Contents

• 9.7.10 Disposition of Forfeited Property
  • 9.7.10.1 OVERVIEW
  • 9.7.10.2 METHODS OF DISPOSAL
  • 9.7.10.3 FUNDS ON DEPOSIT IN THE CUSTOMS SUSPENSE ACCOUNT
  • 9.7.10.4 FUNDS GENERATED FROM THE SALE OF PERSONAL OR REAL PROPERTY BY THE SEIZED PROPERTY CONTRACTOR
  • 9.7.10.5 DISPOSITION INSTRUCTIONS FOR ASSETS OTHER THAN CURRENCY
  • 9.7.10.6 DISPOSITION OF EQUITABLE SHARE
  • 9.7.10.7 OFFICIAL USE OF FORFEITED PROPERTY
  • 9.7.10.8 PROPERTY DONATED PURSUANT TO THE "WEED AND SEED" INITIATIVE
  • 9.7.10.9 SEIZED PROPERTY RETURNED TO OWNER, CLAIMANT, OR PETITIONER
  • 9.7.10.10 FORFEITED PROPERTY DESTROYED BY COURT ORDER
  • 9.7.10.11 FIREARMS PROCEDURES
  • 9.7.10.12 PROPERTY TRANSFERRED TO GENERAL SERVICE ADMINISTRATION (GSA)
    • Exhibit 9.7.10-1 Sample Telephone Bidder Registration Form
    • Exhibit 9.7.10-2 Disposition Order
    • Exhibit 9.7.10-3 Transfer of Equitably Shared Property to Requesting Agency
    • Exhibit 9.7.10-4 Request to Place Forfeited Vehicle (Property) Into Official Use
    • Exhibit 9.7.10-5 Sample SF-120, Report of Excess Personal Property
    • Exhibit 9.7.10-6 Sample SF-122, Transfer Order Excess Personal Property

9.7.10.1  (01-18-2001)
OVERVIEW

1. This section explains the methods that can be used to dispose of assets once forfeiture has occurred. It also discusses disposal of abandoned property once the abandonment procedures have been completed. The following topics are addressed in this section:
   • Methods Of Disposal
   • Funds On Deposit In The Customs Suspense Account
   • Funds Generated From The Sale Of Personal Or Real Property By The Seized Property Contractor
   • Disposition Instructions For Assets Other Than Currency
   • Disposition Of Equitable Share
   • Official Use Of Forfeited Property
   • Property Donated Pursuant To The "Weed And Seed" Initiative
   • Seized Property Returned To Owner, Claimant, Or Petitioner
   • Forfeited Property Destroyed By Court Order
   • Firearms Procedures
   • Property Transferred To General Service Administration (GSA)

9.7.10.2  (01-18-2001)
METHODS OF DISPOSAL

1. Property forfeited either administratively or judicially to the government, under 18 U.S.C. Section 981 (civil forfeiture), or under 18 U.S.C. Section 982 (criminal forfeiture), may be disposed of as follows:
   1. Deposited in the Treasury Forfeiture Fund (currency, negotiable instruments, proceeds of any financial account or proceeds from the sale of seized property).
   2. Equitably Shared through the Treasury Asset Forfeiture Program.
   3. Placed into official use.
   4. Transferred (real property only) under the "Weed and Seed" Initiative (See Treasury Enforcement Office Asset Forfeiture (TEOAF) Directive 9).
   5. Returned to the owner, claimant, or petitioner.
   6. Destroyed pursuant to court order.
2. The Special Agent in Charge (SAC), has been delegated the authority to sign deeds and titles relating to forfeited property, thereby effecting final disposition in any manner.
3. The Asset Forfeiture Coordinator (AFC) must update and forward all Forms 4008 to Headquarters AFTRAK Unit, to reflect disposition of the assets. The sales price must be included; otherwise, AFTRAK will default to the appraisal value.

