.
If, at any point, the U.S. Attorney elects, in the exercise of discretion, not to proceed because significant contamination renders the property unmarketable, the U.S. Attorney must consider the following alternatives:
(1) the filing of a release of lis pendens (assuming a lis pendens had been filed) containing notice of the reason (significant contamination) for dismissal of the forfeiture action;
(2) the filing of some other document in the county deed records containing notice of the significant contamination (if such filing is permitted under the law);
(3) notification of a federal, state, or local environmental agency of the significant contamination for purposes of appropriate enforcement action (federal, state, or local law may require mandatory notification);
(4) notification of any lien holders of the significant contamination for such action as they may want to take; and
(5) consideration of prosecution, civilly or criminally, for violations of the environmental laws by the private owner—the USAO should contact the Environmental Division (Environmental Crimes Section or Environmental Enforcement Section).
Not all of these alternatives are mandatory. Ultimately, it is within the discretion of the U.S. Attorney to decide how best to proceed when an election not to proceed with forfeiture is made. For additional information on this topic see Chapter 1 of the Asset Forfeiture Policy Manual ("Contaminated Real Property").
9-111.600 - Seized Cash Management
The Attorney General has established the following policy on the handling of seized cash:
Seized cash, except where it is to be used as evidence, is to be deposited promptly in the Seized Asset Deposit Fund pending forfeiture. The Chief of MLARS may grant exceptions to this policy in extraordinary circumstances. Transfer of cash to the United States Marshal should occur within 60 days of seizure or 10 days of indictment.
(Paragraph VII (1), Attorney General's Guidelines on Seized and Forfeited Property, July 1990.) This policy applies to all cash seized for purposes of forfeiture. Therefore, all currency seized that is subject to criminal forfeiture or to civil forfeiture, must be delivered to the United States Marshals Service (USMS) for deposit in the USMS Seized Asset Deposit Fund either within 60 days after seizure or 10 days after indictment, whichever occurs first. (This policy does not apply to the recovery of buy money advanced from appropriated funds. To the extent practical, negotiable instruments and foreign currency should be converted and deposited.) Where appropriate, photographs or videotapes of the seized cash should be taken for later use in court as evidence.
If the amount of seized cash to be retained for evidentiary purposes is less than $5000, permission need not be sought from the Asset Forfeiture and Money Laundering Section for an exception, but any exception granted must be granted at a supervisory level within a United States Attorney's Office using the aforementioned criteria. (The criteria and procedure for obtaining exemptions remains the same for cash retained by Customs.)
If the amount of seized cash to be retained for evidentiary purposes is $5000 or greater, the request for an exemption must be forwarded to MLARS. Requests for an exemption should be filed by the United States Attorney's Office or Criminal Division Section responsible for prosecuting, or reviewing for prosecution, a particular case. The request should include a brief statement of the factors warranting its retention and the name, position, and phone number of the individual to contact regarding the request.
Limited exceptions to this directive, including extensions of applicable time limits, will be granted, on an interim basis, only with the express written permission of the Chief of MLARS, Criminal Division. Retention of currency will be permitted when retention of that currency, or a portion thereof, serves a significant independent, tangible, evidentiary purpose due to, for example, the presence of fingerprints, packaging in an incriminating fashion, or the existence of a traceable amount of narcotic residue on the bills. Avoidance of the effect of a court order is not a significant evidentiary purpose. If only a portion of the seized cash has evidentiary value, only that portion with evidentiary value should be retained. The balance should be deposited in accordance with Department policy. See Chapter 1 of the Asset Forfeiture Policy Manual ("Seized Cash Management") at 31.
9-111.700 - International Seizures
Prosecutors should give priority to pursuing forfeitable assets beyond the borders of the United States. Prosecutors who seek to restrain and forfeit illicit assets located abroad must seek the advice of one of the attorneys in MLARS' International Programs Unit (IPU) at 202-514-1263. Contact should be made as soon as foreign assets that might become subject to a U.S. forfeiture judgment are identified. The extent and speed of forfeiture assistance can vary greatly depending upon treaty obligations and the operation of foreign domestic law. International requests for legal assistance can touch upon diplomatically sensitive issues and may require coordination with foreign or other domestic investigations. Therefore, it is imperative that prosecutors seek guidance from MLARS IPU attorneys.
All incoming and outgoing international contacts by prosecutors in criminal justice matters must be coordinated with and through the Office of International Affairs (OIA). OIA is the channel through which the United States must make all formal requests to foreign governments for legal assistance. Federal prosecutors should adhere to established procedures for international contacts and should not contact foreign officials directly on case matters unless such contacts have been approved by, are under the supervision of, or are in consultation with OIA. At its discretion, OIA may permit prosecutors to have direct contact with foreign officials provided OIA is copied on or informed about all the relevant communications. Prosecutors should consult with OIA regarding the official policy on contact with foreign officials.
