UNITED STATES MARSHALS SERVICE
MAINTENANCE AND DISPOSAL OF SEIZED ASSETS
Audit Report 94-14, (3/94)
TABLE OF CONTENTS
2. SUPERVISION OF SERVICE PROVIDERS
STATEMENT ON INTERNAL CONTROL STRUCTURE
STATEMENT ON COMPLIANCE WITH LAWS AND REGULATIONS
APPENDIX I - Schedule of Cost Exceptions
APPENDIX II - Vehicle Storage Conditions in San Diego
APPENDIX III - Executive Office for Asset Forfeiture Comments
APPENDIX IV - Audit Division Analysis and Summary of Actions Necessary to Close Report
EXECUTIVE DIGEST
The Office of the Inspector General, Audit Division, has completed an audit of the United States Marshals Service (USMS) Maintenance and Disposal of Seized Assets. The objective of the audit was to assess the adequacy of controls over the maintenance of seized assets and related expenses including advertising, sales, and sales receipts.
The USMS is responsible for the day-to-day maintenance, protection, and disposal of properties seized and forfeited under the asset forfeiture program. When we began the audit, the inventory of seized assets was valued at approximately $1.8 billion.
Asset seizure and forfeiture activities have been identified as high-risk areas warranting special audit effort because of their vulnerability to fraud, waste, and mismanagement. Numerous prior audits and other reviews have been performed in this area and have produced a variety of findings dealing with significant weaknesses. This audit disclosed that material weaknesses continue to exist in the maintenance and disposal of seized and forfeited assets.
The USMS did not dispose of forfeited assets expeditiously. This resulted in interest expense estimated at more than $18 million over a period of 9 years for assets held in custody in 20 USMS districts.
The USMS improperly donated forfeited furs appraised at $51,000 to a charitable thrift store. One fur was from an endangered species and its sale was prohibited by the Endangered Species Act.
The USMS did not exercise due care in reviewing the performance of providers of certain services. As a result, assets were allowed to deteriorate, contractors and other vendors failed to perform as required, and overcharges of at least $140,000 were paid.
Although the Deputy Attorney General ordered the USMS to use its hangar in Oklahoma City, Oklahoma, for storage of large seized aircraft, the USMS did not do so. As a result, the USMS incurred storage costs of more than $322,000 for seized aircraft, some of which could have been avoided.
Many instances occurred where USMS asset files either could not be found or else lacked critical documents. Records relating to assets valued at $9.9 million could not be located in one district office. In addition, the Seized Asset Management System database contained significant errors and omitted significant data.
INTRODUCTION
The Office of the Inspector General (OIG), Audit Division, has completed an audit of the United States Marshals Service (USMS) Maintenance and Disposal of Seized Assets. This report presents the audit results and provides recommendations for improving program operations and internal controls.
OBJECTIVE
The objective of the audit was to assess the adequacy of controls over the maintenance of seized assets and related expenses including advertising, sales, and sales receipts.
SCOPE AND METHODOLOGY
The audit generally encompassed maintenance and disposal activities relating to seized assets in the USMS inventory during the period of October 1, 1990 through February 28, 1993.
The audit focused primarily on aircraft, motor vehicles, real property, vessels, and jewelry. Limited testing was also performed in other asset categories. Our testing evaluated the economy and effectiveness with which assets were safeguarded and stored, the measures taken to ensure preservation of their market value, and the marketing of forfeited assets.
The audit was performed in accordance with generally accepted government auditing standards and included such tests as were necessary to accomplish our objective.
We used computer-processed data contained in the USMS Seized Asset Management System (SAMS). We conducted limited tests of the reliability of SAMS data and we reviewed prior audit findings concerning the reliability of SAMS. Although there were significant errors in the SAMS database (see Finding 4), no other more reliable source was identified that could have been used for our purposes. We used the database to establish the universe from which we identified locations and assets for review. We also performed analyses using data on the number, types, values, and seizure date of assets reportedly in USMS custody.
