Combating Alien Smuggling: The Federal Response Can Be Improved  
(12-JUL-05, GAO-05-892T).					 
                                                                 
Globally, alien smuggling generates billions of dollars in	 
illicit revenues annually and poses a threat to the nation's	 
security. Creation of the Department of Homeland Security (DHS)  
in March 2003 has provided an opportunity to use financial	 
investigative techniques to combat alien smugglers by targeting  
and seizing their monetary assets. For instance, the composition 
of DHS's largest investigative component--U.S. Immigration and	 
Customs Enforcement (ICE)--includes the legacy Customs Service,  
which has extensive experience with money laundering and other	 
financial crimes. Another DHS component, U.S. Customs and Border 
Protection (CBP) has primary responsibility for interdictions	 
between ports of entry. In summer 2003, ICE announced that it was
developing a national strategy for combating alien smuggling.	 
This testimony is based on GAO's May 2005 report on the 	 
implementation status of the strategy and investigative results  
in terms of convictions and seized assets.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-892T					        
    ACCNO:   A29540						        
  TITLE:     Combating Alien Smuggling: The Federal Response Can Be   
Improved							 
     DATE:   07/12/2005 
  SUBJECT:   Border patrols					 
	     Border security					 
	     Crimes						 
	     Criminals						 
	     Homeland security					 
	     Illegal aliens					 
	     Immigration					 
	     Interagency relations				 
	     Law enforcement					 
	     Search and seizure 				 
	     Smuggling						 
	     Strategic planning 				 

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GAO-05-892T

United States Government Accountability Office

GAO Testimony

Before the Subcommittee on Criminal Justice, Drug Policy and Human
Resources, Committee on Government Reform, House of Representatives

For Release on Delivery

Expected at 2:00 p.m. EDT COMBATING ALIEN

Tuesday, July 12, 2005

SMUGGLING

                      The Federal Response Can Be Improved

Statement of Richard M. Stana
Director, Homeland Security and Justice

GAO-05-892T

July 2005

COMBATING ALIEN SMUGGLING

The Federal Response Can Be Improved

[IMG]

  What GAO Found

As of July 5, 2005, ICE had not finalized its strategy for combating alien
smuggling. ICE was adjusting the draft strategy to focus on the southwest
border and encompass all aspects of smuggling, aliens as well as drugs and
other contraband. In adjusting the strategy, ICE officials stressed the
importance of incorporating lessons learned from ongoing follow-the-money
approaches such as Operation ICE Storm, a multi-agency task force launched
in October 2003 to crack down on migrant smuggling and related violence in
Arizona. Also, the strategy's effectiveness depends partly on having
clearly defined roles and responsibilities for ICE and CBP, two DHS
components that have complementary antismuggling missions. CBP is
primarily responsible for interdictions between ports of entry and ICE for
investigations that extend to the U.S. interior. In this regard, ICE and
CBP signed a memorandum of understanding in November 2004 to address their
respective roles and responsibilities, including provisions for sharing
information and intelligence. Currently, however, there is no mechanism in
place for tracking the number and the results of referrals made by CBP to
ICE for investigation. CBP and ICE officials acknowledged that
establishing a tracking mechanism could have benefits for both DHS
components. Such a mechanism would help ICE ensure that appropriate action
is taken on the referrals. Also, CBP could continue to pursue certain
leads if ICE-for lack of available resources or other reasons-cannot take
action on the referrals.

In fiscal year 2004, about 2,400 criminal defendants were convicted in
federal district courts under the primary alien-smuggling statute, and ICE
reported seizures totaling $7.3 million from its alien-smuggling
investigations. For the first 6 months of fiscal year 2005, ICE reported
$7.8 million in seizures from alien-smuggling investigations. A concern
raised by ICE and the Department of Justice is the lack of adequate
statutory civil forfeiture authority for seizing real property, such as
"stash" houses where smugglers hide aliens while awaiting payment and
travel arrangements to final destinations throughout the nation. However,
Justice does not have a legislative proposal on this subject pending
before Congress because the department's legislative policy resources have
been focused on other priorities.

