7 August 2001

See contents of full IRS Handbook of Criminal Investigation: http://cryptome.org/irs-ci/irs-ci.htm

Handbook 9.7
Asset Seizure and Forfeiture


Chapter 2
Methods to Effect Seizures

Contents

[9.7] 2.1  (04-30-1998)
OVERVIEW

  1. Seizure of property involved in a transaction in violation of 18 USC 1956 or 1957 or of 31 USC 5313(a) or 5324(a), or any property traceable to such property, may be accomplished using any of the methods prescribed in 18 USC 981(b). These methods are described in the following subsections of this chapter.
    • Warrant of Arrest In Rem
    • Seizure Incident to Lawful Arrest or Search
    • Seizure Warrant
    • Adoptive Seizures
    • Temporary Restraining Order--Criminal Seizure Only

[9.7] 2.2  (04-30-1998)
WARRANT OF ARREST IN REM

  1. Title 18 USC 981(b)(2) specifically provides for the use of warrants of arrest in rem issued by the federal district court under the authority of the Supplemental Rules for Certain Admiralty and Maritime Claims. The Supplemental Rules for Certain Admiralty and Maritime Claims are found at the end of the Federal Rules of Civil Procedure in Title 28 of the United States Code and are commonly referred to as the Supplemental Rules.
  2. Real estate must be seized pursuant to a warrant of arrest in rem.
  3. Supplemental Rule C(3) provides that a warrant of arrest in rem be issued by the clerk of the court on the filing of a verified complaint for forfeiture by the U.S. Attorney along with the affidavit of a federal agent. While Rule C(3) allows the warrant of arrest in rem to be issued by the clerk of the court without a review by a magistrate judge, Treasury policy, consistent with the Supreme Court's decision in United States v. James Daniel Good Real Property , 510 U.S. 43 (1993), requires that the owner be given notice and the opportunity for a hearing prior to the seizure of real estate.
  4. Title 28 USC 1355 (d) authorizes the federal district court issuing a warrant of arrest in rem to have its warrant served on property
    nationwide.
  5. Warrants of Arrest in Rem are also used to initiate Code forfeitures when the proceedings are civil judicial.

[9.7] 2.3  (04-30-1998)
SEIZURE INCIDENT TO LAWFUL ARREST OR SEARCH

  1. Title 18 USC 981(b)(2)(A) provides that seizures may be made incident to a lawful arrest or search warrant, or incident to otherwise lawful searches.
  2. Seizures made incident to an arrest or search can lead to prolonged litigation, and potential civil and criminal liability. Therefore, agents should attempt such seizures only after carefully considering the circumstances with which they are confronted, and should consult legal counsel, if time permits. (Department of Treasury Policy encourages the use of seizure warrants whenever practical.)
  3. Rule 41 of the Federal Rules of Criminal Procedure (F.R.Cr.P.) permit seizures, incident to a legal search, of the:
    1. Instrumentalities and means by which a crime is committed.
    2. Fruits of the crime.
    3. Weapons which arrested individuals might use to escape.
  4. Property seized incident to an arrest or a search warrant, or otherwise lawful search, generally is:
    1. Property that is contraband which should be turned over to an agency with summary forfeiture authority over that contraband, e.g., firearms to the Bureau of Alcohol Tobacco and Firearms.
    2. Property that is known to be subject to prior judgments in favor of the United States.
    3. Property that the agent has probable cause to believe is forfeitable under federal law but which will be destroyed, concealed, or removed if not immediately seized.
    4. Property that is abandoned and is taken into custody for
      safekeeping.
  5. After property is seized incident to arrest or incident to a lawful search, special agents must prepare a memorandum stating the facts and circumstances detailing the probable cause to believe that the property is subject to forfeiture under Title 18 USC 981, or IRC sections 7301 or 7302.
  6. This memorandum prepared in Title 18 seizures must then be presented to District Counsel for review and preparation of a law and fact memorandum.
  7. The memorandum prepared in Code seizures must be sent to District Counsel for review and preparation of a law and fact memorandum for review by the Assistant Chief Counsel (Criminal Tax) and, in judicial forfeitures, Department of Justice (DOJ), Tax Division.
  8. Additional details concerning search warrants and warrantless searches can be found in Handbook 9.4 Chapter 13.