9.7.10.3  (01-18-2001)
FUNDS ON DEPOSIT IN THE CUSTOMS SUSPENSE ACCOUNT

1. This section applies only to forfeitures done under Title 18.
2. Currency, negotiable instruments, or funds of any financial account, initially deposited in the Customs Suspense Account, must be transferred to the Treasury Forfeiture Fund upon obtaining a Final Order of Forfeiture.
3. When property has been identified for disposal, i.e., to be forfeited, or returned to an owner, claimant, or petitioner, the AFC shall prepare the Disposition Instructions for Currency Held in the Customs Suspense Account, TEOAF Form 2 (Exhibit 9.9.9-7). The Form is then faxed to the IRS liaison at TEOAF to initiate the final disposition of funds held in the Customs Suspense Account.
4. If a settlement agreement or court order requires the return of any seized funds to the owner or third party(s), the identity of the owner or third party and amount to be returned must be reflected on the disposition form. All checks shall be made payable to the owner or third party and given to the AFC for forwarding to the owner or third party.
5. The number of equitable sharing requests received on an asset covered by the disposition form must be noted so that TEOAF can review its files for the approved sharing percentage(s).
6. If any equitable sharing requests are filed, the seizure and/or forfeiture related expenses (advertising and any other asset specific related costs), award payments made to IRS informants, and prior reimbursements to the requesting agencies must be noted on the disposition form. These expenses are deducted from the forfeited funds to determine the net proceeds for equitable sharing purposes. Contract employees, may not obligate the government for any expenses.
7. After TEOAF confirms the funds have been transferred to the Treasury Forfeiture Fund, the AFC shall prepare Form 4008, reflecting the date and amount of deposit, and forward it to the Headquarters AFTRAK Unit.

9.7.10.4  (01-18-2001)
FUNDS GENERATED FROM THE SALE OF PERSONAL OR REAL PROPERTY BY THE SEIZED PROPERTY CONTRACTOR

1. Net proceeds (sale proceeds less storage, maintenance and other management costs) from the sale of personal or real property by the seized property contractor are deposited into the Treasury Forfeiture Fund.

