Republic by falsely representing that the gold coins he was pledging as collateral were authentic but, in fact, they were counterfeit and gold-plated. Pursuant to 18 U.S.C. § 982, the United States seized and forfeited numerous assets from the defendant, valued at $565,424.38. On May 13, 1996, the Department of Justice authorized the distribution to Republic of the net proceeds of sale of some of the forfeited property, amounting to $266.013.19, and the remission of other assets worth $274,624.74. Furthermore, on March 30, 1992, Republic recovered an additional $34,818.75 through an administrative petition for remission filed with the Federal Bureau of Investigation. Petition for remission of property forfeited in United Seven insurance companies were defrauded of $200,544.07 as the result of an automobile insurance fraud scheme. The government successfully forfeited two bank accounts owned by the defendants containing a total of $103,980.24. On May 2, 1996, the Department of Justice remitted this amount to the petitioners. Petitions filed in connection with United States v. $112,000 in United States Currency (Southern District of Texas): Five financial institutions were defrauded of approximately $84,000 pursuant to a credit card fraud scheme. Under 18 U.S.C. § 981 (a) (1) (C), the government forfeited $112,000 from bank accounts controlled by the perpetrator of the scheme. On June 3, 1996, the Department of Justice returned $84,118.85 to the petitioners, representing the petitioners' total losses from the scheme. Petition for remission of proceeds of sale of forfeited property in United States v. Cheeseman (Northern District of New York) : Petitioner, Key Bank of New York, was the victim of an extortion scheme executed by a former employee. The forfeited property consisted of the assets contained in the defendant's pension plan and certain shares of stock, all of which were forfeited pursuant to 18 U.S.C. § 982. On January 30, 1996, the Department of Justice returned $136,488.68 to Key Bank, representing the full net proceeds derived from the sale of the forfeited property. Petition for remission of forfeited currency in United Petitioner, the Annapolis Housing Authority (AHA), was defrauded of an estimated loss amounting to hundreds of thousands of dollars through the defendant's bribery and racketeering activities. In its amended petition, AHA claimed an interest in $78,000 of the $157,000 in currency forfeited by the defendant in this case. The currency was forfeited under 18 U.S.C. § 1963. Pursuant to 18 U.S.C. § 1963 (g) (1), the Department of Justice on April 22, 1996, authorized the return of the requested $78,000 to AHA. Petition for remission of property forfeited in United Bank Polska, a corporation wholly owned by the government of Poland, was defrauded of $2,000,000 through a money laundering and bank fraud conspiracy. Pursuant to 18 U.S.C. § 982 (a), the United States criminally forfeited $1,161,344.40 from two bank accounts controlled by the conspirators. On April 12, 1996, the Department of Justice granted remission of the full amount of the forfeited currency pursuant to 18 U.S.C. § 982. Petition for remission of property forfeited in United Petitioner, the United States Services Automobile Association (USAA), was defrauded of approximately $61,100 through the payment of a fraudulent insurance claim. The United States seized and forfeited $15,649 in currency under 18 U.S.C. § 982. On June 14, 1994, the Department of Justice distributed the $15,302.50 to USAA. Petition for remission of proceeds of sale of real property forfeited in United States v. 2358 Payne Avenue, Wichita, Kansas (Eastern District of Virginia): PRC, Inc. (PRC), was the victim of an extortion scheme perpetrated by one of its employees from which it lost a total of $448,934.81. The above-captioned real property was forfeited from the defendant under 18 U.S.C. § 982. PRC requested remission of the proceeds from the sale of the forfeited real property. On November 16, 1995, the Department of Justice returned to PRC the full amount of the net proceeds obtained from the sale of the forfeited real property, which amounted to $13,654.37. Mr. HYDE. Ms. Blanton. STATEMENT OF JAN P. BLANTON, DIRECTOR, EXECUTIVE OFFICE FOR ASSET FORFEITURE, DEPARTMENT OF THE TREASURY Ms. BLANTON. Good morning, Mr. Chairman. I am Jan Blanton, the Director of the Department of Treasury's Executive Office for Asset Forfeiture. I am pleased to appear before you today to offer our perspective on H.R. 1916 and the changes it would bring about in Federal forfeiture. Civil forfeiture has been an authority of Treasury law enforcement that dates back to the very founding of our Republic. In the last dozen