News headlines regularly report on FBI seizures of money from alleged criminals. For instance, in September 2022, the Albuquerque FBI Division seized $1.8 million in cash, as well as guns and drugs, during a gang investigation.
VERIFY reader Robin recently asked us whether the federal government keeps the money it seizes during investigations.
Does the federal government keep money it seizes during criminal investigations?
- U.S. Department of Justice
- U.S. Department of Treasury
- U.S. Marshals Service
- Congressional Research Service
- Government auction websites
- Independent audit of Assets Forfeiture Fund from KPMG, an auditing and tax firm
- Independent audit of Treasury Forfeiture Fund from GKA, P.C., a public accounting firm
- Institute for Justice, a nonprofit advocacy organization that is a proponent of asset forfeiture reform
Yes, the federal government keeps the money it seizes during criminal investigations.
WHAT WE FOUND
Law enforcement at all levels of government seize money and property during investigations through a process called asset forfeiture. When the federal government confiscates a person’s assets, it will usually sell that property through public auctions and deposit the money made from those auctions, as well as any money collected during the investigation, into dedicated federal government funds.
From those funds, law enforcement divides up the seized assets for various needs and expenses. Generally, most of the revenue goes back to federal law enforcement to pay for future asset forfeiture operations, which can include the training of law enforcement and the paying off of debts attached to seized property, the Justice Department says. But the proceeds from asset forfeiture operations exceed the cost of those operations, leaving some revenue leftover.
A smaller portion of the forfeiture revenue goes to the Equitable Sharing Program, which allows federal law enforcement to share with local and state law enforcement up to 80% of the assets seized from operations they assist in, or goes to Congress so other federal government agencies can use it. Some of the seized assets are returned or awarded to victims of the associated crime or other third parties. Whatever revenue is still left after all of that remains within the funds.
Law enforcement agencies under the U.S. Department of Justice, such as the FBI, U.S. Marshals and Drug Enforcement Administration, put forfeited assets into a joint fund, called the Assets Forfeiture Fund (AFF). Law enforcement with the U.S. Department of Treasury and the U.S. Department of Homeland Security put forfeited assets into a different fund, called the Treasury Forfeiture Fund (TFF).
The U.S. Marshals Service manages the AFF for all of the Justice Department agencies, an independent audit from KPMG, an auditing and tax firm, says. The U.S. Marshals Service says it also manages seized property including real estate, commercial businesses, financial instruments, vehicles, jewelry, art, antiques, collectibles, vessels and aircraft. Once in their possession, the Marshals will sell property through auctions, both online and in-person, to convert the property into cash.
Property seized by the Treasury Department is also sold at auction and managed by the Treasury Executive Office for Asset Forfeiture.
According to a 2023 Congressional Research Service report, federal law enforcement puts more than $1.5 billion in assets into the two funds a year. Annual revenues are higher than costs most years, allowing both funds to build up a large reserve of money over time.
At the end of the 2022 fiscal year, the Assets Forfeiture Fund held $1.5 billion and the Treasury Forfeiture Fund held $1.8 billion, according to KPMG’s audit and an independent audit of the Treasury Forfeiture Fund by GKA, P.C., a public accounting firm.
Federal law enforcement officers can seize a person’s money and property through criminal asset forfeitures, which is when law enforcement seizes money or property because the person who owns it was convicted of a crime; or civil and administrative asset forfeitures, which is when law enforcement claims the money or property was used in a crime, the Justice Department says.
Civil and administrative asset forfeitures have been criticized by activists and members of Congress because the property owner does not have to be arrested or be involved in a crime to have their assets seized, a Justice Department Office of the Inspector General report says. Without the need to prove the property owner is part of a crime, law enforcement can abuse these kinds of forfeitures by taking a person’s property based on flimsy reasoning, says critics, such as the Institute for Justice, a nonprofit advocacy organization that is a proponent of asset forfeiture reform.
The purpose of asset forfeiture, the Justice and Treasure Departments say, is to discourage crime.
“Asset forfeiture is designed to deprive criminals of the proceeds of their crimes, to break the financial backbone of organized criminal syndicates and drug cartels, and to recover property that may be used to compensate victims and deter crime,” the Justice Department says.
Each state has its own asset forfeiture laws that determine how assets seized by local and state law enforcement can be spent. It may go partially or entirely to law enforcement in some states, while in others it’s reserved for school funding.