9.7.10.5  (01-18-2001)
DISPOSITION INSTRUCTIONS FOR ASSETS OTHER THAN CURRENCY

1. This section applies only to forfeitures under Title 18.
2. When property has been identified for disposal, the AFC should prepare a Disposition Order (Exhibit 9.7.10-2), and fax it to the seized property contractor to initiate final disposition. Additionally, the AFC should simultaneously prepare a TEOAF Form 1, Disposition Instructions for Assets Other Than Currency (Exhibit 9.7.9-8), and fax it to the IRS liaison at TEOAF.
3. If the property is to be released to the owner, claimant, or petitioner, including a valid lienholder, the SAC may waive all storage and maintenance costs associated with the property.
4. If property is shared, all storage and maintenance costs associated with the property will be paid by the sharing agency before the property is released, unless, on rare occasion, the costs are waived by the Chief, Criminal Investigation (CI). If costs are to be waived, the appropriate block in section 6 of the Disposition Order must be checked. Liens and mortgages cannot be waived and must be paid by the law enforcement agency receiving the property. If the sharing agency receives property directly from the seized property contractor, proof of the payment of all costs and liens will be required by the contractor prior to the release of property directly to a sharing agency. These matters shall be coordinated through the AFC.
5. The Disposition Order includes an instruction block for any special disposal instructions that need to be provided by the AFC to the seized property contractor.
6. The disposition process commences upon the IRS faxing the disposition form to the seized property contractor to dispose of assets in his or her custody. The AFC may indicate a written minimum bid requirement if the property is valued at $25,000 or more at the time the disposition form is faxed. IRS seized or forfeited property will not be disposed of absent a written request and authorization document from the AFC.
7. Upon receipt of the disposition form, IRS property will be sold at the next scheduled contractor sale, or if required, by special sale. Absent court-imposed requirements, the seized property contractor will determine the type of sale to be conducted. Field office personnel and AFCs should not enter into negotiated sales without prior approval of the Director, Warrants and Forfeitures Section.
8. The seized property contractor will assist the IRS in complying with the provisions of 18 U.S.C. Section 1963(f) and 21 U.S.C. Section 853(h) which prohibit the sale of forfeited property to a criminal defendant or his or her agent. The seized property contractor shall provide specific notice to prospective purchasers of this prohibition. The notice shall state as follows:
   • Notice: To ensure compliance with the comprehensive Crime Control Act of 1984 and Department of the Treasury policy, all prospective bidders must complete a Bidder Registration Form (at the time of registration--if auction, or for submission with a bid--if negotiated sale or sealed bid). Completion of this form represents the bidder's certification that the bidder and/or the party(s) that the bidder is representing, is not the individual(s) from whom the property was seized, and that he/she is not bidding for or on behalf of said individual(s).
9. Exhibit 9.7.10-1 is a Bidder Registration Form. Within one (1) working day following a sale, the seized property contractor will transmit a copy of the Bidder Registration Form to the AFC who will check the appropriate files and notify the seized property contractor of the results as soon as possible; but, no later than three (3) working days from receipt of the form from the seized property contractor.
10. TEOAF Directive 1 generally prohibits Treasury Department employees and members of their immediate family from purchasing forfeited property sold by the Department of the Treasury or its agents. The policy is intended to ensure there is no actual or apparent use of inside information, or even the appearance of any conflict of interest, by employees in the handling and disposition of forfeited property.
11. If any complaints or disputes arise during or from the sale of IRS property, the AFC will be advised of any unresolved matters by the seized property contractor.
12. When IRS property does not sell after the second attempt, the AFC shall be notified within five (5) working days after the attempted sale. The AFC shall provide further direction for the disposition of the property within five (5) working days.
13. After IRS property is sold, the sale proceeds will be deposited through the National Finance Center in the Treasury Forfeiture Fund by the seized property contractor, who will also identify the IRS as the seizing Treasury agency.
14. The seized property contractor will notify the AFC that IRS disposition instructions for sale were completed by sending the authenticated original of the Disposition Order to the AFC within seven (7) working days after authentication.
15. The Disposition Order contains, as appropriate:
    1. A specific accounting of all sale proceeds.
    2. Name of the party taking possession of the property.
    3. The date of release.
    4. Holding costs collected.
16. Upon receipt of the Disposition Order from the seized property contractor, the AFC will prepare Form 4008 to show the final disposition by sale and sale price, and then forward the Form 4008 to the Headquarters AFTRAK Unit.

9.7.10.6  (01-18-2001)
DISPOSITION OF EQUITABLE SHARE

1. The SAC will coordinate the distribution of requested property under approved equitable sharing agreements. Exhibit 9.7.10-3 is a letter used to transfer property to a requesting agency.
2. If the property consists of funds on deposit, the SAC will obtain a check payable to the requesting agency, and personally present the check to the appropriate agency official. Shares to a foreign country will be coordinated with the Headquarters, Warrants and Forfeitures Section. If there is international sharing, Headquarters, Warrants and Forfeitures Section is responsible for coordinating with TEOAF, the Office of International Affairs, Criminal Division, Department of Justice and the State Department.
3. In order for the appropriate SAC to obtain the sharing check and personally present it to the appropriate requesting agency official, the following must be included in the additional comments section of the disposition form:
   • "Send equitable sharing check to the AFC for presentation."

   Otherwise, the check will be sent directly to the requesting agency or electronically transferred (EFT) into their bank account.

4. The reason for a personal presentation by the SAC or the State Department in investigations involving foreign countries, is to ensure that law enforcement agencies are properly thanked for their participation in the investigation and to encourage future joint efforts. The SAC should be sensitive to the desires of the U.S. Attorney, Chief, CI and other participating law enforcement officials wishing to be involved in formal presentations.
5. The AFC will update Form 4008 with the date of disposition and other pertinent information on equitable sharing and then forward it to the Headquarters AFTRAK Unit.
6. The National Finance Center will notify TEOAF of the dates and amounts of the equitable sharing checks made payable to the sharing agency/country. TEOAF will notify the AFC of the dates and amounts of the equitable sharing checks for AFTRAK updating purposes.

