Asset Forfeiture: Marshals Service Controls Over Seized Assets (Letter
Report, 03/26/99, GAO/GGD-99-41).

GAO reviewed the U.S. Marshals Service's (USMS) asset forfeiture
programs, focusing on: (1) controls over selected categories of seized
assets--namely vehicles, vessels, real property, financial instruments,
and general property--at four large USMS districts: the Central District
of California, the Southern District of Florida, and the Southern and
Eastern Districts of New York; and (2) whether selected seized assets at
the test locations under USMS control were accurately accounted for and
safeguarded against theft, loss, and deterioration.

GAO noted that: (1) GAO was able to account for all of the seized assets
included in its review at the four USMS districts it visited; (2) in
addition, based on GAO's observations and documentation in the case
files, the seized assets generally appeared to be in good condition and
were stored and secured properly, in accordance with physical security
and property management provisions in storage and maintenance contracts;
(3) for the categories for which GAO randomly sampled assets, GAO is
confident, based on its asset selection methodology and its findings,
that few if any of the seized assets in the categories reviewed were
unaccounted for or improperly stored and secured at the four districts
visited; (4) for the categories in which GAO reviewed all items and
those in which GAO reviewed judgmental samples, GAO found that all of
the items reviewed were accounted for and properly stored and secured;
(5) GAO's results apply to the four districts and cannot be projected to
all USMS districts; (6) although GAO was able to account for each
selected seized asset, GAO identified several discrepancies between the
physical location of the asset and the location listed on the district's
computerized Consolidated Asset Tracking System (CATS) Assets on Hand
inventory; (7) Department of Justice and USMS officials attributed these
discrepancies to delays in updating CATS; and (8) when GAO was unable to
locate assets as shown in CATS, other documentation permitted GAO to
verify the disposition of the assets in question.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-99-41
     TITLE:  Asset Forfeiture: Marshals Service Controls Over Seized 
             Assets
      DATE:  03/26/99
   SUBJECT:  Assets
             Search and seizure
             Law enforcement
             Warehouse facilities
             Inventory control systems
             Internal controls
             Data integrity
             Property and supply management
             Facility security
IDENTIFIER:  DOJ/Treasury Consolidated Asset Tracking System
             California
             Florida
             New York
             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  This text was extracted from a PDF file.        **
** Delineations within the text indicating chapter titles,      **
** headings, and bullets have not been preserved, and in some   **
** cases heading text has been incorrectly merged into          **
** body text in the adjacent column.  Graphic images have       **
** not been reproduced, but figure captions are included.       **
** Tables are included, but column deliniations have not been   **
** preserved.                                                   **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************
gg99041 ASSET FORFEITURE Marshals Service Controls Over Seized
Assets

United States General Accounting Office

GAO Report to the Honorable Janet Reno, The Attorney General


March 1999 

GAO/GGD-99-41

March 1999   GAO/GGD-99-41

United States General Accounting Office Washington, D. C. 20548

General Government Division

B-280466

Page 1 GAO/GGD-99-41 Asset Forfeiture

GAO March 26, 1999 The Honorable Janet Reno The Attorney General

Dear Madam Attorney General: Since 1990, the Department of
Justice's asset forfeiture program has been designated a high-
risk area by the Comptroller General because it has been
characterized by mismanagement and internal control weaknesses.
Over the years, we have reported on the existence of major
operational problems relating to the management and disposition of
seized and forfeited property that resulted in unnecessary losses
to the government. 1 Our recent high- risk report noted that while
improvements have been made, several weaknesses existed, and the
program remained high risk. 2

As part of our continuing oversight of asset forfeiture programs,
we initiated a review of certain U. S. Marshals Service controls
over selected categories of seized assets namely vehicles,
vessels, real property, financial instruments, and general
property at four large Marshals Service districts: the Central
District of California, the Southern District of Florida, and the
Southern and Eastern Districts of New York. 3 At each location, we
selected a number of assets for review from the district's
inventory, 4 including totals for the four districts of 258
vehicles; 76 vessels; 55 real properties; 230 financial
instruments (e. g., travelers checks and money orders); and 77
items of general property (i. e., artwork, jewelry, tools, and
machinery). Our objective was to determine whether selected seized
assets at the test locations under Marshals Service control were
accurately accounted for and safeguarded against theft, loss, and
deterioration.