We interviewed officials and/or staff of the Executive Office for Asset Forfeiture (EOAF), the USMS, the Justice Management Division (JMD), and several private contractors who provided maintenance and/or disposal services to the USMS.
We performed work at the following locations.
Washington, DC:
USMS Headquarters
JMD Headquarters
USMS Regional, District, and Other Field Offices:
Atlanta, Georgia
Brooklyn, New York
Brunswick, Georgia
Chicago, Illinois
Harrisburg, Pennsylvania
Houston, Texas
Miami, Florida
Midland, Texas
Oklahoma City, Oklahoma
San Diego, California
Seattle, Washington
USMS Contractors:
Brooklyn, New York
Brunswick, Georgia
Chicago, Illinois
Harrisburg, Pennsylvania
Houston, Texas
Miami, Florida
Midland, Texas
San Diego, California
Seattle, Washington
BACKGROUND
The asset forfeiture program was intended to punish and deter criminal activity by depriving criminals of property used or acquired through illegal activities and to use this property to produce revenue to strengthen law enforcement.
The EOAF directs the asset forfeiture program within the Department of Justice (DOJ). Two funds are under the management control of the EOAF and are administered by the USMS. The Seized Assets Deposit Fund provides temporary storage of nonevidentiary cash subject to forfeiture. The Assets Forfeiture Fund (AFF) contains cash and proceeds derived from forfeited assets. To enhance law enforcement efforts, disbursements are made from the AFF to law enforcement agencies participating in asset seizures.
The USMS is responsible for the day-to-day maintenance, protection, and disposal of properties seized and forfeited under the asset forfeiture program. When we began the audit, the inventory of seized assets was valued at approximately $1.8 billion.
The basic policies and procedures governing the management of the seized asset program were set forth in the USMS "Seized Asset Management Handbook" (March 1986), which was replaced in October 1990 by the "Seized Asset Management Guidelines and Procedures." Additional guidance was found in a series of Asset Forfeiture Policies issued over a span of several years.
The program is directed by the Seized Assets Division (SAD) at the Headquarters of the USMS and administered through the 94 districts of the USMS. To assist the districts in the management of the program, the USMS established regional offices of the SAD. Originally there were 13 regional offices but at present there are only 3 (Atlanta, Georgia; Houston, Texas; and Seattle, Washington.)
Asset seizure and forfeiture activities have been identified as Office of Management and Budget high-risk areas warranting special audit effort because of their vulnerability to fraud, waste, and mismanagement. Numerous prior audits and other reviews have been performed in this area and have produced a variety of findings dealing with significant weaknesses. The following is a brief synopsis of findings from some of those audits and reviews.
DOJ Audits
"Special Audit of the United States Marshals Service," Justice Management Division (JMD) Audit Staff Report No. 89-8, February 1989. The audit disclosed weak controls over the Asset Forfeiture Fund.
"Management of Seized and Forfeited Assets in the Department of Justice," OIG Audit Report No. 90-14, September 1990. The audit disclosed that there were multiple databases which were inaccurate. In addition, the USMS was not conducting or maintaining inventories adequately, and was not exercising proper internal controls over vendor invoices. It also found inadequate oversight and control of the program resulting from a failure of the SAD regional offices to monitor, influence, or direct district operations.
"United States Marshals Service Aircraft Hangar," OIG Audit Report No. 91-4, January 1991. This audit found that the aircraft hangar which the USMS had agreed to lease in Oklahoma City, Oklahoma, was not required to meet effectively and efficiently the need of the USMS' aircraft operations. We recommended that the USMS terminate the lease. In the resolution of the audit, the Deputy Attorney General decided that the USMS could continue to lease the hangar for use by Service-owned aircraft, but would also have to store large seized aircraft there.
