Executive Summary Program Evaluation Prepared For The Budgetary Responsibility Oversight Committee Property Forfeitures Under State and Federal Drug Laws October 2002 Russell W. Hinton, State Auditor Performance Audit Operations Division 254 Washington St., S.W. Department of Audits and Accounts Atlanta, GA 30334-8400 Background Both state and federal laws allow law enforcement agencies to seize property that is linked to illegal drug sales and possession. Seized property can include practically anything of value (such as money, real estate, cars, weapons, cell phones, scales, etc.). State and federal forfeiture cases are usually handled in civil court separately from the criminal proceedings against the owner of the property. In deciding if a case should be prosecuted under state or federal law, several factors are considered such as the amount of property and drugs seized, which laws were violated, which laws would result in a stiffer penalty, and if the case is an isolated incident or if it is related to a larger drug network. State and federal forfeiture laws have different restrictions relating to the distribution and use of the proceeds of forfeiture cases. Some of the restrictions on state law enforcement agencies are different than the restrictions on local law enforcement agencies. If there is no compelling reason to prosecute the case under state or federal law, the decision may be based on the preferences of law enforcement agencies or on whether state or federal forfeiture laws provide for the most favorable distribution of forfeited proceeds. Since no state agency collects statewide information concerning the total number or dollar amount of property forfeitures under state law, we surveyed district attorney offices to determine the amount of property forfeited under state law and how the property was distributed. The period covered by the survey was from December 1, 2000 to November 30, 2001. Forty-five (94%) of the 48 circuits responded to the survey. The circuits reported 2,831 state forfeiture cases, $7.2 million in forfeited cash, and 4,448 pieces of forfeited property valued at $888,732. It should be noted that these totals are underreported since 24 of the 45 circuits that responded to the survey did not provide estimates of the value of the property forfeited, and eight circuits only reported the value of some of the property forfeited. In addition, according to the U.S. Department of Justice, Georgia received $11.4 million in cash and 38 pieces of property valued at $225,686 in federal fiscal year 2001 from drug-related federal forfeitures. This evaluation was conducted to answer certain questions raised by the Budgetary Responsibility Oversight Committee regarding "Drug Enforcement and Prevention". The scope of the evaluation focused on the issues identified by BROC that are listed on the next page: Property Forfeitures Under State and Federal Drug Laws Page 1 Issue: To what extent are assets forfeited under state and federal drug laws tracked? State forfeiture cases are not tracked. The absence of any tracking or monitoring of forfeiture cases processed under state law has resulted in problems not being identified, which precludes any corrective action taking place. The General Assembly should consider revising the law to provide for at least minimal tracking and monitoring of state forfeiture cases. Based on systems in use in other states, it should be possible to develop a low cost system that would improve controls over state forfeiture cases. Distributions from federal forfeiture cases are tracked by the U.S. Department of Justice, the U.S. Department of the Treasury, and the U.S. Marshals Service. Issue: Comment on what happens to funds or property transferred to cooperating law enforcement agencies under O.C.G.A. 16-13-49(u)(4)(B) (property forfeitures under state drug laws) and 16-13-48.1 (property forfeitures under federal drug laws). State law enforcement agencies have not processed any forfeiture cases involving cash under state law. Consequently, the State has not received any revenue from state forfeiture cases. State agencies processed forfeiture cases under federal law or elected to turn over their state forfeiture cases to local law enforcement agencies (in some instances in return for donated equipment). There is no incentive for state agencies to participate in state forfeiture cases, because state agencies must remit the proceeds of these cases to the General Fund of the State Treasury. Local law enforcement agencies process their forfeiture cases under both state and federal law. The decision criteria has some flexibility and agencies will sometimes prosecute a forfeiture case based on their preferences for the use of state or federal laws or under the set of laws that they feel will result in the most favorable distribution of proceeds; however, local law enforcement agencies in Georgia do not appear to be unduly favoring the use of federal (or state) forfeiture laws. Evaluation team visits to 26 local law enforcement agencies in four judicial circuits, which received proceeds from state forfeiture cases, found problems with local agencies not complying with state forfeiture laws, misusing forfeited proceeds, and commingling forfeited proceeds with other fund sources. Evaluation team visits to three state and 10 local law enforcement agencies, which received proceeds from federal forfeiture cases, found that their expenditures were allowable under federal forfeiture laws. However, the team also found that the GBI and GSP maintain relatively large reserves ($1.8 million and $4.7 million) of federal forfeiture proceeds. While these reserves are permissible under state budget provisions, these funds should be used within a reasonable period of time and not held as reserves indefinitely. For additional information, or to request a copy of the Program Evaluation, please contact Paul E. Bernard, Director, Performance Audit Operations Division, at (404) 657-5220. Click here for full report Property Forfeitures Under State and Federal Drug Laws Page 2