1 High- Risk Series: Quick Reference Guide (GAO/HR-97-2, Feb.
1997) and High- Risk Series: Asset Forfeiture Programs (GAO/HR-95-
7, Feb. 1995). 2 High- Risk Series: An Update (GAO/HR-99-1, Jan.
1999).

3 The Marshals Service is the custodian of seized and forfeited
properties for the Department of Justice. It is responsible for
safeguarding, storing, and maintaining property, such as vehicles,
vessels, real property, and financial instruments seized by the
Department's investigative agencies, such as the Federal Bureau of
Investigation (FBI) and the Drug Enforcement Administration (DEA).

4 Depending on the number of assets in each category at each
district, we randomly selected a sample of assets from the
universe or, when feasible, included the entire universe in the
review. In other instances, we included or excluded assets from
review, based on time and cost constraints. The randomly selected
samples allowed us to draw statistical conclusions about the
universe of assets in those categories.

B-280466 Page 2 GAO/GGD-99-41 Asset Forfeiture

We were able to account for all of the seized assets included in
our review at the four Marshals Service districts we visited. In
addition, based on our observations and documentation in the case
files, the seized assets generally appeared to be in good
condition and were stored and secured properly, in accordance with
physical security and property management provisions in storage
and maintenance contracts. 5 For the categories for which we
randomly sampled assets, we are confident, based on our asset
selection methodology and our findings, that few if any of the
seized assets in the categories we reviewed were unaccounted for
or improperly stored and secured at the four districts we visited.
For the categories in which we reviewed all items and those in
which we reviewed judgmental samples, we found that all of the
items reviewed were accounted for and properly stored and secured.
Our results apply to the four districts and cannot be projected to
all Marshals Service Districts.

Although we were able to account for each selected seized asset,
we identified several discrepancies between the physical location
of the asset and the location listed on the district's
computerized Consolidated Asset Tracking System (CATS) Assets on
Hand inventory. 6 Department of Justice and Marshals Service
officials attributed these discrepancies to delays in updating
CATS. When we were unable to locate assets as shown in CATS, other
documentation permitted us to verify the disposition of the assets
in question.

The government seizes property associated with violations of
various federal statutes and takes title to that property
(forfeiture) through either an administrative or judicial process.
Asset forfeiture is a means of punishing and deterring criminal
activity by depriving criminals of property used or acquired
through illegal activities. After federal forfeiture, noncash
property may be sold, put into official use, or shared with state
and local law enforcement agencies participating in the seizure.
Seized and forfeited property include businesses, cash, bank
accounts, vehicles, vessels, airplanes, jewelry, art objects, and
real estate. Justice investigative agencies, such as the FBI and
DEA, also seize illegal drugs, weapons, and

5 The Marshals Service contracts with private companies, called
vendors, for storage and maintenance of various types of assets. 6
CATS is the primary automated system for asset tracking and
management used by all agencies participating in the Justice asset
forfeiture program. Results in Brief

Background

B-280466 Page 3 GAO/GGD-99-41 Asset Forfeiture

counterfeit items that have no resale value to the government.
These latter items are typically held until they are approved for
destruction.

The Marshals Service has primary responsibility in the Department
of Justice for the maintenance, protection, and disposal of seized
property. Ninety- four Marshals Service district offices
administer seized assets programs. The Marshals Service currently
manages more than 25,000 assets valued at more than $1.3 billion.
More than 35 percent of the total value relates to real property,
while vehicles comprise 50 percent of the total inventory items.

At each of the four Marshals Service districts we visited, we were
able to account for all of the seized assets that we reviewed. At
each location, we selected a number of assets from the district's
CATS Assets on Hand inventory for review. In those asset
categories where we reviewed all cases, we were able to account
for each item. In those categories where we randomly sampled
assets, we were able to account for each selected item, and thus
we are 95- percent confident that at least 95 percent of all items
in the universe were accounted for. In those categories where we
judgmentally sampled assets, we were able to account for all
selected items. Table l in the Scope and Methodology section shows
the numbers of seized assets reviewed and the sampling method
employed by category and district.

