oversight

Summary

Published by the Department of Justice, Office of Inspector General on 2017-03-29.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

            Office of the Inspector General
            U.S. Department
            Office          of Justice General
                   of the Inspector
            U.S. Department of Justice




Review of the Department’s Oversight
   of Cash Seizure and Forfeiture
              Activities




Evaluation and Inspections Division 17-02        March 2017
                                 EXECUTIVE SUMMARY
Introduction

       The U.S. Department of Justice (DOJ, Department) has authority to seize
property associated with violations of federal law and then assume title to that
property through a process known as asset forfeiture. The Department views asset
forfeiture as an important means of removing the proceeds of crime used to
perpetuate and incentivize criminal activity and uses forfeited funds to both
compensate victims of associated crimes and to fund certain Department and state
and local law enforcement activities. 1 Over the past 10 years, forfeitures through
the Department’s Asset Forfeiture Program have grown to over $28 billion. The
annual total value of forfeited assets has fluctuated during this time, in part
because in certain years the Department has reached large financial settlements
resulting in forfeiture.

       While the Department views asset forfeiture as an important law
enforcement tool, concerns have been raised about its use. Advocates of asset
forfeiture reform, including Members of Congress and public interest groups, have
expressed concerns that the ability to use forfeiture revenues to fund law
enforcement activities may incentivize the Department and state and local law
enforcement to use asset seizure and forfeiture beyond the purpose of deterring
and punishing criminal conduct and in a manner that creates risks to civil liberties.
This concern is heightened because Department law enforcement officers have the
authority to seize and forfeit cash or property without independent judicial
oversight and without charging the owner or possessor of the cash or property with
a crime. Advocates of reform also have argued that the Department’s historical,
but now largely proscribed practice of “adopting” state seizures for federal forfeiture
inappropriately allows state and local law enforcement to circumvent their own
state laws so that they can obtain a greater share of forfeiture proceeds than they
would receive otherwise.

Previous Reviews Related to Asset Seizure

        The Office of the Inspector General (OIG) has conducted numerous reviews,
audits, and investigations pertaining to the Department’s asset seizure and
forfeiture activities. For example, in our report on the Drug Enforcement
Administration’s (DEA) Use of Cold Consent Encounters at Mass Transportation
Facilities, we found that the DEA needed to better train its task forces and collect


       1
           The Criminal Division’s response to the formal draft of our report (attached as Appendix 4)
suggests that the OIG does not fully appreciate the importance of asset seizure and forfeiture in
addressing our nation’s crime and illegal drug problems. To the contrary, we have long recognized
that a well-run asset seizure program can be an important law enforcement tool, and this report takes
no issue with the Department’s view in this regard. Still, we believe the Criminal Division’s comments
indicate that it has missed a key point — that regardless of the importance of the law enforcement
tool, it must be used appropriately, with effective oversight, and in a way that does not place undue
risks on civil liberties.




                                                  i
and analyze more data to ensure that its law enforcement encounters and searches
are conducted in an unbiased and effective manner. 2 A separate OIG investigation
found that a task force led by Florida’s Village of Bal Harbour Police Department
(BHPD) conducted investigative money laundering operations in which the task
force laundered over $56 million. Based on intelligence collected from the money
laundering operations, other federal law enforcement agencies conducted additional
investigative work which, according to the task force, resulted in the arrest of
84 individuals and the seizure of approximately $49 million. The OIG found that
the BHPD received over $6 million in revenue derived, in part, from equitable
sharing payments related to these seizures. However, according to a task force
official, the task force did not file a single criminal indictment related to its money
laundering investigative operations. Such outcomes can raise questions about
whether seizures are intended to serve legitimate law enforcement interests or to
bolster law enforcement budgets.

       The OIG initiated the current review to evaluate the Department’s oversight
of cash seizure and forfeiture activities. We focus primarily on the activities of the
DEA because it was responsible for 80 percent of the Department’s cash seizures
from fiscal years 2007 to 2016. Of those DEA seizures that resulted in forfeiture,
81 percent were forfeited administratively. These forfeitures totaled approximately
$3.2 billion during this 10-year period.

Results in Brief

      The current review identified specific weaknesses in the Department’s
oversight of asset seizure and forfeiture activities. We believe that effective
oversight by the Department of these activities is essential to assure the public that
these authorities are being used appropriately.

        We found that the Department and its investigative components do not use
aggregate data to evaluate fully and oversee their seizure operations, or to determine
whether seizures benefit criminal investigations or the extent to which they may pose
potential risks to civil liberties. The Department and its components can determine
how often seizure and forfeiture advance or relate to criminal investigations only
through a manual, case-by-case review of component case management systems.
Although the Department can aggregate data that can be used to identify associated
risk factors and the outcomes of seizure activity, such as instances in which a portion
or all of a seizure was returned to the owner as the result of a successful challenge,
the Department’s investigative components do not actively use this type of aggregate
data to evaluate and oversee seizure operations. We do not doubt the financial and
deterrent effect seizures can have on criminal organizations and that intelligence
collected during seizure operations can assist investigations. However, without
evaluating data more systemically, it is impossible for the Department to determine
(1) whether seizures benefit law enforcement efforts, such as advancing criminal


       2
          DOJ OIG, Review of the Drug Enforcement Administration’s Use of Cold Consent Encounters
at Mass Transportation Facilities, Evaluation and Inspections Report 15-3 (January 2015).




                                                ii
investigations and deterring future criminal activity, or (2) the extent to which seizures
may present potential risks to civil liberties.

        In the absence of data and seizure-specific metrics that would have allowed
the OIG to assess how seizures and forfeitures related to criminal investigations, we
reviewed a judgmental sample of 100 DEA cash seizures. In addition to providing
the opportunity to assess some seizures that are particularly susceptible to civil
liberties concerns, this sample allowed us to better understand an important subset
of the Department’s seizure activity and also allowed us to identify additional
potential risk factors that can help the Department better understand and oversee
its seizure activity. We selected these 100 cash seizures based on the presence of
characteristics that we believe made them particularly susceptible to civil liberties
concerns. In that regard, we selected cash seizures that, according to Department
data, appeared to have occurred without a court-issued warrant and without the
presence of narcotics, the latter of which would provide strong evidence of related
criminal behavior. Our analysis of these seizures and their related outcomes
revealed three important areas for the Department’s consideration.

        First, we found that 85 of the 100 seizures occurred as a result of interdiction
operations at transportation facilities, such as airports, parcel distribution centers,
train stations, and bus terminals, or as a result of a highway interdiction or traffic
stop. All but 6 of the 85 encounters or situations that led to interdiction seizures
were initiated on the observations and immediate judgment of DEA agents and task
force officers absent any preexisting intelligence of a specific drug crime (the
remaining six were based on preexisting intelligence). This is particularly relevant
in light of the findings in our 2015 report highlighting potential risks to civil liberties
associated with cold consent encounters that occur during transportation
interdiction operations. 3

       Second, the DEA could verify that only 44 of the 100 seizures, and only 29 of
the 85 interdiction seizures, had (1) advanced or been related to ongoing
investigations, (2) resulted in the initiation of new investigations, (3) led to arrests,
or (4) led to prosecutions. When seizure and administrative forfeitures do not
ultimately advance an investigation or prosecution, law enforcement creates the
appearance, and risks the reality, that it is more interested in seizing and forfeiting
cash than advancing an investigation or prosecution.

      Third, our review revealed an area in which policy and training were
inadequate for ensuring consistency in seizure operations. If seizure operations are
not conducted consistently, this may foster a public perception that law
enforcement officers are using their seizure authority in an arbitrary manner.

       We also found that the Department’s investigative components do not
require their state and local task force officers to receive training on federal asset
seizure and forfeiture laws and component seizure policies prior to conducting
federal seizures. As a result, state and local task force officers, who wield the same

       3
           DOJ OIG, Cold Consent Encounters.




                                               iii
authorities to make seizures as the Department’s Special Agents, may not have
received training on these topics beyond what is included in their respective law
enforcement academy curriculum.

       In January 2015, Attorney General Eric H. Holder, Jr., issued an order that
eliminated most opportunities for state and local law enforcement to use adoptive
seizure to avail themselves of federal forfeiture and related equitable sharing
proceeds. Our analysis determined that the elimination of most adoptions
contributed to a reduction in the annual number of DEA cash seizures by over half
and the annual value of DEA cash seizures by more than a third. However, the
Attorney General’s Order and related guidance do not preclude the federal forfeiture
of property seized through joint task forces or as a result of federal/state
investigations. This may be of particular concern because, as demonstrated in this
report, seizures derived from joint interdiction operations may not always advance
a federal criminal investigation or lead to a prosecution.

       Based on our analysis, we also determined that the limitation on adoptions
resulting from the Attorney General’s Order has financially affected state and local
law enforcement, especially in at least two states where law enforcement frequently
had used federal adoption in the past because laws in those two states placed
limitations on state forfeiture. Prior to the issuance of the Attorney General’s
Order, law enforcement in these two states had received significant revenues from
adoption. Department, DEA, and state and local law enforcement officials in these
states told us that, consistent with congressional intent, they believe these funds do
foster cooperation among all levels of law enforcement by enabling them to
contribute personnel to federally led task forces and joint investigations. To the
extent that these funds do in fact foster cooperation, we believe it is important for
the Department to monitor the effects of the Attorney General’s Order and take
steps to ensure that it does not negatively impact law enforcement cooperation.

Recommendations

       Federal seizures and forfeitures should advance federal criminal
investigations, be consistent with civil liberties, and facilitate cooperation among
law enforcement. In this report, we make four recommendations to help the
Department develop policy and practices to appropriately direct and oversee its
asset seizure and forfeiture activities to achieve these goals.




                                           iv
                                     TABLE OF CONTENTS
INTRODUCTION ............................................................................................. 1

        Background .......................................................................................... 1

        Scope and Methodology of the OIG Review ............................................ 15

RESULTS OF THE REVIEW ............................................................................. 16

        The Department Does Not Measure How Its Asset Seizure and Forfeiture
        Activities Advance Criminal Investigations .............................................. 16

        The DEA Conducts Cash Seizures that May Not Advance or Relate to
        Criminal Investigations and May Pose Potential Risks to Civil Liberties ....... 20

        The Department Does Not Require Its State and Local Task Force Officers
        to Receive Training on Federal Asset Seizure and Forfeiture Laws Prior to
        Conducting Federal Seizures................................................................. 30

        The Attorney General’s Order Eliminates Most Opportunites for State
        and Local Law Enforcement to Use Federal Forfeiture When Federal
        Involvement in a Seizure is Limited; However, Current Policy Does Not
        Address All Areas of Concern ................................................................ 32

        The Attorney General’s Order Seeks to Prevent Law Enforcement from
        Using Adoption to Circumvent State Seizure Laws; It Also May Have
        the Potential to Affect Cooperation between Federal and State and
        Local Law Enforcement ........................................................................ 35

CONCLUSION AND RECOMMENDATIONS ......................................................... 38

        Conclusion ......................................................................................... 38

        Recommendations............................................................................... 40

APPENDIX 1:         EXPANDED METHODOLOGY ..................................................... 41

        Standards .......................................................................................... 41

        Data Analysis ..................................................................................... 41

        Site Visits .......................................................................................... 41

        Interviews .......................................................................................... 42

        Document Review ............................................................................... 42

        Sample of DEA Seizure and Forfeiture Activities ...................................... 43




                                                       v
APPENDIX 2:   ATTORNEY GENERAL’S ORDER PROHIBITING CERTAIN
              FEDERAL ADOPTIONS ............................................................. 44

APPENDIX 3:   POLICY DIRECTIVE 15-2: ADDITIONAL GUIDANCE .................... 46

APPENDIX 4:   THE CRIMINAL DIVISION’S RESPONSE TO THE DRAFT REPORT .... 49

APPENDIX 5:   OIG ANALYSIS OF THE CRIMINAL DIVISION’S RESPONSE ........... 59

     The Criminal Division’s General Comments and the OIG’s Reply ................ 59




                                            vi
                                      INTRODUCTION
Background

        The U.S. Department of Justice (DOJ, Department) has authority to seize
property associated with violations of federal law, and then assume title to that
property through a process known as asset forfeiture. The Department views asset
forfeiture as an important means of dismantling criminal organizations and
removing the proceeds of crime used to perpetuate criminal activity. 4 The
Department uses forfeiture proceeds to compensate victims of the associated
crimes and to fund other DOJ asset seizure and forfeiture activities. 5 Through the
Equitable Sharing Program, the Department has distributed substantial forfeiture
proceeds to state and local law enforcement partners to encourage and support
their cooperation. According to the Department, it has returned more than
$4 billion in forfeited funds to crime victims since fiscal year (FY) 2000 and has
provided over $6 billion to state and local law enforcement through equitable
sharing during the same period. 6

Civil Liberties Concerns regarding Asset Seizure and Forfeiture Activities

        Members of Congress, public interest groups, and various commentators
have raised concerns about the potential risks to civil liberties that are posed by
certain aspects of the Department’s law enforcement seizure and forfeiture
activities. Specifically, these groups have expressed concern that asset forfeiture
authorities allow law enforcement officers to seize and forfeit cash or property
without independent judicial oversight and without charging the owner or possessor
of the cash or property with a crime. Further, there are concerns that the
Department’s Equitable Sharing Program may improperly incentivize state and local




       4
          The Criminal Division’s response to the formal draft of our report (attached as Appendix 4)
suggests that the OIG does not fully appreciate the importance of asset seizure and forfeiture in
addressing our nation’s crime and illegal drug problems. To the contrary, and as detailed in our
analysis of the Criminal Division’s response (attached as Appendix 5), we have long recognized that a
well-run asset seizure program can be an important law enforcement tool, and this report takes no
issue with the Department’s view in that regard. Still, we believe that the Criminal Division’s
comments indicate that it has missed a key point — that regardless of the importance of the law
enforcement tool, it must be used appropriately, with effective oversight, and in a way that does not
place undue risks on civil liberties.
       5
         The Department also uses forfeiture proceeds to support Joint Law Enforcement Operations,
a program the Department uses to pay for officer overtime and equipment needs.
       6
            For example, the Department will use forfeited assets associated with Bernard Madoff’s
crimes to compensate his victims. The Department anticipates making additional payments of
$4 billion in this matter, bringing the total amount of victim compensation to over $8 billion by the
close of the Madoff compensation process. The Department also deposits the proceeds of forfeiture in
the Assets Forfeiture Fund, which is used to cover the costs associated with accomplishing the legal
forfeiture of property and payments to law enforcement partners.




                                                  1
law enforcement seizures by providing access to a greater share of forfeiture
proceeds than may be available under state law. 7

       The DOJ Office of the Inspector General (OIG) has conducted several
reviews, audits, and investigations related to the Department’s asset seizure and
forfeiture activities. Through this body of work, we have discussed:

   •   seizure-centric law enforcement operations that may be prone to racial profiling,

   •   instances in which a lack of data collection impeded the ability of law
       enforcement to ensure that such activities were conducted in an unbiased
       and effective manner,

   •   instances in which additional training was needed to ensure that law
       enforcement officers conduct seizure operations appropriately, and

   •   instances in which a task force appeared to be conducting seizures without
       pursuing criminal investigations.

         In January 2015, the OIG issued a report on the Drug Enforcement
Administration’s (DEA) use of cold consent encounters at mass transportation
facilities. The OIG initiated that review after receiving complaints from two African-
American women who claimed that they were inappropriately racially profiled
during separate DEA-initiated cold consent encounters at an airport.8 Although
neither complaint was substantiated, the Department has noted that consent
encounters can be susceptible to racial profiling. This is because cold consent
encounters can occur in one of two ways: (1) when an agent approaches an
individual based on no particular behavior by the individual or (2) when an agent
approaches an individual based on the officer’s perception that the person is
exhibiting characteristics indicative of a drug crime without any independent
predicating information.

       Because of the potential sensitivity of these types of encounters that often lead
to searches and seizures, effective oversight by management is necessary to ensure
that these encounters are conducted appropriately. However, we found that the DEA
had not collected sufficient data on cold consent encounters to assess whether they
are conducted in an unbiased or effective manner. Further, we found that the DEA

       7
           For example, U.S. Senate Committee on the Judiciary, The Need to Reform Asset Forfeiture,
114th Cong., 1st sess., April 15, 2015. The Institute for Justice, a public interest group, also
expressed concerns about the use of seizures and administrative forfeiture that occur without court
involvement, as well as equitable sharing, in its report Policing for Profit: The Abuse of Civil Asset
Forfeiture, 1st ed. (March 2010) and 2nd ed. (November 2015). Many news organizations have
published articles on these topics, including “Stop and Seize,” Washington Post, September 6, 2014;
“Efforts to Curb Asset Seizures by Law Enforcement Hit Headwinds,” Wall Street Journal, June 4,
2015; “Government Shouldn’t Seize Assets without Greater Proof of Crime,” Chicago Sun-Times,
April 20, 2016; and “DEA Regularly Mines Americans’ Travel Records to Seize Millions in Cash,” USA
Today, August 11, 2016.
       8
          DOJ OIG, Review of the Drug Enforcement Administration’s Use of Cold Consent Encounters
at Mass Transportation Facilities, Evaluation and Inspections Report 15-3 (January 2015).




