Handbook 9.7
Asset Seizure and Forfeiture
Chapter 6
Seizure Planning
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Contents
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Consideration should be given to the handling of certain assets requiring
special procedures prior to the execution of the warrant. There are numerous
issues involved beyond the legality to execute the seizure. The agent should
look beyond the ability to seize and address the practical aspects of what
it will cost to seize, handle, and dispose of the asset. In addition, there
are innocent owner, victim, and contingent liability issues and recent court
decisions which become practical matters of consideration when deciding to
seize and forfeit. By meeting early on with the various parties to the seizure
forfeiture action, the answers to questions which arise in special circumstance
cases can usually be resolved. The following sections are included in this
chapter:
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Pre-Seizure Responsibility For Title 18 Forfeitures
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Source of Information Used As Basis of Seizure
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Equity Considerations
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Adoptive Seizures
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Special Circumstances Surrounding the Assets to be Seized
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Currency
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Financial Instruments
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Personal Property
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Real Estate Seizures
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Storage of Assets
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Chain of Custody--Evidence
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Chain of Custody Procedures--Forfeitures
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Removal of Seized Property From the Judicial District
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Payment of Awards for Information or Assistance Leading to a Civil or Criminal
Forfeiture
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Expenses Incidental to a Seizure
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Special Agent Liability in Seizure Cases
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[9.7] 6.2 (04-30-1998)
PRE-SEIZURE RESPONSIBILITY FOR TITLE 18 FORFEITURES
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In judicial cases, the U.S. Attorney's office representative is responsible
for ensuring that proper and timely pre-seizure planning occurs. In
administrative cases, the Asset Forfeiture Coordinator (AFC) is responsible
for this function. In smaller districts or outlying posts of duty, the reality
is that this responsibility may be with the seizing agent. Regardless of
who is formally responsible, the seizing agent must take the initiative to
ensure that pre-seizure meetings are incorporated in the process of any seizure.
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Specific procedures for pre-seizure planning will ensure that critical financial
and property management issues are addressed prior to seizure of real property,
commercial enterprises, or other types of property which may pose potential
problems of maintenance or disposition. The degree and nature of pre-seizure
planning will depend directly upon the circumstances and complexity of each
case. EG&G is currently the independent contractor for Treasury cases
and serves as the property manager. A representative of EG&G has to be
actively involved in the planning process. However, in judicial matters,
the Assistant United States Attorney (AUSA) may feel the pre-seizure information
is too sensitive and may want the pre-seizure meetings bifurcated to limit
the information discussed with the EG&G representative.
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[9.7] 6.3 (04-30-1998)
SOURCE OF INFORMATION USED AS BASIS OF SEIZURE
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In the course of a criminal investigation, special agents work with restricted
and sensitive information from various sources. When planning for seizure
activity (which is frequently a civil action), one must be certain to adhere
to the secrecy provisions surrounding the grand jury process. The IRS special
agent also has to be cognizant of the Service's restrictions concerning the
revelation of tax return and return information.
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It is important to remember that 18 USC 981 and Code forfeitures are civil
actions whether they are administrative or judicial. Therefore, grand jury
information generally cannot be used to perfect the civil forfeiture; however,
if information relating to a forfeiture is developed in the normal course
of a grand jury investigation, it can be used for forfeiture via the Rule
6(e) order.
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If grand jury information is used, it must be a judicial proceeding.
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When grand jury information is needed to effect a seizure of an asset,
consideration should be given to using the criminal forfeiture provisions
of 18 USC 982, especially if a criminal indictment of the responsible party
is forthcoming for violation of 31 U.S.C. 5313(a) or 5324(a) or 18 USC 1956,
1957 or 1960.
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In situations where a criminal indictment is not immediately forthcoming,
or a decision is made that a criminal forfeiture action under 18 USC 982
is not prudent, then the only available method for using grand jury information
is by obtaining a Rule 6(e) order (See F.R.Cr.P. 6(e)(3)(c)(i)).
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In requesting grand jury information pursuant to Rule 6(e) for a civil forfeiture
proceeding, the government must demonstrate a "particularized need," i.e.,
that the evidence sought is needed to avoid a possible injustice in another
judicial proceeding, that the need for the disclosure is greater than the
need for continued secrecy, and that the request is structured to cover only
the material needed.
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If grand jury information has been used to obtain an arrest or search warrant,
then any seizure of property pursuant to the warrant based upon this information
must be seized as evidence of a crime, and not for civil forfeiture purposes.
To pursue a forfeiture, subsequently, a Rule 6(e) order will be needed, if
the information has not yet become public knowledge through an indictment,
complaint, etc.
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If the information received relating to a possible Code forfeiture action
is not grand jury information, the potential forfeitures may be perfected
administratively.
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There are two methods which allow an agent to utilize tax return and return
related information when attempting to include this information in an affidavit
for a seizure warrant or other means of seizing assets and the subsequent
litigation:
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Ex parte Order
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Related Statute Test
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Internal Revenue Code Section 6103(i)(1) allows disclosure of returns and
return information for investigations of non-tax criminal violations. Upon
grant of an Ex Parte Order, Internal Revenue Code Section 6103(i)(4)(a) provides
for this information to also be used in a civil forfeiture proceeding.
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The ex parte order is considered the safest and preferable method to access
tax returns. In many districts throughout the country, if an investigation
is conducted strictly on money laundering, the only way a tax return can
be accessed is through an ex parte order.
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The application for this order must demonstrate to the district court judge
or magistrate judge:
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Reasonable cause to believe a specific criminal act has been committed.
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Reasonable cause to believe the information is or may be relevant to a matter
relating to the commission of such act.
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The information is sought only for use in a federal criminal investigation
or proceeding concerning such an act, and the information cannot be reasonably
obtained, under the circumstances, from another source.
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Revenue Code Section 6103(h)(1) and (2) stipulate that returns and return
information shall be open to inspection by or disclosed to employees of the
Department of Justice (DOJ) in matters involving tax administration. The
money laundering statutes found in the Anti-Drug Abuse Act (Title 18 USC
981, 1956 or 1957) and the Bank Secrecy Act (Title 31) can involve matters
of tax administration and can be considered statutes related to the Internal
Revenue laws for tax purposes.
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The agent must submit a memorandum to the Chief, CI, providing sufficient
information on which the Chief can issue an opinion in good faith that the
related statute test has been met. The Chief must be able to conclude from
the evidence detailed in the memorandum that the Title 31, 18 USC 1956 or
1957 and 18 USC 981 violation being investigated:
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Was committed in furtherance of a violation of Title 26.
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Is part of a pattern of violations of Title 26.
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The Chief's memorandum finding that the related statute test has been met
is the document that needs to be in the file.
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The District Disclosure Office should be contacted if the agent relies on
the related statute method for accessing tax returns.
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If these conditions are met, then disclosure of returns and return information
to the DOJ for the purpose of conducting an investigation is permissible.
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The related statute method is less preferred, as once this method is initiated,
all the case information becomes subject to the rules under Internal Revenue
Code Section 6103. Further, the decision by the Chief is subjective and open
to scrutiny in the event of a claim of improper disclosure.
