IntroductionThe Introduction explains that the principal purpose of the FIRREA MOU is to facilitate inter-agency coordination in identifying, seizing, and disposing of forfeitable properties in order to maximize FIRREA recoveries for the benefit of the American taxpayer. To facilitate the identification of cases in which the use of criminal or civil forfeiture may be appropriate, the Introduction calls for periodic, local and regional meetings of federal prosecutors, federal law enforcement, and federal financial institution regulatory agency representatives to coordinate investigations. Additionally, each regulatory agency is to designate a FIRREA MOU contact point at its headquarters.
Section 1 (Minimizing Litigation) establishes as a basic principle of inter-agency coordination that the departments and agencies of the United States should not litigate against each other, i.e., that the Government should not litigate against itself. Section 1 provides that the Department of Justice and the Department of the Treasury will give appropriate deference to both the legal and equitable claims of the regulatory agencies and will seek to resolve those claims within the Executive Branch.
Specifically, the Department of Justice will not prosecute closed financial institutions. Additionally, in any "FIRREA forfeiture" case, and in any forfeiture case in which a regulatory agency asserts legal title to property seized for forfeiture, the agency's legal title will be determined within the Executive Branch, not through the filing of a claim in the forfeiture proceeding or the filing of a petition for remission. (The term "FIRREA forfeiture" has been carefully defined in footnote 2 of the FIRREA MOU. Most significantly, the definition includes forfeitures of any property which is referred to in 18 U.S.C. § 981(a)(1)(C) or (D) and therefore, forfeitable under FIRREA, regardless of whether the forfeiture is actually sought or obtained under 18 U.S.C. § 981(a)(1)(C) or (D), or under some other statute, as long as the property is designed as a FIRREA forfeiture before it is forfeited.) There are minor exceptions in footnotes 4 and 5 of the FIRREA MOU applicable in forfeitures other than FIRREA forfeitures for petitions for remission or mitigation necessary to recover non-legal property interests and for claims for expedited settlement policy compliance. (Footnote 1. The term "FIRREA forfeiture" has been carefully defined in footnote 2 of the FIRREA MOU. Most significantly, the definition includes forfeitures of any property which is referred to in 18 U.S.C. § 981(a)(1)(C) or (D) and therefore, forfeitable under FIRREA, regardless of whether the forfeiture is actually sought or obtained under 18 U.S.C. § 981 (a)(1)(C) or (D), or under some other statute, as long as the property is designated as a FIRREA forfeiture before it is forfeited.) The Department of Justice also will assert regulatory agency legal claims against property in forfeiture actions as necessary to preserve any priority of the regulatory agency's interest from encroachment by other claims.
Custody of Seized Assets
Section 2 (Custody of Seized Assets) designates the United States Marshals Service (USMS) or designated Treasury component to be the primary custodians of assets pending FIRREA forfeiture. Section 2 also incorporates Department of Justice and Department of the Treasury pre-seizure planning procedures and provides that the "pertinent regulatory agency" (as determined pursuant to footnote 8 of the FIRREA MOU) will participate with federal prosecutors, the USMS or designated Treasury component, and the seizing agency in pre-seizure planning for FIRREA forfeitures. Footnote 9 of the FIRREA MOU designates the Federal Bureau of Investigation and the United States Secret Service as the "seizing agencies."
Currency, negotiable instruments, and securities seized for FIRREA forfeiture will be deposited by the USMS into the Department of Justice Seized Asset Deposit Fund, or by the appropriate Department of the Treasury component into the relevant Department of the Treasury seized asset fund. Such assets will be designated as related to a FIRREA forfeiture and will be invested in interest-bearing Treasury securities pending disposition.
Methods of Recovery and Enforcement
Section 3 (Methods of Recovery and Enforcement) provides guidance for the coordination of FIRREA forfeitures with other actions. Priority consideration is to be given to maximizing recovery and minimizing costs. Additionally, specific consideration is to be given to avoiding duplicate actions by different agencies to recover the same property.
Retention of Forfeited Property by Federal, State, and Local Agencies
Section 4 (Retention of Forfeited Property by Federal, State, and Local Agencies) provides that in FIRREA forfeitures there will be no equitable transfers of forfeited assets to state or local agencies and no retention of forfeited assets for official use by federal agencies, except that the FBI and the Secret Service (the "seizing agencies") may retain office and electronic communications equipment valued at under one thousand dollars ($1,000.00) and motor vehicles pursuant to standard procedures in the Attorney General's Guidelines on Seized and Forfeited Property.
