[Title 28 CFR 9]
[Code of Federal Regulations (annual edition) - July 1, 2002 Edition]
[Title 28 - JUDICIAL ADMINISTRATION]
[Chapter I - DEPARTMENT OF JUSTICE]
[Part 9 - REGULATIONS GOVERNING THE REMISSION OR MITIGATION OF CIVIL AND CRIMINAL FORFEITURES]
[From the U.S. Government Printing Office]


28JUDICIAL ADMINISTRATION12002-07-012002-07-01falseREGULATIONS GOVERNING THE REMISSION OR MITIGATION OF CIVIL AND CRIMINAL FORFEITURES9PART 9JUDICIAL ADMINISTRATIONDEPARTMENT OF JUSTICE
PART 9--REGULATIONS GOVERNING THE REMISSION OR MITIGATION OF CIVIL AND CRIMINAL FORFEITURES--Table of Contents




Sec.
9.1  Authority, purpose, and scope.
9.2  Definitions.
9.3  Petitions in administrative forfeiture cases.
9.4  Petitions in judicial forfeiture cases.
9.5  Criteria governing administrative and judicial remission and 
          mitigation.
9.6  Special rules for specific petitioners.
9.7  Terms and conditions of remission and mitigation.
9.8  Provisions applicable to victims.
9.9  Miscellaneous provisions.

    Authority: 28 U.S.C. 509, 510, 515-518, 524; 8 U.S.C. 1324; 15 
U.S.C. 1177; 17 U.S.C. 509; 18 U.S.C. 512, 981, 982, 1467, 1955, 1963, 
2253, 2254, 2513; 19 U.S.C. 1613, 1618; 21 U.S.C. 853, 881; 22 U.S.C. 
401.

    Source: Order No. 2064-96, 62 FR 316, Jan. 3, 1997, unless otherwise 
noted.

[[Page 223]]



Sec. 9.1  Authority, purpose, and scope.

    (a) Purpose. This part sets forth the procedures for agency 
officials to follow when considering remission or mitigation of 
administrative forfeitures under the jurisdiction of the agency, and 
civil judicial and criminal judicial forfeitures under the jurisdiction 
of the Criminal Division. The purpose of the regulations in this part is 
to provide a basis for ameliorating the effects of forfeiture through 
the partial or total remission of forfeiture for individuals who have an 
interest in the forfeited property but who did not participate in, or 
have knowledge of, the conduct that resulted in the property being 
subject to forfeiture and, where required, took all reasonable steps 
under the circumstances to ensure that such property would not be used, 
acquired, or disposed of contrary to law. Additionally, the regulations 
provide for partial or total mitigation of the forfeiture and imposition 
of alternative conditions in appropriate circumstances.
    (b) Authority to grant remission and mitigation. (1) Remission and 
mitigation functions in administrative forfeitures are performed by the 
agency seizing the property. Within the Federal Bureau of Investigation, 
authority to grant remission and mitigation is delegated to the 
Forfeiture Counsel, who is the Unit Chief, Legal Forfeiture Unit, Office 
of the General Counsel; within the Drug Enforcement Administration, 
authority to grant remission and mitigation is delegated to the 
Forfeiture Counsel, Office of Chief Counsel; and within the Immigration 
and Naturalization Service, authority to grant remission and mitigation 
is delegated to the INS Regional Directors.
    (2) Remission and mitigation functions in judicial cases are 
performed by the Criminal Division of the Department of Justice. Within 
the Criminal Division, authority to grant remission and mitigation is 
delegated to the Chief, Asset Forfeiture and Money Laundering Section, 
Criminal Division.
    (3) The powers and responsibilities delegated by these regulations 
in this part may be redelegated to attorneys or managers working under 
the supervision of the designated officials.
    (c) The time periods and internal requirements established in this 
part are designed to guide the orderly administration of the remission 
and mitigation process and are not intended to create rights or 
entitlements in favor of individuals seeking remission or mitigation. 
The regulations will apply to all decisions on petitions for remission 
or mitigation made on or after February 3, 1997. The regulations will 
apply to decisions on requests for reconsideration of a denial of a 
petition under Secs. 9.3(j) and 9.4(k) only if the initial decision on 
the petition was made under the provisions of this part effective on 
February 3, 1997.
    (d) This part governs any petition for remission filed with the 
Attorney General and supersedes any Department of Justice regulation 
governing petitions for remission, to the extent such regulation is 
inconsistent with this part. In particular, this part supersedes the 
provisions of 21 CFR 1316.79 and 1316.80, which contain remission and 
mitigation procedures for property seized for narcotics violations. The 
provisions of 8 CFR 274.13 through 274.19 and 28 CFR 8.10, which concern 
non-drug related forfeitures, are also superseded by this part where 
those regulations relate to remission and mitigation.



Sec. 9.2  Definitions.