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Title 12 USC 3401 et seq. provides procedures for how law enforcement agencies
may obtain financial institution records by means other than a grand jury
subpoena, provided that the records are relevant to a legitimate law enforcement
inquiry, e.g., civil forfeiture perfection independent of an ongoing grand
jury investigation. A letter from the Chief, CI, (Exhibit 6-1, Formal Request),
requests production of records from the financial institution, as defined
in Title 12.
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NOTE:
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The definition of a financial institution according to Title 12 is not as
broad as the definition found in Title 31.
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A copy of the request letter must be served on the financial institution's
customer for whom records are being sought (Exhibit 6-2, Notice of Formal
Request) along with certain attachments (Exhibits 6-3 through 6-6). These
attachments are the same as Part C of Treasury Department Form 90-22.31 (Rev.
8-88), Title 31 Summons, excluding the red lettering.
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If it is believed that the customer notice will jeopardize the forfeiture
investigation, a delay of customer notice can be applied for as follows;
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After the Chief, CI, signs the request letter, the agent will prepare an
affidavit setting forth the circumstances that indicate that notice will
"seriously jeopardize" the investigation (Exhibit 6-7, Affidavit). An application
may be made to include an order to seal the notice (Exhibits 6-8 and 6-9,
Application and Order).
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The agent will arrange a meeting with a civil section AUSA for review of
the affidavit to delay customer notice.
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If the AUSA concurs, the agent will appear before the U.S. magistrate judge
or district court judge.
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The Formal Request and Delay of Notice Order will be served on the financial
institution.
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The delay is binding for 90 days, and must be renewed every 90 days.
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If the Delay of Notice Order is not renewed, notice must be sent to every
customer listed in the formal request and must contain specific language
(Exhibit 6-10, Delayed Notice of Formal Title 12 Request). (This is also
Part F of TDF 90-22.31, without the red lettering.)
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The net equity in property must be considered in determining whether to seize
property. Minimum equity amounts are usually standard throughout the Treasury
and Justice agencies. In individual cases, these guideline thresholds may
be waived to serve a compelling law enforcement interest. If a seizure is
done in which the property's net equity is less than the minimum equity standard,
it must be approved in writing by the Chief, CI. An explanation for the departure
will be noted in the case file.
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The minimum net equity is the difference between current market value of
the property less innocent third party liens and mortgage(s).
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The minimum equity positions on individual assests are as follows:
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| Conveyances |
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Vehicles |
$5,000 |
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Vessels |
$10,000 |
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Aircraft |
$10,000 |
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| Real Property |
--Land and improvements |
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$20,000 or 20
percent of the appraised value, whichever is greater |
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| All Other Property |
--Currency, Bank accounts, |
monetary instruments, jewelry, etc. |
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$2,000 |
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| Note: These minimum net equity requirements are higher than
the stated minimum thresholds appearing in the Department of the Treasury,
Executive Office for Asset Forfeiture, Guide to Equitable Sharing for Foreign
Countries and Federal, State, and Local Law Enforcement Agencies, dated October
1, 1996. |
If the person from whom the asset was seized was or is being criminally
prosecuted by state or federal authorities for criminal activity related
to the property, the amount must be at least $1,000.
Minimum net equity is $25,000 for IRS seizures computed by aggregating the
net equity value of the assets.
The Personal and Real Property Pre-Seizure Checklists (Exhibits 6-11 and
6-12) set forth procedures to follow in determining net equity and other
pre-seizure considerations.
See also LEM IX, 454.1.
The equity considerations set forth above may be waived in individual cases
to serve a compelling law enforcement interest such as:
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Failure to seek forfeiture of some of the assets will cause the government
to take an inconsistent position in its theory of
forfeiture.
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The seized assets are an integral part of the criminal operation and the
failure to seek forfeiture of the asset will allow the criminal operation
to continue.
Any downward departures, either for an individual asset or from the $25,000
aggregate, must be approved in writing by the Chief, CI. An explanation for
the departure will be noted in the investigative file.
In code forfeitures (unlike Title 18 forfeiture), IRS is responsible for
all costs associated with the appraisal, storage, maintenance, and disposition
of all Code forfeited assets. Careful scrutiny of the inherent costs as opposed
to the asset's net equity should be made prior to seizure. In general, if
the anticipated costs exceed the value of the asset, the asset should not
be seized. If the asset has been seized, the Chief, CI, should quickly release
it. However, this is not the ultimate criteria. An asset may be seized, despite
the low equity value, if there is an overriding law enforcement benefit. |
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Knowing the value of what will be seized is very important. This is immediately
relevant in determining if the proposed asset seizure meets existing net
equity threshold standards to warrant seizure. Keep in mind that seizures
and forfeitures are not without costs to the government. In many instances
the cost of seizing, maintaining, and disposing of seized/forfeited assets
is substantial and can adversely impact the decision to initiate the action.
However, this is not the ultimate criteria and it is understood that, in
some circumstances, the overriding law enforcement benefit will require the
asset be seized.
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EG&G and/or the USCS (FP&F) can provide or locate qualified, expert
appraisers to suit specific situations.
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[9.7]
6.4.2 (04-30-1998)
Identification and Value of Assets Subject to Criminal Forfeiture
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Identify all forfeitable assets and determine a total aggregate value for
that property in the indictment. In addition, include an all inclusive phrase
for any other property in violation of 18 USC 982, not known of at the
indictment, but later identified or found.
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In the forfeiture count, seek an overall money judgment as the total proceeds
for forfeiture. This provides the basis for the substitution of assets, should
this become necessary. Sample indictment language follows: "Money laundering
money judgment forfeiture charge: As a result of the foregoing offense, (name
the defendant), shall forfeit to the United States all property, real and
personal, involved in the aforestated offense and all property traceable
to such property, including but not limited to the following: $ ______ in
United States currency and all interest and proceeds traceable thereto, in
that such sum in aggregate is property which was involved in the aforestated
offense or is traceable to such property, in violation of Title 18, United
States Code, 1956 and 982."
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State and local law enforcement authorities may seize vehicles, currency
and other property for evidence of a violation of statutes over which they
have jurisdiction, but have no forfeiture authority. Federal agencies without
forfeiture authority may request that IRS adopt their seizure. State and
local law enforcement agencies which have forfeiture authority may also request
that their seizures be adopted by the IRS, or other federal agency participating
in a forfeiture fund, in expectation that the majority of the proceeds resulting
from forfeiture will be directly returned to the requesting agency as equitable
sharing.
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Forfeitures of seized property accepted in this manner have the same effect
as if the property had originally been seized by the IRS.
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Where the property has also been used in violation of 31 USC 5313(a) or 5324;
or 18 USC 1956 or 1957, those state and local jurisdictions that do not have
forfeiture statutes may ask the Service to adopt the action in order to prevent
the continued use of the property in unlawful activities. Seizures of vehicles
and other property used in violation of these laws may be adopted from state
and local law enforcement authorities, via a seizure warrant, in those instances
where:
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A particularly desirable deterrent effect would result.
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The net equity value of the asset meets IRS threshold
requirements.
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The evidence on which the forfeiture proceeding will be predicated has been
legally obtained.
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If a state or local seizure is not adopted by the IRS because there is no
violation within our jurisdiction, it is appropriate to refer the local
authorities to the federal agency having jurisdiction.