                                                  2
had not ensured that training and operational requirements were clearly established
and communicated to the interdiction task force members who conduct these
encounters or that all group members had attended the DEA’s interdiction training.9

        In or around 2012, the OIG investigated concerns about the forfeiture
activities of a money laundering task force led by Florida’s Village of Bal Harbour
Police Department (BHPD). The investigation, initiated based on information
received from the Department’s Money Laundering and Asset Recovery Section
(MLARS), found that the money laundering task force had conducted operations
that were purportedly designed to build cases against members of drug cartels and
criminal organizations that attempted to launder drug proceeds through undercover
task force officers. During the investigation, witnesses told the OIG that between
2008 and 2011 the task force had conducted 227 cash pickups in which it laundered
over $56 million. Based on intelligence collected from the cash pickups, other
federal law enforcement agencies had conducted surveillance operations and
investigations, which, according to the task force, resulted in the arrest of
84 individuals and the seizure of approximately $49 million. Following the seizure,
the task force submitted an equitable sharing claim against subsequent seizures.
Consequently, the OIG found that the BHPD received over $6 million in equitable
sharing funds in FYs 2010 and 2011, a significant increase from the years prior to
the formation of the task force. The OIG did not determine the extent to which
other federal investigations resulted in federal prosecutions, but we found that no
BHPD-led task force cases were presented to or prosecuted by the Florida State
Attorney’s Office and that the BHPD did not maintain files or documentation related
to the individuals arrested. 10

Methods of Seizure

       There are two primary methods by which federal law enforcement officers
may legally seize assets: (1) an officer may request a seizure warrant from a
federal judge if, prior to a seizure, the officer can establish that there is probable
cause that an asset is subject to forfeiture or (2) an officer may seize assets
pursuant to a lawful arrest or search, or when another exception to the Fourth
Amendment warrant requirement applies and there is probable cause to believe
that the property is subject to forfeiture. 11 An interdiction operation at a mass

        9
            The DEA told us that these types of encounters and searches are used primarily by DEA
interdiction task force groups that interdict drug-related cash proceeds carried through transportation
facilities by cash couriers. Interdiction task force groups are teams of DEA Special Agents and
deputized state and local law enforcement officers.
        10
           DOJ OIG, Village of Bal Harbour Police Department, Bal Harbour, Florida, Case No. 2012-
005018 (September 2012). The OIG investigation was initiated based upon information received from
the DOJ’s MLARS that the BHPD had failed to provide adequate documentation to ensure compliance
with DOJ policy and to determine whether funds had been obligated in regard to impermissible
expenditures. The MLARS also requested that the OIG determine the nature of the BHPD-led task
force. Due in part to the OIG investigation, the Department removed the BHPD from the equitable
sharing program and the BHPD returned over $1.2 million equitable sharing funds to the Department.
        11
           The FBI’s Forfeiture Corporate Policy Directive and Policy Implementation Guide (2012)
states that “some courts have defined probable cause ‘as a reasonable ground for belief of guilt,
supported by less than prima facie proof but more than mere suspicion.’” See United States v.
                                                                                               (Cont’d)


                                                   3
transportation facility is one example of a law enforcement operation in which
federal agents, working in conjunction with state and local task force officers, may
initiate an encounter with an individual without a warrant or without prior
knowledge of a specific drug crime. 12 During an encounter, the officer may either
receive consent from an individual or determine that there is probable cause to
search the individual and his or her personal effects without consent based on
observations and/or questioning the individual. If, as a result of the questioning,
search, or other investigatory action, the officer establishes probable cause that
property has been used in the commission of a crime, the officer may seize the
property. State and local law enforcement officers also perform highway
interdictions, during which they obtain consent or establish probable cause to
search vehicles after making traffic stops based on observed traffic infractions.
Although DOJ agents do not typically perform highway interdiction operations, they
sometimes provide investigative support to such operations when state and local
officers identify criminal activity that justifies federal involvement.

        Federal law enforcement officers may make probable cause seizures as a
result of a federal investigation or through federal involvement in a joint
investigation. Joint investigations are investigations in which federal law
enforcement officers work with state and local law enforcement agencies, other
federal agencies, or foreign countries to enforce federal laws. Seizures may
originate from a joint federal, state, or local task force investigation or from state or
local investigations that become state or federal cases.

       According to Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); DEA;
and Federal Bureau of Investigation (FBI) asset forfeiture policies, following a
seizure, the federal agent or task force officer who made the seizure must complete
an investigative report explaining the circumstances and probable cause that led to
the seizure. 13 These policies explain that the agent’s supervisor or an agency legal
advisor must then review and approve the report to ensure that there was sufficient
probable cause to warrant federal forfeiture. 14 Investigative agencies also use the
investigative report for reference purposes to record the names of all persons from
whom cash was seized or who they believe to be related to the crime underlying the
seizure. For example, DEA personnel enter the names identified in an investigative
report into the DEA’s Narcotic and Dangerous Drug Information System (NADDIS) so


$64,000 in U.S. Currency, 722 F.2d 239, 244 (5th Cir. 1984) (quoting United States v. One 1978
Chevrolet Impala, 614 F.2d 983, 984 (5th Cir. 1980)).
        12
             DOJ OIG, Cold Consent Encounters.
        13
           ATF, Review of Probable Cause Statements Standard Operating Procedures (2014); DEA
Agents Manual (2015); and FBI, Forfeiture Corporate Policy Directive and Policy Implementation Guide
(2012).
        14
           When determining whether to make a seizure, DOJ law enforcement officers and task force
officers must also consider DOJ policies. For example, DOJ policies provide that, unless there is an
overriding law enforcement interest, the minimum amount of a cash seizure must be at least $5,000
unless the person from whom the cash was seized either was or is being prosecuted by state or
federal authorities for criminal activities related to the property. In the latter case, the policy provides
that the amount should be at least $1,000.




                                                     4
that other DEA agents and law enforcement officers can use this information to
identify links between past, present, and potential future investigations.

Federal Adoptive Seizure

       Federal law permits law enforcement components to “adopt” seizures made
under state law, as long as the conduct giving rise to the seizure is also a violation
of a federal law that provided for forfeiture. 15 On January 16, 2015, Attorney
General Eric H. Holder, Jr., issued an Order entitled Prohibition on Certain Federal
Adoptions of Seizures by State and Local Law Enforcement Agencies (the Attorney
General’s Order). 16 This Order ended most federal adoptions of assets such as
vehicles, valuables, and cash seized by state or local law enforcement under state
law. The Attorney General’s Order stipulated that only property that directly relates
to public safety (firearms, ammunition, explosives, and property associated with
child pornography) remained eligible for federal adoption, though the Order
provided that it did not apply to property seized through joint task forces or as a
result of federal/state investigations or activities coordinated with federal
authorities as part of ongoing federal investigations. 17 Shortly after the Attorney
General’s Order, on February 10, 2015, the Department issued Policy
Directive 15-2, which required that an Assistant United States Attorney (AUSA)
determine whether there is sufficient federal involvement for a seizure made by
state and local law enforcement to be eligible for federal forfeiture under the
provision of the Attorney General’s Order that allows seizures resulting from joint
task forces and investigations. 18

       According to the Department, in the 1980s, when adoption policies initially
were implemented, few states had forfeiture statutes similar to the federal asset
forfeiture laws. Consequently, when state and local law enforcement agencies
seized criminal proceeds and property used to commit crimes, they often lacked the
legal authority to forfeit the seized items. Adoption allowed state and local law
enforcement to turn over seized assets to the federal government instead of
returning those assets to criminals. In a press release accompanying the Attorney
General’s Order in 2015, the Department explained that it regularly reviews its
asset forfeiture policies and had determined that most federal adoptions were less
necessary because all states now have civil or criminal forfeiture laws.


        15
            18 U.S.C. 981(b)(2)(C). If a DOJ component declines to adopt a seizure made by a state or
local law enforcement agency, a U.S. Attorney may request permission, from the Department’s MLARS,
to directly adopt the seizure for federal forfeiture. If the MLARS approves the request, the U.S. Marshals
Service (USMS) will take custody of the asset in support of a related judicial forfeiture action.
       16
           U.S. Attorney General Order, Prohibition on Certain Federal Adoptions of Seizures by State
and Local Law Enforcement Agencies, January 16, 2015 (see Appendix 2).
        17
           According to the Attorney General’s Order, seizures of property that do not fall within the
public safety provision can still be adopted with the approval of the Assistant Attorney General for the
Criminal Division.
        18
          DOJ Policy Directive 15-2, Additional Guidance on the Attorney General’s January 16, 2015,
Order on Adoptions, February 10, 2015 (see Appendix 3).




                                                    5
        Department officials from the Office of the Deputy Attorney General and the
MLARS explained to us that the Attorney General’s Order was designed, in part, to
limit federal involvement in state and local seizures that previously had resulted in
federal forfeiture. The officials explained that the Department had very little
oversight of seizures made independently by state and local law enforcement and
that many of these seizures may not have justified federal forfeiture because they
did not help to advance federal investigations. They added that in some instances
state and local law enforcement agencies had used adoption to obtain a greater
percentage of forfeiture revenue through federal equitable sharing (discussed
below) than was available through state forfeiture laws.

        Before the Attorney General’s Order, from FY 2007 through FY 2014, ATF,
the DEA, and the FBI adopted approximately 32,000 seizures, according to an OIG
analysis of data from the Department’s Consolidated Asset Tracking System
(CATS). As shown in Figure 1, the prohibition on adoptive seizure most
significantly affects the DEA because, from FY 2007 through FY 2014, the DEA
accounted for 88 percent of the total number of ATF, DEA, and FBI adoptive
seizures, amounting to $742 million of the $880 million total. 19

                                             Figure 1
            ATF, DEA, and FBI Adoptive Seizures, FY 2007 – FY 2014

                                 FBI                            ATF
                                1,742                          2,179
                                (5%)                           (7%)




                                               DEA
                                              27,866
                                              (88%)




                          Total Number of Adoptive Seizures: 31,787

               Source: CATS

Types of Forfeiture

       Title to seized assets may be transferred to the federal government through
three types of forfeiture: (1) criminal, (2) civil, or (3) administrative. Criminal

       19
           The adoptive seizures that we detail above and throughout this report do not include
firearms and ammunition. This is because the Attorney General’s Order does not apply to the
adoption of these asset types.




                                                  6
forfeiture occurs after an individual has been found guilty of an underlying criminal
offense. Civil and administrative forfeiture do not require the owner to be arrested
or convicted of a crime, but they do require that the government demonstrate, by a
preponderance of the evidence, that the seized property was connected to a crime.
Assets may be forfeited through either civil or criminal proceedings only if a court
or jury determines that the seized asset constituted proceeds or instrumentalities of
a crime. By contrast, administrative forfeiture requires only an agency finding, as
opposed to a court finding, that the seized asset constituted proceeds or
instrumentalities of a crime. All administrative forfeiture proceedings may,
however, be terminated in favor of a civil forfeiture proceeding involving a court
determination, if requested by the property owner.

       The Department’s Asset Forfeiture Policy Manual and the U.S. Attorneys’
Manual provide that administrative forfeiture must be used in all but specified
situations. 20 Assets such as cash, vehicles, and other personal property valued at
$500,000 or less may be administratively forfeited. 21 According to the MLARS,
administrative forfeiture may be the only avenue available for forfeiture when a
criminal case is not possible, such as in instances when property is in the
possession of a third party or is linked to an unavailable criminal defendant, such as
a fugitive or a deceased person. Further, the MLARS asserts that many
administratively forfeited assets are seized pursuant to court-issued seizure
warrants or are linked to ongoing criminal investigations. 22

       According to an OIG analysis of data from CATS, between FY 2007 and
FY 2016, ATF, the DEA, and the FBI forfeited 77 percent of the number and
23 percent of the value of all assets through the administrative process. The large
disparity between the proportional number of administratively forfeited assets
compared to the proportional value of administratively forfeited assets is due to a
small number of large financial settlements resulting in civil forfeiture. For
example, in FY 2012, ATF, the DEA, and the FBI administratively forfeited
approximately 27,500 assets, with a total value of $551 million. In the same year,
the Department civilly forfeited one asset worth $7.2 billion related to the crimes of
Bernard Madoff.

Equitable Sharing of Forfeiture Revenues

       In 1984, to encourage cooperation among all levels of law enforcement,
Congress authorized the Attorney General to transfer federally forfeited property to
state and local law enforcement agencies and required that the value of a transfer
bear “a reasonable relationship to the degree of direct participation of the state or


        20
           DOJ MLARS, Asset Forfeiture Policy Manual (2016), Ch. 2, and DOJ Offices of the U.S.
Attorneys, U.S. Attorneys’ Manual (2016), Ch. 9.
        21
             Real property and personal property valued over $500,000 must be civilly or criminally forfeited.
        22
           As we detail in the Results of the Review, the MLARS acknowledges that the Department
lacks an automated way to link forfeited assets to particular criminal investigations and prosecutions,
which makes it difficult to demonstrate these connections in larger data sets.




                                                        7
local agency in the law enforcement effort resulting in the forfeiture.” 23 The
Department facilitates these transfers through its Equitable Sharing Program, which
allows participating state and local law enforcement agencies to receive up to
80 percent of the proceeds of joint investigative or adoptive forfeitures. 24

       Although equitable sharing revenues can enhance law enforcement
collaboration and provide state and local law enforcement additional resources to
fight crime, advocates of forfeiture reform assert that equitable sharing may
incentivize seizure and forfeiture because it allows state and local law enforcement
to keep a substantial portion of the forfeiture revenues. As noted at the outset of
this report, between FYs 2000 and 2016, the Department’s Equitable Sharing
Program distributed over $6 billion to state and local law enforcement agencies.

       On December 21, 2015, in response to a combined $1.2 billion rescission to
the Assets Forfeiture Fund, the Department temporarily deferred all equitable
sharing payments to its state, local, and tribal partners. 25 The Department
subsequently announced that it would resume making payments under the program
as of March 28, 2016.

Law Enforcement Purposes and Civil Liberties Concerns Related to Asset Seizure
and Forfeiture

      There are valid law enforcement purposes for asset seizure and forfeiture;
however, if misused, they can undermine civil liberties and public confidence in law
enforcement. During congressional hearings on civil asset forfeiture reform in
1997, the Assistant Chief of the Department’s Asset Forfeiture and Money
Laundering Section (subsequently renamed the Money Laundering and Asset
Recovery Section) at the time stated:

        No matter how effective asset forfeiture may be as a law enforcement
        tool — and this is a very effective law enforcement tool — that no
        program, no tool of law enforcement, however effective at fighting
        crime, can survive long if the public thinks that it violates the basic



        23
             21 U.S.C. § 881(e)3 (1984).
        24
            The MLARS is responsible for managing the Equitable Sharing Program and overseeing
equitable sharing participants; however, the MLARS is responsible for determining distributions only in
cases in which the forfeited assets total $1 million or more. If assets are administratively forfeited
and the total appraised value of all items forfeited is less than $1 million, the head of an investigative
agency, or designated agency headquarters official, decides the appropriate equitable sharing amount
to be distributed. U.S. Attorney’s Offices decide equitable sharing amounts in judicial cases in which
seized assets total less than $1 million. The USMS is responsible for distributing equitable sharing
payments.
        25
            The Bipartisan Budget Act of 2015 included a $746 million permanent reduction of Asset
Forfeiture Program Funds. This reduction, or “rescission,” means that $746 million was transferred
from the Asset Forfeiture Program Funds to the General Treasury Fund. The Consolidated
Appropriations Act of 2016 included an additional $458 million reduction in the FY 2016 Asset
Forfeiture Program Funds.




                                                    8
       principles of fairness and due process that lie at the core of the
       American system of justice. 26

      Table 1 summarizes the Department’s stated law enforcement purposes and
the commonly expressed concerns about federal seizure authorities and different
elements of the Department’s asset seizure and forfeiture activities.

