Maintenance and Disposal of Seized and Forfeited Assets
in Selected Western Districts

Report No. 02-07
March 2002
Office of the Inspector General

The Attorney General's Guidelines on Seized and Forfeited Property ¹ (Guidelines) state that:

The [DOJ] asset forfeiture program has three primary goals: (1) to punish and deter criminal activity by depriving criminals of property used or acquired through illegal activities; (2) to enhance cooperation among foreign, federal, state and local law enforcement agencies through the equitable sharing of assets recovered through this program; and, as a by-product, (3) to produce revenues to enhance forfeitures and strengthen law enforcement.

The Guidelines also state that "the integrity of the entire forfeiture program depends upon the faithful stewardship of forfeited property and the proceeds thereof." This stewardship is exercised through the USMS, which has primary responsibility for the maintenance and disposal of seized and forfeited property. Our audit was designed to test USMS performance of its responsibilities with regard to selected categories of assets at certain locations.

We initiated the audit as part of our continuing responsibility for oversight of a program that has been listed by the Comptroller General as a high-risk area since 1990. Our office and the General Accounting Office (GAO) have issued numerous audit reports critical of USMS management of seized and forfeited assets. ² Recently, however, both GAO and the independent auditors who performed the financial statement audits for DOJ have issued more favorable reports. ³

We designed our audit to examine the current practices of the USMS and follow up on key issues from prior audit reports. Of particular concern was the management of seized and forfeited vehicles in San Diego, CA. Because of the numerous findings in our 1994 report, we considered it necessary to include San Diego in the sites for our current review and to examine the current practices with regard to vehicles in that district. We also performed audit work at Las Vegas, NV, and three sites in the District of Arizona. ⁴

We tested the following asset categories at each location: vehicles, vessels, cash/currency, and financial instruments. We also tested jewelry but only at a nationwide auction held in Las Vegas. On a national basis the assets in these categories were valued at $696,081,000, or more than 85 percent of the dollar value of all asset categories in USMS custody at the end of fiscal year (FY) 2000.

DOLLAR VALUE OF ASSETS IN CUSTODY AT SEPTEMBER 30, 2000

CATEGORY	SEIZED	FORFEITED	TOTAL	PERCENT
Cash Financial Instruments Jewelry Vehicles Vessels	$ 298,189,000 226,033,000 9,004,000 58,251,000 3,542,000	$ 58,045,000 13,882,000 2,657,000 24,758,000 1,720,000	$ 356,234,000 239,915,000 11,661,000 83,009,000 5,262,000	43.72 29.44 1.43 10.19 .65
SUBTOTAL	595,019,000	101,062,000	696,081,000	85.43
All Others	77,307,000	41,407,000	118,714,000	14.57
TOTAL	$672,326,000	$142,469,000	$814,795,000	100.00

Source: OIG Analysis of Data from JMD Asset Forfeiture Management Section

1. July 1990.

2. Our March 1994 report, United States Marshals Service Maintenance and Disposal of Seized Assets, 94-14, documented serious deficiencies, such as the failure to dispose of forfeited assets promptly and to exercise due care in monitoring the performance of service providers at several USMS districts.

3. For example, in 1999 GAO issued a report, ASSET FORFEITURE: Marshals Service Controls Over Seized Assets, GAO/GGD-99-41, with no significant adverse findings based on audit work at four large USMS districts.

4. We performed fieldwork at the District Office in Las Vegas in conjunction with our observation of a nationwide auction sale of forfeited jewelry held in that city in March 2001. We selected the District of Arizona based on its relatively high volume of seized and forfeited vehicles in custody. We performed field work at the District Office in Phoenix and the suboffices in Tucson and Yuma.