Aliens Held in "Stash" House in Southern California

                 United States Government Accountability Office

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss federal efforts to combat alien
smuggling. This transnational crime globally generates illicit revenues
estimated to total billions of dollars annually and is recognized as a
significant and growing problem that can pose a serious threat to the
security of the United States, a primary destination country. Although it
is likely that most aliens smuggled into the United States seek economic
opportunities, some are brought into the United States as part of criminal
or terrorist enterprises. This concern has heightened since September 11,
2001. Creation of the Department of Homeland Security (DHS) in March 2003
has provided new opportunities to more effectively combat alien smuggling,
particularly in reference to using financial investigative techniques to
target and seize the monetary assets of smuggling organizations. For
instance, the department's largest investigative component-U.S.
Immigration and Customs Enforcement (ICE)- integrates the legal
authorities and investigative tools of the legacy Immigration and
Naturalization Service (INS) and the U.S. Customs Service, which has
extensive experience in combating money laundering and other financial
crimes. Another DHS component, U.S. Customs and Border Protection (CBP),
has a complementary antismuggling mission with primary responsibility for
interdictions between ports of entry. Given their complementary
antismuggling missions, CBP makes referrals to ICE on alien-smuggling
interdictions that may warrant further investigation.

At congressional hearings 2 years ago, in June and July 2003, ICE
officials testified that ICE was developing a national strategy to
dismantle criminal and terrorist organizations that smuggle or traffic in
people by tracing and stripping away their monetary assets. My testimony
today will address two principal questions:

o  	First, what is the implementation status of ICE's strategy for
combating alien smuggling, particularly regarding efforts to use financial
investigative techniques to follow the money trail and seize the monetary
assets of smuggling organizations?

o  	Second, since the creation of DHS and ICE, what results have been
achieved from alien-smuggling investigations in terms of prosecutions and
convictions, as well as seizures of smugglers' monetary assets?

  Summary

My testimony is based on a report we issued in May 2005 to the House
Judiciary Subcommittee on Immigration, Border Security, and Claims.1 Also,
on July 5, 2005, we contacted ICE headquarters to obtain an update on the
implementation status of ICE's strategy for combating alien smuggling.

Although its development was announced as early as June 2003, ICE's
national strategy for combating alien smuggling had not been finalized as
of July 5, 2005. In the absence of a national strategy, ICE has used
various means to provide interim guidance to investigators. ICE officials
said the draft strategy was being adjusted to broadly cover all aspects of
smuggling, encompassing aliens as well as drugs and other illegal
contraband, and to focus initially on the southwest border. In its
official response to our report, DHS said "This narrowed focus on the
southwest border will allow ICE to review best practices and evaluate
lessons learned before an expanded nationwide strategy is finalized." For
example, DHS cited Operation ICE Storm as a strategic model for
antismuggling operations in other parts of the nation. Operation ICE Storm
is a multiagency task force launched in October 2003 to crack down on
migrant smuggling and related violence in Arizona. Another reason for the
strategy's continuing development period is that the working relationship
of ICE and CBP is still evolving. The strategy's effectiveness depends
partly on having clearly defined roles and responsibilities for these two
DHS components, which have complementary antismuggling missions. In this
regard, ICE and CBP signed a memorandum of understanding in November 2004
to address their respective roles and responsibilities, including
provisions for sharing information and intelligence. Currently, however,
there is no mechanism in place for tracking the number and the results of
referrals or leads made by CBP to ICE for investigation. Without such a
mechanism, there may be missed opportunities for identifying and
developing cases on large or significant alien-smuggling organizations.
CBP and ICE officials acknowledged that establishing a tracking mechanism
could have benefits for both agencies. Such a mechanism would help ICE
ensure that appropriate action is taken on the referrals. Also, CBP could
continue to pursue certain leads if ICE-for lack of available resources or
other reasons-cannot take action on the referrals. Our May 2005 report
recommended that the Secretary of Homeland

1GAO, Combating Alien Smuggling: Opportunities Exist to Improve the
Federal Response, GAO-05-305 (Washington, D.C.: May 27, 2005).