                                               Table 1
     Law Enforcement Purposes and Civil Liberty Concerns regarding the
            Department’s Asset Seizure and Forfeiture Activities

                        Law Enforcement Purposes                     Civil Liberties Concerns
                                                               Seizure can occur without judicial
     Non-          Allows agents to quickly seize              review or prior knowledge of a specific
   Warranted       suspected criminal proceeds on site         crime.
    Seizure        without having to seek a warrant            Seizure can occur without an arrest or
                                                               prosecution of the owner.
                                                               Forfeiture can occur without an arrest
 Administrative     Increases the speed and efficiency of      or prosecution of the owner.
   Forfeiture       uncontested forfeiture actions *           Forfeiture can occur without
                                                               independent judicial oversight.
                    Enhances cooperation between state
                    and local law enforcement and federal
                    law enforcement                            May incentivize seizure and forfeiture
    Equitable       Provides state and local law               because it allows state and local law
     Sharing        enforcement additional resources to        enforcement to keep some of the
                    fight crime and cover expenses             forfeiture revenues
                    associated with participation in federal
                    task forces and joint investigations
                                                               Incentivizes state and local law
                    Provides federal forfeiture authority in   enforcement to pursue forfeitures that
                    cases where state law does not             are not supported by state law due to
                    support forfeiture                         the availability of federal equitable
                                                               sharing revenues
                    Strengthens collaboration with federal     Department investigative agencies
    Adoption        law enforcement because it offers          have limited oversight into the law
                    additional opportunities to (1) share      enforcement activity surrounding an
                    information regarding state and local      adoptive seizure.
                    seizure activity and (2) access
                    additional resources to cover expenses
                    associated with participation in federal
                    task forces and joint investigations
* DOJ MLARS, Asset Forfeiture Policy Manual (2014)
Source: OIG analysis



       26
          Stephan D. Casella, Assistant Chief, Asset Forfeiture and Money Laundering Section, before
the Committee on the Judiciary, U.S. House of Representatives, concerning the “Civil Forfeiture
Reform Act” (June 11, 1997).




                                                   9
The Department’s Seizure Activities

       We analyzed data in CATS, the Department’s system for tracking asset
seizures, to assess the seizure activity of ATF, the DEA, and the FBI because these
are the Department’s investigative components with the asset seizure authorities
most relevant to our review. 27 As explained below, we focused our analysis on the
DEA because it accounts for the great majority of cash seizures. Table 2 describes
the investigative responsibilities of these agencies that can give rise to seizure.

                                               Table 2
     DOJ Investigative Component Responsibilities that May Give Rise to
                                 Seizure

       Component                                         Responsibilities
                            ATF enforces federal laws and regulations relating to alcohol, tobacco,
                            firearms, explosives, and arson. ATF has the authority to seize and
            ATF             forfeit firearms, ammunition, explosives, alcohol, tobacco, currency,
                            conveyances, and certain real property involved in criminal activity.
                            The DEA enforces federal drug laws and implements major investigative
                            strategies against drug networks and cartels. The DEA has the authority
            DEA             to seize a wide range of money and property used or acquired in
                            connection with federal drug crimes.
                            The FBI enforces a broad range of criminal violations, integrating the use
                            of asset forfeiture into its overall strategy to eliminate targeted criminal
                            enterprises. Seizures conducted by the FBI are, for example, the result
            FBI             of white collar crime, organized crime, drug crime, violent crime, and
                            terrorism investigations. The FBI has the authority to seize a wide range
                            of property used or acquired through illegal activity.
Source: DOJ Asset Forfeiture Program

       ATF, the DEA, and the FBI seize many different types of assets, including
cash, jewelry, vehicles, real property, financial instruments, firearms, and
ammunition. CATS data indicates that these three components were involved in
approximately 425,000 asset seizures between FY 2007 and FY 2016, of which
52 percent were seizures of firearms and ammunition involved in criminal activity. 28
Despite the large volume of firearms and ammunition seizures, most of which are
seized by ATF, this report does not focus on these types of seizures. The
Department does not sell forfeited firearms and ammunition and, as a result, these

       27
            The USMS is the Department’s primary custodian of seized property. The USMS manages
and disposes of all valued assets that are not considered evidence, contraband, or targeted for use by
individual law enforcement agencies. Although an investigative component, the USMS has limited
seizure authority and seizes assets primarily when a U.S. Attorney’s Office brings a forfeiture action.
This occurs in a relatively small number of cases relative to the seizures conducted by the DEA and
other law enforcement components.
       28
           Multiple assets may be seized during a law enforcement operation or encounter. In certain
instances, multiple pieces of property may be seized from one or more individuals. Each piece of
property is generally given its own CATS Asset ID number. For the purposes of this report, we
calculated the unique number of CATS Asset ID numbers provided to us and defined these unique
occurrences as “seizures.”




                                                  10
types of assets do not result in deposits to the Assets Forfeiture Fund. 29 Instead,
we focused our attention on the seizure of cash because, of the remaining
categories of seized assets, cash is the asset most frequently seized and is of
particular concern in the public debate about asset seizure and forfeiture. Figures 2
and 3 show the cash seizure activities of ATF, the DEA, and the FBI, and indicate
that the DEA accounts for a substantial majority of the Department’s cash seizures,
both in terms of overall number of seizures and their value.

                                              Figure 2
                      Number of ATF, DEA, and FBI Cash Seizures
                                 FY 2007 – FY 2016

                                                               ATF
                                                              4,749
                                                              (5%)
                                            FBI,
                                           14,708
                                           (15%)




                                                  DEA
                                                 80,141
                                                 (80%)



                           Total Number of Cash Seizures: 99,598



            Notes: These numbers represent the aggregate adoptive and non-adoptive
            cash seizure activities of ATF, the DEA, and the FBI and therefore include all
            cash seizures that may have resulted in criminal, civil, and administrative
            forfeiture.
            These numbers reflect the total number of assets that are coded as the asset
            type “Cash/Currency” in CATS. The Department acknowledges that errors in
            coding occur and that as a result these numbers may be over- or understated.
            Source: CATS




       29
             Forfeited firearms and ammunition are generally destroyed; however, a small number of
forfeited firearms are transferred to the Department for official use.




                                                  11
                                                                   Figure 3
                                            Approximate Value of ATF, DEA, and FBI Cash Seizures
                                                            FY 2007 – FY 2016

                                         $4,500
                                                                       $4.15 billion
                                         $4,000
     Asset Value at Seizure (Millions)




                                         $3,500

                                         $3,000

                                         $2,500

                                         $2,000

                                         $1,500
                                                                                       $1.07 billion
                                         $1,000

                                          $500
                                                    $141 million
                                           $-
                                                        ATF                DEA             FBI

   Note: These numbers represent the aggregate value of adoptive and non-adoptive cash
   seizure activities of ATF, the DEA, and the FBI and therefore include the value of all cash
   seizures that may have resulted in criminal, civil, and administrative forfeiture.
   These numbers reflect the total value of assets that are coded as “Cash/Currency” in CATS.
   The Department acknowledges that errors in coding occur and that as a result these numbers
   may be over- or understated.
   Source: CATS

        In Table 3 below, we further break down DEA cash seizures by asset value
category demonstrating that, although the amount of cash the DEA most frequently
seizes is less than $100,000, the overall value of the DEA’s cash seizures is largely
driven by seizures of greater than $100,000. According to the MLARS, this
distinction is important because the ongoing public debate about asset seizure and
forfeiture has focused particularly on low-value cash seizures, and the MLARS
asserts that seizures in excess of $100,000 generally do not trigger the same type
of civil liberties concerns as lower value seizures because it is unlikely that an
individual suspected of a drug crime would have a legitimate claim to suspected
drug proceeds in excess of $100,000.




                                                                     12
                                            Table 3
              Number, Value, and Percentages of DEA Cash Seizures
                              FY 2007 – FY 2016
                                                                                   % of
          Asset Value           Number of        % of          Cumulative
                                                                                 Cumulative
           Category              Assets         Number       Value of Assets
                                                                                   Value

      Less than $100,000              71,478          89%                $1.24           30%
      $100,000 and over                 8,663         11%                $2.91           70%
      Total                          80,141          100%               $4.15          100%
     Notes: We express Cumulative Value of Assets in billions of dollars. These figures
     represent the aggregate cash seizure activities of the DEA and therefore include all cash
     seizures which may have resulted in criminal, civil, and administrative forfeiture.
     Source: CATS

       According to CATS, approximately 65,000, or 81 percent, of all DEA cash
seizures have been forfeited administratively at a value of over $3.2 billion. While
DEA and Department law enforcement officers have the authority to seize and
administratively forfeit cash without independent judicial oversight and without
charging the owner or possessor of the cash or property with a crime, as we
detailed above, the MLARS asserts that many administratively forfeited assets are
seized pursuant to court-issued seizure warrants or linked to ongoing criminal
investigations.

Post-Seizure Claim and Petition Process and the Disposition of the DEA’s Cash
Seizures

       The post-seizure claim and petition process begins when an investigative
agency, such as the DEA, seizes property and seeks to forfeit the property
administratively. Within 60 days after the date of seizure, the agency must provide
notice to possible claimants of the government’s intent to forfeit the property. If an
individual contests the forfeiture by filing a claim against the property,
administrative forfeiture proceedings are terminated, and the government has
90 days to proceed with a civil or criminal forfeiture action or return the property
and initiate a forfeiture action a later date. If no individual files a timely, valid
claim, the seizing agency’s counsel evaluates the probable cause for seizure and
forfeiture, as documented in investigative files and other relevant materials, and
either enters a declaration of forfeiture, transferring title and ownership of the
property to the federal government, or declines forfeiture and returns the asset.

       Alternatively, any interested parties, such as innocent owners of the asset,
lienholders, victims of the crimes underlying the forfeiture, or any other interested
parties can petition the seizing agency to return the administratively forfeited asset.
Upon receipt of the petition, the seizing agency evaluates the petitioner’s interest in




                                                13
the asset and then rules on the merits of the petition; this may result in the return
of a portion or the entire value of the forfeited asset. 30

       Given the volume of DEA cash seizures, we analyzed how much of the DEA’s
seized cash was forfeited and deposited into the Department’s Assets Forfeiture
Fund versus being returned to the individual from whom the asset was seized or to
another party such as an owner, lienholder, or crime victim. Of the DEA’s
80,141 cash seizures that occurred between FYs 2007 and 2016, a claim or a
petition was filed for 15,867 (20 percent). Of these 15,867 seizures with a related
claim or petition, 6,232 (39 percent) resulted in a full or partial return. The DEA
also returned part or all of an additional 492 cash seizures for which it had not
received a claim or a petition.

       Overall, the DEA returned all or part of 6,724 cash seizures, or 8 percent of
the seizures it made, between FYs 2007 and 2016. In terms of value, we also
found that the DEA returned approximately $153 million of its cash seizures, while
approximately $3.8 billion was forfeited and deposited into the Department’s Assets
Forfeiture Fund. Because, as was mentioned above, the MLARS asserts that cash
seizures of less than $100,000 may raise more civil liberties concerns than those
above $100,000, we distinguish between the disposition for cash seizures less than
and greater than $100,000 in Tables 4 and 5.

                                                  Table 4
      Number and Percentage of DEA Cash Seizures by Disposition Type
                           FY 2007 – FY 2016
                                                                 Number of               Number of
                                                               Dispositions of         Dispositions of
                      Disposition Type                       Seizures Less than       Seizures Greater
                                                                  $100,000             than $100,000
                                                              Number          %        Number         %
 Full Deposit to Assets Forfeiture Fund                           63,454      79%          7,694      10%
 Full Return to Owner, Lienholder, or Victim                       3,170       4%            155      <1%
 Partial Return *                                                  2,997       4%            402       1%
 Not Adjudicated at Time of Data Request **                        1,680       2%            395      <1%
 Other ***                                                           177      <1%             17      <1%
 Total                                                     71,478      89%         8,663             11%
* The Department may forfeit a portion of seized property and return the remainder to an
owner, lienholder, or victim.
** At the time of our data request, not all seized assets were adjudicated through the forfeiture
process.
*** A small percentage of seized assets were disposed of by other means (e.g., adoptive
seizures returned to state authorities for potential state seizure).
Source: CATS



         30
              The MLARS rules on petitions for cases in which a civil or criminal forfeiture has occurred.




                                                      14
                                              Table 5
         Value and Percentage of DEA Cash Seizures by Disposition Type
                              FY 2007 – FY 2016
                                                      Value of                     Value of
                                                  Dispositions of             Dispositions of
             Disposition Type                   Seizures Less than         Seizures Greater than
                                                     $100,000                    $100,000

                                               Approx. Value       %       Approx. Value        %
 Deposited to Assets Forfeiture Fund           $1,122,100,000      28%      $2,668,800,000      68%
 Returned to Owner, Lienholder, or Victim          $74,200,000      2%         $78,900,000          2%
 Other Disposal Type *                              $3,400,000    < 1%          $6,200,000     <1%
 Total                                        $1,199,700,000      30%     $2,753,900,000       70%
Note: There are more than 2,000 assets not yet adjudicated as of February 2017. Therefore, disposal
value is not yet available for the full population of assets seized between FYs 2007 and 2016.
*A small percentage of seized assets were disposed of by different means (e.g., adoptive seizures
returned to state authorities for potential state seizure).
Source: CATS

Scope and Methodology of the OIG Review

       We analyzed the asset seizure and forfeiture policies, practices, and
performance management capabilities of the Department as a whole. We also
analyzed data from CATS to examine asset seizure and forfeiture activities of ATF,
the DEA, and the FBI between FY 2007 and FY 2016. However, this review focused
specifically on the DEA’s use of cash seizure. Among the Department’s
investigative components, the DEA is responsible for the majority of cash seizures,
the vast majority of which are in turn forfeited administratively.

       In the absence of sufficient data to permit a thorough analysis, we reviewed
a judgmental sample of 100 DEA cash seizures that were administratively forfeited
under certain conditions that we believe, without effective oversight, may pose
potential risks to civil liberties. In addition to providing the opportunity to assess
some seizures that are particularly susceptible to civil liberties concerns, this
sample allowed us to better understand an important subset of the Department’s
seizure activity and also allowed us to identify additional potential risk factors that
can help the Department better understand and oversee its seizure activity.
Because the Attorney General’s Order prohibiting certain federal adoptions was
issued in January 2015, during the course of our review, we also examined how the
Order and related policy guidance affected the Department’s asset seizure and
forfeiture activities and its relationship with state and local law enforcement.

        Finally, we interviewed Department and law enforcement component officials
responsible for asset seizure and forfeiture activities and we spoke with officials
from the Office of the Deputy Attorney General, ATF, DEA, FBI, and AUSAs. We
also spoke with state and local law enforcement leadership, as well as state and
local law enforcement officers serving on federal task forces. A detailed description
of the methodology of our review is in Appendix 1.

                                                 15
                              RESULTS OF THE REVIEW
The Department Does Not Measure How Its Asset Seizure and Forfeiture
Activities Advance Criminal Investigations

       The Department asserts that asset forfeiture is an effective law enforcement
tool that dismantles criminal organizations by removing the proceeds of crime used
to perpetuate criminal activity, and the Department’s investigative components all
state that forfeiture should be used in a manner that advances criminal
investigations. However, we found that although Department investigative
components have the authority to and do forfeit cash from individuals without
charging these individuals with a crime, they do not collect data to measure, among
other factors, how often seizures and forfeitures advance or relate to criminal
investigations. Without fully evaluating the relationship between seizures and law
enforcement efforts, the Department cannot effectively assess whether asset
forfeiture is being appropriately used and it risks creating the impression that its
law enforcement officers prioritize generating forfeiture revenue over dismantling
criminal organizations.

        We found that the Department and its investigative components could
determine how often seizure and forfeiture advance or relate to criminal
investigations only by performing a manual, case-by-case review of component
case management systems. Further, we found that the Department can aggregate
data that can be used to identify associated risk factors and the outcomes of
seizure activity, such as instances in which a portion or all of a seizure was returned
to the owner as the result of a successful challenge; but the Department’s
investigative components do not actively use this type of aggregate data to
evaluate and oversee seizure operations. Without evaluating this data, the
Department cannot determine (1) whether certain types of seizures, such as those
effected without a warrant that result in administrative forfeiture, benefit law
enforcement efforts or (2) the extent to which seizures may present potential risks
to civil liberties.

       The OIG’s 2015 review of the Drug Enforcement Administration’s (DEA) Use
of Cold Consent Encounters at Mass Transportation Facilities found that the DEA did
not use data sufficiently to assess whether cold consent encounters were conducted
in an unbiased or effective manner. 31 This was a concern because seizures
resulting from these encounters can be random or triggered by an individual’s
behavior rather than foreknowledge of the individual’s involvement in criminal
activity; thus, such seizures can present risks to civil liberties.

       In comments on a draft of this report, the Department’s Money Laundering
and Asset Recovery Section (MLARS) asserted that administrative forfeiture may be
the only avenue available for forfeiture when a criminal case is not possible and
that many administratively forfeited assets are seized pursuant to court-issued
seizure warrants or linked to ongoing criminal investigations. The MLARS also

      31
           DOJ OIG, Cold Consent Encounters, ii.




                                                   16
acknowledges that the Department lacks an automated way to link forfeited assets
to particular criminal investigations and prosecutions. We recognize that there are
challenges to fully measuring the relationship between asset seizure and criminal
investigations and prosecutions. However, without making efforts to obtain the
best such measurements, particularly for those seizures and forfeitures that occur
without judicial involvement, the Department cannot effectively oversee its asset
seizure and forfeiture activities to ensure these activities sufficiently benefit law
enforcement’s efforts to dismantle criminal organizations and do not present
significant risks to civil liberties.