    As used in this part:
    (a) The term administrative forfeiture means the process by which 
property may be forfeited by an investigative agency rather than through 
judicial proceedings.
    (b) The term appraised value means the estimated market value of an 
asset at the time and place of seizure if such or similar property was 
freely offered for sale between a willing seller and a willing buyer.
    (c) The term Assets Forfeiture Fund means the Department of Justice 
Assets Forfeiture Fund or Department of the Treasury Asset Forfeiture 
Fund, depending upon the identity of the seizing agency.
    (d) The term Attorney General means the Attorney General of the 
United States or his or her designee.
    (e) The term beneficial owner means a person with actual use of, as 
well as an

[[Page 224]]

interest in, the property subject to forfeiture.
    (f) The terms Chief, Asset Forfeiture and Money Laundering Section, 
and Chief, refer to the Chief of the Asset Forfeiture and Money 
Laundering Section, Criminal Division, United States Department of 
Justice.
    (g) The term general creditor means one whose claim or debt is not 
secured by a specific right to obtain satisfaction against the 
particular property subject to forfeiture.
    (h) The term judgment creditor means one who has obtained a judgment 
against the debtor but has not yet received full satisfaction of the 
judgment.
    (i) The term judicial forfeiture means either a civil or a criminal 
proceeding in a United States District Court that may result in a final 
judgment and order of forfeiture.
    (j) The term lienholder means a creditor whose claim or debt is 
secured by a specific right to obtain satisfaction against the 
particular property subject to forfeiture. A lien creditor qualifies as 
a lienholder if the lien:
    (1) Was established by operation of law or contract;
    (2) Was created as a result of an exchange of money, goods, or 
services; and
    (3) Is perfected against the specific property forfeited for which 
remission or mitigation is sought (e.g., a real estate mortgage; a 
mechanic's lien).
    (k) The term net equity means the amount of a lienholder's monetary 
interest in property subject to forfeiture. Net equity shall be computed 
by determining the amount of unpaid principal and unpaid interest at the 
time of seizure, and by adding to that sum unpaid interest calculated 
from the date of seizure through the last full month prior to the date 
of the decision on the petition. Where a rate of interest is set forth 
in a security agreement, the rate of interest to be used in this 
computation will be the annual percentage rate so specified in the 
security agreement that is the basis of the lienholder's interest. In 
this computation, however, there shall be no allowances for attorneys' 
fees, accelerated or enhanced interest charges, amounts set by contract 
as damages, unearned extended warranty fees, insurance, service contract 
charges incurred after the date of seizure, allowances for dealer's 
reserve, or any other similar charges.
    (l) The term owner means the person in whom primary title is vested 
or whose interest is manifested by the actual and beneficial use of the 
property, even though the title is vested in another. A victim of an 
offense, as defined in paragraph (v) of this section, may also be an 
owner if he or she has a present legally cognizable ownership interest 
in the property forfeited. A nominal owner of property will not be 
treated as its true owner if he or she is not its beneficial owner.
    (m) The term person means an individual, partnership, corporation, 
joint business enterprise, estate, or other legal entity capable of 
owning property.
    (n) The term petition means a petition for remission or mitigation 
of forfeiture under the regulations in this part. This definition 
includes a petition for restoration of the proceeds of sale of forfeited 
property and a petition for the value of forfeited property placed into 
official use.
    (o) The term petitioner means the person applying for remission, 
mitigation, restoration of the proceeds of sale, or for the appraised 
value of forfeited property, under the regulations in this part. A 
petitioner may be an owner as defined in Sec. 9.2(l), a lienholder as 
defined in Sec. 9.2(j), or a victim as defined in Sec. 9.2(v), subject 
to the limitations of Sec. 9.8.
    (p) The term property means real or personal property of any kind 
capable of being owned or possessed.
    (q) The term record means a series of arrests for related crimes, 
unless the arrestee was acquitted or the charges were dismissed for lack 
of evidence; a conviction for a related crime or completion of sentence 
within ten years of the acquisition of the property subject to 
forfeiture; or two convictions for a related crime at any time in the 
past.
    (r) The term related crime as used in Sec. 9.2(q) and Sec. 9.6(e) 
means any crime similar in nature to that which gives rise to the 
seizure of property for forfeiture. For example, where property is 
seized for a violation of the federal laws relating to drugs, a related 
crime

[[Page 225]]

would be any offense involving a violation of the federal laws relating 
to drugs or the laws of any state or political subdivision thereof 
relating to drugs.
    (s) The term related offense as used in Sec. 9.8 means:
    (1) Any predicate offense charged in a Federal Racketeer Influenced 
and Corrupt Organizations Act (RICO) count for which forfeiture was 
ordered; or
    (2) An offense committed as part of the same scheme or design, or 
pursuant to the same conspiracy, as was involved in the offense for 
which forfeiture was ordered.
    (t) The term Ruling Official means any official to whom decision 
making authority has been delegated pursuant to Sec. 9.1(b).
    (u) The term seizing agency means the federal agency that seized the 
property or adopted the seizure of another agency for federal 
forfeiture.
    (v) The term victim means a person who has incurred a pecuniary loss 
as a direct result of the commission of the offense underlying a 
forfeiture. A drug user is not considered a victim of a drug trafficking 
offense under this definition. A victim does not include one who 
acquires a right to sue the perpetrator of the criminal offense for any 
loss by assignment, subrogation inheritance, or otherwise form the 
actual victim, unless that person has acquired an actual ownership 
interest in the forfeited property.
    (w) The term violator means the person whose use or acquisition of 
the property in violation of the law subjected such property to seizure 
for forfeiture.



Sec. 9.3  Petitions in administrative forfeiture cases.