years, however, the Congress has developed and expanded forfeiture to enable all of Federal law enforcement to address the varied manifestations of sophisticated, modern and financially profitable crime. While allowing us to go after the proceeds and instrumentalities of crime, our use of asset forfeiture has now evolved to the point where it strikes at the very core of criminal organizations and has become an essential part of our overall enforcement strategy. The attractiveness of asset forfeiture and a reason for its growth in the United States is very simple: it takes the profit out of crime. Asset forfeiture is a program that cuts to the heart of most criminal activity, dismantling criminal syndicates in a way that simple incarceration never could. By relentlessly focusing on the profitability of crime, it is an enforcement tool that keeps pace with evermore well-financed and internationalized criminal groups. It is an enforcement tool with notable interrelated benefits. It pays for its own property management costs and relieves additional burdens that otherwise would fall to our law-abiding citizens and taxpayers. It strengthens law enforcement by rechanneling forfeited value back into this most fundamental societal purpose, to promote cooperation among Federal, State and local police around the country through our ability to equitably share forfeited assets with those who have assisted in our investigations. It allows for victim restitution by permitting us to return the forfeited assets of criminals to those who were once their prey. Under the Weed and Seed Program, it turns tainted properties back to constructive community use. It even sanctions the donation of forfeited assets to charitable organizations and the transfer of forfeited monies to support our national effort to reduce the demand for illegal drugs. In just a very few specific examples, the canine and handler teams detecting firearms and explosives for the Bureau of Alcohol, Tobacco and Firearms, the enhanced security presence at this summer's Olympic games in Atlanta, and the antidrug and violence presentations to elementary school children by police officers in California's Orange County would not be as far along as they are were it not for support of the Federal forfeiture programs. We have arrived at this point through a reflective and measured expansion of forfeiture authorities always guided by the fundamental belief that the strength of Federal forfeiture rests directly upon public confidence in the program's integrity. While we appreciate the intent of H.R. 1916 to safeguard that integrity, we have significant reservations about how this bill would adversely impact today's Federal forfeiture authorities. The principal provisions of H.R. 1916 would amend several sections of the Tariff Act of 1930, codified in title 19, U.S.C., to place the burden of proof on the United States in a civil forfeiture action, raise the standard of proof from probable cause to clear and convincing in a civil forfeiture action, eliminate the need to file a cost bond to have a claim of interest in property determined in a civil judicial proceeding, provide for appointment of counsel in a civil forfeiture action when a claimant cannot afford that representation, provide for the release of seized property prior to forfeiture if the seizure causes substantial hardship on a claimant, and provide for a cause of action to require the release of property pending the completion of the forfeiture proceeding. In addition, H.R. 1916 would amend title 18 to provide for the Department of Justice to pay for the compensation awarded by the courts for representation of claimants. Collectively these provisions of H.R. 1916 present three problems that detract significantly from the bill's intended reform purposes. First, title 19 is a commercial statute designed to facilitate trade, expedite the collections of fines, penalties and import duties, prohibit the introduction of contraband items into the United States, protect intellectual property rights, as well as the public health and safety. The changes proposed by H.R. 1916 would compromise the ability of the U.S. Customs Service to fulfill these vital responsibilities. Think about the message that the United States would be sending to its trading partners if at our borders Customs officials could no longer seize and retain the sizable quantities of pirated products stolen from the inventiveness and creativity of American workers. Indeed, in those instances where the detention of property serves as an appropriate substitute for a lien, the ability of the Secretary of the Treasury to collect Customs revenues could be impaired. Second, it is our belief that H.R. 1916 would greatly