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Local or state agencies requesting the IRS to adopt their seizures for forfeiture
action must do so within 30 days of the seizure action so as to avoid situations
where property is held for interminable periods of time prior to the commencement
of forfeiture proceedings. The Chief, CI, may waive this rule provided the
requesting agency can set forth circumstances justifying the delay.
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Prior to formally adopting the seizure, the Chief, CI, will ensure that the
adoption meets the minimum equity threshold guidelines and considers the
action a good quality seizure. The Request for Adoption of a Local or State
Seizure form detailing the probable cause to support the seizure will be
forwarded to District Counsel. Attachments to the memorandum should include
pertinent police reports, affidavits for Search Warrant(s) and other memoranda
of activities.
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The Chief, CI, will not take custody of the seized property and institute
the necessary forfeiture procedures until, and only if, District Counsel
signs off on the Request for Adoption of a Local or State Seizure form (Exhibit
2-1) supporting the action, and after a federal seizure warrant is obtained.
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[9.7] 6.6 (04-30-1998)
SPECIAL CIRCUMSTANCES SURROUNDING THE ASSETS TO BE SEIZED
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When planning a seizure, Ci must take into account some special circumstances
such as:
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Contaminated property.
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Ongoing Businesses.
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Perishable goods.
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The potential liability and poor marketability of potentially contaminated
property leaves it a very undesirable asset to seize. Although, with the
expansion of Code forfeitures to include motor fuel excise tax violations,
there is a high probability that environmentally contaminated property may
be seized for forfeiture, i.e. tank farms, barges, gasoline stations, and
fuel trucks.
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It is the policy of the Departments of Treasury (TEOAF Directive 7) and Justice
that property, which is contaminated or potentially contaminated with hazardous
substances, may be seized and forfeited only upon a determination by the
U.S. Attorney in the district where the property is located. This decision
will be made in consultation with the seizing agency and the contractor,
in consultation with the seizing agency and EG&G.
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Once a potentially contaminated property has been seized, an environmental
study should be initiated immediately. If it is determined the cost to correct
any problems would exceed the property's net equity, the Chief, CI, should
proceed to quick release the property, unless there is an overriding law
enforcement purpose not to do so.
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If the agent or AFC becomes aware after the seizure that the property is
contaminated, the AFC must notify the contractor (EG&G)
immediately.
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Due to the complexities of seizing an on-going business and the potential
for substantial losses from such a seizure, the AUSA shall obtain by memorandum
the concurrence of the IRS Asset Seizure/Forfeiture Section, prior to initiating
a forfeiture action against, or seeking a temporary restraining order affecting,
an on-going business. The AFC will discuss frequency of operating reports
of the business from EG&G or their subcontractor in pre-seizure planning.
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Where forfeiture of a business is sought under the theory that the business
facilitated a money laundering offense, civil or criminal forfeiture action
may not be filed without prior consultation with DOJ's Asset Forfeiture Office
and the IRS Asset Seizure/Forfeiture Section.
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Perishable goods pose an immediate problem of trying to maintain the condition
of the asset at time of seizure. It is extremely important to involve the
representative from EG&G in pre-seizure discussions since the value of
the asset can deteriorate rapidly if appropriate measures are not taken.
The best way to handle seized perishable goods is to dispose of the property
immediately after seizure through a stipulated sale between the parties or
an interlocutory sale authorized by a court order.
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Another possibility is to have the property owner post a bond in an amount
equal to the Fair Market Value (FMV) of the property so the perishable property
may be returned to the owner.
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Currency, whether seized for forfeiture or for evidence, must be handled
according to established procedures.
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CI policy mandates that seized domestic and foreign currency, except when
held as evidence or held as a "collectible asset" , must be expeditiously
counted, processed, and deposited to the U.S. Customs Suspense Account within
5 days of seizure. The use of safe deposit boxes, or other similar methods
of storing seized currency, is acceptable when necessary for overnight storage.
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All seized currency must be assigned an AFTRAK seizure number.
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Currency should be videotaped or photographed, if possible, at the time of
seizure. The seizure of the currency will be witnessed by two special agents
or at least one special agent and another law enforcement officer if two
special agents are not available. At the seizure site, it is recommended
that the currency be sealed (preferably heat sealed) in a container by the
two seizing special agents and/or law enforcement officer, all of whom will
initial and date the seal.
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The inventory left at the search site should reflect that a "lot of currency
was seized and sealed" from the location where the currency was found during
the search. (The currency can be counted on-site, but this may be time consuming,
and there may be discrepancies between what the agents count, and what the
bank counts. If the currency is counted onsite, the currency must be counted
by at least two special agents or one special agent and a law enforcement
officer).
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The seized currency will be accompanied by the seizing special agents and
law enforcement officer to a bank where a banking relationship has been
established. The seized currency will be unsealed by the seizing agents and
the law enforcement officer and counted by bank personnel in the presence
of the seizing agents and the law enforcement officer. There may be instances
where the bank provides the counting service but will not allow agents into
the counting area. The sealed identifiable container will be delivered to
personnel in the counting facility who will provide an initial receipt for
a specific sealed container to the agents delivering the currency.
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Once the currency is counted, the bank will provide a detailed accounting
of the seized currency. The seizing agents will document the chain of custody
from the seizure to the physical delivery of the currency to the bank facility.
The Chief, CI, should also ensure that the banking facility provides adequate
preventive measures to preclude embezzlement of funds by bank personnel.
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The seized currency will be transmitted by the bank personnel to the Customs
Suspense Account via the FED Wire (wire transfer) system. (See 6.7.2 below.)
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Once the seized currency has been counted and wire transferred to the U.S.
Customs Suspense Account, the actual amount of seized currency should be
noted on the search warrant inventory returned to the U.S. magistrate or
judge and written notice should be delivered to, or sent by certified mail,
the party from whom the currency was seized.
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If currency, which is seized for forfeiture and held as evidence, serves
a significant, independent, tangible, evidentiary purpose, and is less than
$5,000, written approval to retain the currency must be granted at a supervisory
level within the cognizant United States Attorney's Office.
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Should the amount of currency, seized for forfeiture and held as evidence,
equal or exceed $5,000, a request for an exception to the seized cash management
policy should be obtained from the Chief, Asset Forfeiture and Money Laundering
Section, Criminal Division, Department of Justice. A copy of the approval
document from the Asset Forfeiture and Money Laundering Section granting
an exception to retain currency as evidence should be obtained from the United
States Attorney's Office and be transmitted to the Treasury Executive Office
for Asset Forfeiture, through the Asset Forfeiture and Narcotics Section.
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At least 2 agents will take the currency to a bank where the Service has
a banking relationship, and FED Wire (wire transfer) the money to the Customs
Suspense Account.
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The cost of the wire transfer must not be paid out of the seized funds, but
either by an advance from the imprest fund account or from personal funds
followed by a claim for reimbursement (Form 1164) to the imprest fund indicating
Sub-Object Code (SOC) 2504.
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Instructions for preparation of the Wire Transfer Form are on Exhibit 6-14.
The IRS Subject Seizure Number and Class Code (732) must also be entered
on the form.
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When the transfer is complete, a report of the deposit (Wire Transfer Form
or Deposit Ticket) and a copy of the Deposit Information Form, TEOAF Form
6 (Exhibit 6-15), must be faxed to: Forfeiture Fund Unit, Customs National
Finance Center, Fax No. 317-298-1569 (see TEOAF Directive 4).