    (a) Notice of seizure. The notice of seizure and intent to forfeit 
the property shall advise any persons who may have a present ownership 
interest in the property to submit their petitions for remission or 
mitigation within thirty (30) days of the date they receive the notice 
in order to facilitate processing. Petitions shall be considered any 
time after notice until the forfeited property is placed into official 
use, sold, or otherwise disposed of according to law, except in cases 
involving petitions to restore the proceeds from the sale of forfeited 
property. A notice of seizure shall include the title of the seizing 
agency, the Ruling Official, the mailing and street address of the 
official to whom petitions should be sent, and an asset identifier 
number.
    (b) Persons who may file. A petition for remission or mitigation 
must be filed by a petitioner as defined in Sec. 9.2(o) or as prescribed 
in Secs. 9.9(g) and (h).
    (c) Contents of petition. (1) All petitions must include the 
following information in clear and concise terms:
    (i) The name, address, and social security or other taxpayer 
identification number of the person claiming an interest in the seized 
property who is seeking remission or mitigation;
    (ii) The name of the seizing agency, the asset identifier number, 
and the date and place of seizure;
    (iii) A complete description of the property, including make, model, 
and serial numbers, if any; and
    (iv) A description of the petitioner's interest in the property as 
owner, lienholder, or otherwise, supported by original or certified 
bills of sale, contracts, deeds, mortgages, or other documentary 
evidence.
    (2) Any factual recitation or documentation of any type in a 
petition must be supported by a sworn affidavit.
    (d) Releases. In addition to the contents of the petition for 
remission or mitigation set forth in paragraph (c) of this section, upon 
request, the petitioner shall also furnish the agency with an instrument 
executed by the titled or registered owner and any other known claimant 
of an interest in the property releasing interest in such property.
    (e) Filing petition with agency. (1) A petition for remission or 
mitigation subject to administrative forfeiture shall be addressed to 
the appropriate federal agency as follows:
    (i) Drug Enforcement Administration, Office of Chief Counsel, Street 
Address: 700 Army Navy Drive, Arlington, VA 22202
    Mailing Address: P.O. Box 28356, Washington, D.C. 20038.
    (ii) Federal Bureau of Investigation, Special Agent in Charge, Field 
Office that seized the property.

[[Page 226]]

    (iii) Immigration and Naturalization Service District Director, 
Chief Patrol Agent, or Regional Asset Forfeiture Office at location with 
jurisdiction over the forfeiture proceeding.
    (2) The petition is to be sent to the official address provided in 
the notice of seizure and shall be sworn to by the petitioner or by the 
petitioner's attorney upon information and belief, supported by the 
client's sworn notice of representation pursuant to 28 U.S.C. 1746, as 
set out in Sec. 9.9(g). The Chief of the Asset Forfeiture and Money 
Laundering Section is delegated authority to amend the address of the 
official to whom petitions may be sent from time to time, as necessary, 
by publishing notice of the change of address in the Federal Register. 
Failure to publish a notice of change of address in the Federal Register 
shall not alter the authority of the Ruling Official to determine 
petitions for remission or mitigation nor the obligation of a petitioner 
to file a petition at the address provided in the notice of seizure. 
Failure to publish a notice of change of address in the Federal Register 
shall not be grounds for expanding the time for filing a petition for 
remission or mitigation under the regulations in this part.
    (f) Agency investigation. Upon receipt of a petition, the seizing 
agency shall investigate the merits of the petition and prepare a 
written report containing the results of that investigation. This report 
shall be submitted to the Ruling Official for review and consideration.
    (g) Ruling. Upon receipt of the petition and the agency report, the 
Ruling Official for the seizing agency shall review the petition and the 
report, and shall rule on the merits of the petition. No hearing shall 
be held.
    (h) Petitions granted. If the Ruling Official grants a remission or 
mitigation of the forfeiture, a copy of the decision shall be mailed to 
the petitioner or, if represented by an attorney, to the petitioner's 
attorney. A copy shall also be sent to the United States Marshals 
Service or other property custodian. The written decision shall include 
the terms and conditions, if any, upon which the remission or mitigation 
is granted and the procedures the petitioner must follow to obtain 
release of the property or the monetary interest therein.
    (i) Petitions denied. If the Ruling Official denies a petition, a 
copy of the decision shall be mailed to the petitioner or, if 
represented by an attorney, to the petitioner's attorney of record. A 
copy of the decision shall also be sent to the United States Marshals 
Service or other property custodian. The decision shall specify the 
reason that the petition was denied. The decision shall advise the 
petitioner that a request for reconsideration of the denial of the 
petition may be submitted to the Ruling Official in accordance with 
paragraph (j) of this section.
    (j) Request for reconsideration. (1) A request for reconsideration 
of the denial of the petition shall be considered if:
    (i) It is postmarked or received by the office of the Ruling 
Official within ten (10) days from the receipt of the notice of denial 
of the petition by the petitioner; and
    (ii) The request is based on information or evidence not previously 
considered that is material to the basis for the denial or presents a 
basis clearly demonstrating that the denial was erroneous.
    (2) In no event shall a request for reconsideration be decided by 
the same Ruling Official who ruled on the original petition.
    (3) Only one request for reconsideration of a denial of a petition 
shall be considered.
    (k) Restoration of proceeds from sale. (1) A petition for 
restoration of the proceeds from the sale of forfeited property, or for 
the appraised value of forfeited property when the forfeited property 
has been retained by or delivered to a government agency for official 
use, may be submitted by an owner or leinholder in cases in which the 
petitioner:
    (i) Did not know of the seizure prior to the entry of a declaration 
of forfeiture; and
    (ii) Could not reasonably have known of the seizure prior to the 
entry of a declaration of forfeiture.
    (2) Such a petition shall be submitted pursuant to paragraphs (b) 
through (e) of this section within ninety (90) days

[[Page 227]]

of the date the property is sold or otherwise disposed of.



Sec. 9.4  Petitions in judicial forfeiture cases.