Security establish a referral-tracking mechanism. DHS agreed with our
recommendation. DHS said CBP and ICE, in consultation with Border and
Transportation Security, would work together to identify and implement a
solution to address our recommendation.

In fiscal year 2004, about 2,400 criminal defendants were convicted in
federal district courts under section 274 of the Immigration and
Nationality Act, the primary statute for prosecuting alien smuggling.2
Further, for fiscal year 2004, ICE reported seizures totaling $7.3 million
from its alien-smuggling investigations-plus an additional $5.3 million
generated by the state of Arizona under Operation ICE Storm. ICE officials
anticipate increased seizures from alien-smuggling investigations in
future years, as ICE more broadly applies its financial and
money-laundering expertise. For the first 6 months of fiscal year 2005,
for instance, ICE officials reported seizures of $7.8 million. The
officials said, however, that there are competing demands for
investigative resources and also noted that alien-smuggling cases, in
contrast to drug-trafficking cases, are much less likely to result in
large seizures of currency. But, even absent seizures of money or other
assets from alien smugglers, ICE officials noted the importance of
applying financial investigative expertise in appropriate cases to
determine the scope and operational patterns of alien-smuggling
organizations, identify the principals, and obtain evidence to build
prosecutable cases. Regarding potential forfeitures in alien-smuggling
cases, ICE and Department of Justice officials said that a concern for
investigators is lack of adequate statutory civil forfeiture authority for
seizing real property, such as "stash" houses, used to facilitate the
smuggling of aliens. According to Justice, analysis of civil and criminal
forfeiture statutes generally has led the department to conclude that a
statute that provides only for criminal and not civil forfeiture of
facilitating property will be inadequate in such cases, and investigative
experience indicates that these cases are numerous. Justice officials
noted, however, that the department has not developed and submitted to
Congress a legislative proposal because the department's legislative
policy resources have been focused on other priorities. Our May 2005
report recommended that the Attorney General, in collaboration with the
Secretary of Homeland Security, consider developing and submitting to
Congress a legislative proposal, with appropriate justification, for
amending the civil forfeiture

2Also, according to the Department of Justice, alien-smuggling-related
activity may have been prosecuted under a variety of other federal
criminal statutes covering, for example, passport fraud, immigration
document fraud, bribery of a public official, and racketeering activity.

authority for alien smuggling. The Department of Justice agreed with our
recommendation and said it plans to move forward with a proposal as GAO
recommended.

                                   Background

By definition, alien smuggling (sometimes called people smuggling or human
smuggling) is transnational in that it involves more than one country and
also usually involves persons who have consented to be transported to
another country. This activity generally produces shortterm profits for
the smugglers. That is, after the aliens reach their final destinations,
they have no continuing relationship with the smugglers. In legal and
diplomatic references, alien smuggling is distinct from human trafficking,
although both smuggling and trafficking may have similarities or common
elements. In human trafficking, the criminality and human rights
abuses-such as coercion for prostitution, labor sweat shops, or other
exploitative purposes and servitude arrangements-may continue after the
migrants reach the United States in order to produce both shortterm and
long-term profits. Whereas a trafficked person is a victim, an alien who
consents to be smuggled is subject to criminal processing and deportation.

Given the underground nature of alien smuggling, exact figures quantifying
the size or scope of this transnational crime are not available.
Nonetheless, estimates by the United Nations and the federal law
enforcement and intelligence communities indicate that people smuggling is
a huge and highly profitable business worldwide, involving billions of
dollars annually, and the United States is a major destination country.
People smuggling is a continuously growing phenomenon, according to the
International Criminal Police Organization (Interpol). The types of
smugglers can range from opportunistic business owners who seek cheap
labor to well-organized criminal groups that engage in alien smuggling,
drug trafficking, and other illegal activities. Partly because of
increased border monitoring by governments, Interpol has noted that
criminal networks increasingly control the transnational flow of migrants.
That is, willing illegal migrants increasingly rely on the services of
criminal syndicates that specialize in people smuggling, even though
traveling conditions may be inhumane and unsafe.