When faced with the seizure of non-fungible assets abroad that may require management, a federal prosecutor or investigator should contact the U.S. Marshals Service (USMS) at (202) 307-9009. The USMS, if needed, may enlist the assistance of the Diplomatic Security Services, which has been cross-designated by the USMS to provide property management services for property restrained or seized abroad. In cases where the lead law enforcement agency is a Department of Treasury or Department of Homeland Security agency, the federal prosecutor or investigator should contact the Department of Treasury, Executive Office of Asset Forfeiture (TEOAF) at 202-622-9600. Finally, as is true with the forfeiture of businesses located in the United States, MLARS must be consulted before the United States asks a foreign government to restrain or seize an ongoing business or its assets or to appoint or hire a guardian, monitor, trustee, or manager for same.
In civil forfeiture proceedings, the United States will be required to provide notice by publication as set forth in Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. Publication abroad should be requested in the manner and format that complies with the requirements of domestic publication and, as much as is possible, in the manner requested by the foreign government providing assistance with the publication. Before attempting publication in a foreign country, prosecutors must contact an MLARS IPU attorney to ascertain the foreign government's preferences when it comes to notice by publication.
In cases where a foreign government has restrained or seized assets based upon a formal U.S. request, prosecutors must consult an MLARS IPU attorney or the OIA attorney handling the case before seeking repatriation of those assets. Further, federal prosecutors and investigators should always consult with an MLARS IPU or an OIA attorney before entering into an agreement with a defendant to repatriate criminally derived assets from abroad even when not restrained by the foreign government before seeking an order actually compelling the repatriation of specific assets pursuant to 21 U.S.C. § 853(e)(4).
OIA advises prosecutors seeking the seizure or restraint of property abroad to first obtain a probable cause finding regarding the property in question before asking OIA to make a request to seize and restrain assets for forfeiture pursuant to multilateral treaties, Mutual Legal Assistance Treaties (MLATs), letters rogatory, and letters of request. OIA will consider making a formal request without a probable cause determination where the assets located in a foreign state are held by a person "with no voluntary attachment to the United States." If the facts support this conclusion, the prosecutor should discuss this possibility with OIA.
Section 981(k) authorizes the United States to restrain, seize and forfeit property held in bank accounts located outside of the United States by permitting the restraint, seizure, and forfeiture of an equivalent amount of funds from any correspondent/interbank account that the foreign financial institution holds in the United States. See 18 U.S.C. § 981(k). Approval to use section 981(k) rests with the Chief of MLARS in consultation with the appropriate officials from OIA, the Department of the Treasury, and the Department of State. Because these stakeholders in the policy issues implicated by the potential use of section 981(k) need an opportunity to review the proposed section 981(k) request to consider its ramifications, formal approval to utilize section 981(k) should be sought well in advance of the intended attempt to restrain or seize assets from any foreign bank's correspondent accounts. Applications requesting approval to use section 981(k) should be submitted in writing to the Chief, MLARS, and presented through the deputy chief of MLARS' IPU, who has responsibility for coordinating the approval process. Sample section 981(k) approval requests can be obtained from the MLARS IPU. Requests for authority to use section 981(k) as the basis for forfeiting funds on deposit in accounts located outside the United States will only be approved if there are no other viable means of effecting forfeiture of the foreign property and should be considered only as a last resort. An application will not be approved solely because it is deemed more expedient than using the treaty mechanism.
Section 981(k) requests will be approved only in limited cases, such as when:
(1) There is no applicable treaty, agreement, or legal process in the foreign nation that would allow it to restrain, seize, or forfeit the target assets for the United States;
(2) There is a treaty or agreement in force, but the foreign nation does not recognize the U.S. offense that gives rise to forfeiture;
(3) There is a treaty or agreement in force, and in spite of its treaty obligation, in the past the foreign nation has failed to provide forfeiture assistance, or provided untimely or unsatisfactory forfeiture assistance;
(4) There is a treaty or agreement in force, but the foreign nation has no domestic enabling legislation that would permit it to fully execute U.S. forfeiture orders or judgments; or
(5) There is another significant reason that in the view of the stakeholders justifies use of section 981(k), e.g., corruption within the foreign government that may compromise the execution of a treaty request, or the inability to repatriate or return victim money to the United States after forfeiture.
Forfeiture of assets located abroad must be initiated as part of a pending criminal case or judicial civil forfeiture action. There is no authority under federal law to initiate the administrative forfeiture of property that is not physically located in the United States or its territories or possessions.
Prosecutors must consult with OIA before filing an in rem forfeiture action based on 28 U.S.C. § 1355(b)(2). OIA and MLARS will determine whether the foreign country where the assets are located can assist in the U.S. action.
Federal prosecutors should neither agree to, nor enter into, any settlement or plea agreement affecting assets located abroad and should not make any representation about the availability of assets abroad to pay for legal fees incurred by a defendant without first speaking to an MLARS IPU attorney about the foreign consequences of those decisions. In addition, prosecutors should be aware of limitations on negotiating with fugitives and persons fighting extradition. The policy considerations underlying the consultation and approval procedures that apply to settlement and plea agreements and agreements to use forfeitable funds to pay for attorney's fees apply with even greater force in the international context, particularly in light of the problems inherent in releasing funds held abroad. For additional information on this topic, see Chapter 10 of the Asset Forfeiture Policy Manual ("International Forfeiture").
[updated January 2020]