    (a) Notice of seizure. The notice of seizure and intent to forfeit 
the property shall advise any persons who may have a present ownership 
interest in the property to submit their petitions for remission or 
mitigation within thirty (30) days of the date they receive the notice 
in order to facilitate processing. Petitions shall be considered any 
time after notice until such time as the forfeited property is placed in 
official use, sold, or otherwise disposed of according to law, except in 
cases involving petitions to restore property. A notice of seizure shall 
include the title of the Ruling Official and the mailing and street 
address of the official to whom petitions should be sent, the name of 
the agency seizing the property, an asset identifier number, and the 
district court docket number.
    (b) Persons who may file. A petition for remission or mitigation 
must be filed by a petitioner as defined in Sec. 9.2(o) or as prescribed 
in Sec. Sec. 9.9 (g) and (h).
    (c) Contents of petition. (1) All petitions must include the 
following information in clear and concise terms:
    (i) The name, address, and social security or other taxpayer 
identification number of the person claiming an interest in the seized 
property who is seeking remission or mitigation;
    (ii) The name of the seizing agency, the asset identifier number, 
and the date and place of seizure;
    (iii) The district court docket number;
    (iv) A complete description of the property, including the address 
or legal description of real property, and make, model, and serial 
numbers of personal property, if any; and
    (v) A description of the petitioner's interest in the property as 
owner, lienholder, or otherwise, supported by original or certified 
bills of sale, contracts, mortgages, deeds, or other documentary 
evidence.
    (2) Any factual recitation or documentation of any type in a 
petition must be supported by a sworn affidavit.
    (d) Releases. In addition to the content of the petition for 
remission or mitigation set forth in paragraph (c) of this section, the 
petitioner, upon request, also shall furnish the agency with an 
instrument executed by the titled or registered owner and any other 
known claimant of an interest in the property releasing the interest in 
such property.
    (e) Filing petition with Department of Justice. A petition for 
remission or mitigation of a judicial forfeiture shall be addressed to 
the Attorney General; shall be sworn to by the petitioner or by the 
petitioner's attorney upon information and belief, supported by the 
client's sworn notice of representation pursuant to 28 U.S.C. 1746, as 
set forth in Sec. 9.9(g); and shall be submitted to the United States 
Attorney for the district in which the judicial forfeiture proceedings 
are brought. A petitioner also shall submit a copy of the petition to 
the seizing agency in the judicial district in which the seizure 
occurred as specified in the notice of seizure, except in Drug 
Enforcement Administration cases, where the copy shall be submitted to 
Drug Enforcement Administration Headquarters, Office of Chief Counsel, 
P.O. Box 28356, Washington, D.C. 20038, or 700 Army Navy Drive, 
Arlington, VA 22202.
    (f) Agency investigation and recommendation; United States 
Attorney's recommendation. Upon receipt of a petition, the United States 
Attorney shall direct the seizing agency to investigate the merits of 
the petition based on the information provided by the petitioner and the 
totality of the agency's investigation of the underlying basis for 
forfeiture. The agency shall submit to the United States Attorney a 
report of its investigation and its recommendation on whether the 
petition should be granted or denied. Upon receipt of the agency's 
report and recommendation, the United States Attorney shall forward to 
the Chief, Asset Forfeiture and Money Laundering Section, the petition, 
the seizing agency's report and recommendation, and the United States 
Attorney's recommendation on whether the petition should be granted or 
denied.
    (g) Ruling. The Chief shall rule on the petition. No hearing shall 
be held. The

[[Page 228]]

Chief shall not rule on any petition in any case in which similar 
petition has been administratively denied by the seizing agency prior to 
the referral of the case to the United States Attorney for the 
institution of forfeiture proceedings.
    (h) Petitons under Internal Revenue Service liquor laws. The Chief 
shall accept and consider petitions submitted in judicial forfeiture 
proceedings under the Internal Revenue Service liquor laws only prior to 
the time a decree of forfeiture is entered. Thereafter, district courts 
have exclusive jurisdiction.
    (i) Petitions granted. If the Chief grants a remission or mitigates 
the forfeiture, the Chief shall mail a copy of the decision to the 
petitioner or, if represented by an attorney, to the petitioner's 
attorney, the appropriate United States Attorney, the United States 
Marshals Service or other property custodian, and the appropriate 
seizing agency. The written decision shall include the terms and 
conditions, if any, upon which the remission or mitigation is granted 
and the procedures the petitioner must follow to obtain release of the 
property or the monetary interest therein. The Chief shall advise the 
petitioner or the petitioner's attorney to consult with the United 
States Attorney as to such terms and conditions. The United States 
Attorney shall confer with the seizing agency regarding the release and 
shall coordinate disposition of the property with that office and the 
United States Marshals Service or other property custodian.
    (j) Petitions denied. If the Chief denies a petition, a copy of that 
decision shall be mailed to the petitioner, or if represented by an 
attorney, to the petitioner's attorney of record, to the appropriate 
United States Attorney, the United States Marshals Service or other 
property custodian, and to the appropriate seizing agency. The decision 
shall specify the reason that the petition was denied. The decision 
shall advise the petitioner that a request for reconsideration of the 
denial of the petition may be submitted to the Chief at the address 
provided in the decision, in accordance with paragraph (k) of this 
section.
    (k) Request for reconsideration. (1) A request for reconsideration 
of the denial shall be considered if:
    (i) It is postmarked or received by the Asset Forfeiture and Money 
Laundering Section at the address contained in the decision denying the 
petition within ten (10) days from the receipt of the notice of denial 
of the petition by the petitioner; and
    (ii) The request is based on information or evidence not previously 
considered that is material to the basis for the denial or presents a 
basis clearly demonstrating that the denial was erroneous. A copy of the 
request must be received by the appropriate United States Attorney 
within ten (10) days of the receipt of the denial by the petitioner.
    (2) In no event shall a request for reconsideration be decided by 
the Ruling Official who ruled on the original petition.
    (3) Only one request for reconsideration of a denial of a petition 
shall be considered.
    (4) Upon receipt of the request for reconsideration of the denial of 
a petition, disposition of the property will be delayed pending notice 
of the decision at the request of the Chief. If the United States 
Attorney does not receive a copy of the request for reconsideration 
within the prescribed period, the deposition of the property may 
proceed.
    (l) Restoration of proceeds from sale. (1) A petition for 
restoration of the proceeds from the sale of forfeited property, or for 
the appraised value of forfeited property when the forfeited property 
has been retained by or delivered to a government agency for official 
use, may be submitted by an owner or lienholder in cases in which the 
petitioner:
    (i) Did not know of the seizure prior to the entry of a final order 
of forfeiture; and
    (ii) Could not reasonably have known of the seizure prior to the 
entry of a final order of forfeiture.
    (2) Such a petition must be submitted pursuant to paragraphs (b) 
through (e) of this section within ninety (90) days of the date the 
property was sold or otherwise disposed of.