Alien smuggling generally is prosecuted under section 274 of the
Immigration and Nationality Act, which prohibits knowingly or recklessly

bringing in, transporting, or harboring certain aliens.3 Depending on the
conduct charged, a conviction under section 274 could result in a maximum
penalty of 10 years' imprisonment per alien smuggled. Moreover,
significant enhanced penalties are provided for some section 274
violations that involve serious bodily injury or placing life in jeopardy.
If certain violations result in the death of any person, the convicted
defendant may be punished by imprisonment for any term of years or be
subjected to a death sentence.4 Other federal criminal statutes may also
be applicable. Specifically, alien-smuggling-related offenses are among
the list of Racketeer Influenced and Corrupt Organizations predicate
offenses (18 U.S.C. S: 1961(1)) and also are included within the
definition of specified unlawful activity for purposes of the
money-laundering statute (18 U.S.C. S: 1956). Further, criminal and civil
forfeiture statutes may apply to aliensmuggling cases.

Although ICE is a primary DHS component for investigating alien smuggling,
combating the smuggling of aliens into the United States can involve
numerous federal agencies, as well as the cooperation and assistance of
foreign governments. In addition to ICE, other relevant DHS components are
the Border Patrol (a "front-line defender"), which is now part of CBP, and
the U.S. Coast Guard, which is tasked with enforcing immigration law at
sea. Additionally, significant roles in combating alien smuggling are
carried out by Department of Justice components, including the Criminal
Division, the Federal Bureau of Investigation (FBI), and U.S. Attorney's
Offices, and Department of the Treasury components, such as Internal
Revenue Service (Criminal Investigation) and the Financial Crimes
Enforcement Network (FinCEN). Further, Department of State components have
significant roles. For instance, the Bureau of Diplomatic Security-the law
enforcement arm of the State Department-is statutorily responsible for
protecting the integrity of U.S. travel

3See 8 U.S.C. S: 1324. Also, as mentioned previously,
alien-smuggling-related activity may be prosecuted under a variety of
other federal criminal statutes covering, for example, passport fraud,
immigration document fraud, bribery of public officials, and racketeering
activity.

4There are various differences in penalty provisions applicable to alien
smuggling. For instance, there are mandatory minimum penalties for certain
violations of 8 U.S.C. S: 1324(a)(2) but not for similar violations of 8
U.S.C. S: 1324(a)(1)(A). Also, enhanced penalties for causing serious
bodily injury or placing life in jeopardy apply to violations of 8 U.S.C.
S: 1324(a)(1)(A) but not to similar violations of 8 U.S.C. S: 1324(a)(2).
Further, the death penalty or imprisonment for life may be imposed for
violations of 8 U.S.C. S: 1324(a)(1)(A) in which death results, but such
penalties are not available for similar violations of 8 U.S.C. S:
1324(a)(2).

documents. Perhaps the most coveted and sought after travel documents in
the world are U.S. passports and visas. Alien smuggling and travel
document fraud often are inextricably linked.

An interagency coordination mechanism to help ensure that available
resources are effectively leveraged is the National Security Council's
Migrant Smuggling and Trafficking Interagency Working Group, which is
cochaired by State and Justice. The Interagency Working Group has a
targeting subgroup, whose role is to identify for investigation and
prosecution the most dangerous international alien smuggling networks,
especially those that pose a threat to national security. Another
coordination mechanism is the Human Smuggling and Trafficking Center, an
interagency entity for disseminating intelligence and other information to
address the separate but related issues of alien smuggling, trafficking in
persons, and clandestine terrorist travel. Although its establishment was
announced in December 2000, the center was not operational until July
2004.

The March 2003 creation of DHS, including its largest investigative
component (ICE), ushered in an opportunity for developing a strategy to
combat alien smuggling by, among other means, using financial
investigative techniques. Two months later, in May 2003, ICE used such
techniques to follow the money and prosecute the perpetrators of a
smuggling operation that had resulted in the deaths of 19 aliens in
Victoria, Texas. The Victoria 19 case has been cited by ICE as
representing a new model for fighting alien smuggling-a model that ICE (1)
subsequently used to launch a multi-agency task force (Operation ICE
Storm) in the Phoenix (Arizona) metropolitan area and (2) reportedly was
using to develop ICE's national "Antismuggling/Human-Trafficking
Strategy."