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Should the amount of currency, seized solely for evidence or for evidence
as part of a Title 26 investigation, be less than $5,000, written approval
to retain the currency should be obtained for the cognizant United States
Attorney's Office. The approval to retain the currency as evidence should
be maintained in the seizure file.
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Should the amount of currency, seized solely for evidence or as part of a
Title 26 investigation equals or exceeds $5,000, written approval to retain
the currency must be obtained from the Director, National Operations Division.
A written request to retain the currency must be obtained from a supervisory
level within the cognizant United States Attorney's Office. The request of
the United States Attorney's Office should then be transmitted to the Asset
Forfeiture and Narcotics Section, for approval decision by the Director,
National Operations Division.
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If only some of the cash seized as evidence is requested by the US Attorney's
Office (USAO) to be held intact, then the rest should be deposited into the
IRS Suspense Account or Customs Suspense Account as appropriate.
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If cash has been seized as evidence pursuant to a Title 26 investigation's
search warrant or incident to an arrest, it must also be deposited into the
IRS Suspense Account, unless the USAO has requested it to be held intact.
The deposit ticket must note that it pertains to a Title 26 seizure for evidence.
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Currency seized solely as evidence is to be placed on the General Ledger
by sending a copy of the Form 4008 Fiscal Management Branch. The Fiscal
Management Branch must also be informed by the AFC if this situation changes
and the currency no longer has to be carried on the General Ledger to reverse
the transaction.
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For more detailed information and considerations concerning currency seized
for evidence see Chapter 11 of this Handbook.
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Financial accounts include checking, savings, money market, mutual funds,
and brokerage accounts, including those accounts "frozen" at financial
institutions.
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The procedures generally call for the agent or AFC to contact the custodian,
carrier, financial institution, or responsible agency official who issued
the instrument or controls the funds backing the instrument. In situations
involving brokerage accounts, airline tickets and personal checks, the asset
must be converted immediately into cash to preserve the funds. However, if
conversion is not possible, the procedures for freezing the funds should
be determined and implemented until the forfeiture is litigated. These
instruments can then be liquidated upon forfeiture.
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If it is a Title 18 seizure, immediately have the financial institution wire
transfer the seized funds to the Customs Suspense Account via the FED Wire
(wire transfer) system. However, if it is a Code forfeiture, the forfeited
funds are to be deposited to the Treasury's General Fund, instead of the
Treasury's Asset Forfeiture Fund. If wire transfer is not used, all cashier's
checks for Title 18 seizures should be made to the "U.S. Treasury Department."
Cashier checks for Title 26 seizures are to be made payable to the "IRS"
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Conversion of all financial instruments where the value may depreciate should
be undertaken to protect the interest of the government. This may be accomplished
by an interlocutory sale which requires a court order or a stipulated sale
which simply requires an agreement of all the parties to the forfeiture who
assert an interest in the property. If the instruments can simply be negotiated,
this action should be taken. In either situation, the proceeds will be handled
as instructed above concerning the seizure of currency, fed wired, or obtained
in the form of a cashier's check made payable to the "U.S. Treasury Department"
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TEOAF Directive 2, issued in July 1993, addresses "Seizure of Financial
Instruments," a copy should be available through the AFC. The document covers
the handling of:
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Postal Money Orders.
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Personal Checks.
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Cashiers Checks.
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Certificates of Deposit.
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Travelers Checks.
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Stocks and Bonds.
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U.S. Savings Bonds.
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Airline Tickets.
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Postal Money Orders--Immediately following seizure, prepare and send a letter
containing a list of the serial numbers, the amount of each money order,
and a statement that the government has seized the money orders, and is entitled
to them under the applicable forfeiture law to the: National Money Order
Coordinator, St. Louis Postal Data Center, P.O. Box 388, St. Louis, MO
63166-0388.
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Bank Checks and Bank Money Orders--Immediately following seizure, notify
the bank upon which the check is drawn that the check has been seized for
forfeiture. Direct the financial institution to take whatever legal steps
necessary to prevent the withdrawal or transfer of funds. Obtain a seizure
warrant for the bank account on which the check or money order is drawn and
seize the funds in the account. The proceeds from the account will be handled
as instructed in 6.8.1.1 below.
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Cashier's Checks--Use same procedure as used for personal checks.
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Certificates of Deposit--Immediately following seizure, notify the bank which
issued the certificate of deposit (CD) that it has been seized for forfeiture
and instruct the bank officials to take whatever legal steps necessary to
freeze the funds covered by the certificate so that the certificate of deposit
will be negotiable after forfeiture. The proceeds from the account will be
handled as instructed in 6.8.1.1 below.
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Traveler's Checks--Immediately following seizure, notify the company issuing
the checks that they have been seized for forfeiture. Determine what procedures
will be required in order to redeem the checks. If they can be redeemed prior
to forfeiture, take appropriate steps to liquidate the checks and have the
issuing company issue a cashier's check made payable to the "U.S. Treasury
Department" and handled as instructed in 6.8.1.1 below. If liquidation cannot
occur until after forfeiture, the issuing company must be notified to freeze
the funds (by serving a copy of the seizure warrant) and the checks will
be properly secured in a safe deposit box until forfeiture.
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Stocks and Bonds--Immediately following seizure, contact a state or national
certified stock broker to establish the FMV of the asset and determine how
the instrument is traded. Stocks and bonds with a Fair Market Value equal
to $0, or any stocks and bonds which are privately or closely held, or were
issued by a "shell corporation" and are not traded on an open market should
not be retained. Stocks and bonds of privately or closely held corporations
should be "quick released" unless it can be documented that they have significant
value. Listed Over The Counter (OTC) stocks and bonds will be held unless
there is a possibility they will lose their value during the forfeiture process.
CI should try to liquidate stocks and bonds through interlocutory sale or
a stipulated sale whenever possible. If the stocks and bonds are liquidated,
a check should be made payable to the "U.S. Treasury Department" from the
broker and handled as instructed in 6.8.1.1 below.
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United States Savings Bonds--The procedure for the liquidation of United
States savings bonds are listed in TEOAF Policy Directive 31. Upon forfeiture,
the bonds should be delivered to the TEOAF by hand or registered mail to:
Revenue Desk, Executive Office for Asset Forfeiture, Suite 700, 740-15th
Street, N.W. Washington DC 20220. The following documentation of the forfeited
property should be submitted with the bonds:
-
Inventory of the bonds, i.e. owner, issue date, serial number, and face amount.
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Copy of the final order of forfeiture of declaration of forfeiture.
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Name of the seizing agency, seizing agency contact person, telephone number,
and office address.
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Agency seizure number.
-
A Brief description of the circumstances under which the bond(s) were forfeited
and the basis for forfeiture.
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The TEOAF will process the request for bond redemption with the Bureau of
Public Debt and will provide the seizing agency notice of the date of payment
and amount received for the bond redemption.
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Airline Tickets--Immediately following seizure, notify the issuing carrier
of the government's intention to forfeit. Determine what procedures will
be required in order to redeem the tickets. If they can be redeemed prior
to forfeiture, take appropriate steps to liquidate the tickets and have the
issuing carrier obtain a cashier's check made payable to the "U.S. Treasury
Department" with verification that the issuing company has been notified.