[[Page 229]]



Sec. 9.5  Criteria governing administrative and judicial remission and mitigation.

    (a) Remission. (1) The Ruling Official shall not grant remission of 
a forfeiture unless the petitioner establishes that:
    (i) The petitioner has a valid, good faith, and legally cognizable 
interest in the seized property as owner or lienholder as defined in 
this part; and
    (ii) The petitioner is innocent within the meaning of the innocent 
owner provisions of the applicable civil forfeiture statute, is a bona 
fide purchaser for value without cause to believe that the property was 
subject to forfeiture at the time of the purchase, or is one who held a 
legally cognizable interest in the seized property at the time of the 
violation underlying the forfeiture superior to that of the defendant 
within the meaning of the applicable criminal forfeiture statute, and is 
thereby entitled to recover his or her interest in the forfeited 
property by statute. (If the applicable civil forfeiture statute 
contains no innocent owner defense, the innocent owner provisions 
applicable to 21 U.S.C. 881(a)(4) shall apply.) Unless otherwise 
provided by statute, in the case of petitioners who acquired their 
interest in the property after the time of the violation underlying the 
forfeiture, the question of whether the petitioner had knowledge of the 
violation shall be determined as of the point in time when the interest 
in the property was acquired.
    (2) The knowledge and responsibilities of petitioner's 
representative, agent, or employee in paragraph (a)(1)(ii) of this 
section are imputed to the petitioner where the representative, agent, 
or employee was acting in the course of his or her employment and in 
furtherance of the petitioner's business.
    (3) The petitioner has the burden of establishing the basis for 
granting a petition for remission or mitigation of forfeited property, a 
restoration of proceeds of sale or appraised value of forfeited 
property, or a reconsideration of a denial of such a petition. Failure 
to provide information or documents and to submit to interviews, as 
requested, may result in a denial of the petition.
    (4) The Ruling Official shall presume a valid forfeiture and shall 
not consider whether the evidence is sufficient to support the 
forfeiture.
    (5) Willful, materially-false statements or information, made or 
furnished by the petitioner in support of a petition for remission or 
mitigation of forfeited property, the restoration of proceeds or 
appraised value of forfeited property, or the reconsideration of a 
denial of any such petition, shall be grounds for denial of such 
petition and possible prosecution for the filing of false statements.
    (b) Mitigation. (1) The Ruling Official may grant mitigation to a 
party not involved in the commission of the offense underlying 
forfeiture:
    (i) Where the petitioner has not met the minimum conditions for 
remission, but the Ruling Official finds that some relief should be 
granted to avoid extreme hardship, and that return of the property 
combined with imposition of monetary and/or other conditions of 
mitigation in lieu of a complete forfeiture will promote the interest of 
justice and will not diminish the deterrent effect of the law. 
Extenuating circumstances justifying such a finding include those 
circumstances that reduce the responsibility of the petitioner for 
knowledge of the illegal activity, knowledge of the criminal record of a 
user of the property, or failure to take reasonable steps to prevent the 
illegal use or acquisition by another for some reason, such as a 
reasonable fear of reprisal; or
    (ii) Where the minimum standards for remission have been satisfied 
but the overall circumstances are such that, in the opinion of the 
Ruling Official, complete relief is not warranted.
    (2) The Ruling Officials may in his or her discretion grant 
mitigation to a party involved in the commission of the offense 
underlying the forfeiture where certain mitigating factors exist, 
including, but not limited to: the lack of a prior record or evidence of 
similar criminal conduct; if the violation does not include drug 
distribution, manufacturing, or importation, the fact that the violator 
has taken steps, such as drug treatment, to prevent further criminal 
conduct; the fact that the violation was minimal and was not part of

[[Page 230]]

a larger criminal scheme; the fact that the violator has cooperated with 
federal, state, or local investigations relating to the criminal conduct 
underlying the forfeiture; or the fact that complete forfeiture of an 
asset is not necessary to achieve the legitimate purposes of forfeiture.
    (3) Mitigation may take the form of a monetary condition or the 
imposition of other conditions relating to the continued use of the 
property, and the return of the property, in addition to the imposition 
of any other costs that would be chargeable as a condition to remission. 
This monetary condition is considered as an item of cost payable by the 
petitioner, and shall be deposited into the Assets Forfeiture Fund as an 
amount realized from forfeiture in accordance with the applicable 
statute. If the petitioner fails to accept the Ruling Official's 
mitigation decision or any of its conditions, or fails to pay the 
monetary amount within twenty (20) days of the receipt of the decision, 
the property shall be sold, and the monetary amount imposed and other 
costs chargeable as a condition to mitigation shall be subtracted from 
the proceeds of the sale before transmitting the remainder to the 
petitioner.