Department Case Management and Asset Tracking Systems Do Not Collect Data
Sufficient to Measure How Asset Seizure and Forfeiture Advances Criminal
Investigations

        The Department does not fully collect and analyze data on seizure and
forfeiture activities sufficient to enable it to determine (1) whether seizures benefit
law enforcement efforts or (2) the extent to which seizures present potential risks
to civil liberties. Specifically, we learned that the Department-wide Consolidated
Asset Tracking System (CATS) does not collect data sufficient to measure whether
asset seizure and forfeiture advance criminal investigations and the individual
investigative component case management systems do not aggregate data that
would allow the components, the Department, or the OIG to measure this
relationship. We also found that although CATS tracks and can aggregate those
seizures that include a claim, petition, or return, Department’s components do not
actively use this aggregate information to identify issues or determine whether
seizures are being conducted appropriately.

        An official at the Department’s Asset Forfeiture Management Section (AFMS)
explained that CATS cannot be used to measure the performance of law
enforcement operations. Instead, CATS maintains programmatic and financial data
that is used to track seized and forfeited assets through the asset forfeiture
lifecycle. CATS is also used to fulfill the data-reporting mandates of the Civil Asset
Forfeiture Reform Act of 2000 (CAFRA).32 CAFRA requires the Department to
provide annual reports detailing its seizure and forfeiture activities, including the
type of assets seized and the financial results of forfeiture. CAFRA reports contain
the following:

   •   total deposits to the Assets Forfeiture Fund by state of deposit;

   •   total expenses paid from the Assets Forfeiture Fund, by category of expense
       and recipient agency, including equitable sharing payments;

   •   number, value, and types of properties placed into official use by federal
       agencies, by recipient agency;




       32
            Civil Asset Forfeiture Reform Act of 2000, 106th Cong., 2d Sess., H.R. 1658.




                                                  17
   •   number, value, and types of properties transferred to state and local law
       enforcement agencies, by recipient agency;

   •   number, value, and types of forfeited property disposed of during the year,
       by type of disposition;

   •   year-end inventory of property under seizure, but not yet forfeited, which
       reflects the type of property, its estimated value, and the estimated value of
       outstanding liens and mortgages;

   •   list of each property in the year-end inventory, not yet forfeited, with an
       outstanding equity of not less than $1,000,000; and

   •   audited financial statements for each fiscal year for the Assets Forfeiture Fund.33

       The same AFMS official also told us that although the CAFRA reports are the
main source of publicly available data about asset forfeiture, he does not believe
that the reports allow the public to fully understand the Department’s seizure and
forfeiture activities. Publicly available reports provide only a cumulative and broad
explanation of the Department’s seizure and forfeiture activities. They focus on the
financial benefit to federal, state, and local government, rather than providing
information as to whether seizure and forfeiture advance investigative efforts, and
they do not include information on returned assets that might be useful in determining
whether there are issues in the Department’s seizure efforts. This official explained
that the only current way to fully evaluate how seizure and forfeiture contribute to
advancing criminal investigations is to review narrative reports from individual
investigative case files in components’ case management systems. Moreover, the
MLARS acknowledges that the Department lacks an automated way to link forfeited
assets to particular criminal investigations and prosecutions, which makes it difficult
to demonstrate these connections in larger data sets.

       During our document review and discussions with frontline supervisors and
legal counsel from the investigative components, we learned that these officials
review individual investigative case files and seizure documentation to ensure that
seizures justify federal forfeiture according to the criteria discussed below, and that
they also receive claims before forwarding the claim to a U.S. Attorney’s Office and
evaluate petitions to determine instances in which it may be appropriate to return
forfeited property. However, they do not have metrics to evaluate whether seizures
and forfeitures advance criminal investigations and they generally do not use
aggregate seizure data, such as the number and value of seizures and the
proportion of those seizures that include a claim, petition, or return, to help
measure performance of seizure-related enforcement activities or identify systemic


       33
            In accordance with CAFRA, the OIG supervises an annual audit, performed by KPMG LLP, of
the Department’s Assets Forfeiture Fund and Seized Asset Deposit Fund. The audit details the
financial position of the Assets Forfeiture Fund, its net costs, changes in net position, and budgetary
resources for the period of review. The audit also issues reports on internal controls over financial
reporting, compliance, and other matters.




                                                  18
issues. 34 For example, we found that the DEA returned only 4 percent of the value
of seizures made between FY 2007 and FY 2016. Although CATS contains raw data
regarding claims, petitions, and returns, without an evaluation of aggregate data
that would indicate, for example, whether these actions are more likely to occur in
one jurisdiction versus another or whether the frequency of these actions indicates
potential problems in certain seizure operations, the Department cannot fully
assess its seizure activities.

       We recognize that cases can develop over a long period of time and that it
may take years to determine whether a seizure advanced a larger investigation or
resulted in a prosecution. This may be especially true for the DEA because it will
commonly seize assets and use administrative forfeiture at the outset or during the
course of an investigation, prior to the initiation of formal charges. DEA officials
explained that, as a result, it is difficult to measure the relationship between seizure
and forfeiture and other law enforcement outcomes without reviewing all of the
related case information. 35 For example, DEA officials told us that, in some cases, it
is better for the long-term investigation to make a seizure of cash without arresting a
possible courier or taking any other immediate law enforcement action. Multiple DEA
agents we spoke with mentioned the general scenario that we detail in the text box.

                      Scenario in Which Seizure Is Made without an Arrest
      During the course of an investigation of a drug trafficking organization, the DEA may learn that
a large amount of currency is about to be transported by a courier working for a drug trafficking
organization. In these situations, the DEA may ask state and local law enforcement to make the
seizure consistent with routine law enforcement activities, such as a traffic stop, without making an
arrest. According to DEA agents, this allows the DEA to collect intelligence that it can use to build
the investigation without revealing to higher echelon members of the drug trafficking organization
that they are targets of a federal investigation. This is because the seizure appears to be incident to
a routine traffic stop by state or local officers, as opposed to a larger, federal investigation. The DEA
may then administratively forfeit the currency without revealing the investigation. The higher
echelon targets of the investigation do not have to be involved or even made aware of the investigation
until the government is ready to initiate a prosecution, which may happen well after the seizure.


        We understand that assessing the relationship between asset seizure and
criminal investigations can be complex; but, without such measurements, the
Department and its investigative components cannot fully evaluate and oversee
their seizure and forfeiture activities to ensure they advance investigations that
help to dismantle criminal organizations and do not present a potential risk to civil
liberties. Therefore, it is important that the Department collect and evaluate data
to determine, for example, under what circumstances a seizure occurred; the

        34
           Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and DEA headquarters officials
confirmed that their agencies do not analyze aggregate data to monitor claims, petitions, or returns.
Federal Bureau of Investigation (FBI) headquarters officials explained that the FBI does not actively
analyze this data but that may review it on an as-needed basis.
         35
            FBI and ATF agents explained that they may use administrative forfeiture during the course of
an investigation as well; however, they generally make seizures as an investigation concludes or a case is
ready to be prosecuted, thereby making the connection between a seizure and a federal investigation more
readily apparent than a DEA seizure made early during the course of an ongoing investigation.




                                                   19
relationship between the seizure and other criminal activity; how seizures benefit
law enforcement efforts; and any claims, petitions, and returns of assets resulting
from a seizure.

       We made a similar finding during our review of the DEA’s Use of Cold
Consent Encounters at Mass Transportation Facilities. We determined that the DEA
does not sufficiently use data to assess whether these consent encounters are
conducted in an unbiased and effective manner. The DEA concurred with our
recommendations and reported to us that it (1) is actively researching ways to
reach an appropriate determination about the viability of collecting demographic
data and (2) has developed a proposed policy for documenting consensual
encounters at mass transportation facilities that will allow the DEA to track certain
information about these encounters, including their frequency and whether they
result in seizures or arrests. We will continue to assess the DEA’s progress in
responding to our recommendations, and we believe that the additional data
analysis discussed in our current report, if implemented, would further assist the
DEA with its ongoing efforts to assess the effectiveness of its interdiction activities.

The DEA Conducts Cash Seizures that May Not Advance or Relate to
Criminal Investigations and May Pose Potential Risks to Civil Liberties

       In the absence of specific metrics that would allow us to use aggregate data
to evaluate how the Department’s seizures and forfeitures relate to criminal
activity, we reviewed a judgmentally selected sample of DEA cash seizures to
assess this relationship. This review of sampled seizures provided evidence that
many of the DEA’s interdiction seizures may not advance or relate to criminal
investigations.

       We selected a sample of DEA cash seizures because the DEA was responsible
for approximately 80 percent of the Department’s cash seizures from FY 2007
through FY 2016. Specifically, we sampled 100 DEA cash seizures resulting in
administrative forfeiture that met 2 criteria we believe make the seizures
particularly susceptible to civil liberties concerns. First, we selected seizures that
occurred without a warrant, which indicates no judicial oversight prior to the
seizure. Second, we selected seizures that, according to CATS data, seemed to
indicate the absence of illicit narcotics. 36 We believe that this second criterion is
particularly important because, when illicit narcotics are not present at the time of a
seizure, DEA agents and task force officers must use considerable discretion to

        36
             See Appendix 1 for a full description of our sampling methodology. We used case-type
codes and method-of-seizure indicators that accompany asset seizure records in CATS to identify
which seizures occurred absent a warrant and illicit narcotics. DEA managers explained that they are
not confident that these fields are reliable because they are subject to staff interpretation and case-
type codes are subject to change throughout the course of an investigation. Therefore, we do not
aggregate this information for calculating overall number of seizures that occurred absent a warrant
and illicit narcotics; however, we believe that this data was adequate for selecting our sample.
         Consistent with the DEA’s assessment that CATS data may not be reliable to assess these
criteria, we identified 12 sampled seizures in which either bulk or personal-use amounts of illicit
narcotics were present at the time of seizure.




                                                  20
distinguish a criminal cash courier from an ordinary individual who possesses cash
legally. DEA agents and task force officers must regularly make these judgments
because, they explained, it is rare for drug trafficking organizations to transport
illicit narcotics and related cash proceeds together and cash couriers often use
widely available commercial transportation to move large quantities of drug-related
currency. As a result, DEA agents and task force officers must quickly assess
whether there is sufficient legal basis for seizure. They base their assessment on
observations of behavior and circumstances that separately may appear innocent
but, when considered collectively, can be consistent with illegal cash couriering.

        Our analysis of the sampled case files revealed three important areas for the
Department’s consideration. First, most of the sampled seizures occurred in
interdiction settings, in which trained law enforcement officers rely on their
immediate, on-the-spot judgment to determine whether their observations justify
initiating an encounter which may lead to seizure, in the absence of predicating
information regarding involvement in drug trafficking activities. This is particularly
relevant in light of the OIG’s findings in our 2015 report highlighting potential risks
to civil liberties associated with cold consent encounters that occur during such
interdiction operations.37 Second, as a result of our review of DEA records and
subsequent discussions with DEA officials, we determined that the DEA could verify
only 44 of the 100 seizures we sampled as having advanced or having been related
to criminal investigations. This means that in over half the cases there was no
discernable connection between the seizure and the advancement of law
enforcement efforts. Third, we identified an aspect of DEA seizure practice that its
policies and training did not fully address. Specifically, we found that different task
force officers made different decisions in similar situations when deciding whether
to seize all of the cash discovered. These differences demonstrate how seizure
decisions can appear arbitrary, which should be a concern for the Department, both
because of potentially improper conduct and because even the appearance of
arbitrary decision-making in asset seizure can fuel public perception that law
enforcement is not using this authority legitimately, thereby undermining public
confidence in law enforcement. As a result of these findings, we believe that the
DEA and the Department should take additional steps to ensure that its seizure
activities align with its priorities to advance criminal investigations and that seizures
are conducted consistently. We discuss each of these three areas of concern below.

Most of the Sampled Seizures Occurred during Interdiction Operations in Which
Trained Law Enforcement Officers Often Rely on Their Immediate Judgment to
Initiate Encounters that Lead to Seizure

        We found that 85 of the 100 seizures we reviewed occurred as a result of a
DEA or joint law enforcement interdiction operation. Department and non-federal
task force officers conduct these operations at transportation facilities including
airports, parcel distribution centers, train stations, and bus terminals. State and
local law enforcement officers also regularly conduct interdiction on highways and
contact a local DEA office if they need DEA investigative support. We believe that

      37
           DOJ OIG, Cold Consent Encounters, i.




                                                  21
interdiction operations at transportation facilities and on highways can be
particularly susceptible to civil liberties concerns. Absent a court-issued warrant
and preexisting intelligence of a specific drug crime, DEA agents and task force
officers make on-the-spot assessments of fast-moving situations. These
assessments are sometimes informed by tips from paid confidential informants, but
may also be based only on their observations and law enforcement experience, to
initiate an encounter that leads to seizure. Table 6 shows the type of enforcement
operation and the value of cash at seizure for our sample.

                                             Table 6
      Sampled DEA Currency Seizures by Type of Enforcement Operation
                               and Amount
                                                           Total        Lowest          Highest
                                            Total
   Type of Enforcement Operation                          Amount        Amount          Amount
                                           Seizures
                                                          Seized        Seized          Seized
 Interdiction Operations                          85     $3,970,000
 Airport Interdictions                            46     $1,720,000         $3,000       $325,010
 Parcel Interdictions                             18       $320,000         $5,000        $45,920
 Bus/Rail Interdictions                           13       $710,000         $3,140       $164,159
 Highway Interdictions or Traffic Stop               8   $1,220,000         $8,740       $599,730


 Non-Interdiction Operations                      15     $2,570,000         $1,045       $494,966
 Total                                          100      $6,540,000
Note: We rounded Total Amount Seized values to the nearest tens of thousands.
Sources: OIG Analysis of CATS data and DEA documentation

       Of the 85 interdiction seizures in our sample, all of which were conducted
without a warrant, 79 were initiated based on the observations and immediate
judgment of DEA agents and task force officers absent any preexisting intelligence
of a specific drug crime. The remaining six seizures were connected to enforcement
operations that were initiated as a result of preexisting intelligence of a specific
drug crime.

         Establishing Reasonable Suspicion to Question a Suspect

        Our sample showed that DEA agents and task force officers reported
establishing reasonable suspicion to initiate questioning of an individual suspected
of illegal cash couriering based on factors consistent with those described in the
DEA’s Interdiction Manual. 38 For example, our review of seizure event narratives
indicated that DEA agents and task force officers may initiate consensual
encounters to question individuals based on factors including, but not limited to,
       38
          The DEA’s Interdiction Manual (2010) cites United States v. Sokolow, 490 U.S. 1 (1989) as
the seminal Supreme Court case with respect to the legality and parameters of airport interdiction.
The Manual relies on Sokolow for the proposition that “seemingly innocent behavior and/or
circumstances may give rise to reasonable suspicion when viewed by a trained agent.”




                                                22
traveling to or from a known source city for drug trafficking, purchasing a ticket
within 24 hours of travel, purchasing a ticket for a long flight with an immediate
return, purchasing a one-way ticket, and traveling without checked luggage. 39

        Our evaluation of seizure narratives and our discussions with DEA agents and
task force officers indicate that they often learn about a traveler’s ticket purchase
method and travel itinerary from confidential sources who work for airlines,
airports, or bus or rail companies. DEA agents and task force officers may also
initiate contacts that lead to seizures after receiving information from airport
security screeners that a large volume of currency was packaged within an
individual’s carry-on or checked luggage. As our recent audit of the DEA’s
Confidential Source Program outlined, some of these confidential sources are
engaged in long-term and lucrative relationships with the DEA. The report states
that this could have implications relating to compliance with the Fourth
Amendment’s protections against unreasonable searches and seizures. 40

       Our sample also indicated that during the course of a routine traffic stop a
state or local law highway interdiction officer may suspect that a driver is involved in
cash couriering or other illegal activity as a result of observations such as nervous
behavior, inconsistent answers to questioning, or the odor of narcotics. Officers may
also search relevant law enforcement databases to determine the past criminal
history of the driver. As a result of these observations and database searches, the
officer can extend the traffic stop to continue questioning and may request that a
police dog sniff the vehicle in an attempt to identify narcotics residue.

        Establishing Probable Cause to Perform a Search and Make a Seizure

       Sampled seizure narratives showed that during interdiction operations,
probable cause to search an individual or to search and seize packages, luggage, or
a vehicle was generally established when a dog alerted to the presence of narcotics
residue on currency. Of the 85 interdiction seizures we sampled, the narratives
indicated that a dog had positively alerted to the presence of narcotics residue
79 times, or in more than 90 percent of the cases. For the remaining six seizures,
either a dog was not used or the dog had not positively alerted to the currency,
although other factors had been used to develop probable cause to support a
search and seizure.

