Purpose

To determine whether the New York Division of State Police properly accounts for seized assets and whether it obtains the requested share from forfeited assets. This audit covers the period of April 1, 2011 through September 19, 2013.

Background

The mission of the New York State Division of State Police (Division) is to serve, protect, and defend the people of New York State while preserving their rights and dignity. During the course of an investigation or an arrest, law enforcement agencies may seize assets, including cash, personal property, real property, vehicles, or other items that are suspected of being used to conduct criminal activity, are the proceeds from a criminal activity, or were purchased with the proceeds of a criminal activity. For asset seizure cases in which the Division is involved, its Asset Seizure Unit (ASU) is responsible for ensuring proper processing and tracking of asset seizure cases, even when another law enforcement agency takes custody of the seized assets. If a judicial or administrative process determines the seized assets should be forfeited, proper processing and tracking by the Division should ensure that it receives the requested share of any forfeitures. Assets are considered in pending status until a forfeiture determination is made. As of September 2013, the Division was tracking 5,047 pending seized assets valued at $2.012 billion. Funds received from forfeited assets are to be used to enhance law enforcement efforts.

Key Findings

• The Division did not properly account for or track seized assets. Specifically, the Division did not maintain its Asset Seizure Tracking System database with complete and/or updated information, including case disposition status, number and value of assets, and amount of proceeds received.
• Of 107 seized assets we sampled pending disposition per the Division’s control records, we determined that 56 assets were actually closed. The 56 forfeited assets were valued at $992.7 million, and the Division received only $12.2 million (or less than 1.25 percent of the amount seized). Generally, the Division does not receive explanations of distributions for cases it does not administer, nor does it question the amounts it receives.
• For 13 assets, the difference between what the Division expected to receive and what it actually received totaled about $1.4 million. In one instance, the Division received $840,000 less than it anticipated.
• The Division had custody of more than $700,000 in seized assets classified as abandoned. When rightful owners cannot be located, the Division should turn the assets over to the Office of the State Comptroller’s Office of Unclaimed Funds.
• Individual troops did not always report asset seizures to Division Headquarters. During our site visits, we identified 16 cash seizures totaling $39,967 and three vehicles that were not reported to Division Headquarters.

Key Recommendations

• Ensure the Division obtains the proper share of any proceeds from forfeited assets by:
  • Reconciling the amounts received with the amounts requested by obtaining and reviewing the calculation used to determine the Division’s share. Question the amount received when the difference is greater than a pre-established variance;
  • Obtaining an accounting of proceeds that were distributed to the Special Narcotics Prosecutor in accordance with the Task Force Agreement; and
  • Periodically following up on pending cases to determine their status.
• Ensure Division records accurately reflect up-to-date information about all seized assets by:
  • Requiring that all seized assets be reported to Division Headquarters, even those in the custody of a local or Federal law enforcement agency;
  • Routinely providing reports of all pending seized assets to Division troops for them to update with any status changes; an
  • Updating the seized asset tracking database timely, including when: notifications of dispositions are made; an asset should be returned to its rightful owner; or assets should be turned over to the State Comptroller’s Office of Unclaimed Funds.

Other Related Audit/Report of Interest

Division of State Police: Interest Earned on Seized Assets (2009-S-57)