If liquidation cannot occur until forfeiture, the tickets will be properly
secured in a safe deposit box until forfeiture. Upon receipt of a declaration
or order of forfeiture, liquidate the tickets in accordance with the procedures
in 6.8.1.1 below.
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If the financial institution will not wire transfer the seized funds as procedure
outlines in 6.7.2, one of the following procedures can be used to transfer
the seized funds to the Customs Suspense Account:
-
Obtain a cashier's check made payable to the "U.S. Treasury Department" and
make arrangements to wire transfer the funds through another financial
institution using the same transfer procedures. (Also see section on the
transfer of seized currency.)
-
Mail the cashier's check to TEOAF at Asset Forfeiture Financial Management,
Suite 700, 740 15th Street, NW, Washington DC 20220, along with a completed
Deposit Information Form, TEOAF Form 6 (Exhibit 6-15).
-
Deposit the cashier's check into the IRS Suspense Account and wire transfer
(OPAC) the funds to the Customs Suspense Account. See TEOAF Directive 4.
This deposit and transfer is accomplished by a Request to OPAC Funds Deposited
to the IRS Suspense Account, (Exhibit 6-16)
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A primary question of whether to seize all or only a portion of the proceeds
in an account has ample case law on both sides of the issue. The decision
depends on the frequency of transactions involving tainted funds and how
well it can be demonstrated that the clean money cloaked the tainted money
and thereby advanced the money laundering scheme to continue undetected.
This is a decision that will have to be made by consulting with the AUSA,
if judicial, and District Counsel, if administrative. Caution must be exercised
when indirect or secondary bank accounts are involved as the potential exists
for an award of costs and attorneys' fees to claimants under the Equal Access
to Justice Act in cases where the seizure was inappropriate.
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In Title 18 seizures, the fungible property statute (18 USC 984) allows for
seizing of funds from the same account when traceable funds are no longer
in the account, provided that seizure takes place within one year of the
violation.
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Promissory notes, secured or unsecured, seized pursuant to Title 18 should
be sold if a purchaser of such notes can be found. Contract services to sell
promissory notes should be obtained through the normal procurement process
using Form 1334. If the notes are sold, the sales proceeds should be deposited
into the Customs Suspense Account via the FED Wire (wire transfer) system.
If the funds cannot be wire transferred, use one of the procedures listed
in 6.8.1.1 above to deposit the seized funds to the Customs Suspense Account.
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If promissory notes are not sold, arrangements must be made to contract the
collection of such notes by a financial institution or a reputable finance
company. The contract should cover the collection of funds and their deposit
to the Customs Suspense Account. Contract services to handle the collection
of such notes should be obtained through the normal procurement process using
Form 1334.
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If a mortgage business or a finance company that handles collections on
promissory notes is seized, the business enterprise should be seized and
transferred to EG&G using the procedures established to transfer real
property and business enterprises.
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For Promissory Notes (secured or unsecured) seized under the Code, the proceeds
are to be deposited into the IRS Suspense Account in lieu of the Customs
Suspense Account.
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If a Code seizure obtains financial accounts include checking, savings, money
market, mutual funds, and brokerage accounts, including those accounts "frozen"
at financial institutions:
-
Immediately upon seizure have the financial institution wire transfer the
seized funds to the IRS Suspense Account via the FED Wire system.
-
If the financial institution will not wire transfer the funds, obtain a cashier's
check made payable to the "IRS" . Either deposit the check into the IRS Suspense
Account or make arrangements to wire transfer the funds through another financial
institution to the IRS Suspense Account.
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Agents and AFCs are to ensure that personal property is stored securely.
When a contract storage facility is used, it must provide a secure storage
area with limited access. If a vendor is utilized to store vehicles, vessels,
or aircraft, ensure that the contract calls for required maintenance to keep
the asset in the condition in which it was seized.
-
During the pre-seizure phase when arranging contract services for a Code
seizure, agents must also be aware of disclosure limitations and sensitivity
of the seizure.
-
Access to the storage facilities will be limited to the seizing agent(s)
and a CI management official. An entry log will be maintained.
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The storage, towing, maintenance, and repairs of assets seized for Title
18 seizures are to be arranged through EG&G. Code forfeitures must be
arranged through Facilities Management. Under no circumstances will the Treasury
Forfeiture Fund be used to pay for Code forfeiture expenses.
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In emergency situations where the seized items must be stored in facilities
belonging to another agency, a representative of the agency must sign a detailed
inventory listing the seized items being stored by him or her on behalf of
CI. The use of Form 9573, Custody Receipt for Retained or Seized Property
(Exhibit 6-17), is recommended for use in these situations. This will ensure
that the chain of custody is
maintained.
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Special agents and AFCs will obtain receipts when seized property is stored
in any public facility. Since the type of receipt to be obtained in storing
other personal property will depend upon the circumstances involved, no receipt
form is prescribed. If the storage facility does not provide a formal receipt,
the seizing agent will prepare one for preservation in the seized property
file.
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Seized vehicles, airplanes, vessels, any sealed container, and other personal
property, except currency, financial accounts, financial instruments, or
promissory notes, should be temporarily stored at the earliest practical
date at a no-cost government facility, unless Customs has been contacted
as is recommended and EG&G has a representative present to take immediate
possession of the seized asset. (See Chapter 8 of this Handbook on how to
transfer personal property to EG&G.) If neither of these options is
available, the seized personal property should be stored in the nearest contract
garage or other suitable storage place based on the nature of the property
and what type of facility will provide the best security for and preservation
of the asset at the most favorable cost to the government.
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When seizing vehicles, airplanes, vessels, any sealed container, or any other
personal property, an inventory will be performed via Form 181, Inventory
Record of Seized Vehicle, Vessel or Aircraft (Exhibit 6-18), for preservation
in the seized property file. Any items discovered in the course of a property
inventory and which constitutes contraband or evidence of a crime is subject
to seizure.
-
To effect the transfer of vehicles, vessels, aircraft, and other personal
property to a vendor arranged by Facilities Management, Form 9573, Custody
Receipt for Retained or Seized Property, and Form 9572, Continuation Sheet
(Exhibits 6-19 & 6-20), will be used as accountable documents for transfer
of custody of seized assets. Special agents will enter the AFTRAK number
in Block 2 and the Subject Seizure Investigation Number in Block 3 of Form
9573, and will complete all other applicable portions of the form when
transferring custody of property. All receipts will be preserved as part
of the Seized Property File.
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When a computer is seized, the stored data should be retrieved for evidentiary
purposes by a CI computer investigative specialist (CIS). Once the evidence
has been retrieved and secured, the seized computer shall remain in the custody
or possession of the CIS until all investigative matters have been completed.
Once forfeiture proceedings have been concluded, the computer equipment should
not be sold, transferred to a sharing agency, or placed into official use
until a CIS has "deleted" all data on the hard drive.
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The same rules and procedures utilized to transfer personal property seized
for Title 18 forfeiture will be used for Title 26 seized assets.
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In U.S. v. James Daniel Good Real Property et. al., the Supreme Court held
that, absent exigent circumstances, the due process clause of the Fifth Amendment
prohibits the government in a civil forfeiture case from seizing real property
without first affording the owner notice and an opportunity to be heard.