Sec. 9.6  Special rules for specific petitioners.

    (a) General creditors. A general creditor may not be granted 
remission or mitigation of forfeiture unless he or she otherwise 
qualifies as petitioner under this part.
    (b) Rival claimants. If the beneficial owner of the forfeited 
property and the owner of a security interest in the same property each 
files a petition, and if both petitions are found to be meritorious, the 
claims of the beneficial owner shall take precedence.
    (c) Voluntary bailments. A petitioner who allows another to use his 
or her property without cost, and who is not in the business of lending 
money secured by property or of leasing or renting property for profit, 
shall be granted remission or mitigation of forfeiture in accordance 
with the provisions of Sec. 9.5.
    (d) Lessors. A person engaged in the business of leasing or renting 
real or personal property on a long-term basis with the right to 
sublease shall not be entitled to remission or mitigation of a 
forfeiture of such property unless the lessor can demonstrate compliance 
with all the requirements of Sec. 9.5.
    (e) Straw owners. A petition by any person who has acquired a 
property interest recognizable under this part, and who knew or had 
reason to believe that the interest was conveyed by the previous owner 
for the purpose of circumventing seizure, forfeiture, or the regulations 
in this part, shall be denied. A petition by a person who purchases or 
owns property for another who has a record for related crimes as defined 
in Sec. 9.2(r), or a petition by a lienholder who knows or has reason to 
believe that the purchaser or owner of record is not the real purchaser 
or owner, shall be denied unless both the purchaser of record and the 
real purchaser or owner meet the requirements of Sec. 9.5.
    (f) Judgment creditors. (1) A judgment creditor will be recognized 
as a lienholder if:
    (i) The judgment was duly recorded before the seizure of the 
property for forfeiture;
    (ii) Under applicable state or other local law, the judgment 
constitutes a valid lien on the property that attached to it before the 
seizure of the property for forfeiture; and
    (iii) The petitioner had no knowledge of the commission of any act 
or acts giving rise to the forfeiture at the time the judgment became a 
lien on the forfeited property.
    (2) A judgment creditor will not be recognized as a lienholder if 
the property in question is not property of which the judgment debtor is 
entitled to claim ownership under applicable state or other local law 
(e.g., stolen property). A judgment creditor is entitled under this part 
to no more than the amount of the judgment, exclusive of any interest, 
costs, or other fees including attorney's fees associated with the 
action that led to the judgment or its collection.
    (3) A judgment creditor's lien must be registered in the district 
where the property is located if the judgment was obtained outside the 
district.

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Sec. 9.7  Terms and conditions of remission and mitigation.

    (a) Owners. (1) An owner's interest in property that has been 
forfeited is represented by the property itself or by a monetary 
interest equivalent to that interest at the time of seizure. Whether the 
property or a monetary equivalent will be remitted to an owner shall be 
determined at the discretion of the Ruling Official.
    (2) If a civil judicial forfeiture action against the property is 
pending, release of the property must await an appropriate court order.
    (3) Where the government sells or disposes of the property prior to 
the grant of the remission, the owner shall receive the proceeds of that 
sale, less any costs incurred by the government in the sale. The Ruling 
Official, at his or her discretion, may waive the deduction of costs and 
expenses incident to the forfeiture.
    (4) Where the owner does not comply with the conditions imposed upon 
release of the property by the Ruling Official, the property shall be 
sold. Following the sale, the proceeds shall be used to pay all costs of 
the forfeiture and disposition of the property, in addition to any 
monetary conditions imposed. The remaining balance shall be paid to the 
owner.
    (b) Lienholders. (1) When the forfeited property is to be retained 
for official use or transferred to a state or local law enforcement 
agency or foreign government pursuant to law, and remission or 
mitigation has been granted to a lienholder, the recipient of the 
property shall assure that:
    (i) In the case of remission, the lien is satisfied as determined 
through the petition process; or
    (ii) In the case of mitigation, an amount equal to the net equity, 
less any monetary conditions imposed, is paid to the lienholder prior to 
the release of the property to the recipient agency of foreign 
government.
    (2) When the forfeited property is not retained for official use or 
transferred to another agency or foreign government pursuant to law, the 
lienholder shall be notified by the Ruling Official of the right to 
select either of the following alternatives:
    (i) Return of property. The lienholder may obtain possession of the 
property after paying the United States, through the Ruling Official, 
the costs and expenses incident to the forfeiture, the amount, if any, 
by which the appraised value of the property exceeds the lienholder's 
net equity in the property, and any amount specified in the Ruling 
Official's decision as a condition to remit the property. The Ruling 
Official, at his or her discretion, may waive costs and expenses 
incident to the forfeiture. The Ruling Official shall forward a copy of 
the decision, a memorandum of disposition, and the original releases to 
the United States Marshals Service or other property custodian who shall 
thereafter release the property to the lienholder; or
    (ii) Sale of property and payment to lienholder. Subject to the 
provisions of Sec. 9.9(a), upon sale of the property, the lienholder may 
receive the payment of a monetary amount up to the sum of the 
lienholder's net equity, less the expenses and costs incident to the 
forfeiture and sale of the property, and any other monetary conditions 
imposed. The Ruling Official, at his or her discretion, may waive costs 
and expenses incident to the forfeiture.
    (3) If the lienholder does not notify the Ruling Official of the 
selection of one of the two options set forth in paragraph (b)(2) of 
this section within twenty (20) days of the receipt of notification, the 
Ruling Official shall direct the United States Marshal or other property 
custodian to sell the property and pay the lienholder an amount up to 
the net equity, less the costs and expenses incurred incident to the 
forfeiture and sale, and any monetary conditions imposed. In the event a 
lienholder subsequently receives a payment of any kind on the debt owed 
for which he or she received payment as a result of the granting of 
remission or mitigation, the lienholder shall reimburse the Assets 
Forfeiture Fund to the extent of the payment received.
    (4) Where the lienholder does not comply with the conditions imposed 
upon the release of the property, the property shall be sold after 
forfeiture. From the proceeds of the sale, all costs incident to the 
forfeiture and sale shall first be deducted, and the balance up to

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the net equity, less any monetary conditions, shall be paid to the 
lienholder.