  ICE's Strategy for Combating Alien Smuggling Not Yet Issued

Although its development was announced as early as June 2003, a national
strategy for combating alien smuggling had not been finalized and
implemented by ICE as of July 5, 2005. During congressional testimony,5 an
ICE official said ICE was developing a strategy that would address alien
smuggling (and human trafficking) at the national and international level
because as in the war on terrorism, the most effective means of addressing
these issues is by attacking the problem in source and transit countries
to prevent entry into the United States. In the absence of a national
strategy to combat alien smuggling, including investigating the money
trail, ICE has used various means to provide interim guidance to
investigators. Such guidance included, for instance, the formation of
working groups with members from various field offices and disciplines, as
well as a presentation at a March 2004 conference of
special-agents-in-charge and attaches. Moreover, ICE said it continues to
provide guidance to the field in the form of training seminars and
managerial conferences. Also, ICE indicated that it has posted guidance
and policy memorandums to the field on its Web site, which is available
and accessible to agents at their desktops for reference. According to
ICE, the Web site is regularly reviewed and updated to ensure that the
most recent guidance is available to the field. Additionally, ICE
officials said that headquarters staff routinely travel to field offices
to review ongoing undercover operations and large-scale investigations to
help ensure compliance with existing policies and priorities.

ICE officials indicated that the draft strategy was being adjusted to
broadly cover all aspects of smuggling-encompassing aliens, as well as
drugs and other illegal contraband-and to focus initially on the Southwest
border, between the United States and Mexico-the most active area in terms
of smuggling activity and open investigations. The officials explained
that ICE was developing a comprehensive southwest border strategy, given
the anticipated displacement of smuggling activity to other areas along
the border resulting from Operation ICE Storm and its expansion statewide
under the Arizona Border Control Initiative. The officials explained that
criminal enterprises tend to smuggle not only people but also drugs,
weapons, counterfeit trade goods, and other illegal contraband. The ICE
officials emphasized that irrespective of whether smuggling involves
aliens or contraband, ICE can use similar investigative

5Statement of Tom Homan, ICE Interim Resident Agent-In-Charge (San
Antonio, Tex.), at a hearing ("Deadly Consequences of Illegal Alien
Smuggling") before the Subcommittee on Immigration, Border Security, and
Claims of the Committee on the Judiciary, House of Representatives, June
24, 2003.

techniques for following the money trail. Moreover, the officials said
that, following a certain period of implementation, the Southwest border
strategy would be evaluated and expanded into a nationwide strategy. The
officials noted, for instance, that although there is no one law
enforcement strategy totally effective in all areas of the nation, the
methodologies applied in Arizona with both Operation ICE Storm and the
Arizona Border Control Initiative would be evaluated and tailored for use
in other parts of the country.

The strategy's continuing development period is attributable partly to
organizational and training needs associated with integrating the separate
and distinct investigative functions of the legacy INS and the U.S.
Customs Service, following creation of DHS in March 2003. Also, ICE and
CBP- two DHS components with complementary antismuggling missions- signed
a memorandum of understanding in November 2004 to address their respective
roles and responsibilities, including provisions to ensure proper and
timely sharing of information and intelligence. CBP has primary
responsibility for interdictions between ports of entry while ICE has
primary responsibility for investigations, including those resulting from
alien smuggling interdictions referred by CBP. Accordingly, sharing of
information between the two components is critical to achieving ICE's
investigative objective of determining how each single violation ties into
the larger mosaic of systemic vulnerabilities and organized crime. The
ability to make such determinations should be enhanced when DHS components
have compatible or interoperable information technology systems-which is a
long-term goal of an ongoing, multiyear project called the Consolidated
Enforcement Environment. Currently, however, there is no mechanism in
place for tracking the number and the results of referrals or leads made
by CBP to ICE for investigation, including even whether ICE declined to
act on the referrals. Without such a mechanism, there may be missed
opportunities for identifying and developing cases on large or significant
alien-smuggling organizations. For instance, if a tracking mechanism were
in place, CBP could continue pursuing certain leads if ICE-for lack of
available resources or other reasons-does not take action on the
referrals.

