United States Attorneys have authority to settle civil and
criminal
forfeitures within the following monetary amount or value
limitations:
- cases not in excess of $500,000; and
- cases between $500,000 and $5,000,000, provided that the
settlement
releases not more than 15 percent of the amount involved.
The United States Attorney must consult with the Asset Forfeiture
and Money
Laundering Section (AFMLS), Criminal Division, before settling
forfeiture cases
involving $5,000,000 or more, and before a settlement releasing
more than 15
percent of the amount involved in any case between $500,000 and
$5,000,000.
See Attorney General Order No. 92-1598, Appendix to Subpart
Y, Part O,
Title 28, Code of Federal Regulations (C.F.R.).
The authority of the Assistant Attorney General pursuant
to 28 C.F.R.
§ 0.160 for settlement of forfeiture cases is delegated to the
Chief, AFMLS,
(formerly "Director, Asset Forfeiture Office"), Criminal Division,
by paragraph
(c) of Attorney General Order No. 1598-92. This authority is
limited to
settlements releasing not more than $2,000,000 or 15 percent of the
amount
involved, whichever is greater. When the proposed settlement would
release more
than $2,000,000 or 15 percent of the amount involved, whichever is
greater, the
Director, AFMLS, Criminal Division must refer the matter to the
Deputy Attorney
General for approval pursuant to 28 C.F.R. § 0.161.
The following procedures apply to settlement agreements in
civil
judicial forfeiture cases and to criminal forfeiture plea
agreements where an
administrative forfeiture is necessary to effectuate the agreement.
In such
cases, the headquarters of the seizing agency involved must be
consulted by the
United States Attorney's Office prior to finalizing an agreement in
order to
ensure the agency can accommodate the terms of the agreement. The
Department's
policy is to pursue an agreed upon administrative forfeiture where
it is possible
and economically efficient to do so.
The following requirements must be met where a claim and
a cost bond
have been filed and the case has been referred to the United States
Attorney but
a settlement is reached before a civil judicial complaint has been
filed.
The terms of the settlement should be reduced to writing
by the United
States Attorney and include:
- A provision whereby the claimant/defendant identifies his
or her
ownership interest in the property to be forfeited;
- A provision whereby the claimant/defendant gives up all
right, title, and
interest in the property;
- A provision whereby the claimant/defendant agrees not to
contest the
government's administrative forfeiture action;
- A provision whereby the claimant/defendant agrees and
states that the
property to be forfeited administratively was connected to the
illegal activity
as proscribed by the applicable civil forfeiture statute (e.g.,
money to be
forfeited is in fact proceeds from illegal drug trafficking);
- A "hold harmless" provision and a general waiver of Federal
Tort Claims
Act rights and Bivens actions, as well as other actions
based on the
Constitution (e.g., the Excessive Fines Clause). Finally, a
Halper waiver
should be included so that future civil or criminal cases are not
hampered by the
settlement agreement.
The case should be referred promptly back to the seizing
agency to
reinstitute the administrative process. The seizing agency shall
reinstitute the
administrative forfeiture process to effectuate the agreement upon
receipt of a
referral in compliance with this policy, consistent with its lawful
authority.
Where the agreement provides for the claimant to withdraw
the claim to
all property covered by claim and cost bonds filed, the entire case
will be
referred back to the agency for administrative forfeiture.
Re-publication of the
notice of the administrative forfeiture action is not necessary,
provided
publication occurred prior to filing of the claim and cost bond.
Where the agreement provides for the claimant to withdraw
only a part
of a claim, the case will be referred back to the agency for
administrative
forfeiture of that portion of the forfeitable property named in the
agreement,
and the agency may release the remainder to the claimant consistent
with the
settlement. Re-publication of the notice or of the administrative
forfeiture
action is not necessary, provided publication covering the property
to be
forfeited occurred prior to the filing of the claim and cost bond.
In cases where the judicial action was commenced without
a prior
administrative forfeiture action having begun and a settlement
agreement has been
reached involving a proposed administrative forfeiture of seized
property:
- the headquarters of the seizing agency must concur in that
part of the
settlement that would obligate the agency to commence
administrative forfeiture
proceedings;
- the complaint must be dismissed; and
- the jurisdiction of the district court must be relinquished
before
referral may be made to a seizing agency under this policy.
The seizing agency shall initiate the administrative forfeiture
process to
effectuate such an agreement upon receipt of a referral in
compliance with this
policy, consistent with its lawful authority.
In those cases where property has been seized or
restrained for
forfeiture under criminal statutes and an agreement reached between
the United
States Attorney and the claimant/defendant prior to an order of
forfeiture
relating to a proposed administrative forfeiture of the property:
- the headquarters of the seizing agency must concur in that
part of the
settlement that would obligate the agency to commence
administrative forfeiture
proceedings;
- the seizure or restraining orders must be dismissed; and
- the jurisdiction of the district court over the property
must be
relinquished. The provisions of USAM
9-113.310 must be met before referral may be made to a seizing
agency under
this policy.
The seizing agency shall initiate the administrative forfeiture
process to
effectuate such an agreement upon receipt of a referral in
compliance with this
policy, consistent with its lawful authority.
No agreement, whether a settlement in civil judicial
action or a plea
agreement resolving both criminal charges and the forfeiture of
assets, may
contain any provision binding the Department and the agencies to a
particular
decision on a petition for remission or mitigation, or otherwise
contain terms
whose effectiveness is contingent upon such a decision. The
remission and
mitigation process, like the pardon process in criminal cases, is
completely
independent of the litigation and case settlement process.