Sec. 9.8  Provisions applicable to victims.

    The provisions of this section apply to victims of an offense 
underlying the forfeiture of property, or of a related offense, who do 
not have a present ownership interest in the forfeited property (or, in 
the case of multiple victims of an offense, who do not have a present 
ownership interest in the forfeited property that is clearly superior to 
that of other petitioner victims). The provisions of this section apply 
only with respect to property forfeited pursuant to statutes that 
explicitly authorize restoration or remission of forfeited property to 
victims. Victims who have a superior present legally cognizable 
ownership interest in forfeited property may file petitions, as other 
owners, subject to the regulations set forth in Sec. 9.7(a). The claims 
of such owner victims, like those of any other owners, shall have 
priority over the claims of any non-owner victims whose claims are 
recognized pursuant to this section.
    (a) Qualification to file. A victim, as defined in Sec. 9.2(v), of 
an offense that was the underlying basis for the criminal, civil, or 
administrative forfeiture of specific property, or a victim of a related 
offense, may be granted remission of the forfeiture of that property, if 
in addition to complying with the other applicable provisions of 
Sec. 9.8, the victim satisfactorily demonstrates that:
    (1) A pecuniary loss of a specific amount has been directly caused 
by the criminal offense, or related offense, that was the underlying 
basis for the forfeiture, and that the loss is supported by documentary 
evidence including invoices and receipts;
    (2) The pecuniary loss is the direct result of the illegal acts and 
is not the result of otherwise lawful acts that were committed in the 
course of a criminal offense;
    (3) The victim did not knowingly contribute to, participate in, 
benefit from, or act in a willfully blind manner towards the commission 
of the offense, or related offense, that was the underlying basis of the 
forfeiture;
    (4) The victim has not in fact been compensated for the wrongful 
loss of the property by the perpetrator or others; and
    (5) The victim does not have recourse reasonably available to other 
assets from which to obtain compensation for the wrongful loss of the 
property.
    (b) Pecuniary loss. The amount of the pecuniary loss suffered by a 
victim for which remission may be granted is limited to the fair market 
value of the property of which the victim was deprived as of the date of 
the occurrence of the loss. No allowance shall be made for interest 
foregone or for collateral expenses incurred to recover lost property or 
to seek other recompense.
    (c) Torts. A tort associated with illegal activity that formed the 
basis for the forfeiture shall not be a basis for remission, unless it 
constitutes the illegal activity itself, nor shall remission be granted 
for physical injuries to a petitioner or for damage to a petitioner's 
property.
    (d) Denial of petition. In the exercise of his or her discretion, 
the Ruling Official may decline to grant remission where:
    (1) There is substantial difficulty in calculating the pecuniary 
loss incurred by the victim or victims;
    (2) The amount of the remission, if granted, would be small compared 
with the amount of expenses incurred by the government in determining 
whether to grant remission; or
    (3) The total number of victims is large and the monetary amount of 
the remission so small as to make its granting impractical.
    (e) Pro rata basis. In granting remission to multiple victims 
pursuant to this section, the Ruling Official should generally grant 
remission on a pro rata basis to recognized victims when petitions 
cannot be granted in full due to the limited value of the forfeited 
property. However, the Ruling Official may consider, among others, the 
following factors in establishing appropriate priorities in individual 
cases:
    (1) The specificity and reliability of the evidence establishing a 
loss;
    (2) The fact that a particular victim is suffering an extreme 
financial hardship;

[[Page 233]]

    (3) The fact that a particular victim has cooperated with the 
government in the investigation related to the forfeiture or to a 
related persecution or civil action; and
    (4) In the case of petitions filed by multiple victims of related 
offenses, the fact that a particular victim is a victim of the offense 
underlying the forfeiture.
    (f) Reimbursement. Any petitioner granted remission pursuant to this 
part shall reimburse the Assets Forfeiture Fund for the amount received 
to the extent the individual later receives compensation for the loss of 
the property from any other source. The petitioner shall surrender the 
reimbursement upon payment from any secondary source.
    (g) Claims of financial institution regulatory agencies. In cases 
involving property forfeitable under 18 U.S.C. 981(a)(1)(C) or 
(a)(1)(D), the Ruling Official may decline to grant a petition filed by 
a petitioner in whole or in part due to the lack of sufficient 
forfeitable funds to satisfy both the petition and claims of the 
financial institution regulatory agencies pursuant to 18 U.S.C. 
981(e)(3) or (7). Generally, claims of financial institution regulatory 
agencies pursuant to 18 U.S.C. 981(e)(3) or (7) shall take priority over 
claims of victims.



Sec. 9.9  Miscellaneous provisions.