"Department of Justice Contract for Asset Forfeiture Support Services with EBON Research Systems, Contract Number 8C-Y-JMD-0064," OIG Audit Report No. 92-20, September 1992. Problems noted in this audit included the selection of Contracting Officer Technical Representatives without regard to training or experience in contract monitoring and administration.
"Contract Services for the Management of Seized Assets," OIG Audit Report No. 93-10, March 1993. This audit disclosed that the quality of contract administration had not improved, despite findings of serious weaknesses in prior audit reports and corrective actions by the USMS. The audit also disclosed that mismanagement of contracts resulted in substantial excessive costs and lost revenues.
Audits of the asset forfeiture financial statements were performed by a certified public accounting firm under contract to the Department of Justice. Although those reports gave an unqualified opinion as to the financial statements, the auditors noted certain conditions. "Asset Forfeiture Program Management Letter Report for Fiscal Year 1991," No. 93-2B, December 1992, disclosed that case files could be removed from district office storage cabinets without employee accountability, and receipts were not reported timely or recorded in the proper accounting period. "Asset Forfeiture Program Management Letter Report for Fiscal Year 1992," No. 93-13B, September 1993, disclosed that case files did not reconcile to accounting records.
DOJ OIG Inspections
"United States Marshals Service National Asset Seizure and Forfeiture Program," Report No. I-90-05, April 1990. This inspection disclosed major problems in the information system, such as overstatement of the value of seized items and the assignment of values to items that would be destroyed. It also disclosed friction between the USMS districts and the regional offices of the National Asset Seizure and Forfeiture Division (now Seized Assets Division.)
"Coordination of the Department of Justice Asset Forfeiture Program by the Executive Office for Asset Forfeiture," Report I-92-11, June 1992. This inspection noted that DOJ officials could not be sure of the accuracy of information concerning the inventory of seized assets and their associated value. It also contained an observation that the Consolidated Asset Tracking System (CATS) being developed was the most important project then under way in the EOAF.
DOJ Management Review
"A Management Review of the U.S. Marshals Service Asset Seizure and Forfeiture Program," issued by the JMD Management and Planning Staff, August 1992. The review, which was requested by USMS management, found problems involving: use of deputy marshals instead of qualified business managers or other administrative personnel for functions not requiring use of law enforcement officers, unclear roles for the regional offices, and lack of accurate and useful management information.
General Accounting Office (GAO) Reports
"Better Care and Disposal of Seized Cars, Boats, and Planes Should Save Money and Benefit Law Enforcement," Report GAO/PLRD-83-94, July 1983. The report noted that prolonged retention of seized conveyances had resulted in depreciation, deterioration, and devaluation, plus increased storage and maintenance costs and exposure to vandalism and theft.
"Real Property Seizure and Disposal Program Improvements Needed," Report GAO/T-GGD 87-28, September 1987. This report noted that although the primary purpose of real property forfeiture was to punish criminals, the government needed to employ sound business practices to maximize the return and protect innocent parties.
"Asset Forfeiture: Need for Stronger Marshals Service Oversight of Commercial Real Property," Report GAO/GGD-91-82, May 1991. The report found that the seized property program functioned in "a highly decentralized environment that requires strong oversight" but "regional oversight was weak and inconsistent."
Although some corrective measures were taken by the USMS in response to these reports,
we found that many of the concerns mentioned above were still valid during this audit. Our
work at the USMS Western District of Washington (Seattle) did not disclose any material
deficiencies in the areas reviewed. The findings and recommendations in this report are
based on conditions found in the other five USMS districts reviewed.
FINDINGS AND RECOMMENDATIONS
1. MANAGEMENT OF ASSETS
The USMS did not dispose of forfeited assets expeditiously. For assets held in the custody of 20 USMS districts, this resulted in imputed interest expense estimated at more than $18 million over a period of 9 years and delayed the sharing of forfeited assets with law enforcement agencies. USMS neither considered the imputed cost of borrowing when deciding whether to pay liens and mortgages prior to the sale of forfeited real property nor exercised due care for certain assets, including more than $150,000 in cash. These deficiencies occurred because USMS management oversight needs to be strengthened.