In addition to accounting for all of the seized assets that we
selected for review, based on our observations and documentation
in the case files, the assets we reviewed appeared to be in good
condition and were stored and secured properly, in accordance with
physical security and property management provisions in the
storage and maintenance contracts for the assets selected. For
example, in the Central District of California, each of the 14
real properties we judgmentally selected appeared to be cared for
properly (e. g., we observed no overgrown grass, broken windows,
or trash in the yard) in accordance with the grounds maintenance
provisions in the vendor's property management contract. This was
a marked contrast to our 1996 report, 7 in which we observed
instances where property had deteriorated because of inadequate
maintenance, causing the government to incur unnecessary losses.
Additionally, property management case files for these real
properties contained documentation of recent physical inspections,
as required by the contract, and appraisals in accordance with
Marshals Service policy and procedures. District officials
attributed the improvements in real property management, which we
observed during

7 Review of SADF Disbursements (GAO/AIMD-96-114R, June 1996).
Seized Assets Selected

for Review Were Accounted for, Properly Stored, and Secured

B-280466 Page 4 GAO/GGD-99-41 Asset Forfeiture

this current review, to increased oversight of properties by
district personnel and preseizure planning on all real estate
seizures.

Our current observations of real property at the Southern District
of Florida and the Southern District of New York also found that
assets we reviewed appeared to be in good condition and were
properly stored and secured, in accordance with vendor property
management contract provisions. One difference that surfaced,
however, in our observations among districts involved the
appearance of some vehicles. We observed that 7 of the 126
vehicles in inventory in the Southern and Eastern Districts of New
York had flat tires; and many were dirty and unwashed, while the
vehicles that we observed at the other two districts appeared
clean and had no flat tires. Both New York districts used the same
vendor for vehicle storage and maintenance. Although the contract
did not call for the vendor to wash the vehicles, district
officials said that they would consider corrective action.

The results of our seized asset reviews in the 4 districts cannot
be projected to all 94 Marshals Service districts. A summary of
our results for each of the four districts is found in appendix I.

During our review, we found discrepancies between the physical
location of several assets selected for review and the location
listed on the CATS Assets on Hand inventory. For example, we did
not physically locate or observe 34 assets selected for review in
the Central District of California, although we were able to
account for the assets' disposition. Marshals Service and vendor
officials said that the assets either had been transferred to
other authorized locations or had been sold. They attributed these
discrepancies to delays in updating CATS to reflect the changes.
Nevertheless, other documentation permitted us to verify the
disposition of these selected assets. In most cases, documentation
was readily available and updates to CATS were being made in a
reasonable amount of time.

Although our review did not involve an assessment of the CATS
inventory, we brought the CATS- related discrepancies to the
attention of the Department of Justice Asset Forfeiture Management
staff and Marshals Service officials at our exit conference. The
officials responded that they were aware of the situations, and
would attempt to rectify them.

We also found several discrepancies when attempting to locate
copies of checks and deposit tickets to verify receipt of funds
and deposits to a Federal Reserve Bank or other authorized
institution. In each instance, we Several Discrepancies

in Inventory Control and Other Procedures Were Identified

B-280466 Page 5 GAO/GGD-99-41 Asset Forfeiture

were provided alternative support that showed the deposits were
made. For example, in the Southern District of Florida, we were
unable to locate copies of 5 checks and 11 deposit tickets,
although Marshals Service policies require deposit tickets to be
maintained. However, the Marshals Service subsequently sent us
copies of deposit tickets for 8 of the 11, documentation showing
that funds had been returned in 1 case, and 3 alternative support
documents showing that funds had been received and deposits had
been made for the remaining 2 cases. Officials in the Southern and
Eastern Districts of New York also provided us with several
alternative support documents for each case where copies of
deposit tickets were not in the case files. Officials in the three
districts said that they would emphasize the necessity to maintain
copies of checks and deposit tickets to substantiate receipt and
deposit of seized funds. Appendix I provides additional
information on this issue.

Through interviews of seized asset personnel, file reviews, and
observations, we identified property management policies and
procedures to determine if the seized assets managed by the
Marshals Service could be accounted for and safeguarded against
theft, loss, and deterioration. 8 We chose four Marshals Service
districts with high- dollar value seized asset inventories and
selected five categories of assets for review 9 to determine
whether (1) the assets could be physically located or their
disposition documented, (2) the description of assets in CATS
matched the physical attributes of the assets, and (3) the assets
appeared to be in good condition and had been stored and secured
in accordance with contractual requirements. Additionally, for
financial instruments, we determined whether (1) the case file
could be located, (2) the dollar amount in CATS matched the amount
received by the Marshals Service, and (3) documentation existed to
show that the appropriate amount received by the Marshals Service
was subsequently deposited into a bank account.

