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Military Asset Forfeiture

On August 12, 2012, in Uncategorized, by Eapen Thampy

The Department of Defense Criminal Investigation Service now has the ability to use federal asset forfeiture and “Equitable Sharing” provisions to seize and forfeit property:

In order to gain sharper teeth in its investigations and prosecutions, DCIS added something more to its arsenal in 2007. A Memorandum of Understanding outlining basic functions and guidelines of DCIS’s participation in the DOJ’s Asset Forfeiture Program was formalized on May 25, 2007. Before this MOU became official, DCIS could only seek civil judgments and settlements for large sums of money as some form of financial punishment.

Assets being sought for forfeiture by DCIS are entered into DOJ’s Consolidated Asset Tracking System (CATS). DOJ’s CATS system, a controlled DOJ database, tracks assets through the forfeiture process and gives the Attorney General a good picture of what assets are being forfeited, in what amounts, from whom, and by what investigative agency. CATS, however, is only as accurate as the end user or data entry specialist who inputs the information at the local level. If assets are being forfeited but are not entered into CATS, DOJ has no other way to know what assets are being forfeited by each investigative agency.  As the forfeiture partnership progresses, CATS should provide an accurate reflection of the assets being forfeited by DCIS.

Another aspect of the DOD/DOJ MOU is that the United States Marshal’s Service (USMS) will be the custodian of all assets seized when DCIS is the lead investigative agency. This is common practice for other DOJ criminal investigative agencies such as the DEA, FBI, and some non-DOJ participating investigating agencies such as the United States Postal Inspection Service (USPIS).

Part of the rationale for establishing DCIS as a participating agency in the DOJ Asset Forfeiture Program, specifically the Assets Forfeiture Fund, are the two DCIS capabilities that were not available before 2007. As previously described, DCIS now has the ability to take  [*204]  the profit out of crime affecting DOD and its sub-agencies. Additionally, the MOU gives DCIS the ability to receive equitable sharing funds directly from the DOJ Assets Forfeiture Fund. Equitable sharing is available to DCIS if it was not the lead investigative agency seeking forfeiture on a case but contributed to the investigation. The MOU establishes that DCIS can not only seek equitable sharing from DOJ criminal investigative agencies, but also investigative agencies that participate in the Treasury Fund and Postal Fund. An example of this would be when IRS Criminal Investigations is the lead agency on a forfeiture case that DCIS substantially assisted. Funds shared and received must be used in accordance with 28 U.S.C. § 524(c), the Attorney General’s Guidelines on Seized and Forfeited Property (July 1990), and DOJ’s policies.

Interesting legal twist:

Unique problems may exist when the federal government seeks to civilly forfeit assets from active duty personnel and national guardsman or reservists called to active duty under Title 10 of the United States Code. Under the Servicemembers’ Civil Relief Act of 2003 (SCRA), service members have certain protections against default judgments being entered against them. While the language of the statute states that the act “applies to any civil action or proceeding in which the defendant does not make an appearance,” it is unclear if this protection applies specifically to civil forfeiture actions. In order to comply with the statute, a plaintiff must provide an affidavit to the court stating whether or not the defendant is in military service or showing that the plaintiff is unable to determine whether or not the defendant is in military service. Due to the in rem nature of civil forfeiture actions, the defendant is the asset itself, and thus will never be in military service within the meaning of the SCRA. Any property subject to a civil forfeiture action cannot defend itself against a default judgment unless a third party intervenes and files a claim to the property. Therefore, in the case that a service member is the owner of assets being sought in civil forfeiture, the service member is not the defendant in the action, but rather the claimant if he or she files a timely claim to the subject property. No precedent exists on the SCRA’s prevention of default judgment in federal civil judicial forfeiture actions. Historically, the SCRA’s language was intended to prevent the entry of default judgments against service members who were named parties to common place civil actions such as tort actions, small claims lawsuits, copyright  [*208]  infringement, civil rights lawsuits, bankruptcies, debt and foreclosure actions, divorces, or any child custody proceeding.

Some data:

As previously discussed, assets are entered into the DOJ CATS system for tracking purposes by the lead investigative agency in a forfeiture case. In 2008, DCIS judicially forfeited over $ 238,000 in assets coming from Virginia, Texas, and Pennsylvania. Currently in CATS, n65 DCIS is seeking forfeiture of over $ 10.5 million in assets ranging from televisions, jewelry, gold coins, computer equipment, cash, bank accounts, vehicles, watercraft, real property, stock shares, and other items. Because federal asset forfeiture is still new for DCIS, not all states have active DCIS judicial forfeiture cases pending. But many states and districts are quickly joining with DCIS as a viable and strategic partner in combating crime and punishing criminal activities within the DOD.

This is all from the article “Federal Asset Forfeiture and the Military”, in the 2009 Air Force Law Review, authored by Staff Sergeant Steven Morley.

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