Inventory Turnover
To test the aging of the inventory, we analyzed the SAMS reports of assets that were forfeited but not disposed (report SAMP010) for 20 judgmentally selected districts. The 20 districts reported a total of 1,678 non-cash forfeited assets valued at about $119 million which had been in inventory from 6 months to 8 years after forfeiture. The following chart displays the dollar value of the assets by year of forfeiture.
The USMS did not have specific standards, by asset category, requiring the timely disposition of forfeited assets. If the USMS disposed of forfeited assets expeditiously, then the inventory would be made up almost entirely of recent forfeitures. However, in the 20 districts, the inventory was almost evenly divided in thirds. Forfeited assets from the years 1984 through 1990 represented 31 percent ($36.7 million) of the total inventory.
The retention of forfeited assets in inventory over prolonged periods of time resulted in increased and avoidable costs to the government. These included both imputed costs and direct costs.
Interest Expense. The failure to turn over the inventory of forfeited assets in a timely manner results in an interest expense to the Government (imputed interest) and delays the sharing of forfeited assets with law enforcement agencies. To estimate the Government's imputed interest expense, we used the annual average interest rates for 6-month U.S. Treasury bills for the years in question. We estimated the imputed cost of interest for the dollar amounts shown in the preceding chart and the results are displayed in the following graph.
The total imputed interest expense for assets forfeited between 1984 and 1992 was $13,975,345. If the USMS continues to retain forfeited assets for substantial periods of time, the imputed costs will continue to grow dramatically. For instance, if the inventory of about $119 million for the 20 selected districts was to remain undisposed, the imputed interest would accrue by about $4.6 million a year.
Direct Costs. The USMS district office in San Diego failed to turn over the inventory of motor vehicles expeditiously. The contract for vehicle storage provided for payment of a flat rate for the first 1,500 vehicles, plus 50 cents a day for each vehicle in excess of that number. Our analysis of vendor bills found that no vehicles in excess of 1,500 were billed prior to May 1989. Thereafter, the number in excess increased from approximately 645 in May 1989 to 3,902 in December 1992. From 1987 through 1992, USMS sales of forfeited vehicles averaged only 312 a month, in the months when sales were held. However, between August 1987 and September 1992, there were 8 months when no sales were held at all. Since disposals were not keeping pace with seizures, the inventory could only grow.
In February 1993, the contractor submitted a bill listing 5,382 vehicles, 476 of which reportedly had been received by the contractor prior to 1992. The cumulative cost of storing those 476 vehicles was over $185,000, as of the end of the February 1993 billing cycle. Based on our analysis of USMS statistical records, we estimate that between 50 and 70 percent of the total vehicles (5,382) listed on the February 1993 bill were forfeited. Applying those percentages to the cumulative cost of storing the 476 vehicles mentioned above, we estimated that the USMS could have avoided between $92,500 and $129,500 in unnecessary storage costs by promptly disposing of forfeited vehicles in San Diego.
We reviewed records of vehicle sales held between August 1, 1987 and September 30, 1992, a period of 62 calendar months. The records documented that sales were held in 54 of those months, and that 16,873 vehicles were sold. This was an average of 312 vehicles sold in the months when sales were held. The last sale held during the life of the former vehicle storage contract was on September 24, 1992, when 286 vehicles were sold. In all of 1992, there were 8 sales and the average number of vehicles sold was 229.
A new vendor was awarded a contract to tow, maintain, store, and sell motor vehicles for the USMS in San Diego. Between January and April 1993, vehicles were moved from the lot of the former contractor to that of the new one, with a towing cost of $20 per vehicle. Records maintained by the new contractor disclosed that 5,979 vehicles were received during the transfer period, resulting in a total towing charge of more than $119,000. Much of that expense could have been avoided if forfeited vehicles had been sold more promptly.
