Prevailing Winds has an article in the latest issue about the Donald Scott attempted seizure that may inform our understanding of the mechanics of seizure cash flows and how the federal seizure industry has grown. My impression from reading the DOJ Asset Forfeiture Fund financial statements is that the state and local rebates flow back through judicial districts. The main players on the federal side appear to be the District Offices of the US Attorney's around the country which must be organized and hence the cash flows back through judicial districts corresponding somehow to the federal district courts. (The HUD Housing Fraud initiative was legislated to correspond to judicial districts.) When the rebates dropped substantially in 1996 (at the same time that the GAO audit was published--March 1996---with a very negative report on the DOJ asset forfeiture fund), the drop appeared to be concentrated in only some of the markets---generally the larger ones. The largest cash flows appear to correspond to the markets with the highest concentration of traditional HUD defaults and financial fraud. The biggest looks to be California's Central District, which is LA and the LA area. California Central District also appears to be the target of one of the HUD Housing Fraud Initiatives which should be going on now. If the Donald Scott case is representative it would appear that the main players for local government are the District Attorney's offices and the county Sheriffs. The courts must figure in, but I do not know how yet. Comdenation and bankruptcy issues appear to be two of the pieces important at the local level to some of the action. The Donald Scott attempted seizure was on October 2 1992 (we should put in chronology). There was a 32 man assault team supported by the efforts of additional team members before the raid. Present for the federal government was: The National Park Service The Jet Propulsion Laboratory (a private government contractor described as one of the most significant NASA and DOD contractors) The DEA A US Border Patrol search unit using a US Army surveillance aircraft The primary player for the local government was the LA County Sheriff's Office which the article indicates would participate in substantial cash booty (presumably this is the local rebate piece----more and more it looks like it flows through the county's and the sheriff's offices...I do not understand the structure of enforcement, but it appears the sheriffs also attach the IRS tax liens to homes. Perhaps the Sheriffs are the folks who deal with all the property issues) It turns out that individual cash rewards were also involved "And, perhaps most troubling, the lead investging officer would get a cash percentage of the total value. He is Los Angeles County Sheriff's Office narcotics detective Gary Spencer." (Prevailing Winds, Murder in Malibu, by Joseph Bosco). The article mentions that no teams from the Ventura County District Attorney's office or Shefiff's officer were present, where Scott's ranch was located. It appears that the District Attorney in Ventura County (Bradbury) has made an important contribution to getting the facts of what happened illuminated. Spencer was the officer who shot and killed Scott during the raid, that produced no evidence of drugs or wrongdoing and did not result in a seizure. Members of the LAPD canine unit were also present as was the California National Guard and members of the California DEA. Also present was an informant who had given testimony that there was marijauna growing on Scott's ranch and who stood to make a % of the profits. There is an indication in the article that Scott had sued or been involved in litigation against the National Park Service and the Jet Propulsion Laboratory over the land. It appears that they wanted it, but I can not tell what the facts are. One of the most informative pieces in this article as it may relate to our situation is the presence of individual financial incentives allocated to government officials from seizures. The behavior that we have seen from the HUD IG office and the attorneys at the District US Attorney's office and Commercial Litigation branch is compatible with such personal cash incentives for themselves or for some of the players in the system. The behavior of this portion of the team is much more compatible with commissioned bond salesmen or real estate brokers than government officials. In the HUD IG audit of the Operation Safe Home program, the HUD IG audit team remarked on the substantial number of LEAP payments that were being made without documentation or supporting paperwork. I wonder if LEAP is being used to provide a % cash bonus system sub rosa to individuals who consummate successful cash transactions (seizures, civil money penalties, negotiated settlements).