[9.7] 2.4  (04-30-1998)
SEIZURE WARRANT

  1. Title 18 USC 981(b)(2)(B) provides that seizures may be made with a seizure warrant issued pursuant to the F.R.Cr.P. A seizure warrant is issued by a federal magistrate judge or a district court judge based on the affidavit of a special agent. Property seized with a seizure warrant is forfeited using the administrative process under the U.S. Customs Laws detailed in 19 USC 1602 et seq., except in the following situations which require initiation of a judicial forfeiture action:
    1. personal property valued over $500,000 (except currency or monetary instruments which can be administratively forfeited without limit)
    2. real estate
    3. the decision to forfeit depends on the use of grand jury information still subject to the secrecy restrictions of F.R.Cr.P. 6(e)
    4. the filing of a Claim and Cost Bond
  2. Property subject to forfeiture under 18 USC 982 (Criminal Forfeiture) may be seized by obtaining a seizure warrant in the same manner as provided for a search warrant pursuant to 21 USC 853(f).
  3. If the proposed seizure for forfeiture can be initiated administratively, District Counsel should be requested to assist in the preparation of the affidavit in support of the seizure warrant. If the proposed seizure for forfeiture is one which must be initiated judicially, Counsel may assist in the preparation of the affidavit, or may be provided with a copy of the affidavit, and all pertinent documents, provided the affidavit is prepared with the assistance or concurrence of the Assistant United States Attorney (AUSA).

[9.7] 2.5  (04-30-1998)
ADOPTIVE SEIZURES

  1. State and local law enforcement authorities may seize vehicles, currency, and other property for evidence of a violation of statutes over which they have jurisdiction, but have no forfeiture authority. Federal agencies without forfeiture authority may also request that IRS adopt their seizures.
  2. Where the property has also been used in violation of 31 USC 5313(a) or 5324; or 18 USC sections 1956 or 1957, those state and local jurisdictions that do not have forfeiture statutes may ask the Service to adopt the action in order to prevent the continued use of the property in unlawful activities. Seizures of vehicles and other property used in violation of these laws may be adopted from state and local law enforcement authorities, via a seizure warrant.
  3. Local or state agencies requesting the IRS to adopt their seizures for forfeiture action must do so within 30 days of the seizure action so as to avoid situations where property is held for interminable periods of time prior to the commencement of forfeiture proceedings. The Chief, CI, may waive this rule provided the requesting agency can set forth circumstances justifying the delay.
  4. The Request for Adoption of a Local or State Seizure form detailing the probable cause to support the seizure will be forwarded to District Counsel. Attachments to the memorandum should include pertinent police reports, affidavits for Search Warrant(s) and other memoranda of activities. The Chief, CI, will not take custody of the seized property and institute the necessary forfeiture procedures until, and only if, District Counsel signs off on the Request for Adoption of a Local or State Seizure form (Exhibit 2-1) supporting the action, and after a Federal seizure warrant is obtained.
  5. See the Chapter on Seizure Planning and Considerations in this Handbook for more information on adoptive seizures.

[9.7] 2.6  (04-30-1998)
TEMPORARY RESTRAINING ORDER--CRIMINAL SEIZURE ONLY

  1. Because criminal forfeiture is an integral part of the underlying criminal prosecution, the F.R.Cr.P. govern the general process by which property is criminally forfeited. Criminal forfeiture is an "in personam" proceeding instituted in conjunction with a criminal charge against a particular defendant. The property subject to forfeiture must be described in an indictment pursuant to Rule 7(c) of the F.R.Cr.P. Unlike civil forfeiture, the property is not the defendant, but the forfeiture is based on criminal conviction of the property owner and a showing of the property's involvement in the crimes. Title 18 USC 982(b)(1) states that the provisions of Title 21 USC 853(c) and (e) through (p) shall govern the seizure and disposition of any property subject to forfeiture under Title 18 USC 982 as it relates to violations listed in 982(a)(1) and (a)(6). Title 21 USC 853(e)(1) provides that a Temporary Restraining Order (TRO) may be issued prior to the conclusion of a criminal investigation to preserve the availability of the property for forfeiture. A TRO restrains the transfer of the property or further encumbrances. Caution is to be exercised in using a TRO because premature discovery of the criminal case may result via a required court hearing.

    Exhibit [9.7] 2-1  (04/30/98)
    Sample Request For Adoption of State or Local Seizure

Internal Revenue Manual  

Hndbk. 9.7 Chap. 2 Methods to Effect Seizures

  (04-30-1998)


05/02/2001 14:29:51 EST