Our review included a selection of assets from the CATS Assets on
Hand inventory on the week prior to our visit. For some asset
categories and districts, our review included all the assets on
the CATS Assets on Hand inventory. For other asset categories and
districts, our review included judgmentally selected assets on the
CATS inventory that were within a reasonable geographic distance,
given our time and cost constraints. For

8 We did not review other major asset forfeiture program areas,
including CATS, preseizure planning, equitable sharing, financial
management, or chain of custody controls. 9 Vehicles, vessels,
real property, financial instruments, and general property;
categories varied by district. Scope and

Methodology

B-280466 Page 6 GAO/GGD-99-41 Asset Forfeiture

the remaining assets categories and districts, we drew random
samples from the CATS Assets on Hand inventories. The results of
these random samples allow us to make 95- percent confidence
statements about all the assets on the inventories for these
categories. Our results, however, cannot be projected to all
Marshals Service districts or other asset types. Table 1 shows the
numbers of seized assets reviewed and the sampling method employed
by category and district.

Marshals Service districts Asset category Central California
Southern Florida Southern New York Eastern New York Total Vehicles
60 a 60 a 80 b 58 b 258 Vessels 19 c 57 b 0 d 0 d 76 Real property
16 c 21 c 18 c 0 d 55 Financial instruments 60 a 60 a 50 a 60 a
230 General property 60 a 0 d 13 b 4 b 77 Total 215 198 161 122
696

a Random selection of cases. b Selection of all cases. c
Judgmental selection of cases. d Not included in our review.

Source: GAO review of Marshals Service data.

During our visits to the four districts, we interviewed Marshals
Service and vendor officials, reviewed vendor contracts and case
files for the selected assets, and traveled to various seized
asset storage facilities, consisting primarily of warehouses and
boatyards for storing and securing vehicles and vessels. At the
facilities, we observed the overall condition of the selected
assets, noting whether they were clean and appeared to be in no
danger of deteriorating. We also observed whether the facilities
appeared to be secure and had fencing, alarms, and security
personnel, for example. We reviewed selected provisions in
vendors' contracts (e. g., physical security and storage
provisions), but we did not attempt to assess vendor compliance
with numerous other contract provisions, including auction and
payment activities.

We also traveled to numerous real estate locations to personally
observe the appearance of the selected properties. While at these
locations, we observed the overall condition of the property,
focusing on the exterior and looking for any apparent damage or
adverse conditions, such as overgrown grass, broken windows, and
trash in the yard, that could contribute to possible
deterioration. We did not enter the structures and did not perform
any inspection of the interior, the roof, plumbing, wiring, or
interior condition. We also did not attempt to assess vendor
compliance

Table 1: Seized Assets Reviewed by Asset Category and Marshals
Service District

B-280466 Page 7 GAO/GGD-99-41 Asset Forfeiture

with numerous other contract provisions, including maintenance and
repair. However, we reviewed the related case files to check for
recent inspections by others.

For financial instruments, we traced receipt of the instrument
identified on the CATS inventory (e. g., check or money order) to
the Marshals Service from the seizing agency. We then verified the
instrument's deposit in a Federal Reserve Bank or other authorized
institution, usually by deposit ticket but in some cases by
alternative support, such as Marshals Service internal reports
showing deposits made to a bank account. With respect to the
general property, we also observed various seized assets, usually
jewelry, stored in Marshals Service district office vaults. We
conducted our work between July and November 1998 in accordance
with generally accepted government auditing standards.

We provided a copy of a draft of this report to the Attorney
General for comment. On February 3, 1999, we met with Department
of Justice officials to discuss a draft of this report. These
officials generally agreed with the information presented in this
report and provided technical comments that we incorporated as
appropriate.