Consequently, specific procedures (see TEOAF Directive 6) shall normally
be followed when seizing real property for civil judicial forfeiture.
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The government can give notice and opportunity for a pre-seizure hearing
or file a lis pendens in conjunction with a complaint for forfeiture to meet
these requirements. The Service prefers to file a lis pendens, except in
those Circuits with more stringent notice requirements.
-
Special agents must work closely with the AUSA to ensure that the filing
of the complaint is done at or near the filing of the lis pendens. This will
reduce the possibility of additional hearings and ensure that due process
is observed. Agents must be cognizant of local requirements for service and
notice of the lis pendens. Any personal notice or lis pendens will be served
by CI special agents, or the U.S. Marshal, if agreed to in a pre-seizure
plan. In addition, notice of the judicial proceeding must be made to all
potential claimants and published in a local newspaper by the U.S. Marshal
or U.S. Attorney.
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Some judicial districts require title reports and preliminary appraisals
prior to executing a complaint. EG&G will provide this service. This
title report will reflect all liens and encumbrances to assist in determining
the potentially interested parties.
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After the Complaint for Forfeiture has been filed, the AUSA should prepare
and serve a Rule 34 Request for Inspection (FRCivP). At the appropriate time,
preferably within 45 days of the filing of the complaint, an agent and the
appraiser will inspect the property.
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Occupancy issues are also of vital concern. If the property is vacant, EG&G
will obtain a property manager and possibly initiate rental agreements on
a month-to-month basis. If the property is occupied and not vacated upon
forfeiture, it will be necessary for the IRS to enter into a post forfeiture
occupancy agreement (Exhibit 6-21), with the Chief, CI, being the approving
official. Occupancy agreements can be obtained from the AFC.
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Obtain a complaint for forfeiture evidencing a violation of Title 18 USC
1956, Title 18 USC 1957 or Title 31 USC 5313(a) or Title 18 USC 5324(a) to
support a forfeiture of the real property pursuant to Title 18 USC 981 and
a warrant of arrest in rem through the U.S. Attorney's office. The warrant
of arrest in rem gives the court jurisdiction over the real property.
-
Accompany the U.S. Marshal's Service in serving the warrant of arrest in
rem on the owner or occupant of the real property and posting process (by
placing a copy of the warrant of arrest in rem on the real property). A Post
and Walk Form (Exhibit 6-22) will be prepared identifying the individual
on whom the "Post and Walk" process was served. Absent a specific court order
based upon a finding of exigent circumstances, no physical seizure of the
property will be made at this time.
-
Obtain an AFTRAK number.
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The special agent, or U.S. Marshal, per pre-seizure agreement, should file
a notice of lis pendens, prepared by the AUSA, pursuant to state law with
the state court having jurisdiction over the real property. The servicing
agent will be responsible for paying any filing fees. This filing will prevent
the real property from being sold or encumbered.
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Notify EG&G through Customs by filing a Form 4008 with "Consignment Order"
noted on top of the form that the real property is subject to forfeiture
and a title search can be performed. If an agent does not want EG&G or
an EG&G subcontractor to make a visual inspection of the real property,
the agent should give specific instructions in the Facts and Circumstances
Section of the Form 4008 regarding "no inspection of the property should
be made by EG&G personnel or subcontractors.""Perform pre-seizure work
only." See the Chapter 7 on Processing Assets in this Handbook.
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If there is evidence that the owner or occupant intends to damage or destroy
the real property, or has damaged the real property, the government can schedule
a hearing to comply with the "Good" decision, or obtain a Writ of Entry to
inspect and photograph or videotape the condition of the real property.
-
Upon receiving a final order of forfeiture, CI will be responsible for seizing,
maintaining, and disposing of the real property. See Chapter 8 on Storage
of Seized Assets in this Handbook for procedures.
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Occupancy agreements should be obtained when exigent circumstances exist
and the court has authorized the seizure of real property prior to a finding
of forfeiture after the owner has been afforded an opportunity to be heard,
and occupants of the property are permitted to remain in the property pending
forfeiture for what may be an extended period. Exhibit 6-23 is an occupancy
agreement developed by TEOAF, see TEOAF Directive 13, which includes various
restrictions (maintenance and access to the property, potential for continued
illegal activity, insurance, etc.) that addresses Treasury Department concerns.
The language of this document is intended to enhance the government's position
in evicting occupants, if necessary, and is to be signed and approved by
the Chief, CI.
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EG&G will propose to the IRS AFC reasonable repairs that will enhance
the salability of real property or business enterprise. The AFC will forward
his concurrence or other recommendations to EG&G through the SPC/SPS.
Repairs to real property cannot exceed 15% of the appraised value or $10,000,
whichever is less, unless a memorandum is sent by the district AFC to TEOAF
for forwarding to the Contracting Officer (USCS) requesting approval for
excess repairs. The memorandum should set forth the anticipated cost of repairs
and how these repairs will enhance the salability of the real property. A
copy of the request and reply should be retained in the Seizure Property
File.
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If the property is rented while in the custody of EG&G, the rental income
shall not be used to pay expenses or mortgages. Rental of the property will
be in accordance with TEOAF Directive 13 regarding executed occupancy agreements.
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Identify the real property for forfeiture pursuant to 18 USC 982 in a criminal
indictment or criminal information. The indictment or information must charge
a violation of Title 18 USC 1956, 1957, 1960 and or Title 31 USC 5324 to
support a forfeiture of the real property pursuant to Title 18 USC 982 (See
F.R.Cr.P. Rule 7 (c)(2)).
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Obtain an AFTRAK number.
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Upon conviction of the defendant and the defendant property (whether by trial
or plea agreement), the court will enter a preliminary order of forfeiture.
The AUSA may obtain a consent order of forfeiture from the defendant setting
forth the property to be forfeited. In addition, the AUSA will start notice
to all third parties in interest and publish advertisement in a publication
serving the area where anyone having an interest may reside. The AFC or special
agent will personally serve notice as directed by the AUSA, to all individuals
believed to have an interest in the property. CI will advise the AUSA of
the name and address of all individuals given personal notice.
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If petitions are not filed within 30 days, the court will enter a final order
of forfeiture. Upon receiving a final order of forfeiture, CI is responsible
for seizing, maintaining and disposing of the real property.
-
If a petition is filed by any party claiming interest in the property, a
hearing will take place before a final order of forfeiture can be entered
by the court. Upon receiving a final order of forfeiture, CI will be responsible
for seizing, maintaining, and disposing of the real property.
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After a preliminary order of forfeiture and prior to a final order of forfeiture,
or upon the filing of a stay of forfeiture, occupants of real property may
be permitted to remain in the property pending the forfeiture. Occupancy
agreements, signed by the IRS in criminal cases, should be obtained, along
with a substitute custodial order naming the IRS as the custodial agency.
Exhibit 6-23, as shown in TEOAF Directive 13 is a occupancy agreement, which
includes various restrictions (maintenance, access to the property, potential
for continued illegal activity, insurance, etc.) that address Treasury Department
concerns. The language of these documents is intended to enhance the government's
position in necessary evictions.
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A final order of forfeiture forfeits the real property to the government,
orders the government to take possession of the real property, and orders
the government to dispose of the real property "according to law."