  Prosecutions and Convictions Pursued in Alien-Smuggling Cases; Asset Seizures
  Expected to Increase

The principal federal statute used to prosecute alien smugglers is section
274 of the Immigration and Nationality Act, which prohibits knowingly or
recklessly bringing in, transporting, or harboring certain aliens. Under
this statute, which is codified at 8 U.S.C. S: 1324, about 2,400 criminal
defendants were convicted in federal district courts in fiscal year 2004.
According to federal officials we interviewed, most alien-smuggling
prosecutions stem from reactive or interdiction-type cases at the border,
wherein in-depth investigations to follow a money trail are not warranted.

However, during our field visits in September 2004 to Phoenix and Houston,
we asked U.S. Attorney's Office officials for their observations regarding
whether there has been an increasing emphasis on the financial aspects of
alien-smuggling investigations since the creation of DHS and ICE. In
Arizona, federal prosecutors emphasized that Operation ICE Storm is a
clear indication of ICE's efforts to become more proactive in
aliensmuggling investigations. Also, federal prosecutors in Texas
(Houston) said the money trail is being pursued when appropriate, such as
proactive cases involving smuggling organizations that are based in the
Far East (e.g., Thailand and certain provinces in the People's Republic of
China) and have networks in Latin America and Mexico. The federal
officials noted that investigations of these cases may include FBI
participation and the use of undercover agents and electronic surveillance
and may result in assets being seized and suspects being charged with
money laundering and violations of the Racketeer Influenced and Corrupt
Organizations Act. More recently, in December 2004, ICE headquarters
officials told us that ongoing alien-smuggling cases in other areas of the
nation-Florida, Georgia, New York, and Washington-were also using
financial investigative techniques and are expected to result in asset
seizures. Because these cases were ongoing, the officials declined to
provide specific details, other than information already made available to
the public.

For fiscal year 2004, ICE reported seizures totaling $7.3 million from its
alien-smuggling investigations-plus an additional $5.3 million generated
by the state of Arizona under Operation ICE Storm. To obtain additional
perspectives on the results of alien-smuggling investigations in terms of
recovered funds or seized assets, we contacted Treasury's Executive Office
for Asset Forfeiture, which provides management oversight of the Treasury
Forfeiture Fund-the receipt account for the deposit of nontax forfeitures
made pursuant to laws enforced or administered by the Internal Revenue
Service-Criminal Investigation and DHS components (including ICE, CBP, the
U.S. Secret Service, and the U.S. Coast Guard). The Treasury officials
told us they anticipate that ICE will have increased seizures in

fiscal year 2005 or later, as ICE further applies its financial and
moneylaundering expertise to address alien smuggling. Similarly, ICE
officials anticipate increased seizures. In this regard, for the first 6
months of fiscal year 2005, ICE reported seizures of $7.8 million from
alien-smuggling investigations.

As mentioned previously, alien smuggling globally generates billions of
dollars in illicit revenues annually, according to some estimates. How
much of the total involves aliens smuggled into the United States is not
known, although the United States is often a primary destination country.
Also, according to ICE officials, much of the U.S.-related smuggling
revenues either may not be paid in this country or, if paid here, may be
transported or transmitted abroad quickly. As such, federal efforts to
combat alien smuggling by following the money trail frequently may present
investigators and prosecutors with opportunities and challenges related to
identifying and seizing funds or assets not located in the United States.

To help investigators and prosecutors meet the opportunities and
challenges associated with transnational crime, the United States has
negotiated and signed more than 50 bilateral mutual legal assistance
treaties (MLAT) with law enforcement partners around the world, according
to the Department of Justice. Such treaties-which are a mechanism for
obtaining evidence in a form admissible in a prosecution- provide for a
broad range of cooperation in criminal matters, such as locating or
identifying persons, taking testimonies and statements, obtaining bank and
business records, and assisting in proceedings related to immobilization
and forfeiture of assets.