We are sending copies of this report to Senator Robert Byrd,
Senator Orrin Hatch, Senator Patrick Leahy, Senator Joseph
Lieberman, Senator Ted Stevens, and Senator Fred Thompson, and to
Representative Dan Burton, Representative John Conyers,
Representative Henry Hyde, Representative David Obey,
Representative Henry Waxman, and Representative C. W. Bill Young
in their capacities as Chair or Ranking Minority Member of Senate
and House Committees. We are also sending copies of this report to
Gerald McDowell, Chief, Asset Forfeiture and Money Laundering
Section, Criminal Division, Department of Justice; Michael Perez,
Director, Asset Forfeiture Management Staff, Justice Management
Division; and The Honorable Eduardo Gonzalez, Director, U. S.
Marshals Service. Copies will also be made available to others
upon request. Agency Comments

B-280466 Page 8 GAO/GGD-99-41 Asset Forfeiture

The major contributors to this report are listed in appendix II.
Please contact me on (202) 512- 8777 if you have any questions
about this report.

Sincerely, Richard M. Stana Associate Director Administration of
Justice Issues

Page 9 GAO/GGD-99-41 Asset Forfeiture

Page 10 GAO/GGD-99-41 Asset Forfeiture

Contents 1 Letter 12 Central District of California, Los Angeles
12 Southern District of Florida, Miami 13 Southern District of New
York, Manhattan 15 Eastern District of New York, Brooklyn 17
Appendix I

Summary of Four Marshals Service Districts

19 Appendix II Major Contributors to This Report

Table 1: Seized Assets Reviewed by Asset Category and Marshals
Service District

6 Tables

Abbreviations

CATS Consolidated Asset Tracking System DEA Drug Enforcement
Administration FBI Federal Bureau of Investigation

Page 11 GAO/GGD-99-41 Asset Forfeiture

Appendix I Summary of Four Marshals Service Districts

Page 12 GAO/GGD-99-41 Asset Forfeiture

To assess Marshals Service controls over seized assets in the
Central District of California, we selected 215 out of 2,957
seized assets representing 5 asset categories from the CATS Assets
on Hand Inventory Report, as of August 1, 1998. The 5 asset
categories and numbers we selected included vehicles (60); vessels
(19); real property (16); financial instruments (60); and general
property (e. g., artwork, jewelry, tools, and machinery) (60). We
visited sites during the months of August and September 1998.

We were able to account for all 215 selected seized assets.
Overall, based on our observations, the assets appeared to be in
good condition and were stored properly in accordance with
physical security and property management provisions in the
vendors' contracts and the Marshals Service Policy and Procedures
Manual. However, we found some discrepancies between the physical
location of the assets and the location noted on the CATS
inventory. The following paragraphs explain how the discrepancies
were resolved. For example, we could not locate or observe 21
general property assets because the CATS inventory records had not
been updated to reflect transfer or sale of assets. We were able
to examine documentation that permitted us to verify the
disposition of these selected assets.

Specifically, we found the following: Vehicles  We physically
located 52 of the 60 vehicles randomly sampled from a universe of
264 vehicles. The 52 vehicles appeared to be stored properly, in a
warehouse, in accordance with the physical security and storage
provisions in the vendor's property management contract. According
to documentation we reviewed in Marshals Service case files, the
eight other vehicles either had been sold, transferred for other
law enforcement agency use, or were in transit between storage
sites. A Marshals Service official explained that the CATS records
had not been updated to reflect the sales or transfers.

Vessels  We physically located 14 of the 19 vessels, selected from
a universe of 20 vessels. We did not try to verify the location of
one vessel because the CATS inventory listing showed that it was
located too far away for a practical visit. The 14 vessels we
examined appeared to be stored properly (e. g., in dry dock or wet
storage) in accordance with the vendor's property management
contract storage provisions. The remaining five vessels were sold
prior to our visit, according to other documentation in the
Marshals Service case files, but were still listed on CATS.
Central District of

California, Los Angeles

Appendix I Summary of Four Marshals Service Districts

Page 13 GAO/GGD-99-41 Asset Forfeiture

Real property  We visited 14 of 16 real properties, judgmentally
selected from a universe of 47 properties. We did not randomly
sample or visit all of the properties because of time and cost
considerations. Based on our observations, all of the properties
we visited appeared to be cared for properly (e. g., we observed
no overgrown grass, broken windows, or trash in yard) in
accordance with the vendor's property management contract. Prior
to visiting the selected properties, we reviewed each case file
and found recent appraisals and evidence of regular inspections
performed by contractors for the Marshals Service. Two of the 16
properties were no longer in Marshals Service custody. According
to documentation in the Marshals Service case files we reviewed,
cash settlements had been received in lieu of the Marshals Service
maintaining custody of the properties. However, according to the
Marshals Service, the CATS records had not been updated to reflect
the settlement actions.