The new contract required the sale of vehicles valued at less than $500 to "licensed salvage, junk, or scrap dealers, or recyclers," and on February 2, 1993, the contractor requested permission to conduct such a sale. As of that date about 350 low value vehicles were on the new contractor's lot. On the following day, the Chief Deputy U.S. Marshal in San Diego wrote back denying permission to sell low value vehicles as requested. He insisted that low value vehicles be sold through public auction rather than for salvage. He explained that experience had "found that low value vehicles bring more at auction than through salvage." However, he did not indicate that factors such as depreciation, the continued cost of storage, or the imputed cost of borrowing had been netted against the selling price to determine what was most advantageous to the government.
Our 1990 audit of "Management of Seized and Forfeited Assets In the Department of Justice" noted the effects of depreciation. In that audit, we mentioned 14 sales of motor vehicles that occurred 18 months after forfeiture and reported that the government lost an estimated $13,195 between the cost of storage and depreciation of the vehicles. Since it is now 3 years later, and vehicles forfeited as long ago as 1989 were found still in inventory, we conclude that the losses attributable to depreciation and prolonged storage have continued. For that reason, we believe the USMS should comply with the terms of its own contract and permit the contractor in San Diego to sell low value vehicles for salvage.
We noted a failure to dispose promptly of certain other assets besides motor vehicles. In 1988 the Southern District of California (San Diego) received custody of a yacht that had been seized in 1985. The value of the yacht had been estimated by the seizing agency at $100,000; however, an appraisal in 1989 placed the value at only $25,000 because of the need for extensive repairs. Even so, the vessel continued to be reported in the USMS database with a value of $100,000. The vessel's storage and maintenance expenses exceeded $54,000 and it was sold in 1991 for only $7,000, resulting in a net loss to the Government of $47,000.
The USMS officials in San Diego attributed the lengthy delay in disposing of the yacht to the failure of the U.S. Attorney to act sooner on their requests for a court order for disposal. However, our review of the case file did not find adequate documentation of contacts with the U.S. Attorney's Office, so we cannot determine how vigorously the U.S. Marshal pursued the matter.
We found that the USMS could have reduced the cost of storing seized vessels at several locations. In San Diego, the USMS paid $9.50 per foot to store vessels in the water. However, vessels with hulls not made of wood could have been stored on land. In fact, the former vehicle storage contractor also stored vessels at a cost of 50 cents a day, and the current vehicle storage contractor charges $2.38 a day per vessel. At those rates, storage of a 30 foot vessel would cost $285 a month in the water versus $15 a month at the former vehicle storage lot or $71.40 at the new one.
In Miami, the marina used by the USMS charged $1 per foot per day, whereas the General Services Administration (GSA) charged 10 cents per foot per day. Our review of the files identified three vessels where the USMS paid a total of $3,420 per month for storage at the marina. By contrast, monthly storage at GSA would have cost $342, thereby saving $3,078 each month that the vessels were in storage.
Another example from San Diego involved items reportedly worth over $32,000 that probably lost all value. The items were checks drawn on Colombian banks. The total face value was 6.2 million Colombian pesos and the dollar value reported in SAMS was over $32,000. The checks were seized in 1987, turned over to the USMS in 1988, and still in safekeeping in the USMS district office in March 1993.
A deputy marshal checked with a local bank and found that the checks were not likely to have any remaining value because they were over 6 months old, there was no assurance that the Colombian banks were still in existence, and there was no assurance that the accounts were still good. That being the case, it appeared that the prolonged retention of the checks may have completely eroded their value.