To get a sense of the extent to which federal law enforcement agencies
were using the MLAT process to follow the money trail abroad in alien
smuggling cases, we contacted Justice's Office of International Affairs,
which is responsible for coordinating the gathering of international
evidence and in concert with the State Department, engages in the
negotiation of new MLATs. According to the Deputy Director, the number of
outgoing requests for formal law enforcement assistance in aliensmuggling
cases is few in comparison with cases in drug trafficking, money
laundering, fraud, and various other offenses. For matters considered to
be alien-smuggling cases, the Deputy Director noted that it would be very
difficult to quantify the exact number of requests made to foreign
countries because, among other reasons, the Office of International
Affairs' database was not originally designed to include a category of
"alien smuggling."

Also, we asked ICE headquarters for information regarding use of MLAT
requests made in attempts to follow the money trail on alien-smuggling
investigations that have extended overseas. That is, we asked how many
MLAT requests were made in fiscal years 2003 and 2004, to which countries,
and what have been the results in terms of assets tracked or seized. ICE's
Office of Investigations' Asset Forfeiture Unit responded that it had no
way of determining the number of MLAT requests. ICE officials noted,
however, that none of ICE's reported seizures from alien-smuggling cases
in fiscal year 2004 ($7.3 million) and the first 6 months of fiscal year
2005 ($7.8 million) were made abroad.

Generally, regarding asset seizures and forfeitures, ICE officials noted
that there can be competing demands for investigative resources. The
mission of ICE's Office of Investigations-which has more than 5,000 agents
in 26 field offices nationwide-encompasses a broad array of national
security, financial, and smuggling violations, including narcotics
smuggling, financial crimes, illegal arms exports, commercial fraud, child
pornography or exploitation, immigration fraud, and human trafficking. ICE
headquarters officials cautioned that alien-smuggling cases, in comparison
with drug cases, are much less likely to result in seizures of money. The
officials explained that almost all drug deals are conducted in cash, and
it is not unusual for law enforcement to arrest criminals handling
hundreds of thousands or even millions of dollars in drug money. In
contrast, the officials noted that alien-smuggling fees per person
generally involve less money and the alien smuggler is not arrested with
large cash amounts. However, even absent the significant differences in
amounts of seized money or other assets from alien smugglers, ICE
headquarters and field office officials stressed the importance and
utility of applying investigative expertise for determining the scope and
operational patterns of alien-smuggling organizations, identifying the
principals, and obtaining evidence to build prosecutable cases.

Both criminal and civil forfeiture authority have limitations that affect
the government's ability to seize real property in alien smuggling cases-
particularly stash houses used by smugglers.6 Asset forfeiture law has
long been used by federal prosecutors and law enforcement as a tool for
punishing criminals and preventing the use of property for further illegal

6 These houses sometimes are also referred to as "drop" houses or "safe"
houses where smugglers hide aliens while awaiting payment and travel
arrangements to final destinations throughout the nation.

activity. In a criminal forfeiture action, upon conviction, the defendant
forfeits and the government takes ownership of property that the defendant
used to commit or facilitate the offense or property that constituted the
proceeds of the illegal activity. Criminal asset forfeiture is rarely an
option in alien-smuggling cases for two reasons. First, because criminal
asset forfeiture is dependent on conviction of the defendant, it is not
available if the defendant is a fugitive, which alien smugglers often are
according to Justice. Second, because the stash house is often rental
property, it is rare that the property owner is convicted as it is
difficult to establish the owner's knowledge of the smuggling.

In contrast to criminal forfeiture, in a civil forfeiture action, the
government is not required to charge the owner of the property with a
federal offense. However, to forfeit property used to facilitate the
offense but purchased with legitimately earned funds, the government must
establish a substantial connection between the use of the property and the
offense. Once that connection is established, the government can forfeit
the house if the owner cannot show innocent ownership due to the owner's
willful blindness to the criminal activity. However, taking civil action
as an alternative to criminal action for real property seizures is not an
option in alien smuggling cases. Civil forfeiture in alien smuggling cases
is generally limited to personal property such as vessels, vehicles, and
aircraft and does not extend to real property.7 Thus, the house used to
hide the aliens and conduct the alien-smuggling business could not be
forfeited in a civil forfeiture action. Civil forfeiture of real property
is available in cases where the house was used to conduct drug
transactions, including the storing of drugs and money, child pornography,
and money laundering.8 In the view of Justice and ICE, this statutory
distinction between alien smuggling and other criminal offenses is
inappropriate.