increase the number of cases on an already crowded docket of the Federal courts. Waiver of the cost bond coupled with the appointment and compensation of counsel could serve to encourage litigation of even the most plainly forfeitable property interests. Third, H.R. 1916 will make it more difficult for the United States to deprive criminal violators of their ill-gotten proceeds. Generally, it will make it more difficult to detain property at the border. Releasing property pending completion of forfeiture appears contrary to the very aims of current forfeiture law. As drafted, the provisions of H.R. 1916 may have a substantial impact on the Federal Government's ability to detain dangerous food products, adulterated or unlicensed drugs, child pornography, illegal firearms and unsafe computer products at the border. It would compromise our ability to protect intellectual property rights and endanger a portion of Customs revenues. Finally, Federal court caseloads and law enforcement's ability to deprive individuals of the proceeds of their illegal activity would be impacted significantly. We value the recent progress that the Congress and law enforcement have made in the last 12 years in the application of forfeiture authorities. We share the concerns of our colleague at the Department of Justice and of you, Mr. Chairman, that forfeiture law can and should be further refined to better ensure its recognition of basic protections accorded property rights. We believe, however, that H.R. 1916 is wide off that mark in achieving the appropriate balance between individual property rights and the enforcement of our civil and criminal forfeiture statutes. Alternatively we commend for your consideration the bill presented by the administration last week, the provisions of which have just been highlighted by my associate at the Department of Justice, and most importantly, achieves the requisite balance. We have worked closely in the crafting of the administration's bill and it contains several sections that broaden and enhance Treasury law enforcement authorities by supporting a common goal of better protecting rights and property. Perhaps because of this imposing power, a power not simply to incarcerate criminals but to take down their organizations, forfeiture today is all too often the subject of negative media coverage. Where Federal forfeiture is involved, we accept the challenge to right the wrongs that may be done, but such incidents should not obscure the many positive aspects of this formidable law enforcement mechanism. The Department of Treasury had been entrusted with significant forfeiture authority for over 200 years. We have exercised this authority in the pursuit of various illegal activities that threaten the safety, security and prosperity of the American people. Forfeiture is a legitimate authority bestowed by the citizens of the United States upon Federal law enforcement. Our obligation then and now is to make proper use of it so that we may realize its most fundamental purpose of protecting the law-abiding. We look forward to bringing Treasury's forfeiture background to bear in working with the committee to strike a desirable, well-balanced reform. Thank you. Mr. HYDE. Thank you. [The prepared statement of Ms. Blanton follows:] PREPARED STATEMENT OF JAN P. BLANTON, DIRECTOR, EXECUTIVE OFFICE FOR ASSET FORFEITURE, Department of THE TREASURY Mr. Chairman, and to all the members of the Committee, good morning. My name is Jan Blanton and I am the Director of the Department of the Treasury's Executive Office for Asset Forfeiture. I am pleased to appear before you today to offer our perspective on H.R. 1916 and the changes it would bring about in federal forfeiture. With your permission, I would like to make a brief opening statement after which I would be glad to answer any questions you or the other members may have. Civil forfeiture has been an authority of Treasury law enforcement that dates back to the very founding of our Republic. In the last dozen years, however, the Congress has developed and expanded forfeiture to enable all of federal law enforcement to address the many varied manifestations of sophisticated, modern and financially profitable crime. By allowing us to go after the proceeds and instrumentalities of crime, our use of asset forfeiture has now evolved to the point where it strikes at the very core of criminal organizations and has become an essential part of our overall enforcement strategy. The attractiveness of asset forfeiture and a reason for its growth in the United States is very simple-it takes the profit out of crime. Asset forfeiture is a program that cuts to the heart of most criminal activity, dismantling criminal syndicates in |