       Our review of seizure narratives also showed that, following a search that led
to the discovery of currency, DEA agents and task force officers further sought to
establish probable cause to seize by detailing that the currency had been packaged
or concealed in a manner consistent with drug trafficking activities. DEA agents

        39
           Based on our review of non-interdiction seizures, we learned that during the course of an
ongoing investigation DEA agents and task force officers also may develop probable cause to search
for and seize assets from sources such as surveillance of suspected drug and cash couriers,
observation of criminal activity, consensual monitoring or wiretaps, and intelligence from confidential
sources about a known drug crime.
        40
           DOJ OIG, Audit of the Drug Enforcement Administration’s Management and Oversight of Its
Confidential Source Program, Audit Report 16-33 (September 2016).




                                                  23
and task force officers described the condition of currency, its packaging, and the
manner of concealment as establishing probable cause to support seizure in 66 of
the 85 interdiction seizures we sampled. For example, seizure narratives indicated
that currency appeared “worn from street use” or “bundled in rubber bands
consistent with narcotic proceeds.” Seizure narratives also stated that currency
had been wrapped in carbon paper to deter x-ray scanners and/or dryer sheets to
obscure the odor of narcotics. Our review showed that, during the course of
searches, law enforcement often found currency hidden in secret compartments or
trapdoors in luggage and vehicles, supporting the inference that the currency
represented illegally couriered drug proceeds. For example, we identified in our
sample an instance in which a task force officer had identified over $7,000 hidden
inside a travel neck pillow.

        As referenced above, we also found that DEA agents and task force officers
describe the condition or packaging of the currency to establish probable cause to
make a seizure after receiving notification of a suspicious package from security
officials working for parcel transport companies. 41 Of the 18 narratives in our
sample describing parcel interdiction seizures, 17 document that seizures had been
initiated after law enforcement officers discovered an anomaly with the package or
its contents. For example, seizure narratives describe packages that contained a
label with an inaccurate return address or that emitted an odor of illicit narcotics.

       In trying to further support the existence of probable cause for seizure after
cash has been identified, DEA agents and task force officers also will ask questions
to ascertain whether the suspected courier has a reasonable explanation for the
source of the currency or a reasonable explanation for travel. For example, seizure
narratives indicated that DEA agents and task force officers also had asked
questions to determine whether a suspect’s employment history was consistent
with the amount of currency in their possession and whether they could clearly
state details about the purpose of and plans for their travel. In these narratives,
DEA agents and task force officers often stated that because the suspect could not
provide reasonable and consistent answers to questions, the suspect’s answers did
not substantiate their claim to the currency. Finally, our review of sampled seizure
narratives indicated that DEA agents or task force officers may search relevant law
enforcement databases in an effort to identify the traveler’s prior criminal history,
which may reveal related drug and cash courier offenses supporting the existence
of probable cause to seize.

We Determined that the DEA Could Not Verify that All Sampled Seizures Had
Advanced or Were Related to Criminal Investigations

      According to the DEA Agents Manual, any seizure should be “an action that
takes place incident to a major drug investigation.” However, we determined that

        41
            The DEA’s Interdiction Manual cites the 1921 Supreme Court Decision Burdeau v.
McDowell, 256 U.S. 465 (1921), to highlight the government’s right to use materials seized by a
private party in a private search without the knowledge or involvement of the government. The
Interdiction Manual further details a freight company’s right to inspect packages, citing United States
v. Rodriguez, 596 F. 2d 169, 173 (6th Cir. 1979).




                                                  24
the DEA could verify that only 44 of the sample of 100 total seizures and only 29 of
the sample of 85 interdiction seizures had advanced or were related to ongoing
investigations, initiated new investigations, led to arrests, or led to prosecution. 42
Table 7 shows that as of December 2016 the DEA could verify that 100 percent of
the non-interdiction seizures in our sample had advanced or were related to a
criminal investigation, but that only 34 percent (29 out of 85) of the interdiction
seizures had advanced or were related to a criminal investigation, again
highlighting the potentially problematic nature of such operations. 43

                                               Table 7
             Sampled DEA Seizures by Type of Enforcement Operation
                 and whether the DEA Could Verify that Seizures
               Had Advanced or Related to a Criminal Investigation
                                                          Could the DEA Verify that the
                                                        Seizure Advanced or Related to a
             Type of Enforcement Operation                   Criminal Investigation?
                                                             Yes                    No
         Interdiction                                                  29                    56
         Non-Interdiction                                              15                     0
         Totals                                                        44                    56
        Sources: OIG analysis of CATS documentation and DEA case descriptions
        reflecting information received throughout 2016

         An important factor that differentiates the sampled non-interdiction seizures
from the sampled interdiction seizures is that the non-interdiction seizures always
derived from enforcement operations that were initiated as a result of preexisting
intelligence of a specific drug crime, and therefore may not pose the same risks to
civil liberties as do standalone interdiction seizures. For example, three of our
sampled seizures were part of the same long-term non-interdiction investigation,
involving court-ordered surveillance, in which the DEA made multiple arrests as well
as significant seizures of firearms, drugs, and additional personal property. 44


        42
           DEA officials explained to us that it may take years for a related arrest or prosecution to
occur following a seizure. Therefore, we sampled seizures that occurred during FY 2012 and assessed
whether they advanced or related to ongoing investigations at any time within 3 years after the seizure.
        43
           To determine whether a seizure had advanced or was related to an ongoing investigation,
we reviewed narratives documenting the probable cause underlying each seizure that the DEA had
uploaded to CATS. From this review we were able to determine that 29 of the sampled seizures had
advanced or were related to ongoing investigations, initiated new investigations, led to arrests, or led
to prosecution. For the remaining 71 seizures, we asked the DEA to provide us additional
documentation that would indicate whether a seizure met the above conditions. Based on this
additional documentation, we made our final determinations, detailed in Table 7, as to the number of
sampled seizures that advanced or were related to a criminal investigation.
        44
            We believe that successfully identifying instances in which multiple seizures are associated
with the same investigation could help the Department and its investigative components evaluate its
asset seizure activities and determine when seizures are more likely to advance or relate to ongoing
investigations. For example, because of the concerns raised about whether low-value seizures
                                                                                                 (Cont’d)


                                                   25
       Conversely, the encounters leading to the sampled interdiction seizures were
generally made in the absence of preexisting intelligence of a specific drug crime.
This is reflected in our conclusion that non-interdiction seizures in our sample were
far more likely than interdiction seizures, on a percentage basis, to advance or
relate to a criminal investigation. When an interdiction seizure advances or relates
to an ongoing criminal investigation, the benefits are obvious. For example, our
sample indicated that a DEA airport interdiction group based in San Juan, Puerto
Rico, had initiated a random consensual encounter and seized $180,000 from an
individual. After the seizure, law enforcement established that the individual was a
cash courier who worked for a known drug trafficker and strip club owner who sent
cocaine to the mainland United States using strippers as drug mules. Our sample
also indicated that DEA agents and task force officers use evidence of past seizures
and data from the Narcotic and Dangerous Drug Information System (NADDIS) to
establish probable cause for a new seizure and to identify links to other
investigations. 45 According to the DEA, this information can prove helpful for other
ongoing investigations. Illustrative of this, we sampled an airport interdiction
seizure that occurred in Tennessee in which a DEA agent, acting on knowledge of
suspicious travel activity, had found a prior notice of seizure while searching a piece
of luggage, indicating that the individual who owned the luggage may have
couriered cash in the past. The DEA agent used NADDIS to link the individual from
whom cash was seized to an ongoing DEA investigation in Texas. 46

        When interdiction seizures do not advance or relate to an ongoing
investigation, the benefits of interdiction are less obvious. The DEA asserts that,
even if an interdiction seizure does not advance or relate to a current criminal
investigation, information collected during the course of the seizure can be used in
future investigations and the seized cash cannot be used to fund future criminal
activities. We do not doubt that intelligence collected during a seizure can be
useful, and that seizures of illegal proceeds can negatively impact criminal
organizations. However, without a specific connection establishing that seized
funds would otherwise have been used to fund criminal activity or that seizures
provided intelligence tied to the same, it is difficult to determine whether seizures
benefit law enforcement efforts to advance investigations. This is true even for

significantly contribute to federal investigations, we conducted an analysis of the 10 lowest value
seizures from the population we used to select our overall sample. In 9 of the 10 instances, we found
that the low-value seizures (ranging from $100 to $1,500) were related to ongoing investigations and
in all 10 instances these seizures were incident to larger seizures. For the one seizure that was not
related to an ongoing investigation, the probable cause statement indicates that that the subject had
multiple prior drug arrests. These results were consistent with DEA agents and task force officers’
statements that low-value seizures are often incident to law enforcement operations that result in
higher value seizures.
        45
            The DEA report of investigation, which is reviewed by a supervisory agent, is also used for
entering information into NADDIS. At the bottom of a report of investigation, DEA agents and task
force officers identify the names of all persons from whom cash was seized, as well as other related
parties, for entry into NADDIS.
        46
           The individual was not arrested at the time of the seizure, but court records indicate that
the individual later pleaded guilty to a charge of conspiracy to import marijuana and was sentenced to
37 months of incarceration.




                                                  26
high value seizures. For example, 7 of the 19 seizures in our sample that were
over $100,000 did not advance or relate to an identified criminal investigation. This
indicates that the value of a seizure alone is not exclusive criteria for determining
the law enforcement benefit of a seizure.

       Further, the risks to civil liberties are particularly significant when seizures
that do not advance or relate to an investigation are conducted without a court-
issued seizure warrant, the presence of illicit narcotics, or subsequent judicial
involvement prior to administrative forfeiture. We highlight one such seizure in our
sample that was of particular concern because DEA agents and task force officers
seized concealed currency from a piece of checked luggage without attempting to
question the owner or otherwise conduct any investigation (Case 1).

                                                 Case 1
     After Transportation Security Administration agents discovered U.S. currency artfully concealed in
a manufactured compartment within the pulley of a checked bag, a task force officer assigned to a
DEA group responded with a drug dog to assess the bag. The dog positively alerted to the presence of
a controlled substance, and the group seized $70,460 concealed in the bag and its pulley. According
to the DEA’s documentation, the group that effected the seizure had no immediate way to contact the
traveler who had checked the bag; the traveler already had boarded the plane and the ticket had not
been purchased through the airline. No effort was made to alert law enforcement in the arrival airport
to stop and speak with the passenger claiming the bag; rather, a DEA agent placed a receipt for the
currency and DEA contact information inside the bag and the airline sent the bag to its final destination.
     The person who had purchased the ticket was different from the traveler but shared the same
address. The DEA sent a notice of seizure to the address; but, after receiving no response, the DEA
took no further action, such as following up, in person, at the known address to interview the traveler
or the person who purchased the ticket. CATS records indicate that this seizure did not receive any
petitions or claims and that it ultimately resulted in an administrative forfeiture of $70,460 to the
federal government.


        As discussed above, the DEA confirmed that its agents made no effort to
follow up with the ticket purchaser or the traveler to further investigate this matter
and that neither the purchaser nor the traveler contacted the DEA to reclaim the
seized cash. Even accepting that the circumstances surrounding the discovery of
this large volume of concealed currency justified law enforcement suspicion and
seizure, we find it troubling that the DEA would make an administrative forfeiture
without attempting to advance an investigation, especially considering that the DEA
had opportunities to contact the potential owners of the currency instead of simply
providing written notice of the seizure.

       Even though the DEA does not have a policy explicitly detailing the extent to
which its agents should conduct an investigation following all cash seizures, the
DEA Agents Manual states that seizure of any asset is to be viewed as “an action
that takes place incident to a major drug investigation.” Therefore, we believe that
the lack of investigative follow-up in the scenario documented above was inconsistent
with the intent of DEA policy governing asset seizure and forfeiture. 47 Moreover,
when the DEA used its seizure and administrative forfeiture authority without even

        47
             DEA Agents Manual (2015).




                                                   27
attempting to investigate or advance an investigation, the DEA and its state and
local partners risked creating the appearance that they are more interested in
seizing and forfeiting cash than advancing a potential criminal investigation.

        Petitions, Claims, and Returns for Sampled Seizures

       We found that the Department had administratively forfeited part or all of the
100 seizures we sampled, collectively valued at approximately $6.5 million. For
14 of the 100 seizures we sampled, an individual such as an owner, lienholder, or
victim filed a petition or a claim. For five of these seizures, the Department
returned a portion of the seized cash, totaling $46,000, but went forward to
administratively forfeit the remainder, totaling $58,000. 48 Overall, that means that
of the $6.5 million forfeited from our seizure sample, the Department returned just
over $46,000 — or less than 1 percent — to petitioners and claimants. Further, we
found that 73 percent ($4.7 million of the $6.5 million) of the Department’s
forfeiture proceeds came from the 19 cash seizures greater than $100,000.

        The number of petitions and claims filed, as well as the amount of seized
cash returned, from our sample further parallel the general conclusion we drew
from our analysis of petitions, claims, and returns for the overall population of DEA
seizures — that few of the petitions and claims filed resulted in a return of seized
cash. According to a DEA official we interviewed, the small number of claims or
petitions, and the even smaller number of instances in which assets were returned,
demonstrate that the DEA is correctly targeting criminals when making seizures.
However, advocates for asset forfeiture reform assert that the claim process is
unduly onerous and unfair, especially when claimants contest low-value seizures.
Reform advocates therefore assert that few claims are filed because the process to
file a claim is confusing and the cost to contest a low-value administrative
forfeiture, particularly if the claimant believes they need a lawyer to assist them, is
often greater than the value of the asset itself. 49 In response to these criticisms,
officials from the MLARS explained to us that they have created a Department-wide
notice of seizure and claim form to improve and clarify the process for filing a claim
to contest a forfeiture. 50

      In our above finding, we explained that the Department does not collect and
analyze data on seizure and forfeiture activities that would enable it to fully
evaluate and monitor whether these efforts advance or are related to criminal

        48
          When an owner makes a claim against seized assets and a U.S. Attorney’s Office negotiates
a settlement, the government may return part of the seized property and forfeit the remainder.
        49
            Both the House of Representatives and the Senate have expressed concern with the
potential cost of legal representation when an individual seeks to contest a seizure. Recent legislative
proposals have sought to guarantee legal counsel to those financially unable to obtain representation
when contesting an administrative forfeiture. See Due Process Act of 2016, 114th Cong., 2nd sess.,
H.R. 5283, and Due Process Act of 2016, 114th Cong., 2nd sess., S. 3045. The Institute for Justice
also expressed concerns about this issue in its report Policing for Profit: The Abuse of Civil Asset
Forfeiture, 1st ed. (March 2010) and 2nd ed. (November 2015).
       50
          The claim form is now available at DOJ, “forfeiture.gov,” www.forfeiture.gov (accessed
March 24, 2017).



                                                  28
investigations and/or present potential risks to civil liberties. Our sample further
demonstrates the significance of this finding because, for more than half of the
interdiction seizures we sampled, which were seized without a warrant, the DEA
could not verify whether they had advanced a criminal investigation. These
outcomes further illustrate the importance that the Department collect and evaluate
data that would allow it and its investigative components to identify those seizures
that do and do not achieve their legitimate law enforcement objectives.

We Identified a Certain Aspect of DEA Seizure Practice that Its Policies and Training
Did Not Fully Address

       Our analysis of the seizures in our sample identified two instances in which
task force officers made different decisions in similar situations, which
demonstrates how seizure decisions can appear arbitrary. In both instances, the
person from whom cash was to be seized asked to retain some of the cash. In one
instance, task force officers agreed, and in one instance they did not. (See
Cases 2.A and 2.B.)


                                               Case 2.A
     A DEA confidential source gave information to DEA agents and task force officers working at an
airport about the suspicious travel activity of a passenger scheduled to arrive on a flight later in the
day. The source told officers that the passenger had paid for his ticket with a prepaid debit card
and cash. A task force officer later learned that the passenger had no checked luggage and
previously had been arrested for vehicle theft, firearms violations, and gambling violations.
     When the passenger arrived, task force officers engaged in a consensual conversation with the
passenger that included questioning him about his travel plans, work history, and possession of
large sums of U.S. currency. The passenger confirmed that he was in possession of cash and
provided other details about his travel plans, as well as the origin and intended use of the currency
— details that the task force officers believed to be suspicious or false.
     The task force officers obtained the passenger’s consent to search his duffel bag, which
contained four rubber-banded bundles of $100 bills in a toiletry bag. An officer noted that the
passenger’s hands were nervously shaking and his face was flushed during the interview. After the
seizure, a dog positively alerted to the presence of a controlled substance on the duffel bag.
     When a task force officer explained that the U.S. currency in the bag was going to be seized
pending further investigation, the passenger asked whether he could keep some of the currency to
travel home. The passenger asserted that all of the currency in the bag was his, and the task force
officers allowed him to retain $1,000. This seizure resulted in an administrative forfeiture of
$27,000 to the U.S. government, and the DEA explained to the OIG that, other than the events
surrounding the seizure, there was no subsequent investigative activity or additional law
enforcement benefit.