-
Upon receiving a final order of forfeiture, and assurance from the AUSA that
no stay of the order has been issued as part of an appeal, the AFC shall
deliver, by personal service or send by registered mail, a letter to the
occupant of the real property (Exhibit 6-24). This letter advises the occupant
that the property has been forfeited, the occupant and all personal property
must be vacated by a specific date, and any personal property left on the
premises will be considered abandoned property, without value, and will be
disposed of according to law.
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The AFC should arrange for EG&G to inspect the real property. If the
occupant refuses to allow the inspection, check with the AUSA for a suggested
course of action.
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If the occupant refuses to vacate the premises, the AFC or special agent
handling the investigation shall ask the AUSA for an eviction order. Some
AUSAs may take the position that an eviction order is not needed since the
final order of forfeiture grants the real property to the government and
the right to remove the occupant. If the AUSA takes this position, have the
AUSA put his or her position in writing before attempting the eviction.
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If eviction is necessary, it will be the responsibility of the AFC to accomplish
the eviction. The AFC may seek the assistance of the AUSA or whatever assistance
he or she feels is necessary for the safety of all involved and to ensure
that access cannot be reasonably obtained by the reentry of the occupant.
Custody of the property will be transferred to EG&G using the procedures
set forth in the Chapter on Storage of Seized Assets found in this Handbook.
-
If the occupant abandons the personal property contained in the real property,
the personal property will be removed and stored, using the procedures set
forth in this Handbook.
-
If the occupant does not claim the personal property within the thirty (30)
days, then abandonment procedures should be initiated and the property disposed
of using the procedures set for abandoned property.
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TEOAF has set the following policies regarding seizures and storage of assets
which we will follow:
-
Any seizures made under Title 26 will not use EG&G, or the Customs Suspense
Account for storage.
-
All currency seized, with the exception of currency seized under Title 26,
is to be stored in the Customs Suspense Account, unless it has physical
evidentiary value due to, for example, fingerprints, packaging in an
incriminating fashion, or the existence of narcotics residue. See Chapter
13 on Seizure of Evidence in this Handbook.
-
Property seized exclusively for evidentiary purposes cannot be stored with
EG&G until forfeiture proceedings have been initiated. Until that happens,
storage will be the responsibility of the IRS. Expenses may be submitted
to TEOAF for reimbursement when forfeiture proceedings are initiated.
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For additional details concerning the transfer and storage of assets, see
Chapter 8 of this Handbook.
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"Chain of custody" is an expression usually applied to the preservation of
the instrument of a crime, other evidence, or any relevant writing in its
original condition through its successive custodians. Documents or other
physical objects may be the instrumentalities used to commit a crime and
are generally admissible as such. However, the trial judge must be satisfied
that the writing or other physical object is in the same condition as it
was when the crime was committed. Consequently, the witness through whom
the instrument is sought to be introduced must be able to identify it as
being in the same condition as when it was recovered. Special agents must,
therefore, promptly identify and preserve in original condition all evidentiary
matter that may be offered into evidence. This would particularly apply to
records, recordings, videotapes, documents, and other paraphernalia seized
in a raid.
-
In order that a seized document may be admissible as evidence, it is necessary
to prove that it is the document that was seized and that it is in the same
condition as it was when seized. Since several persons may handle it in the
interval between the seizure and the trial of the case, it should be adequately
marked at the time of seizure for later identification, and its custody must
be shown from that time until it is introduced in court.
-
When records are obtained from a possible defendant, notation should be made
of the circumstances to show that they were furnished voluntarily. Notation
should also be made of the chain of custody of records and of all other evidence
in order that authenticated identification of the evidence may be made.
-
A special agent who seizes documents should at once identify them by some
marking so that the agent can later testify that they are the documents seized,
and that they are in the same condition as they were when seized. An agent
may put his or her initials and the date of seizure on the margin, in a corner
or some other inconspicuous place on the front, or on the back of each document.
If circumstances indicate that such marking may render the document subject
to attack on the ground that it has been defaced or it is not in the same
condition as when seized, the special agent may, after making a photostat
or other copy for comparison or for use as an exhibit to their report, put
the document into an envelope and write a description and any other identifying
information on the face of the envelope.
-
Special agents are not to sign or initial the records of a possible defendant
nor to assure them in any manner whatsoever that their tax liability has
been correctly reported as of any certain date. They are not to assure them
that their records will be subject to no further examination.
-
The best method of maintaining the chain of custody is to assure that each
item is properly identified and appoint one special agent to have continuous
control of all evidence until he produces it at the trial of the case.
-
To preserve in original condition all evidentiary matter that may be offered
into evidence, material, such as records, recordings, videotapes, documents,
and paraphernalia seized in a raid, should be inventoried, sealed, and maintained
in an Evidence Envelope, Form 5397. This process should be initiated by the
first special agent who has access to any such evidentiary material. The
Evidence Envelope should be filled out on its face with all the appropriate
available information. The envelope should be sealed in the presence of a
witness. The sealer and witness should each apply their signature and date
straddling the sealed envelope flap seam, and the flap seam should be covered
with clear cellulose tape. The lower portion of the face of the envelope
has a printed receipt log to be filled in when the envelope is turned over
to another person.
-
Evidentiary material that is too bulky to be placed in an Evidence Envelope
may be sealed in a carton or other appropriate container. An evidence envelope,
Form 5397, can be affixed to the container with the face of the envelope
appropriately filled out.
-
No evidence container should be opened unless a witness is present. An Evidence
Envelope should be opened by slitting along one of its edges. When a container
is opened, the following should be noted on the container:
-
That the container was opened.
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The date.
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Who opened it.
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Who witnessed it.
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The reason for opening it.
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That the contents were examined and were found to be identical with the
description listed on the front of the Evidence Envelope.
-
An Evidence Envelope, Form 5397, will only be sealed once. Should it become
necessary to open a sealed envelope, that envelope will not be used again
to store evidence. A new Form 5397 will be prepared and the evidence will
be sealed in the envelope as stated above. The old envelope(s) will be retained
and affixed to the new one in order to preserve the chain of evidence.
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The use of safe deposit boxes is acceptable when necessary in storing currency
seized and retained for evidentiary purposes. To preserve the integrity of
the chain of custody over seized items, strict procedures must be followed
in using a safe deposit box for storage.
-
The safe deposit box will be set up to require the signatures of two special
agents, one of whom should be in CI management.
-
An entry log reflecting the dates of entry, the persons entering, and a brief
description of the purpose for entry shall be maintained and kept in CI files.
-
When the safe deposit box is used to store items from multiple seizures,
no commingling of the items is allowed. To preclude this, the items from
each seizure must be placed in a sealed envelope or container and initialed
and dated prior to placement in the safe deposit box. At a minimum, the case
agent of each multiple seizure should be one of the authorized signatures.
If entry is necessary in multiple seizure situations involving different
investigations, the case agent and CI management official should be the entry
personnel.
-
In the event that a seizure is made during hours when access to a safe deposit
box is not possible, the Chief, CI, may authorize the seized items to be
stored in a CI safe, on an interim basis, providing that access to such safe
is limited and a log of entry is maintained as noted above. The seized items
should be moved to a safe deposit box as soon as possible (preferably the
next bank business day). All items secured in a safe deposit box should be
inventoried on an annual basis.