The Asset Forfeiture and Money Laundering Section,
however, in
appropriate cases upon request, will adjudicate a properly filed
petition for
remission or mitigation prior to the negotiation of a forfeiture
settlement or
entry of a final order of forfeiture. It is proper to include in
a settlement
agreement a provision that expressly leaves open or expressly
forecloses the
right of any party to file a petition for remission or mitigation.
The
settlement document should also include a "hold harmless" provision
and a general
waiver of Federal Tort Claims Act rights and Bivens actions,
as well as
other actions based on the Constitution (e.g., the Excessive Fines
Clause).
Finally, a Halper waiver should be included so that future
civil or
criminal cases are not hampered by the settlement agreement.
Any settlement that purports to "forfeit" property binds
only the
parties to it and forfeits only that interest in the property that
the claimant
possesses. The following procedures must be followed to ensure
that a valid and
complete civil judicial forfeiture by settlement occurs:
- A civil verified complaint for forfeiture of the property
must be filed
in the U.S. District Court to establish the court's jurisdiction.
Filing an
action as a "Miscellaneous Docket" and other attempts to short-cut
the process
will not be recognized as a valid forfeiture.
- A warrant of arrest in rem must be executed against the
property.
- All known parties in interest must be given written notice,
and notice
by publication must be made.
- After 10 days, if no claim has been filed pursuant to Rule
C(6) of the
Supplemental Rules for Certain Admiralty and Maritime Claims, a
default judgment
must be sought pursuant to Rule 55, Federal Rules of Civil
Procedure.
- Proposed orders of forfeiture must be filed with the
settlement agreement
and include the terms of the settlement agreement. See the
Criminal Resource Manual at 2244.
The following procedures must be followed to ensure that
a valid
forfeiture results from a plea settlement:
- There must be a forfeiture count in the indictment or
information,
otherwise forfeiture is legally impossible. To the extent property
is known to
be subject to forfeiture, it should be listed in the indictment,
information, or
in a subsequent Bill of Particulars. The United States Attorney's
Office must
ensure that its criminal pleadings are in compliance with Rules 7
and 31 of the
Federal Rules of Criminal Procedure.
- The United States Attorney must comply with the
requirements applicable
to third party interests (e.g., 21 U.S.C. § 853(n)(1)-(7),
including notice
of the forfeiture and the right of third parties to obtain an
adjudication of
their interests in the property.
- The settlement to forfeit property must be in writing, and
the defendant
must concede facts supporting the forfeiture.
- Close attention should be paid to the potential issue of
"double
jeopardy." Any plea or settlement agreement should include a
waiver of any and
all double jeopardy claims that might otherwise be asserted with
respect to any
subsequent government enforcement action. Therefore, a
Halper waiver
should be included so that future civil or criminal cases are not
hampered by the
settlement agreement. The settlement document should also include
a "hold
harmless" provision and a general waiver of Federal Tort Claims Act
rights and
Bivens actions, as well as other actions based on the
Constitution.
- The court must issue a Final Order of Forfeiture that
incorporates the
settlement and, if applicable, addresses any third party
claims.
- Wherever possible, in order to avoid protracted litigation
of ownership
issues in the context of ancillary hearings, the United States
should agree to
accept unencumbered property only, with the exception of valid
financial
institution liens, or at the very least, the plea agreement should
require the
defendant to convey clear title to the government. See USAM 9-113.107, (Forfeiture
Settlements
Involving Partial Payments).
A monetary amount may be accepted in lieu of forfeiture of
the property
in civil or criminal judicial forfeiture actions pursuant to 19
U.S.C. §
1613(c), which is one of the customs laws (Tariff Act of 1930, 19
U.S.C. §
1602-21) incorporated by reference into various federal forfeiture
statutes.
See, e.g., 21 U.S.C. § 881(d). The following procedures
must be
followed:
- A civil complaint against the property or an indictment, or
information
naming the property, and alleging the defendant's interest in the
property must
be filed.
- A written statement that incorporates the language of
section 1613(c)
must be filed and approved by the court.
- The agreement to substitute money in lieu of forfeiture of
property in
judicial cases must be approved by the court.
- The U.S. Marshals Service will accept this court approved
settlement and
deposit the money (and share it where appropriate) in the same
manner as the
proceeds of sale of a forfeited item.
- Monies received in lieu of forfeiture must be transferred
to the U.S.
Marshals Service's District Office in custody of the asset being
returned.
- In cases where the Postal Inspection Service or the
National Marine
Fisheries Service is the primary federal investigative agency, the
U.S. Marshals
Service must deposit the money, deduct expenses (if any) incurred
with respect
to the property being returned, deduct the approved equitable
shares attributable
to other federal agencies participating in the Department of
Justice Assets
Forfeiture Fund, and transfer the balance by refund to the above
services, as
appropriate. Each service will be responsible for sharing with
participating
state and local agencies in these cases.
Any agreement to exempt an asset from forfeiture so that
it can be
transferred to an attorney as fees must be approved by the
Assistant Attorney
General for the Criminal Division. See USAM 9-119.200
Prosecutors should first consult with the Asset Forfeiture
and Money
Laundering Section, Criminal Division, before engaging in
settlement negotiations
in civil forfeiture cases where the claimants are fugitives in
United States
criminal proceedings.
The former Executive Office for Asset Forfeiture
interpreted 28 U.S.C.
§ 524(c) as authorizing pre-forfeiture payment of liens and
mortgages. Use
of this authority must be approved in writing by the Asset
Forfeiture and Money
Laundering Section prior to entering into any agreement to pay a
lienholder. It
is intended that this authority be used sparingly and only in those
situations
where pre-forfeiture payment of liens and mortgages is necessary to
avoid extreme
hardship to natural persons. All other viable options, including
interlocutory
sales, must be pursued prior to seeking this authority.
| March 2001
| USAM Chapter 9-113
|