       We identified a comparable situation, at a different airport, during which a
suspected drug cash courier made a similar request to another group of task force
officers, who denied the request.




                                                   29
                                              Case 2.B
     A task force officer at an airport received information from a confidential source regarding the
suspicious travel activity of an airline passenger who paid cash for her ticket about 90 minutes prior
to her flight’s departure. The officer referred the information to the task force at the passenger’s
destination airport, where task force officers engaged in a consensual conversation with the
passenger. The conversation included questions about her travel plans and whether she was in
possession of large sums of U.S. currency or transporting illegal narcotics. She explained that she
was on her way to visit family and go shopping in a U.S. southwest border city. She denied that
she was transporting illegal narcotics and stated that she was carrying $500.
     A task force officer asked the passenger whether he could search her purse, and she agreed.
The search revealed U.S. currency closer to $5,000 after a base count. The passenger then stated
that she was carrying a “little over $5,000” but that only $525 of it was hers.
     The passenger explained that she was transporting currency for an unknown individual in a
southeastern U.S. city and was traveling to the southwest border city to deliver the currency to
another unknown individual. When informed that the U.S. currency might be seized, the passenger
argued that $500 of the money was hers as payment for transporting the currency. When the
officer asked whether she realized that transporting narcotics proceeds was illegal, she stated that
$525 was hers and that she had removed it from an automatic teller the day before. She could not
provide documentation supporting this assertion or provide any documentation explaining why the
$525 was mixed in with the remainder of the money she was transporting. Task force officers did
not return any money to the passenger. The DEA seized $5,110, including the $525, all of which
was subsequently administratively forfeited to the federal government. According to the DEA, it
later determined that the passenger was working for a known crack cocaine dealer.


       In both cases, task force officers concluded that the statements the
passengers provided were suspicious or untruthful and these conclusions
contributed to their decisions to seize the currency. However, while there are
factual differences between the situations, the inconsistent decisions of task force
officers indicate that more guidance may be needed to clarify how to best handle
such situations. The DEA confirmed that it does not have a policy governing
whether or under what circumstances a DEA agent or task force officer may or
should seize part of the value of an asset that he/she suspects to be entirely drug
proceeds and, conversely, when some currency may be returned to a suspected
courier. Without such a policy, DEA Special Agents and task force officers also
cannot receive consistent training on how to handle these situations. Although
Case 2.A may demonstrate the task force officer’s compassion for the suspected
cash courier and Case 2.B may demonstrate a higher level of suspicion regarding
the courier’s explanations, such disparate results risk creating the appearance that
decisions made during the course of seizure operations are arbitrary.

The Department Does Not Require Its State and Local Task Force Officers
to Receive Training on Federal Asset Seizure and Forfeiture Laws Prior to
Conducting Federal Seizures

       We identified another gap in training, which pertains to state and local task
force officers. Specifically, we found that the Department does not require its task
force officers to receive training on federal asset seizure and forfeiture laws and
component seizure policies prior to conducting federal seizures. As a result, state
and local task force officers, who wield the same authorities to make seizures as
the Department’s Special Agents, may make federal seizures without receiving
training beyond what is included in their respective law enforcement academy


                                                  30
curricula. We highlight the lack of federal asset seizure training for state and local
task force officers as a concern because, as documented by the news media, state
and local officers sometimes receive training from commercial vendors that teach
aggressive search and seizure practices. 51

        Although the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); the
DEA; and the Federal Bureau of Investigation (FBI) all have slightly different
training requirements, each requires its Special Agents to receive training on
federal asset seizure and forfeiture laws and component seizure policies during
basic training. According to component officials responsible for asset seizure
training, this training includes civil rights and civil liberties issues as well as various
legal issues pertaining to asset seizure. Components have also developed
specialized training courses for asset seizure for Special Agents and Supervisory
Special Agents who regularly conduct seizure operations or have oversight of these
operations. Additionally, the MLARS offers a series of courses to federal, state, and
local law enforcement officials focused on asset seizure policy and practices,
financial investigations, and money laundering.

        While ATF, the DEA, and the FBI require that their prospective Special Agents
receive component-developed asset seizure training before making seizures in the
field, we found that none of these three components mandates that its state and
local task force officers do so. Although task force officers told us that they receive
refresher or policy update trainings that convey important information, these
trainings occur after officers are federally deputized and already have had
opportunities to conduct Department-led seizure operations. 52 As a result, ATF, the
DEA, and the FBI cannot instruct all task force officers on Department- and
component-specific seizure policy and practices before task force officers make
federal seizures. This is of added significance, because the Department does not
have oversight of the asset seizure training curricula that state and local law
enforcement agencies provide to their officers, including trainings offered by
commercial vendors that may teach aggressive search and seizure practices.

       We noted in our report on the DEA’s Use of Cold Consent Encounters that the
DEA Agents Manual describes search and seizure as “one of the most dynamic and
potentially confusing areas of the law today.” For this reason, we concluded that
interdiction training for members of interdiction task forces is “of the utmost
importance.” In that report, we found that not all DEA transportation interdiction
task force members received the DEA’s official transportation interdiction training,

        51
            In September 2014, the Washington Post published the “Stop and Seize” series of articles
that identified issues related to how contract training vendors teach aggressive highway interdiction
seizure techniques. During this review, we found that between FY 2007 and FY 2014 the Department
regularly used funds derived from its Assets Forfeiture Fund to hire the vendors identified in this
series. As of FY 2015, the MLARS no longer allows DOJ components to use funds derived from the
Assets Forfeiture Fund to hire any external training vendors.
        52
            Some task force officers explained that they received on-the-job refresher or policy update
training delivered by component management or Assistant U.S. Attorneys. In particular, when ATF
received authority to make seizures related to certain drug crimes, it held asset forfeiture refresher
training in all field divisions.




                                                  31
and therefore that the DEA could not ensure that these officers would receive
training that is consistent with prevailing seizure and forfeiture law and DEA
standards. Similarly, we believe that unless the state and local officers serving on
Department task forces receive uniform training, the Department cannot ensure
that all of its task force officers will be working from the same base of seizure and
forfeiture knowledge as their Department partners.

The Attorney General’s Order Eliminates Most Opportunities for State and
Local Law Enforcement to Use Federal Forfeiture When Federal
Involvement in a Seizure is Limited; However, Current Policy Does Not
Address All Areas of Concern

        On January 16, 2015, Attorney General Holder issued an Order limiting
adoptions, eliminating most opportunities for state and local law enforcement to
utilize federal forfeiture to access equitable sharing funds in situations in which
there is no active federal involvement in a state or local seizure. The impact of the
Order is evidenced by significant reductions in both the number and value of DEA
cash seizures since the issuance of the Attorney General’s Order. Despite the policy
changes discussed in this section, state and local law enforcement still have access
to equitable sharing funds derived from seizures resulting from joint transportation
interdiction operations although, as demonstrated above, these operations do not
always advance a federal criminal investigation or lead to federal prosecution.

        As we discussed in the Introduction, the Attorney General’s Order ended
federal adoption of purely state and local law enforcement seizures (other than
certain public safety exceptions) and on February 10, 2015, the Department issued
Policy Directive 15-2 to help law enforcement officers and Assistant United States
Attorneys (AUSA) implement these limitations. 53 Policy Directive 15-2 requires the
Department’s law enforcement components to submit a request to an AUSA when
they want to pursue federal forfeiture for a seizure made by a state or local law
enforcement officer, pursuant to which the AUSA must determine whether there is
sufficient federal participation or oversight at the time of seizure to justify federal
forfeiture. If the AUSA determines that federal involvement was insufficient at the
time of the seizure to justify federal forfeiture, then, as set forth in in the Attorney
General’s Order, a federal seizure warrant must be obtained in order to pursue
federal forfeiture, apart from the public safety exception referenced above.

      Officials in the Office of the Deputy Attorney General told us that one of the
purposes of the Attorney General’s Order was to prevent state and local law
enforcement from using federal forfeiture to access equitable sharing revenue that
otherwise would be unavailable to them under state seizure laws. As discussed
above, the prohibition on adoptive seizure affects the DEA most significantly
because, from FY 2007 through FY 2014, the DEA accounted for 88 percent of the


        53
           U.S. Attorney General Order, Prohibition on Certain Federal Adoptions of Seizures by State
and Local Law Enforcement Agencies, January 16, 2015 (see Appendix 2); DOJ Policy Directive 15-2,
Additional Guidance on the Attorney General’s January 16, 2015, Order on Adoptions, February 10,
2015 (see Appendix 3).




                                                 32
number of the Department’s adoptive seizures, amounting to $742 million of the
$880 million total.

        To determine whether the elimination of adoptions reduced the overall
number of DEA cash seizures, which would in turn reduce those DEA cash seizures
eligible for equitable sharing, we analyzed DEA cash seizure data from CATS. As
shown in Figure 4, there is a strong correlation between the issuance of the
Attorney General’s Order in January 2015 and the reduction in overall DEA cash
seizures. Specifically, as of the end of FY 2016, there was a 51 percent reduction in
the number of DEA cash seizures since a high of 9,502 in FY 2012, and a
34 percent reduction in the value of DEA cash seizures since a high of $498 million
in FY 2011.

                                                                     Figure 4

    DEA Cash Seizures, Inclusive of Adoptions, by Value and by Number
                            FY 2007 – FY 2016
                                         $600           9,502    9,223                                    10,000
                                                                                             Attorney
                                                8,755
     Value of Cash Seizures (Millions)




                                                                            8,667
                                                                                             General’s    9,000




                                                                                                                   Number of Cash Seizures
                                         $500                                                 Order
                                                                                                          8,000
                                                                                      6,188               7,000
                                         $400
                                                                                                  4,631   6,000
                                         $300                                                             5,000
                                                $498                                                      4,000
                                                        $449                $424
                                         $200                    $409
                                                                                      $345                3,000
                                                                                                  $329
                                                                                                          2,000
                                         $100
                                                                                                          1,000
                                          $0                                                              -
                                                2011    2012      2013      2014      2015        2016
                                                                Seizure Fiscal Year


   Note: We rounded monetary values to the nearest million.
   Source: CATS

       While the Attorney General’s Order and related guidance has limited state
and local law enforcement’s ability to access equitable sharing funds through
adoptive seizure, it does not preclude the federal forfeiture of property seized
through joint task forces or as a result of federal/state investigations, the proceeds
of which may then be eligible for equitable sharing. This may be of particular
concern because, as demonstrated above, seizures derived from joint
transportation interdiction operations may not always advance a federal criminal
investigation or lead to a prosecution.

       According to the Department’s Asset Forfeiture Policy Manual, as a general
rule seizures should follow the investigation from which they arose. A federal
seizure should follow a federal investigation or prosecution, and a state seizure


                                                                         33
should follow a state investigation or prosecution. An MLARS official told us that
this general rule should prevent state and local law enforcement from using federal
forfeiture to access equitable sharing funds in situations in which there is not active
federal involvement in an investigation related to the seizure. However, this official
acknowledged that it is difficult to determine whether a seizure merits federal
forfeiture when it is derived as a result of a transportation interdiction operation in
which there is not an ongoing investigation precipitating or related to the seizure.

       This official also added that the Department is still vulnerable to criticism of
seizures derived from transportation interdiction operations and that the MLARS
continues to work with the DEA to update policy to clarify what seizures involving
state and local law enforcement do or do not justify federal forfeiture. While the
Attorney General’s Order and related policy guidance limiting the use of adoption
may help to focus the use of federal forfeiture authority, as we emphasized above,
the Department has not yet fully leveraged data that would help to identify those
seizures that do and do not achieve their legitimate law enforcement objectives.
Until the Department does so, it cannot develop and implement policy to fully
ensure federal forfeiture is used appropriately.

       During the course of the current review, we also became aware that DEA
agents in the field may not have been interpreting Policy Directive 15-2 as
intended. In reviewing the sample of 100 seizures, we identified multiple
transportation interdiction seizures in which a DEA agent formally made a seizure,
even though a state or local law enforcement officer independently initiated the
encounter that led to seizure or had developed much or all of the probable cause
referenced as supporting the seizure. 54 Although our sampled seizures occurred
prior to the issuance of the Attorney General’s Order and Policy Directive 15-2, we
asked the DEA whether these seizures would require AUSA review had they
occurred subsequent to the issuance of these directives. The DEA initially
responded that if DEA agents formally made these types of seizures, they would not
have to seek AUSA review; however, after we issued the working draft of this
report, DEA headquarters officials acknowledged that the initial response was
incorrect and that such review would have been required. 55




        54
           We do not provide the specific number of seizures formally made by DEA, based largely on
the actions of state and local law enforcement, because the documentation does not always include
enough information to determine the precise level of involvement of DEA agents.
        55
           DEA headquarters personnel explained there was early confusion regarding the application
of the Attorney General’s Order and Policy Directive 15-2 and that the initial responses, likely provided
by field agents, reflect this confusion. DEA headquarters personnel added that while the initial
answers were incorrect, and that some confusion among field agents may still exist regarding the
application of these directives, field office and DEA headquarters supervisory review would identify
when the directives were interpreted inconsistently and would ensure compliance with the directives
when comparable seizures occur under the new policies. Given the timing of our fieldwork, we did not
review seizures occurring after the issuance of the Attorney General’s Order and Policy Directive 15-2.
Therefore, we cannot fully determine the extent to which incorrect interpretations of guidance affect
current seizure activities.




                                                   34
The Attorney General’s Order Seeks to Prevent Law Enforcement from
Using Adoption to Circumvent State Seizure Laws; It Also May Have the
Potential to Affect Cooperation between Federal and State and Local Law
Enforcement

       Congress intended for equitable sharing to increase cooperation between
federal and state and local law enforcement through the distribution of forfeiture
revenues to state and local law enforcement. 56 We were told about two ways in
which equitable sharing can facilitate such cooperation. First, because Department
guidelines governing equitable sharing allow police departments to use these funds
to pay the salary and benefits of officers hired to fill vacancies created when a law
enforcement agency assigns officers to a federal task force, it financially supports
state and local participation in such task forces. 57 Second, it facilitates information
sharing by providing an opportunity that might not otherwise exist for DEA agents
to develop DEA investigations using information collected by state and local law
enforcement.

       In order to consider the impact of the Attorney General’s order on
cooperation between federal and state and local law enforcement, we looked at
CATS equitable sharing data and identified two states in which adoptions appeared
to form a key component of the funding to support such collaborative efforts —
Nebraska and North Carolina. 58 Table 8 below shows equitable sharing distributions
derived from DEA seizures made between FY 2007 and FY 2014 to these states. As
a result of the DEA’s adoptive seizures, state and local law enforcement in Nebraska
and North Carolina received equitable sharing distributions of $24.6 million and
$56.1 million, respectively, which represented 91 and 55 percent, respectively, of
the value of the total equitable sharing revenues distributed in these states. By
comparison, the DEA’s overall adoptive seizure activities accounted for only
18 percent of the value of equitable sharing revenues distributed to state and local
law enforcement nationwide during this time.




          56
               21 U.S.C. § 881(e)(3).
          57
               DOJ MLARS, Guide to Equitable Sharing for State and Local Law Enforcement Agencies
(2009).
          58
            We focused our analysis of CATS data on DEA adoptive seizure activities and related
equitable sharing distributions because the DEA was responsible for the vast majority — 88 percent —
of the Department’s adoptive seizures between FY 2007 and FY 2014 (non-inclusive of firearms and
ammunition). Our further analysis identified specific states in which law enforcement received
relatively high proportions of equitable sharing revenues derived from the DEA’s adoptive seizure
activities between FY 2007 and FY 2014, the 8 full fiscal years prior to the issuance of the Attorney
General’s Order. In particular, we found that among all state and local law enforcement agencies
throughout the country, agencies in North Carolina and Nebraska were the only ones to rank in the
top six of both the total value and the higher proportion of equitable sharing revenues derived from
the DEA’s adoptive seizures.