Financial instruments  We were able to trace and verify the
amounts of all 60 financial instruments, randomly sampled from a
universe of 806 instruments, to copies of checks sent to the
Marshals Service from seizing agencies. Further, we judgmentally
selected 10 case files and verified copies of the deposit tickets
from the Federal Reserve Bank, as required in the Marshals Service
Policy and Procedures Manual. No discrepancies were noted.

General property  We physically located 39 of the 60 assets
randomly sampled from a universe of 1,656 assets. Based on our
observations, the 39 assets appeared to be stored properly in
accordance with the storage provisions in the vendor's property
management contract. According to documentation in the Marshals
Service case files we reviewed, of the remaining 21 assets, 14
were stored at a vendor in Atlanta, GA; 6 had been sold; and 1 was
discovered missing and presumed stolen during an inventory check
done in connection with property transfers from one warehouse to
another. According to a Marshals Service official, delays by data
analysts in recording transfers of assets accounted for the
discrepancies between the CATS listing and the actual location of
the property.

We selected 198 out of 646 seized assets, representing 4
categories of assets from the CATS Assets on Hand Report. The 4
asset categories and numbers we selected included vehicles (60);
vessels (57); real property (21); and financial instruments (60).

We were able to account for all 198 selected seized assets.
Overall, based on our observations of the selected assets that we
could physically locate, Southern District of

Florida, Miami

Appendix I Summary of Four Marshals Service Districts

Page 14 GAO/GGD-99-41 Asset Forfeiture

the assets appeared to be in good condition and had been stored
properly in accordance with physical security and property
management provisions in the vendors' contracts and the Marshals
Service Policy and Procedures Manual. However, we found some
discrepancies between the location of the assets and the location
noted on the CATS inventory. For example, we could not locate or
observe two vessels because the CATS inventory records had not
been updated to reflect that the vessels had been released to
other agencies. We were able to examine other documentation that
permitted us to verify the disposition of these selected assets.

Specifically, we found the following: Vehicles  We physically
located 57 of the 60 vehicles randomly sampled from a universe of
133 vehicles. The 57 vehicles appeared to be stored properly in
accordance with the physical security and storage provisions in
the vendor's property management contract. According to
documentation in the Marshals Service case files, the remaining
three vehicles either had been sold or released to the owner or to
an attorney, yet they remained on the CATS inventory. The CATS
records were not updated to reflect these dispositions, according
to Marshals Service officials.

Vessels  We physically located 52 of 57 vessels. All 52 vessels
appeared to be stored properly in accordance with the storage
provisions in the vendor's property management contract. According
to documentation in the Marshals Service case files, of the five
remaining vessels, three were sold prior to our visit. A fourth
vessel had recently been released to the FBI for official use, and
a fifth vessel had been released to the Immigration and
Naturalization Service for evidence in a criminal trial. The CATS
inventory for the five vessels had not been updated at the time of
our visit.

Real property  We visited 21 judgmentally selected real properties
from a universe of 38 real properties. We did not randomly sample
or visit the universe of properties because of time and cost
constraints. We reviewed the case files for each of the selected
properties and found recent appraisals and evidence of regular
inspections by the contracted property manager. Furthermore, based
on our observations, each of these properties appeared to be cared
for properly, in accordance with the grounds maintenance
provisions in the vendor's property management contract.

Financial instruments  We located the case files for all 60
financial instruments randomly sampled from a universe of 385
instruments. In each file, we looked for copies of checks that
corresponded to the amount listed

Appendix I Summary of Four Marshals Service Districts

Page 15 GAO/GGD-99-41 Asset Forfeiture

in CATS and that had been sent to the Marshals Service from the
seizing agency. At the time of our visit, we were unable to find
copies of checks in 5 out of 60 files. Subsequently, the Marshals
Service provided documentation showing receipt of the five checks.
We also randomly selected a subsample of 20 out of the 60 selected
financial instruments to verify deposit of seized funds into a
bank account, as required by the Marshals Service Policy and
Procedures Manual. We were unable to locate deposit tickets for 11
out of 20 files. However, the Marshals Service subsequently sent
us copies of deposit tickets for 8 of the 11 files. The Marshals
Service also provided documentation showing that funds had been
returned in one case, and provided three alternative support
documents for each of the remaining two cases showing funds had
been received and deposits had been made.