9.7.10.7  (01-18-2001)
OFFICIAL USE OF FORFEITED PROPERTY

1. Property forfeited that can be used for law enforcement purposes (other than funds on deposit in the Treasury Forfeiture Fund) may be placed into official use.
2. Property can only be placed into official use for a law enforcement purpose. The Director, Field Operations under the authority of Delegation Order No. 158, must concur with the SAC's recommendation when forfeited or abandoned property is considered for placement into official use. Directors, Field Operations have the discretion to require approval from the Chief, CI (Finance Section) prior to placing these or other assets into service.
3. After a decision has been made to place forfeited property into official use, the SAC will forward a memorandum to the Director, Field Operations for his or her approval (Exhibit 9.7.10-4). Upon approval by the Director, Field Operations the memorandum will be forwarded to the SAC for approval or information (dependent upon whether the Director, Field Operations has exercised discretionary authority requiring his or her approval to place the property into service). Within fifteen (15) workdays of the property being placed into service, the SAC will ensure that the property has been entered into the Criminal Investigation Equipment Control System (CIECS). Copies of all memorandums relating to the property being placed into service will be retained in the Seizure Property File.
4. Property should not be placed into official use unless it is believed the asset has a useful life of at least one year. Waivers to this must be authorized by TEOAF. Cost of maintenance and other financial expenditures to keep the asset operational will be considered when deciding if the asset should be placed into service.
5. Luxury vehicles will not be placed into official use, except for specific unique uses, (e.g., undercover operations), and are subject to other use limitations and record keeping requirements.
6. Assets cannot be placed into service or used in any way until formally forfeited.
7. In order for title to rest in the U.S. government, liens on vehicles or other personal property must first be paid. The U.S. government must have title to property prior to placing the property into official use.
8. Where forfeited property is not needed for official use in the seizing field office, the responsible Director, Field Operations should determine if the property is needed elsewhere within CI prior to public sale.
9. Real property may be placed into official use (in unusual circumstances) only if the proposed usage of the property is, and remains consistent with serving a significant and continuing federal law enforcement purpose.
10. When property is placed into official use, Form 4008 must be prepared by the AFC showing the date of placement, and then forwarded to the Headquarters AFTRAK Unit.

9.7.10.8  (01-18-2001)
PROPERTY DONATED PURSUANT TO THE "WEED AND SEED" INITIATIVE

1. Forfeited real property may be donated to qualified state and local public agencies and private nonprofit organizations to support the "Weed and Seed" Initiative as outlined in TEOAF Directive 9.
2. Upon donation of property to a qualified recipient, the AFC must prepare a Form 4008 showing the date of donation and then send it to the Headquarters AFTRAK Unit.

9.7.10.9  (01-18-2001)
SEIZED PROPERTY RETURNED TO OWNER, CLAIMANT, OR PETITIONER

1. In administrative seizures where seized property is returned to an owner, claimant, petitioner, or representative, Form 5914, Release and Receipt of Property, (Exhibit 9.7.6-30) must be executed. In addition to Form 5914, a "Hold Harmless Agreement" Release of Claim, (Exhibit 9.7.6-29), should be obtained from the owner, claimant, petitioner, or representative.
2. The executed forms are distributed as follows:
   1. Original-Seized Property File.
   2. Copy-Recipient of the property.
3. In administrative seizures, if the owner refuses to sign a release of claim and files suit against the special agent, the suit will be brought in federal court. The special agent should request the U.S. Attorney seek a Certificate of Reasonable Cause.
4. If property is returned in a judicial seizure, the special agent should have the U.S. Attorney seek a Certificate of Reasonable Cause (28 U.S.C. Section 2456).
5. When seized property is returned to an owner, claimant, petitioner, or representative, the AFC must prepare a Form 4008 showing the date of return. The form must be forwarded to the Headquarters AFTRAK Unit.