                                                   35
                                               Table 8

  Equitable Sharing Distributions to State and Local Law Enforcement in
Nebraska and North Carolina Derived from DEA Adoptive and Non-Adoptive
                      Seizures, FY 2007 – FY 2014
                      Equitable Sharing             Equitable Sharing
                        Distributions                 Distributions
                                             %                              %             Total
                        Derived from                  Derived From
                         Adoptions                   Non-Adoptions
 Nebraska                           $24.6   91%                     $2.5     9%                    $27.1
 North Carolina                     $56.1   55%                    $45.8   45%                    $101.9
 DEA Overall                       $515.6   18%                $2,273.5    82%                 $2,789.1
Notes: We express equitable sharing values in millions. All values include distributions to state, local,
and tribal law enforcement agencies.
Source: CATS

       We visited sites in Nebraska and North Carolina to learn why law
enforcement used adoptive seizure disproportionately to non-adoptive seizures, and
to attempt to determine the effects of the Department’s decision to limit adoptions.
We found, through our interviews with law enforcement officials, that the primary
reason law enforcement in these states has disproportionately used adoptive
seizure is that their states’ forfeiture laws restrict law enforcement’s use of
forfeiture. In 1999, Nebraska’s Supreme Court ruled that civil forfeiture cannot be
pursued in addition to a criminal prosecution — a ruling that was in force up to April
2016. 59 As a result, at the time of our review, local police and county prosecutors
in Nebraska had to pursue either criminal prosecution or the forfeiture of assets
related to the underlying crime. 60 Conversely, in North Carolina, asset forfeiture
related to drug crimes can be pursued only in addition to criminal prosecution,
effectively eliminating law enforcement’s option to use state administrative or civil
forfeiture to take possession of the seized proceeds of crime. 61

        DEA and Nebraska and North Carolina law enforcement officials told us that
the Department’s limitation on adoptions can diminish the extent of law
enforcement cooperation. These officials explained that this is because of the
ability to use equitable sharing funds to support its contribution of personnel to
federally led task forces and joint investigations. However, we could not verify this
assertion because it was beyond the scope of our review to perform an in-depth
analysis that would allow us to assess whether the Attorney General’s Order has
resulted in these two states diminishing their participation in DEA task forces and, if

        59
             State of Nebraska v. Franco, 257 Neb. 15, 594 N.W.2d 633 (1999).
        60
            In April 2016, Nebraska amended its forfeiture laws, which now require a criminal
conviction related to an illegal drug, child pornography, or illegal gambling offense in order to forfeit
property. Additionally, state and local agencies are now prohibited from transferring from other
authorities seized cash and property under $25,000, though this restriction does not apply to property
physically seized by a federal agent. See Neb. Rev. Stat. § 28-1463.01 (2016).
        61
             N.C. Gen. Stat. §§ 75D-5, 90-112; State v. Jones, 158, N.C. App. 465 (2003).




                                                   36
they have diminished their participation, whether their reduced participation has
had a measurable impact on drug enforcement in those two states.

        DEA and Nebraska and North Carolina state and local law enforcement
officials further explained that the Attorney General’s Order is likely to adversely
affect the information sharing between federal and state and local law enforcement
that comes with such cooperation. These officials pointed to the information
sharing that can result from DEA agents receiving information from state and local
law enforcement. However, we do not know the extent to which adoption has
assisted the DEA in developing investigations because, as discussed earlier in this
report, Department investigative components do not collect data that would allow
them to evaluate how often any seizure, including adoptive seizure, advances
criminal investigations. Therefore, we cannot fully evaluate the degree to which
restricting adoption has impacted drug investigations in states like Nebraska and
North Carolina. Indeed, some DEA officials told us that the contribution to criminal
investigations of state and local highway interdiction seizures that resulted in
adoptions may have been limited even before the Attorney General’s Order because
most were “one and done”: the adopted state or local seizure was likely a one-time
event and unlikely to contribute to a criminal investigation, be it state or federal.

        According to officials from the Office of the Deputy Attorney General and the
MLARS, two of the purposes of the Attorney General’s Order were to prevent state
and local law enforcement from using adoption to obtain federal forfeiture revenue
that is unavailable under state seizure laws and to prevent the Department from
forfeiting assets seized by state and local law enforcement without federal
oversight. Our analysis indicates that the Department has accomplished these
objectives to a significant extent. However, given the potential described to us for
the Attorney General’s Order to also affect law enforcement cooperation, especially
in states that have restrictive forfeiture laws, we believe that the Department also
should monitor the effects of the Attorney General’s Order and seek to mitigate any
negative impact it may have on law enforcement cooperation.




                                         37
                   CONCLUSION AND RECOMMENDATIONS
Conclusion

        Asset seizure and forfeiture can provide considerable benefits to law
enforcement. Seizure and forfeiture can financially undermine criminal
organizations and deter illegal behavior by taking the profit incentive out of crime.
Intelligence gathered incident to and as a result of a seizure can also contribute to
case development and criminal prosecutions. However, asset seizure and forfeiture
also present unique potential risks to civil liberties. This is especially true for cash
seizures made without a court-issued warrant that result in administrative forfeiture
because law enforcement can seize and forfeit this fungible property without
charging the owner with a crime and without any court involvement or review.

        In light of these concerns, we believe that it is important for the Department
to assess (1) whether these types of seizures benefit law enforcement efforts and
(2) the extent to which these types of seizures present potential risks to civil
liberties. We found that the Department neither formally collects nor evaluates the
data necessary to determine whether its seizures and forfeitures advance or relate
to federal investigations. Instead, we found that the Department uses the data it
collects primarily to report on the types of assets seized and the financial results of
its forfeiture efforts. As a result, the Department and its investigative components
cannot fully evaluate and oversee their seizure and forfeiture activities to ensure
that they are used to advance investigations that help to dismantle criminal
organizations and that they do not present a potential risk to civil liberties.

       In the absence of seizure-specific metrics that would allow us to use
aggregate data to evaluate how seizures and forfeitures have related to criminal
law enforcement activities, we reviewed a judgmental sample of DEA cash seizures.
We focused our analysis on DEA operations because the DEA conducted 80 percent
of the Department’s cash seizures between FY 2007 and FY 2016.

       Our analysis revealed three important areas for the Department’s
consideration. First, most of these seizures occurred in interdiction settings, in
which trained law enforcement officers make on-the-spot assessments of fast-
moving factual situations to initiate encounters that lead to seizure. This is
particularly relevant in light of the OIG’s findings in a recent report highlighting
potential risks to civil liberties associated with cold consent encounters that occur
during transportation interdiction operations. 62 Second, as a result of our review of
DEA records and subsequent discussions with DEA officials, we determined that the
DEA could verify that only 44 of the 100 seizures we sampled had advanced or
were related to criminal investigations. Third, we identified instances, not
addressed by DEA policy, in which task force officers had made different decisions
in similar situations when deciding whether to seize all of the cash they had
discovered. While the factual situations vary from case to case, such differences in
treatment demonstrate how seizure decisions can appear arbitrary, which in turn

      62
           DOJ OIG, Cold Consent Encounters, i.




                                                  38
can fuel public perception that law enforcement is not using this powerful authority
legitimately.

       We also learned the Department’s investigative components do not require
their state and local task force officers to receive training on federal asset seizure
and forfeiture laws and component seizure policies prior to conducting federal
seizures, despite the fact that they work with and wield the same seizure
authorities as the Department’s Special Agents. We believe that the Department
and its components should take additional steps, in policy and training
development, to ensure that seizures are conducted consistently and that all law
enforcement officers who have the authority to make federal seizures are aware of
federal seizure and forfeiture laws and component seizure policies prior to
conducting seizures.

       We also found that the Attorney General’s 2015 Order and related guidance
eliminates most opportunities for state and local law enforcement to use federal
forfeiture to avail themselves of equitable sharing proceeds when federal
involvement in a seizure is limited. This is evidenced by a one-half reduction in the
annual number of DEA cash seizures and a one-third reduction in the annual value
of DEA cash seizures following the 2015 Order. However, this policy and related
guidance do not preclude the federal forfeiture of property seized through
federal/state investigations or joint task force operations, such as joint
transportation interdiction operations. This may be of particular concern because,
as demonstrated in this report, these seizures may not always advance a federal
criminal investigation or lead to a prosecution.

       Based on our analysis, we also determined that the limitation on adoptions
resulting from the Attorney General’s Order has financially affected state and local
law enforcement, especially in at least two states where law enforcement frequently
had used federal adoption because of restrictive state forfeiture laws. Prior to the
Attorney General’s Order and Department guidance, law enforcement in these
states had received significant equitable sharing revenues from adoption, which
they told us they had used in part to fund the participation of officers on federally
led task forces and in joint investigations. We believe that it is important for the
Department to monitor the effects of the Attorney General’s Order and take steps
to ensure that its financial impacts do not undermine valuable law enforcement
cooperation.




                                          39
Recommendations

       To improve the Department’s ability to manage its oversight of asset seizure
and forfeiture activities, we recommend that the Money Laundering and Asset
Recovery Section work with the Bureau of Alcohol, Tobacco, Firearms and
Explosives; the Drug Enforcement Administration; the Federal Bureau of
Investigation; the Asset Forfeiture Management Section; and the U.S. Attorney’s
Offices to:

1.    Develop ways to collect relevant data related to seizure and forfeiture
      activities sufficient to identify and evaluate whether seizures advance or are
      related to federal investigations.

2.    Review seizure practices to determine whether more-specific policy guidance
      and/or training is needed to ensure consistency in seizure operations.

3.    Ensure that state and local task force officers receive training on federal
      asset seizure and forfeiture laws and component seizure policies before they
      conduct or participate in federal seizures.

4.    Monitor the effects of the Attorney General’s 2015 Order that eliminated
      most types of federal adoptions of state and local seizures, and seek to
      mitigate any negative effects on law enforcement cooperation.




                                         40
                                                                    APPENDIX 1


                        EXPANDED METHODOLOGY
Standards

      The OIG conducted this review in accordance with the Council of the
Inspectors General on Integrity and Efficiency’s Quality Standards for Inspection
and Evaluation (January 2012).

Data Analysis

       We requested from the Department’s Asset Forfeiture Management Section
(AFMS) summary data detailing the seizure and forfeiture activities of the Bureau of
Alcohol, Tobacco, Firearms and Explosives (ATF); the Drug Enforcement
Administration (DEA); and the Federal Bureau of Investigation (FBI) between
FY 2007 and FY 2016. The AFMS provided this data from the Department’s
Consolidated Asset Tracking System (CATS). From this data, we sought to identify
the number and value of assets seized, returned, forfeited, and distributed to state,
local, and tribal law enforcement through equitable sharing during the scope of our
review.

       During a law enforcement operation or encounter, multiple assets may be
seized. In certain instances, multiple pieces of property may be seized from one or
more than one individual. We do not include the Department’s seizures of firearms
and ammunition in our calculation of adoptive seizures because the Attorney
General’s Order does not apply to the adoption of these asset types. Additionally,
our analysis of cash seizures includes the total number of assets that are coded as
“Cash/Currency” in CATS. The Department acknowledges that errors in coding
occur, and as a result these numbers may be overstated or understated.

Site Visits

        We selected sites based on a variety of factors to gain an understanding of
the diversity of seizure activities throughout the country. These factors include
geographic location, volume of seizure activities, volume of adoptive seizure
activities, and amount of equitable sharing revenues derived from those adoptive
seizures. Because the DEA was involved in 88 percent of all DOJ adoptive seizures
between FY 2007 and FY 2014 (excluding firearms and ammunition) and due to the
volume of DEA cash seizure activities that resulted in administrative forfeiture
during that period, we conducted the majority of our site visits at DEA locations.
We visited eight DEA offices within four field divisions: Los Angeles and Riverside,
California (Los Angeles Division); Greensboro, Raleigh, and Wilmington, North
Carolina (Atlanta Division); Milwaukee and Madison, Wisconsin (Chicago Division);
and Omaha, Nebraska (St. Louis Division). Though ATF and the FBI are involved in
considerably fewer cash seizures resulting in administrative forfeiture, we also
wanted to understand their seizure operations in the field. We visited one ATF field
office in Wilmington, North Carolina, and one FBI field office in Los Angeles,
California.




                                         41
       During these site visits, we interviewed federal law enforcement officers and
state and local law enforcement officers who serve as members of federal law
enforcement or task force groups. Our questions focused on law enforcement’s role
in seizure and forfeiture activities; oversight controls on these activities; and how
ATF, the DEA, and the FBI are implementing the Attorney General’s 2015 Order
prohibiting certain federal adoptions and related guidance. We also sought to
determine how the Department measures the performance of seizure activities and
evaluates their benefits to law enforcement.

Interviews

       We interviewed current ATF, DEA, and FBI officials about their roles in asset
seizure and forfeiture activities. These interviews occurred at component
headquarters and regional field office locations. While at headquarters locations,
we spoke with management staff responsible for the administration of asset seizure
and forfeiture activities. We also spoke with headquarters officials to discuss the
capabilities of their investigative agencies’ case management systems.

       While at field locations, we spoke with Assistant Special Agents in Charge,
supervisory Special Agents, non-supervisory Special Agents, non-federal task force
officers, and contract support personnel. Additionally, in Nebraska, we spoke with
senior leadership from state and local law enforcement agencies that partner with
federal law enforcement.

       We met with officials from the Department’s Money Laundering and Asset
Recovery Section and discussed their roles in overseeing the Department’s asset
seizure and forfeiture activities, developing seizure and forfeiture policy, and
managing the Equitable Sharing Program. We also met with officials from the
Office of the Deputy Attorney General to discuss how and why the Department
decided to issue the Attorney General’s Order. In addition, we interviewed officials
from the Asset Forfeiture Management Section to gain a better understanding of
their role in administering CATS.

       We conducted our final series of interviews by telephone with 12 Assistant
U.S. Attorneys who are responsible for asset forfeiture in their respective U.S.
Attorney’s Offices. During these interviews, we asked how they review seizures
made by state and local law enforcement to determine whether federal involvement
in a seizure has been sufficient to justify federal forfeiture.

Document Review

       We reviewed the federal laws, Department policy, and investigative
component policy relevant to asset seizure, asset forfeiture, adoption, and equitable
sharing. We paid particular attention to the Attorney General’s Order, as well as
related guidance. We also examined state laws, congressional testimony, news
articles, and public interest group reports relevant to Department asset seizure and
forfeiture activities. Given the timing of our fieldwork, we did not review seizures
occurring after the issuance of the Attorney General’s Order and related guidance.
Therefore, we cannot fully determine the extent to which incorrect interpretations
of guidance are currently affecting seizure activities.

                                         42
Sample of DEA Seizure and Forfeiture Activities

       We evaluated a judgmental sample of cash seizures from a population of
seizures that we believed were particularly susceptible to civil liberties concerns —
seizures in which the DEA pursued administrative forfeiture, the CATS seizure
method field indicated that seizure was effected without a warrant, and the
accompanying DEA Geo-Drug Enforcement Program code indicated that the seizure
was made without the presence of illicit narcotics. We identified a total population
of 765 DEA cash seizures that occurred during FY 2012 that met the above criteria
and selected a random sub-sample of 100 seizures to evaluate further.

        We analyzed CATS data, including probable cause narratives uploaded to
CATS by the DEA, related to these 100 seizures in an attempt to determine the
following: (1) the type of enforcement operations used to generate the seizures;
(2) the factors the DEA and its state and local partners used to develop reasonable
suspicion to initiate encounters that led to seizures; (3) the factors the DEA and its
state and local partners used to establish probable cause for seizures; (4) the
number of seizures that were returned to the owner prior to forfeiture; and (5) the
extent to which seizures advanced or were related to ongoing investigations,
initiated new investigations, led to arrests, or led to prosecution. From our review
of these narratives we were able to determine that 29 of the sampled seizures had
advanced or were related to ongoing investigations, initiated new investigations, led
to arrests, or led to prosecution. For the remaining 71 seizures, we asked the DEA
to provide us additional documentation that would indicate whether a seizure met
the above conditions. Based on this additional documentation, we made our final
determinations, detailed in Table 7, as to the number of sampled seizures that
advanced or were related to a criminal investigation.

        According to the DEA, it is difficult to assess whether seizures advanced or
related to a federal investigation, as it can take years for the broader law
enforcement benefits of a seizure to become evident. For example, a seizure may
occur at the beginning of an investigation, and it may take many years before an
arrest or prosecution related to that investigation occurs. Therefore, we selected
seizures made during FY 2012 in an attempt to capture all the law enforcement
activities that occurred during the 3 full years following the seizure.




                                         43
                                         APPENDIX 2


ATTORNEY GENERAL’S ORDER PROHIBITING CERTAIN FEDERAL
                     ADOPTIONS




                         44
45
                                     APPENDIX 3

POLICY DIRECTIVE 15-2: ADDITIONAL GUIDANCE




                    46
47
48
                                          APPENDIX 4


THE CRIMINAL DIVISION’S RESPONSE TO THE DRAFT REPORT




                         49
50
51
52
53
54
55
56
57
58
                                                                      APPENDIX 5


    OIG ANALYSIS OF THE CRIMINAL DIVISION’S RESPONSE
      The OIG provided a draft of this report to the Criminal Division for its
comment. The Criminal Division’s response is in Appendix 4 of this report. We
discuss the OIG analysis of the Criminal Division’s response and the actions
necessary to close the recommendations below.