We selected 161 out of 412 seized assets, representing 4
categories of assets from the CATS Assets on Hand Report. The 4
asset categories 1 and numbers selected included vehicles (80);
real property (18); financial instruments (50); and general
property (i. e., jewelry) (13).

We were able to account for all 161 selected seized assets.
Overall, the assets generally appeared to be in good condition and
were stored properly in accordance with physical security and
property management provisions in the vendors' contracts and the
Marshals Service Policy and Procedures Manual. However, we found
some discrepancies between the location of the assets and the
location noted on the CATS inventory. For example, we could not
locate or observe nine real properties because the CATS inventory
records had not been updated to reflect all properties sold and
cash settlements received in lieu of property. We were able to
examine documentation that permitted us to verify the disposition
of these selected assets.

Specifically, we found the following: Vehicles  We physically
located 77 of 80 vehicles. According to documentation in the
Marshals Service case files we reviewed, of the three remaining
vehicles, one was returned to the owner on the day prior to our
visit; another was destroyed in a law enforcement demonstration
project and had not been removed from CATS; and the last vehicle
was sold in 1991, but CATS had not been updated to reflect the
sale. Overall, the

1 We did not try to verify the location and condition of the one
vessel maintained in the district due to time and cost
constraints. Southern District of

New York, Manhattan

Appendix I Summary of Four Marshals Service Districts

Page 16 GAO/GGD-99-41 Asset Forfeiture

selected vehicles appeared to be stored and secured properly in
accordance with the physical security and storage provisions in
the vendor's property management contract. In most cases, the
selected vehicles appeared to be in good condition, although some
were dirty and unwashed; and 5 of 77 had flat tires, unlike the
vehicles that we observed in some of the some of other district
storage locations that we visited. Although the contract did not
call for the vendor to wash the vehicles, when we brought this to
the attention of district management, they agreed to consider
corrective action.

Real property  We physically located 9 of the 18 real properties
we judgmentally selected for review. 2 According to documentation
in the Marshals Service case files that we reviewed, of the
remaining nine properties, three had been sold, cash settlements
had been received in lieu of property for four, and two were
listed in CATS in error. Based on our observations, each of the
nine properties we visited appeared to be cared for properly in
accordance with the grounds maintenance provisions in the vendor's
property management contract. Prior to visiting the properties, we
reviewed each of the case files and found evidence of inspections
performed by a contractor for the Marshals Service. The CATS
report had not been updated to show that the sold and settlement
properties were no longer on hand.

Financial instruments  We traced and verified the amounts of all
50 financial instruments, randomly selected from a universe of 300
instruments, to copies of checks sent to the Marshals Service from
seizing agencies. Further, we randomly selected 16 of these checks
to verify whether there were copies of the deposit tickets, as
required by the Marshals Service Policy and Procedures Manual.
Thirteen of the 16 cases had deposit tickets, while each of the 3
remaining cases had 3 or more alternative support documents
showing funds had been received and deposits had been made.

General property  We physically located the universe of 13 general
property items (i. e., jewelry). Based on our observations, the
items appeared to be securely stored in accordance with Marshals
Service policy and procedures.

2 The universe contained 19 real properties. We did not include
one parcel of vacant land due to time and cost constraints.

Appendix I Summary of Four Marshals Service Districts

Page 17 GAO/GGD-99-41 Asset Forfeiture

We selected 122 out of 920 seized assets, representing 3
categories 3 of assets from the CATS Assets on Hand Report. The
assets and numbers we selected included vehicles (58); financial
instruments (60); and general property (i. e., jewelry) (4).

We were able to account for all 122 selected seized assets.
Overall, the selected assets generally appeared to be in good
condition and were stored properly in accordance with physical
security and property management provisions in the vendors'
contract and the Marshals Service Policy and Procedures Manual.
However, we found some discrepancies between the location of the
selected assets and the location noted on the CATS inventory. For
example, we could not locate or observe nine vehicles because the
CATS inventory records were not always updated to reflect sale of
a vehicle or vehicles held by other agencies. We were able to
examine documentation that permitted us to verify the disposition
of these selected assets.

