1 2 3 22 "(2) any State or local law enforcement agency which participated directly in any of the acts which led to the seizure or forfeiture of the property. 4 The Attorney General or the Secretary of the Treasury, as 5 the case may be, shall ensure the equitable transfer pursuant 6 to paragraph (2) of any forfeited property to the appropriate 7 State or local law enforcement agency so as to reflect gener8 ally the contribution of any such agency participating directly 9 in any of the acts which led to the seizure or forfeiture of 10 such property. A decision by the Attorney General or the 11 Secretary pursuant to paragraph (2) shall not be subject to 12 review. The United States shall not be liable in any action 13 arising out of the use of any property the custody of which 14 was transferred pursuant to this section to any non-Federal 15 agency. The Attorney General or the Secretary of the Treas16 ury may order the discontinuance of any forfeiture proceed17 ings under this section in favor of the institution of forfeiture 18 proceedings by State or local authorities under an appropri19 ate State or local statute. After the filing of a complaint for 20 forfeiture under this section, the Attorney General may seek 21 dismissal of the complaint in favor of forfeiture proceedings 22 under State or local law. Whenever forfeiture proceedings 23 are discontinued by the United States in favor of State or 24 local proceedings, the United States may transfer custody 25 and possession of the seized property to the appropriate State HR 2786 IH 23 1 or local official immediately upon the initiation of the proper 2 actions by such officials. Whenever forfeiture proceedings are 3 discontinued by the United States in favor of State or local 4 proceedings, notice shall be sent to all known interested par5 ties advising them of the discontinuance or dismissal. The 6 United States shall not be liable in any action arising out of 7 the seizure, detention, and transfer of seized property to 8 State or local officials. 9 “(f) All right, title, and interest in property described in 10 subsection (a) of this section shall vest in the United States 11 upon commission of the act giving rise to forfeiture under this 12 section. 13 "(g) The filing of an indictment or information alleging a 14 violation of law which is also related to a forfeiture proceed15 ing under this section shall, upon motion of the United States 16 and for good cause shown, stay the forfeiture proceeding. 17 "(h) In addition to the venue provided for in section 18 1395 of title 28 or any other provision of law, in the case of 19 property of a defendant charged with a violation that is the 20 basis for forfeiture of the property under this section, a pro21 ceeding for forfeiture under this section may be brought in 22 the judicial district in which the defendant owning such prop23 erty is found or in the judicial district in which the criminal 24 prosecution is brought. HR 2786 IN 24 1 “§ 2601. Criminal forfeiture 2 "(a) A person who is convicted of an offense under sec 3 tion 1956 or section 2322 of this title shall forfeit to the 4 United States any money or other property involved in such 5 an offense and any money or other property, real or personal, 6 which represents the proceeds of or which is traceable to 7 such money or property. 8 "(b) In any case in which money or property subject to 9 forfeiture under subsection (a), as a result of any act or omis10 sion of the defendant 11 12 13 14 15 16 17 18 19 "(1) cannot be located upon the exercise of due diligence; "(2) has been transferred or sold to, or deposited with a third party; court; "(3) has been placed beyond the jurisdiction of the “(4) has been substantially diminished in value; or "(5) has been commingled with other property which cannot be divided without difficulty; 20 the person shall forfeit to the United States any other proper21 ty up to the value of any property described in this section. “(c) The court, in imposing sentence on a person for a 22 23 conviction of an offense listed in subsection (a), shall order 24 that the person forfeit to the United States all property de 25 scribed in subsection (a) or (b). HR 2786 IN 25 1 "(d) The provisions of subsections 413 (c) and (e) 2 through (0) of the Comprehensive Drug Abuse Prevention 3 and Control Act of 1970 (21 U.S.C. 853 (c) and (e)–(o)) shall 4 apply to property subject to forfeiture under this section, to 5 any seizure or disposition thereof, and to any administrative 6 or judicial proceeding in relation thereto, if not inconsistent 7 with this section.". 8 (b) The chapter analysis of part I of title 18, United 9 States Code, is amended by adding at the end thereof the 10 following: "120. Forfeiture.. 2600". NR 2786 IN Mr. HUGHES. Our panel of witnesses this morning is a most distinguished one. I am very pleased to welcome once again Mr. John M. Walker, Jr., the Assistant Secretary of the Treasury for Enforcement and Operations. Mr. Walker has appeared before the Subcommittee on Crime many times over the past 4 years on behalf of the Department of the Treasury. He is a graduate of Yale University and the University of Michigan Law School. He practiced law in Botswana in Africa, served as a narcotics prosecutor, as an assistant U.S. attorney for the Southern District of New York, and has generally had a most distinguished career. I might say that this is most likely to be one of his last appearances, if not his last appearance, as a witness before Congress on behalf of the administration. We are going to miss John. The second member of the panel is Mr. Jay B. Stephens, the Associate Deputy Attorney General. He serves as a senior adviser to the Deputy Attorney General and the Attorney General. He is a graduate of Harvard College and Harvard Law School, where he received high honors. He has served as an assistant special prosecutor with a Watergate special prosecution force. For some 5 years, he was an assistant U.S. attorney for the District of Columbia. Since the beginning of this administration, he has been a principal aide to D. Lowell Jensen, now the Deputy Attorney General. The final member of the panel is Mr. James D. Harmon, Jr., Executive Director and Chief Counsel, the President's Commission on Organized Crime. Mr. Harmon is a graduate of West Point and Dickinson Law School. He received a Silver Star and a Purple Heart for his service in Vietnam in 1967. He has been a career prosecutor serving in the New York County District Attorney's office under Frank Hogan for some 6 years and as the assistant attorney in charge of the Organized Crime Strike Force of the U.S. Department of Justice in the Eastern District of New York. He began work with the Commission when it started its work in 1983. Gentlemen, on behalf of the subcommittee, we are happy to welcome you here this morning. I might say at the outset that we received your statements, which are very comprehensive. Without objection, they will be made a part of the record in full. We hope that you can summarize your testimony so that we can get into the questioning. Welcome, Mr. Stephens. STATEMENTS OF JAY B. STEPHENS, ASSOCIATE DEPUTY ATTORNEY GENERAL, U.S. DEPARTMENT OF JUSTICE; JOHN M. WALKER, JR., ASSISTANT SECRETARY, ENFORCEMENT AND OPERATIONS, U.S. TREASURY DEPARTMENT; AND JAMES D. HARMON, JR., EXECUTIVE DIRECTOR AND CHIEF COUNSEL, PRESIDENT'S COMMISSION ON ORGANIZED CRIME Mr. STEPHENS. Thank you very much, Chairman Hughes and Congressman Gekas. It is a pleasure to be here this morning before the subcommittee to discuss and explore with you the issue of money laundering. I think this hearing today, as both of you have indicated, is an opportunity to delve into and explore some of the complex, complicated issues in an area which is of concern both to the committee, as |