The Criminal Division’s General Comments and the OIG’s Reply

        At the outset of the response, the Criminal Division asserts that, because the
OIG gave our report a broad title but included a detailed analysis of a sample of
100 Drug Enforcement Administration (DEA) cash seizures, there is a fundamental
disconnect between the report’s title and its content. We note that the first, third,
and fourth finding areas of this report do not directly discuss the sample of DEA
cases. The first and third finding areas identify Department-wide issues, the
Department’s inability to determine how often seizures and forfeitures advance or
relate to criminal investigations, and the lack of a requirement to provide training to
state and local task force officers prior to conducting federal seizures. The fourth
finding area relates to the need to monitor the effects of the Attorney General’s
2015 Order that eliminated most types of federal adoptions of state and local
seizures and to mitigate any negative effects on law enforcement cooperation. We
therefore continue to believe that the report’s title appropriately reflects the review
that we conducted of the Department’s oversight of its cash seizure and forfeiture
activities.

       The Criminal Division next complains that the 100 DEA cash seizures we
sampled were not appropriately representative and that the conclusions we reached
based on this sampling are unsupported by the data. We disagree. As we state in
our report, we selected our sample from a subset of the universe of DEA’s cash
seizure activity precisely because they presented certain risk characteristics that we
judgmentally identified. Our use of this sample to help assess the Department’s
cash seizure activities was entirely appropriate because it aligns with the OIG’s
standard and accepted practice of identifying and then evaluating areas of
Department operations that present higher levels of risk. By focusing our analysis
on DEA cash seizures, specifically those that were conducted without a warrant and
without the presence of illicit narcotics, we appropriately identified and analyzed
one of the Department’s most significant areas of risk in its cash seizure activity.
Our decision to focus on this area also was informed by public and congressional
concerns about the Department’s use of cash seizure and administrative forfeiture,
as well as our analysis of Consolidated Asset Tracking System (CATS) data, which
indicates that the DEA is responsible for the vast majority of the number and value
of the Department’s cash seizures, most of which result in administrative forfeiture.

       Moreover, we reached our conclusions based on data that we collected and
evaluated in the manner that multiple Department officials told us was most
appropriate for determining whether a seizure had advanced or related to a criminal
investigation — reviewing case-specific narrative information about each seizure.
Specifically, we collected DEA-developed probable cause narratives that detailed the



                                          59
conditions surrounding each seizure and supplemented these narratives with
discussions with DEA officials about seizures for which the narrative did not provide
sufficient information that would allow us to determine whether the seizure
advanced or related to an investigation.

       By contrast, the Criminal Division used its own methods, which are based on
assumptions and speculation, to reach its own conclusions regarding the connection
of these 100 cases to criminal investigations and prosecutions. The result is a
series of assertions by the Criminal Division in its response about how the cases
connect to a criminal investigation, but it uses words such as “may” or “indicates”
or “likely” to condition the claims; for example, one sentence contends that the
presence of certain information “may be indicative of a connection between these
seizures and a broader criminal investigation.” We believe that the Criminal
Division identified a different number of seizures as possibly connecting to a
criminal investigation because it based its analysis solely on a review of non-
narrative CATS data fields using four assumptions that are not entirely warranted
for the purposes of this analysis:

   1.        If a payment was made to a confidential source, as may be
             evidenced by a “forfeiture dependent award,” there was preexisting
             intelligence of a federal criminal violation. Our review of sampled
             seizures revealed numerous ways the DEA uses confidential sources,
             including as providers of routine tips based on standard profiles rather than
             as suppliers of information about a specific drug crime. This former method
             is described in our Audit of the Drug Enforcement Administration’s
             Management and Oversight of Its Confidential Source Program. In that
             report, we found that DEA interdiction units relied heavily on confidential
             sources who were employees in the travel and parcel industries and had
             access to passenger information or private facilities. This report further
             details that some agents requested that sources provide them with
             suspicious travel itineraries that met criteria defined by the agents and, in
             some cases, requested entire passenger manifests almost daily. Similarly,
             some parcel employees were told to provide information related to
             suspicious parcels and, at times, followed DEA instructions to directly
             transfer customer packages to the DEA.63 We believe that this type of
             information is fundamentally different than the type of information provided
             by a confidential source who offers substantive information about a specific
             drug crime, and we therefore do not consider seizures initiated with this
             type of information to indicate a relationship to an investigation absent
             other connections.




        63
           DOJ OIG, Audit of the Drug Enforcement Administration’s Management and Oversight of Its
Confidential Source Program, Audit Report 16-33 (September 2016). Some of the sources the OIG
reviewed had received significant payments for their assistance, including an airline employee who
received more than $600,000 in less than 4 years and a parcel employee who received more than
$1 million over 5 years.




                                               60
   2.   A seizure with a data field that indicates smuggling activity likely
        advanced or related to a criminal investigation. The Criminal Division
        used a data field that, according to DEA officials, its agents do not use
        consistently. Our in-depth review found that many of the seizures with the
        “smuggling” indicator did not advance or relate to an investigation and
        were generally transportation or parcel interdiction seizures.

   3.   If multiple seizures share a common case number, the seizures
        likely advanced or were related to an ongoing criminal
        investigation. Our review of narrative seizure information and DEA
        responses reveals that during a transportation interdiction operation,
        agents and task force officers may seize multiple assets from one or more
        individuals using the same case number. As we discuss in footnote 44 of
        the report, multiple seizures with the same case number can sometimes
        indicate connection to an ongoing investigation. However, our review
        indicates that not all of the sampled seizures that accompanied other
        seizures and have the same case number actually advanced or related to
        an investigation.

   4.   If a U.S. Attorney’s Office becomes involved in a seizure, the
        seizure likely advances or relates to a criminal investigation. While
        this generally may be true when there is a parallel criminal or civil
        forfeiture related to an administrative forfeiture, we observed that U.S.
        Attorney’s Office involvement does not necessarily indicate connection to a
        broader criminal investigation where the involvement is solely for the
        purpose of resolving a claim initiated by a property owner.

       In sum, we stand by the soundness of our methodology and conclusions and
believe that the need for the Department to keep better data is demonstrated by
the fact that the Criminal Division had to engage in assumptions and speculation in
an effort to respond to our findings. Moreover, even the Department’s own
speculative calculations recognize that almost 20 percent of the universe of cases
that we examined has no identifiable connection to criminal investigations.

       The Criminal Division also asserts that the current OIG report does not fairly
describe the amount of forfeiture proceeds that are returned to victims of crime.
This claim is not accurate. On page 1 of the report, we explain that the
Department states that it has returned more than $4 billion in forfeited funds to
crime victims since FY 2000 and that it anticipates returning an additional $4 billion
during the ongoing Madoff victim compensation process. The seizures underlying
these victim returns largely result in civil or criminal forfeiture and are generally
related to fraud investigations conducted by the Federal Bureau of Investigation.
This type of investigative activity is considerably different from the investigative
activity that results in DEA cash seizures. Although we do not have data that
specifically shows the amount of forfeiture proceeds that the DEA specifically
returned to victims as a result of its cash seizures, Asset Forfeiture Management
Section (AFMS) data indicates that between FY 2000 and FY 2016, the DEA
returned approximately $14 million in forfeiture proceeds to victims of crime,



                                          61
regardless of asset type. Additionally, the Criminal Division implies that we are
projecting the return rate from the seizures in our sample to the total amount of
returns for all of the Department’s seizure activity. However, throughout the report
we provide summary data about asset seizure activity and, specifically in Table 5 of
the report, we present the value of returns from all DEA cash seizures. Further, the
Criminal Division incorrectly claims that we misreported the total amount returned
from our sample of DEA cash seizures as $26,000, when, in fact, on page 30 of the
report we reported this figure as $46,000.

       Additionally, the Criminal Division believes that the OIG has overstated the
risks associated with administrative forfeiture by not fully describing the various
opportunities for judicial involvement in the administrative forfeiture process. We
did not intend for this review to portray every Department seizure that results in
administrative forfeiture as a warrantless interdiction-style seizure; however, the
Department is unable to systematically differentiate these types of higher risk
seizures that do not advance or relate to investigations from those less risky
seizures that include judicial involvement and do advance or relate to
investigations. Until the Department can better draw these distinctions, and
identify areas of increased risk, it cannot effectively and efficiently oversee its asset
seizure and forfeiture activity.

       Finally, the Criminal Division suggests that we do not fully appreciate the
importance of law enforcement’s use of asset seizure and forfeiture authorities in
effectively addressing our nation’s crime and illegal drug problems. While we have
long recognized that a well-run asset forfeiture program can be an important law
enforcement tool, we believe that the Criminal Division’s comments on our report
indicate that it has missed a key point: regardless of the importance of the tool, it
must be used appropriately, with effective oversight, and in a way that does not
place undue risks on civil liberties. We further believe that the Department has an
increased responsibility to protect civil liberties when its investigative components
use a tool that permits seizure and forfeiture of property without judicial
involvement or apparent connection to investigative activity, and then uses the
proceeds of that property as a funding mechanism for law enforcement operations.

      Having considered the Criminal Division’s general comments, below we
discuss the actions necessary to close the recommendations.

       Recommendation 1: Develop ways to collect relevant data related to
seizure and forfeiture activities sufficient to identify and evaluate whether seizures
advance or are related to federal investigations.

      Status: Unresolved.

       Criminal Division Response: The Criminal Division indicated that the OIG
may have overstated the relevance of the existence of an ongoing criminal
investigation to civil liberties concerns in the context of an asset forfeiture
proceeding. Further, the Criminal Division stated that the Department believes that
a more extensive review of the information in CATS provides a more accurate
understanding of the Department’s use of asset forfeiture in connection with


                                           62
ongoing criminal matters. However, because of technical, cost, security, privacy,
and efficiency reasons, the Department has not attempted to import investigative
and judicial case database information into CATS. This, and other related
information, is necessary to determine whether an earlier administrative seizure
and forfeiture advanced a later criminal investigation.

       The Criminal Division also stated that in light of the security, privacy, and
technological challenges associated with linking so many disparate databases, the
AFMS, which is responsible for operating CATS, received $2.147 million in FY 2017
for a new public-facing data system that will help link assets and case-related
information. The initial phase of this project will bring together litigation, law
enforcement, court system, and information technology experts from the
stakeholder community to define requirements for linking existing and new data
sources.

       OIG Analysis: We believe that instances in which a seizure does not
advance or relate to an ongoing criminal investigation can raise civil liberties
concerns because such instances raise the question of whether law enforcement is
seizing property for a purpose other than deterring and punishing criminal behavior.
This has been an ongoing concern of Members of Congress as well as civil liberties
organizations that advocate for asset forfeiture reform. We identify this as one of
many risk factors the Department should consider in its efforts to effectively
oversee asset seizure operations. The Criminal Division stated that it agrees that
effective oversight may help assure the public that component agencies continue to
use seizure authority appropriately. The Criminal Division also agrees with the
OIG’s basic premise that the Department must ensure that asset seizure and
forfeiture authorities are used appropriately.

       The data initiative that the Criminal Division discussed in its response is a
promising step toward greater transparency in the Department’s seizure and
forfeiture program, and one that can play an important role in the healthy debate
about asset forfeiture that the Criminal Division supports. However, based on the
information provided in the Criminal Division’s response, this initiative does not
address the need that we identified in our report for the Department to have data
that allows it and its investigative components to fully evaluate and oversee their
seizure and forfeiture activities. While we understand that assessing the
relationship between asset seizure and criminal investigations can be complex, the
Department will have difficulty fully overseeing its asset seizure and forfeiture
operations if it does not collect and evaluate the relevant information, such as the
circumstances under which a seizure occurred; the relationship between the seizure
and other criminal activity; the benefits of seizure activities for law enforcement
efforts; and any claims, petitions, and returns of assets resulting from a seizure.

       It is unclear whether the Criminal Division concurs with this recommendation.
Please provide a statement of concurrence or non-concurrence on or before
June 30, 2017. If the Criminal Division concurs with this recommendation, on or
before June 30, 2017, please also provide information on the steps the Department
plans to take to develop ways to collect relevant data related to seizure and



                                         63
forfeiture activities sufficient to identify and evaluate whether seizures advance or
are related to federal investigations.

       Recommendation 2: Review seizure practices to determine whether more-
specific policy guidance and/or training is needed to ensure consistency in seizure
operations.

      Status: Unresolved.

       Criminal Division Response: The Criminal Division expressed general
agreement that similar matters should be handled consistently and stated that the
training that the Department agrees to conduct to respond to Recommendation 3
will seek to achieve this result. The Criminal Division also asserted that the finding
on which this recommendation is based is not well supported. Further, the Criminal
Division asserted that developing a policy specific enough to ensure consistent
outcomes in the two instances that the OIG provided is not realistic.

       OIG Analysis: Handling similar matters consistently in seizure operations is
necessary to avoid the risk of creating the appearance that decisions in these
sensitive operations are arbitrary. Such an appearance can undermine public trust
in law enforcement and its use of this important tool. Although both the OIG and
the Criminal Division note that there are factual differences in the two seizures we
compare, we believe that these seizures illustrate how operational differences about
a sensitive topic — whether cash in a subject’s possession will be seized — can
appear arbitrary. Therefore, this example is useful for showing the type of
differences that can create the perception that law enforcement does not follow
established protocols for asset seizure activity, which can in turn erode the public’s
trust. Using the comparison of these instances as an example, our
recommendation asks the Department to review its seizure practices to identify any
such inconsistencies and then determine the best way to minimize them. We do
not identify a specific list of inconsistencies to address or say how the Department
should address them.

      It is unclear whether the Criminal Division concurs with this recommendation.
Please provide a statement of concurrence or non-concurrence on or before
June 30, 2017. If the Criminal Division concurs with this recommendation, on or
before June 30, 2017, please also provide steps the Department plans to take to
determine whether, and in what areas, more-specific policy guidance or training is
needed to ensure consistency in seizure operations.

       Recommendation 3: Ensure that state and local task force officers receive
training on federal asset seizure and forfeiture laws and component seizure policies
before they conduct or participate in federal seizures.

      Status: Resolved.

      Criminal Division Response: The Criminal Division indicated that it
concurred with this recommendation, and stated that the Money Laundering and
Asset Recovery Section (MLARS) is considering specific training requirements for



                                          64
state and local law enforcement officers who participate as task force officers with
federal law enforcement. The training would require them to certify that they have
completed two types of training before participating in or conducting federal
seizures: (1) a module on federal asset forfeiture law and procedures and (2) a
module on component-specific policies regarding asset forfeiture. Once both
trainings are completed, the task force officers would certify their completion to the
responsible federal law enforcement agency and each agency would be required to
provide an annual certification indicating that all task force officers received the
required training before participating in or conducting federal seizures. The
Criminal Division stated that the MLARS would oversee the design and
implementation of both modules, which could be designed as e-learning/distance
learning to ensure broad and timely access. In addition, a training resource would
be developed to assist with remediation and reinforcement.

      OIG Analysis: The Criminal Division’s planned actions are responsive to our
recommendation. On or before June 30, 2017, please indicate whether the training
under consideration is approved and provide curricula and implementation plans for
the specific training courses that the MLARS develops for state and local law
enforcement officers who participate as task force officers with federal law
enforcement.

      Recommendation 4: Monitor the effects of the Attorney General’s 2015
Order that eliminated most types of federal adoptions of state and local seizures,
and seek to mitigate any negative effects on law enforcement cooperation.

      Status: Unresolved.

       Criminal Division Response: The Criminal Division stated that the
Department is conducting a review of Attorney General Holder’s 2015 Order to
determine all potential negative effects on federal, state, and local law
enforcement. The Criminal Division noted that it is imperative that the
Department’s relationships with state and local law enforcement partners remain
strong. The Criminal Division also noted that the Department is exploring
“innovative” methodologies for determining equitable sharing payments that would
allow for payments that recognize more forms of cooperation beyond the forfeiture
of specific assets. As the Department continues to explore these possibilities and
evaluate whether changes to statutory authorities would be required to implement
them, the Criminal Division stated that the Department will also provide additional
training to the individuals who decide equitable sharing percentages to ensure that
equitable sharing decisions are fair and proportional to the participating agencies’
contributions.

       OIG Analysis: It is unclear whether the Criminal Division concurs with this
recommendation. Please provide a statement of concurrence or non-concurrence
on or before June 30, 2017. If the Criminal Division concurs with this
recommendation, on or before June 30, 2017, please also provide documentation of
the steps the Department plans to take to monitor the impact of the Attorney
General’s 2015 Order and to mitigate any negative effects it may have on law
enforcement collaboration. These steps may include, but are not necessarily


                                          65
limited to, possible new methodologies for determining equitable sharing payments.
Also provide the curricula and implementation plan for training the individuals who
decide equitable sharing payments.




                                        66
The Department of Justice Office of the Inspector General
(DOJ OIG) is a statutorily created independent entity
whose mission is to detect and deter waste, fraud,
abuse, and misconduct in the Department of Justice, and
to promote economy and efficiency in the Department’s
operations. Information may be reported to the DOJ
OIG’s hotline at www.justice.gov/oig/hotline or
(800) 869-4499.




          Office of the Inspector General
            U.S. Department of Justice
                www.justice.gov/oig