An amendment to the civil forfeiture authority, according to Justice,
would enhance federal efforts to dismantle smuggling organizations because
would-be defendants often are fugitives, which makes criminal forfeiture
unavailable. Also, a civil forfeiture authority for real property used to
facilitate alien smuggling would enable the government to establish
willful blindness arguments against landlords who hope to profit from such
ventures without becoming directly involved. However, our May 2005 report
noted that Justice does not have a legislative proposal on this

7 8 U.S.C. S: 1324(b).
8 See 18 U.S.C. S:S: 881, 981, 2254.

Conclusions

subject pending before Congress because the department's legislative
policy resources have been focused on other priorities.

Expanding civil forfeiture authority in alien smuggling cases to include
real property used to facilitate the offense may raise concerns, including
the potential for abuse of this type of forfeiture and the adequacy of
protection for the rights of innocent property owners. In 2000, several
reforms were made to civil asset forfeiture law to provide procedural
protections for innocent property owners. These reforms were part of a
compromise that was developed over several years by Congress, the
executive branch, and interest groups. Some observers felt that the
legislation did not provide enough reforms and protections, while others
felt that it went too far and would curtail a legitimate law enforcement
tool.

Creation of DHS in March 2003 has provided new opportunities to more
effectively combat alien smuggling, particularly in reference to using
financial investigative techniques to target and seize the monetary assets
of smuggling organizations. However, after more than 2 years, the federal
response to alien smuggling is still evolving, including development and
implementation of a strategy to follow the money trail. Also evolving is
the working relationship of ICE and CBP, two DHS components that have the
primary responsibility for investigating and interdicting alien smugglers.
Having clearly defined roles and responsibilities for these components is
important, given their complementary antismuggling missions. In this
regard, ICE's and CBP's November 2004 memorandum of understanding did not
address a mechanism for tracking the number and the results of leads
referred by CBP to ICE for investigation. If a tracking mechanism were in
place, CBP could continue pursuing certain leads if ICE-for lack of
available resources or other reasons-does not take action on the
referrals. As such, a tracking mechanism would help to further ensure that
large or significant alien-smuggling organizations are identified and
investigated.

Federal law enforcement has concerns that efforts to dismantle
aliensmuggling organizations are constrained by the current absence of
civil forfeiture authority for real property used to facilitate the
smuggling of aliens. In contrast, for drug trafficking and various other
criminal offense categories, civil forfeiture authority is available for
seizing real property used to facilitate these crimes. According to
Justice and ICE, the absence of civil forfeiture authority for real
property used to facilitate the smuggling of aliens is inappropriate
because law enforcement is unable in

many cases to seize stash houses where smugglers hide aliens while
awaiting payment and travel arrangements to final destinations throughout
the nation.

To enhance the federal response to alien smuggling, our May 2005 report
made two recommendations. Specifically, we recommended that

o  	the Secretary of Homeland Security establish a cost-effective
mechanism for tracking the number and results of referrals by CBP to ICE,
and

o  	the Attorney General, in collaboration with the Secretary of Homeland
Security, consider developing and submitting to Congress a legislative
proposal, with appropriate justification, for amending the civil
forfeiture authority for real property used to facilitate the smuggling of
aliens.

DHS and Justice expressed agreement with the respective recommendation.
DHS said CBP and ICE, in consultation with Border and Transportation
Security, would work together to identify and implement a solution to
address our recommendation. Justice said it plans to move forward with a
proposal as GAO recommended.

Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or Members of the Subcommittee may have.

Contact and Staff Acknowledgments

For information about this testimony, please contact Richard Stana,
Director, Homeland Security and Justice Issues, at (202) 512-8777, or
[email protected]. Contact points for our Offices of Congressional Relations
and Public Affairs may be found on the last page of this report. Other
individuals making key contributions to this testimony include Danny
Burton, Grace Coleman, Frances Cook, Odilon Cuero, and Kathleen Ebert.

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