Specifically, we found the following: Vehicles  We physically
located 49 out of the universe of 58 vehicles. The 49 vehicles
appeared to be stored properly in accordance with the storage
provisions in the vendor's property management contract. In most
cases, these selected vehicles appeared to be in good condition,
although some were dirty and unwashed; and 2 of the 49 vehicles
had flat tires, unlike the vehicles that we observed in some of
the other district storage locations that we visited. As in the
Southern District of New York, the district management agreed to
consider corrective action. According to documentation in the
Marshals Service case files, of the remaining nine vehicles, one
was still in DEA's possession, one was sold prior to our visit,
one had the wrong identification number on the windshield (which
was corrected when we brought it to their attention), four were
stored locally at various law enforcement agencies, and two had
been sent to federal agencies for their official use. Again,
Marshals Service officials attributed these discrepancies to
delays in updating the CATS inventory.

Financial instruments  We traced and verified the amounts of all
60 financial instruments, randomly sampled from a universe of 257
instruments, to copies of checks sent to the Marshals Service from
seizing agencies or to documents showing the account was seized in
place at a

3 We did not try to verify the location and condition of the one
vessel or the condition of the real properties maintained in the
district due to time and cost constraints. Eastern District of

New York, Brooklyn

Appendix I Summary of Four Marshals Service Districts

Page 18 GAO/GGD-99-41 Asset Forfeiture

bank. Further, we randomly selected 20 of the cases to verify
copies of the deposit tickets, as required by the Marshals Service
Policy and Procedures Manual. Of the 20 cases, 17 had deposit
tickets. Of the remaining three cases, other documentation showed
that one was an account that was frozen in place at the bank
rather than the funds being transferred to the Marshals Service
(so there was no deposit ticket). In the other two cases, the
deposit tickets had been destroyed, according to a Marshals
Service official. However, for each case, we were provided three
or more alternative support documents showing funds had been
received and deposits had been made.

General property  We physically located only one of the four
assets we selected (i. e., jewelry). According to documentation in
the Marshals Service case files we reviewed, one of the remaining
three assets was listed on CATS inventory in error; the asset had
been disposed of in 1990 and had not been removed from the list. A
Marshals Service Property Detail Report showed that the other two
assets were stored in bank safe deposit boxes. The Property Detail
Report specified the name of the bank and storage location of each
item, and a bank document verified that the Marshals Service had
rented the bank safe deposit boxes.

Appendix II Major Contributors to This Report

Page 19 GAO/GGD-99-41 Asset Forfeiture

Darryl W. Dutton, Assistant Director Barry J. Seltser, Assistant
Director

Design, Methodology, and Technical Assistance Sidney Schwartz,
Senior Mathematical Statistician

Design, Methodology, and Technical Assistance Michael Little,
Communications Analyst

Bonnie D. Hall, Evaluator- in- Charge Carla D. Brown, Senior
Evaluator Hector Wong, Evaluator General Government

Division, Washington, D. C.

Los Angeles Field Office

Page 20 GAO/GGD-99-41 Asset Forfeiture

Ordering Information The first copy of each GAO report and
testimony is free. Additional copies are $2 each. Orders should be
sent to the following address, accompanied by a check or money
order made out to the Superintendent of Documents, when necessary.
VISA and MasterCard credit cards are accepted, also. Orders for
100 or more copies to be mailed to a single address are discounted
25 percent.

Order by mail: U. S. General Accounting Office P. O. Box 37050
Washington, DC 20013

or visit: Room 1100 700 4 th St. NW (corner of 4 th and G Sts. NW)
U. S. General Accounting Office Washington, DC

Orders may also be placed by calling (202) 512- 6000 or by using
fax number (202) 512- 6061, or TDD (202) 512- 2537.

Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512- 6000 using a
touch- tone phone. A recorded menu will provide information on how
to obtain these lists.

For information on how to access GAO reports on the INTERNET, send
e- mail message with info in the body to:

info@ www. gao. gov or visit GAO's World Wide Web Home Page at:
http:// www. gao. gov

United States General Accounting Office Washington, D. C. 20548-
0001

Official Business Penalty for Private Use $300

Address Correction Requested Bulk Rate

Postage & Fees Paid GAO Permit No. G100

(182057)

*** End of document. ***