Cost of Borrowing
The USMS paid off some existing liens on real property before sale of the property. According to seized asset management policy, liens and mortgages should generally be paid from the proceeds of sale. To pay them off prior to sale of the property requires use of the "Significant Seized Property Decision" (SSPD) process if: the lien or mortgage is greater than $50,000, the government's net equity is less than 20 percent, or the U.S. District Court orders monthly mortgage payments. In addition, the Asset Forfeiture Policies 91-22 and 91-24, permitted the expedited settlement of liens and mortgages held by innocent parties "for real property seized, arrested, restrained or charged in a civil or criminal forfeiture action on or after July 1, 1991." Under expedited settlement, a mortgage holder could seek and obtain payment of a perfected lien or mortgage upon civil forfeiture of the real property or upon "return of a criminal indictment charging forfeiture." In our opinion, if a lien or mortgage is paid under the expedited settlement process, the minimum asking price should take into consideration the Government's imputed cost of borrowing.
When districts submitted SSPD proposals for payment of mortgages, the justification was generally to prevent further erosion of the government's equity due to further accumulation of interest. We found no documentation in any case file to indicate that the USMS had calculated the imputed cost for the government and netted it against the additional interest that would accumulate on the lien or mortgage.
In a sample of 15 forfeited but not disposed cases in one district, we found 4 cases where the district had paid either all or a portion of the liens or mortgages on the properties. The total payments for these cases amounted to $633,138. We estimated that the resulting imputed cost of borrowing was at least $27,000 at the end of our field work.
Due Care for Assets
The USMS did not exercise due care for certain assets in its custody. We found deficiencies in the safekeeping of assets in several USMS districts.
· In Brooklyn, New York, the local staff could not locate cash in the amount of $151,264. The District Court had ordered the cash forfeited on October 22, 1985, and directed the Marshal to deposit the proceeds into the Asset Forfeiture Fund. Documents in the case file contained conflicting information about the location of the cash, which was given as either with a Federal Bureau of Investigation (FBI) agent or an Assistant U.S. Attorney (AUSA). Local USMS staff were in contact with both parties but did not obtain the cash from the FBI until August 1993.
The United States Marshals Service Manual section in force as of November 1, 1985, stated that cash should be transferred to the Asset Forfeiture Fund upon receipt of a court order forfeiting the cash to the United States. Subsequent policy, including the Seized Asset Management Handbook (March 1986) and the Seized Asset Management Guidelines and Procedures (October 1990) reiterated the requirement to deposit forfeited cash into the Asset Forfeiture Fund.
Had the cash been transferred to the Asset Forfeiture Fund promptly after forfeiture, the government could have saved imputed interest throughout a period of nearly 8 years, which we estimate at $73,182, or approximately 48 percent of the value of the asset.
· In Miami, Florida, the USMS reported custody of a "promissory note and mortgage deed" valued at $65,000 that had been forfeited in December 1991. Based upon a review of the case file, we determined that the district was receiving payments on the underlying loan, but the document(s) could not be located in either the USMS or the U.S. Attorney's office.
Apparently the district intended to sell the promissory note and mortgage deed because the file also contained a comment, "we can't sell what we don't have. I will try to get AUSA to send us the note so we may dispose of this." We were unable to determine why the note had not been marketed promptly after forfeiture; however, we believe that a timely sale would have prevented the apparent loss of the note.
· The USMS Northern District of Illinois (Chicago) improperly disposed of 14 forfeited furs with an appraised value of at least $51,000 by donation to a charitable organization. This was contrary to the USMS
Seized Asset Management Guidelines and Procedures which expressly state that "U.S. Marshals do not have authority to donate forfeited property to other agencies . . . . " It was also contrary to 21 USC 881, which authorized disposition of civilly and criminally forfeited property through retention for official use, transfer to other Federal or state agencies, sale, destruction, and several other means, but not donation.
On October 22, 1992, the district sent a letter to the furrier storing the furs asking that they be sold as quickly and cost effectively as possible. On December 23, 1992, the district directed the furrier to donate the furs to a charitable organization, based on the furrier's statement that selling them would realize less income than the expense of sale. The file did not document a new appraisal to confirm the value of the furs. As a result of the district's unauthorized action, the USMS lost potential income from the sale of valuable assets.