    (a) Priority of payment. Except where otherwise provided in this 
part, costs incurred by the United States Marshals Service and other 
agencies participating in the forfeiture that were incident to the 
forfeiture, sale, or other disposition of the property shall be deducted 
from the amount available for remission or mitigation. Such costs 
include, but are not limited to, court costs, storage costs, brokerage 
and other sales-related costs, the amount of any liens and associated 
costs paid by the government on the property, costs incurred in paying 
the ordinary and necessary expenses of a business seized for forfeiture, 
awards for information as authorized by statute, expenses of trustees or 
other assistants pursuant to paragraph (c) of this section, 
investigative or prosecutive costs specially incurred incident to the 
particular forfeiture, and costs incurred incident to the processing of 
the petition(s) for remission or mitigation. The remaining balance shall 
be available for remission or mitigation. The Ruling Official shall 
direct the distribution of the remaining balance in the following order 
or priority, except that the Ruling Official may exercise discretion in 
determining the priority between petitioners belonging to classes 
described in paragraphs (a)(3) and (4) of this section in exceptional 
circumstances:
    (1) Owners;
    (2) Lienholders;
    (3) Federal financial institution regulatory agencies (pursuant to 
paragraph (e) of this section), not constituting owners or lienholders; 
and
    (4) Victims not constituting owners or lienholders (pursuant to 
Sec. 9.8).
    (b) Sale or disposition of property prior to ruling. If forfeited 
property has been sold or otherwise disposed of prior to a ruling, the 
Ruling Official may grant relief in the form of a monetary amount. The 
amount realized by the sale of the property is presumed to be the value 
of the property. Monetary relief shall not be greater than the appraised 
value of the property at the time of seizure and shall not exceed the 
amount realized from the sale or other disposition. The proceeds of the 
sale shall be distributed as follows:
    (1) Payment of the government's expenses incurred incident to the 
forfeiture and sale, including court costs and storage charges, if any;
    (2) Payment to the petitioner of an amount up to his or her interest 
in the property;
    (3) Payment to the Assets Forfeiture Fund of all other costs and 
expenses incident to the forfeiture;
    (4) In the case of victims, payment of any amount up to the amount 
of his or her loss; and
    (5) Payment of the balance remaining, if any, to the Assets 
Forfeiture Fund.
    (c) Trustees and other assistants. In the exercise of his or her 
discretion, the Ruling Official, with the approval of the Asset 
Forfeiture and Money Laundering Section, may use the services of a 
trustee, other government official, or

[[Page 234]]

appointed contractors to notify potential petitioners, process 
petitions, and make recommendations to the Ruling Official on the 
distribution of property to petitioners. The expense for such assistance 
shall be paid out of the forfeited funds.
    (d) Other agencies of the United States. Where another agency of the 
United States is entitled to remission or mitigation of forfeited assets 
because of an interest that is recognizable under this part or is 
eligible for such transfer pursuant to 18 U.S.C. 981(e)(6), such agency 
shall request the transfer in writing, in addition to complying with any 
applicable provisions of Secs. 9.3 through 9.5. The decision to make 
such transfer shall be made in writing by the Ruling Official.
    (e) Financial institution regulatory agencies. A Ruling Official may 
direct the transfer of property under 18 U.S.C. 981(e) to certain 
federal financial institution regulatory agencies or an entity acting in 
their behalf, upon receipt of a written request, in lieu of ruling on a 
petition for remission or mitigation.
    (f) Transfers to foreign governments. A Ruling Official may decline 
to grant remission to any petitioner other than an owner or lienholder 
so that forfeited assets may be transferred to a foreign government 
pursuant to 18 U.S.C. 981(i)(1), 19 U.S.C. 1616a(c)(2), or 21 U.S.C. 
881(e)(1)(E).
    (g) Filing by attorneys. (1) A petition for remission or mitigation 
may be filed by a petitioner or by his or her attorney or legal 
guardian. If an attorney files on behalf of the petitioner, the petition 
must include a signed and sworn statement by the client-petitioner 
stating that:
    (i) The attorney has the authority to represent the petitioner in 
this proceeding;
    (ii) The petitioner has fully reviewed the petition; and
    (iii) The petition is truthful and accurate in every respect.
    (2) Verbal notification of representation is not acceptable. 
Responses and notification of rulings shall not be sent to an attorney 
claiming to represent a petitioner unless a written notice of 
representation is filed. No extensions of time shall be granted due to 
delays in submission of the notice of representation.
    (h) Consolidated petitions. At the discretion of the Ruling Official 
in individual cases, a petition may be filed by one petitioner on behalf 
of other petitioners, provided the petitions are based on similar 
underlying facts, and the petitioner who files the petition has written 
authority to do so on behalf of the other petitioners. This authority 
must be either expressed in documents giving the petitioner the 
authority to file petitions for remission, or reasonably implied from 
documents giving the petitioner express authority to file claims or 
lawsuits related to the course of conduct in question on behalf of these 
petitioners. An insurer or an administrator of an employee benefit plan, 
for example, which itself has standing to file a petition as a 
``victim'' within the meaning of Sec. 9.2(v), may also file a petition 
on behalf of its insured or plan beneficiaries for any claims they may 
have based on co-payments made to the perpetrator of the offense 
underlying the forfeiture or the perpetrator of a ``related offense'' 
within the meaning of Sec. 9.2(s), if the authority to file claims or 
lawsuits is contained in the document or documents establishing the 
plan. Where such a petition is filed, any amounts granted as a remission 
must be transferred to the other petitioners, not the party filing the 
petition; although, in his or her discretion, the Ruling Official may 
use the actual petitioner as an intermediary for transferring the 
amounts authorized as a remission to the other petitioners.