Disposition of Property in FIRREA Forfeitures
Section 5 (Disposition of Property in FIRREA Forfeitures) establishes administrative procedures for the disposition of property forfeited in FIRREA forfeitures in order to facilitate the distribution of such property by the Department of Justice and the Department of the Treasury in a manner consistent with the multiple provisions of 18 U.S.C. § 981(e). In particular, subsections 5(c)(i)-(v) establish priorities (absent in section 981(e)) to govern the distribution of FIRREA forfeiture proceeds, "unless compelling circumstances dictate otherwise." In abbreviated form, the distribution priorities are as follows:
- first, as provided in an Order or Declaration of Forfeiture or in any petition for remission or mitigation ruling that specifies distribution (- - this provision effectively grants priority to innocent owners, including co-owners and secured creditors, who file successful claims in the judicial proceeding or meritorious petitions for remission);
second, to any federal agency (including any regulatory agency) that incurred expenses (- - these expenses include such out-of-pocket costs as payments for storage, maintenance, notices by publication, and costs related to the sale of the property);
third, to reimburse regulatory agencies for payments to claimants or creditors of the financial institution affected by the underlying offense and to reimburse the appropriate insurance fund for losses suffered by the fund as a result of receivership or liquidation pursuant to 18 U.S.C. § 981(e)(3) or (7);
fourth, as provided by any outstanding order issued by any regulatory agency pursuant to 18 U.S.C. § 981(e)(4) (- - such order direct restitution to a financial institution for losses suffered);
fifth, to the extent that there are any proceeds remaining, such proceeds may be distributed to any eligible victims pursuant to 18 U.S.C. § 981(e)(6) (restoration of forfeited property to any victim of an offense described in section 981(a)(1)(C)), and then to the Department of Justice Assets Forfeiture Fund or the Department of the Treasury Forfeiture Fund.
Subsection 5(c)(v) also provides that if a regulatory agency is entitled to a share of such net proceeds pursuant to the provisions of 18 U.S.C. § 981(e)(5) (transfers of forfeited property based upon the agency's contribution of resources to the investigation, seizure, and forfeiture), it shall make written request to the appropriate official to obtain such a share and that the decision granting or denying such transfer will be made in writing by the official authorized to make transfer decisions for equitable sharing purposes in such cases. Subsection 5(d) limits the purposes for which the regulatory agencies may expend forfeiture proceeds received through transfers pursuant to 18 U.S.C. § 981(e)(5).
Other Financial Institution Forfeiture Cases
Section 6 (Other Financial Institution Forfeiture Cases) establishes procedures for cases involving the forfeiture of property that is forfeitable under the provisions of 18 U.S.C. § 981(a)(1)(C) but which are not classified under the FIRREA MOU as FIRREA forfeiture cases. In such cases, standard procedures for the custody and disposition of forfeited property will apply, except in two situations.
- First, if a regulatory agency is entitled to remission or mitigation of forfeited assets, subsection 6(b)(i) provides procedures for transfers to the regulatory agency by a written decision after the agency submits a written request containing the information required for petitions for remission or mitigation.
Second, if a regulatory agency is eligible for transfer of 981(e)(1) or (5), the procedures set forth in subsections 5(c)(v) pursuant to section 981(e)(5) will apply.
Statistical Data on FIRREA Cases
Section 7 (Statistical Data on FIRREA Cases) establishes procedures for reporting information on FIRREA recoveries generally, and forfeitures in particular, to the Executive Office for United States Attorneys (EOUSA) for development of accurate data on FIRREA recoveries.
Subsection 7(a) provides that the regulatory agencies will report to EOUSA on recoveries obtained through activities including, but not limited to, forfeitures and that the USMS and designated Treasury component will report to EOUSA on the inventory of property seized for FIRREA forfeiture.
Subsection 7(b) provides that the Consolidated Asset Tracking System (CATS), through the Department of Justice Executive Office for Asset Forfeiture and the Department of the Treasury Executive Office for Asset Forfeiture, will provide EOUSA information about forfeitures which originate as seizures by one of the CATS participating agencies. Statistics on FIRREA forfeitures which do not originate as seizures by one of the CATS participating agencies will be provided by the other seizing agencies, the United States Attorneys' Offices, and the Fraud Section.
Effective Date and Retroactive Application by Consent
Section 8 (Effective Date and Retroactive Application by Consent) will establish a basic starting date for application of the FIRREA MOU. The FIRREA MOU will be applicable to forfeiture actions commenced on or after that date, but it also may be applied by consent to then pending forfeiture actions. For agencies that sign the FIRREA MOU after it goes into effect, the FIRREA MOU will apply to forfeiture actions commenced on or after the signing date, but it also may be applied by consent to forfeiture actions that are pending on the agency's signing date.
[cited in USAM 9-119.500]