We learned from the charitable organization that the furs were being marketed through its thrift store. Some furs were in fact of little value and had been sold for small amounts. However, four items appeared to be in good condition and were being offered at an asking price of $2,000 each, while two others were being offered at $850 and $600, respectively. Our review of the case files found more than $1,000 in expenses paid by either the USMS or the seizing agency, all of which could have been recovered if the USMS had sold the furs.
The district's action may also have allowed an unlawful act to be committed. One item was a jaguar coat, not in good condition according to thrift store personnel, that had been sold for $50. However, the jaguar was an endangered species and the sale of furs taken from an endangered species was prohibited by the Endangered Species Act of 1973. District personnel knew or should have known that the coat was from an endangered species and, therefore, not to be sold. An appraisal form, obtained by the Drug Enforcement Administration (DEA) in February 1991, was found in the USMS case file. It contained the notation "endangered species-no amount available" next to the entry for the jaguar coat.
Because this was an isolated case, we will not make a formal recommendation; however, the USMS should consider drafting a policy regarding the handling of products derived from endangered species.
· In the Southern District of Texas, the USMS may have lost $47,000 in the form of a seized note. A defendant who had sold a house held a note from the buyers for a no-interest loan. When the defendant was arrested, the note, valued in the SAMS database at $47,000, was among the assets seized. It was decided to allow the buyers to continue to occupy the house and make payments. The buyers missed payments and the USMS began exploring the possibility of foreclosure. Before the USMS could act, the buyers divorced and then sold the house. The USMS district staff was unable to tell us what happened to the proceeds from the second sale but the USMS did not receive payment.
Hazardous Materials
The USMS employs the SSPD process for deciding matters beyond the authority of local Marshals. The process did not function satisfactorily in one instance involving the disposal of hazardous materials. This was due to a variety of factors, but the principal one was the inordinate amount of time expended in rendering a decision. Although nothing adverse happened, the potential cost for the government was considerable.
On April 28, 1992, the USMS District of New Mexico seized a warehouse containing a quantity of hazardous and toxic chemicals used in the illegal manufacture of amphetamines. The warehouse inventory included chemicals that were flammable, explosive, or reactive; moreover, incompatible chemicals were stored near each other increasing any potential risk. As early as May 7, 1992, the district warned the regional SAD office of potential liability if an accident occurred.
On June 11, 1992, the local Fire Department sent a letter to the district citing numerous violations of city code. The letter concluded by saying, "due to the nature of these serious violations listed, the immediate mitigation by removal of all hazardous materials from the premises is hereby ordered." The chemicals were removed from the site subsequent to a December 18, 1992 Court Order allowing their immediate destruction; however, it was not until June 3, 1993, that a deputy marshal finally signed the return on the Court Order attesting to the destruction of all the chemicals.
The seriousness of the potential harm in this instance warrants mention in this report.
However, since the delay in processing this SSPD was not typical, we will not offer a
formal recommendation for corrective action. In contrast to this case, we found that most
other requests for SSPDs were handled rather expeditiously. However, many of them involved
matters of a relatively routine nature such as requests to sell real property valued at
levels above the approval level of local officials. In an instance where the process
should have worked smoothly and quickly, it did not. No harm resulted from the lengthy
decision making but considerable damage could have occurred if the chemicals had leaked,
caught fire, or exploded. That being the case, we encourage USMS management to review the
SSPD process to ensure timely decisions.
Recommendations
We recommend that the Director, USMS:
1. Ensure the timely disposition of all forfeited assets.
2. Dispose immediately of the forfeited motor vehicles valued at less than $500 in the Southern District of California.
3. Calculate and consider the imputed cost of borrowing whenever the USMS considers a proposal to pay off a lien or mortgage prior to sale of real property.
4. Promptly locate, perfect, and sell the promissory note missing from the Southern District of Florida.
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