9.7.10.10  (01-18-2001)
FORFEITED PROPERTY DESTROYED BY COURT ORDER

1. In rare circumstances, forfeited property may be destroyed through the court ordered process where the public interest is best served through destruction of the property. Documentation of the destruction and the order authorizing it will be retained in the Seizure Property File.
2. When seized property is destroyed by court order, the AFC must prepare a Form 4008 showing the date of destruction. The form must then be forwarded to the Headquarters AFTRAK Unit.

9.7.10.11  (01-18-2001)
FIREARMS PROCEDURES

1. All weapons seized by CI are to be entered and tracked in AFTRAK. Firearms, like any other type of seized property, must either be forfeited or abandoned before being disposed.
2. If a seized firearm is illegal (e.g., bazooka, sawed-off shotgun, unregistered machine gun), the Bureau of Alcohol Tobacco and Firearms (ATF) can adopt the seizure. The AFC will initiate such a process by promptly contacting the resident ATF office. The SAC or designee, will confirm the adoption with a memorandum to be signed and returned by ATF showing receipt.
3. If the gun is legal, but possession was in violation of federal law, ATF can adopt the seizure within 120 days of seizure. However, every effort must be made to initiate the referral to ATF within 30 days of seizure. When weapons are seized, it is best to involve ATF from the beginning.
4. ATF can not destroy a weapon if they do not adopt the seizure. ATF is required to notify GSA when guns are forfeited. GSA then checks with other Federal agencies to determine whether they may have a need for the weapons. Weapons cannot be released to any state or local law enforcement agency. IRS does not sell firearms and/or weapons.
5. If serviceable weapons suitable for law enforcement use are not adopted by ATF, the AFC will complete SF 120, Report of Excess Personal Property (Exhibit 9.7.10-5), for submission to the regional GSA office for solicitation of need of other federal agencies. GSA will inform the AFC of any interested parties and may ask the AFC to contact the other agency. The AFC arranges for the personal delivery of the weapon to the interested party or mails them through Federal Express (or other overnight service) ONLY. If the U.S. Postal Service is used, the mail must be registered and delivered only between law enforcement offices. Delivery should not be scheduled for a weekend. The receiving agency will complete SF Form 122, Transfer Order Excess Personal Property (Exhibit 9.7.10-6), to receive the weapons. This form will be included in the file, and also sent to Fiscal Management with a memorandum from the SAC requesting removal of the item from the General Ledger. AFTRAK will also be updated. A weapon must be forfeited or abandoned to be disposed through the GSA.
6. Upon notice from the GSA that there are no interested federal agencies, the AFC will be responsible for having the weapons destroyed. Generally, this will involve taking a property officer as a witness to the destruction site, such as one used by the local authorities to destroy weapons. The weapon should be destroyed so that it cannot be placed again in working condition, which generally means melting. The AFC will document the destruction in writing for the file, have it signed by the witness, and submit updates to AFTRAK and to Fiscal Management to clear the General Ledger of the item.

9.7.10.12  (01-18-2001)
PROPERTY TRANSFERRED TO GENERAL SERVICE ADMINISTRATION (GSA)

1. Abandoned and forfeited property can be transferred to Agency-Wide Shared Services for disposal by GSA.
2. When abandoned and forfeited property is transferred to DSS for disposition, the AFC must prepare Form 4008 showing the date of transfer, and forward the form to Headquarters AFTRAK Unit.
3. Abandoned or forfeited property transferred to GSA can be disposed of through a private contractor if GSA elects not to handle the disposition and GSA recommends that a private contractor handle the disposition.

   Exhibit 9.7.10-1  (04-30-1998)
   Sample Telephone Bidder Registration Form

   Exhibit 9.7.10-2  (01-18-2001)
   Disposition Order

Exhibit 9.7.10-5  (04-30-1998)
Sample SF-120, Report of Excess Personal Property

Exhibit 9.7.10-6  (04-30-1998)
Sample SF-122, Transfer Order Excess Personal Property