-
Currency seized as evidence, whether or not it is deposited into the Customs
Suspense Account, is to be placed on the General Ledger by sending a copy
of the Form 4008 to the Fiscal Management Branch, together with a modified
version of Exhibit 6-25. If the funds were deposited to the Customs Suspense
Account, be sure to make that clear in the transmittal memorandum.
-
The Fiscal Management Branch, must also be informed by the AFC when the currency
no longer has to be held as evidence. This notification will remove the currency
from the General Ledger.
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Chain of custody of assets seized for forfeiture is also important so the
trial judge must be satisfied that the asset forfeited is in the same one
(or appropriately substituted one) that was seized.
-
Form 3389, Seized Property Notice and Identification Tag, will be prepared
in an original only and securely attached to each item of seized property,
except in the case of seized vehicles, vessels, or aircraft, when Form 181
will serve as a seizure notice and identification tag.
-
If the seized property is of a type which cannot be removed from the premises
where seized, a duplicate of the Form 3389 will be prepared for the case
file.
-
Where appropriate, a stamped impression, gummed label, printed "Evidence"
envelope, or similar seizure notice may be used in lieu of Form 3389, provided
such notice shows the same basic information as would have been shown on
the front of the Form 3389 and it also shows the chain of custody when necessary.
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Seized currency will be accompanied by the seizing special agents and law
enforcement officer to a bank where a banking relationship has been established.
The seized currency will be unsealed by the seizing agents and the law
enforcement officer and counted by bank personnel in the presence of the
seizing agents and the law enforcement officer. There may be instances where
the bank provides the counting service but will not allow agents into the
counting area. The sealed identifiable container will be delivered to personnel
in the counting facility who will provide an initial receipt for a specific
sealed container to the agents delivering the currency. Once all the seized
currency is counted, the bank will provide a detailed accounting of the seized
currency. The seizing agents will document the chain of custody from the
seizure to the physical delivery of the currency to the bank facility. The
seized currency will be transmitted by the bank personnel to the Customs
Suspense Account via the FED Wire (wire transfer) system.
-
In the case of seized monies, Form 3389 will be attached to or placed in
the sealed package when they are put in the custody of a safekeeper. Also,
in the case of seized monies, the chain of custody portion of Form 3389 need
not be prepared because this information is shown on Form 141-A.
-
Form 141-A will be used by CI to report the acquisition or disposition of
special monies to Fiscal Management, which is charged with the responsibility
of maintaining an accounting control of such funds:
-
As a chain of custody and control document for special monies.
-
As a receipt form for use when special monies are stored with or reclaimed
from a safekeeper.
-
This form is designed as a six-part, snap-out assembly with a worksheet copy.
Ordinarily, it will be necessary to prepare only one assembly to report both
acquisition and disposition of seized monies. Item instructions for preparation
of Form 141-A are included on the form.
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In the event seized property is turned over to the U.S. Marshal in a judicial
forfeiture situation, the U.S. Marshal will act as custodian of the property.
This is not to be considered a final disposition, since the IRS may continue
to incur expenses for the maintenance and storage of the property. A final
disposition will occur only when the forfeiture action is completed. Seized
property may also be turned over to the U.S. Marshal as evidence in a related
case. In this situation, the U.S. Marshal also acts as custodian of the property.
In either situation, an entry should be made in the Seized Property File
stating that the property was turned over to the U.S. Marshal for his custody.
This is to ensure that the chain of custody is preserved.
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[9.7]
6.14 (04-30-1998)
REMOVAL OF SEIZED PROPERTY FROM THE JUDICIAL DISTRICT
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All property should normally remain in the judicial district where it was
seized. The property manager may remove seized property for forfeiture for
economy and maintenance, unless otherwise ordered by the court. The court
does not lose jurisdiction even if property is moved to another judicial
district.
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The forfeiture action may be brought in:
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The district where the underlying crime occurred;
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The district where the property is located;
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The district where a related criminal indictment is pending.
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Coordination with EG&G, the USAO, and any other district office where
assets are located or forfeiture action is instituted is recommended and
encouraged.
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Property seized for evidence may be removed pursuant to Rule 41 from the
judicial district from where it was seized at the discretion of the government.
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[9.7]
6.15 (04-30-1998)
PAYMENT OF AWARDS FOR INFORMATION OR ASSISTANCE LEADING TO A CIVIL OR
CRIMINAL FORFEITURE
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Application for awards will be accepted on behalf of any individual, corporation,
or association. A sample Memorandum of Understanding between the IRS and
an informant dealing with payment of an award for information leading to
forfeiture of assets may be obtained from the Criminal Investigation Asset
Forfeiture and Narcotics Section.
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Awards will be paid only after disposition of the forfeited property.
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Awards will not be paid to individuals who are representatives of state or
local law enforcement agencies. The respective agency may be compensated
through asset sharing for any information or assistance provided by an
individual(s) who represented a state or local law enforcement agency
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No monies will be used to pay retainers or to pay cooperating informants
in the expectation of future specific information or assistance.
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For Title 18 violations involving forfeitures, awards shall not exceed the
lesser of $250,000 or one-fourth the amount realized by the U.S. from the
property forfeited.
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Awards paid relating to Title 31 violations shall not exceed the lesser of
$150,000 or one-fourth the amount realized by the U.S. from the property
forfeited
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If forfeited property is sold, the "amount realized" is the net proceeds
as defined by TEOAF.
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If the forfeited property is retained for official use, the "amount realized"
is the value of the property at the time of seizure minus expenses paid from
the Fund.
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If an award claimant has already received payment under Title 31 USC
9703(a)(1)(A) or (a)(3)(B) for the same information for which an award is
sought, any such award shall be paid only to the extent that the total of
the award and previous payment does not exceed $250,000.
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An informant may apply for an award by submitting a written narrative detailing
his or her participation/contribution to the Chief, CI, in the district
conducting the investigation. The request for an award may also be initiated
by the CI district office conducting the investigation.
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The CI district receiving or initiating the request for award will prepare
a report that will evaluate the information or assistance provided by the
informant and recommend an amount to be paid. This report will be forwarded
through the Director of Investigations to the Assistant Commissioner, CI,
for approval. The report shall:
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Identify the property or properties on which the information or assistance
was provided. Include both the AFTRAK number(s) and the federal district
court case number. Also include the value of the asset less any liens, mortgages
or other extraordinary costs.
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Identify those properties forfeited and date forfeited.
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Recommend the amount of the award and the degree to which the information
or assistance aided in the forfeiture.
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State whether the information or assistance provided was unique or indispensable.
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List the costs incurred with respect to the property forfeited.
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If more than one request for award is received in a single forfeiture action,
the requests should be handled in a consolidated manner. Decisions on all
the requests should be made at the same time and should consider the comparative
value of information or assistance provided by each informant and the aggregate
amount of award(s) to be made. In these cases, the limits discussed previously
apply to the aggregate amount of the awards to be made.
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Any award in excess of $250,000 must be approved by the Under Secretary of
the Treasury (Enforcement). The request for approval must include the information
listed in Exhibit 6-26.
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Internal Revenue Manual
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Hndbk. 9.7 Chap. 6 Seizure Planning
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(04-30-1998)
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