The U.S. Marshal’s Service has sold millions of dollars in seized assets without proper appraisals, public disclosure or even the most simple record-keeping, the Justice Department’s Office of Inspector General, said in a scathing report released Tuesday.
“Between 2005 AND 2010, the small staff of the Complex Asset Team disposed of over $136 million in assets, yet it operated in an environment lacking the procedures to guide its actions and decisions pertaining to seized and forfeited assets,” OIG said. In some cases, the team could not even track the sale price or the ultimate purchaser of an asset.
OIG initiated its probe after investigating allegations that Leonard Briskman, the lead career official with the team, also owned a private appraisal business. While Briskman was cleared of conflict of interest charges, other problems were detected.
For example, in one case, Briskman assessed the viability of a waste management company by counting the number of garbage trucks driving back and forth. However, he failed to consider other factors, such as tax liabilities that only became apparent when the marshal’s service attempted to sell the company a year later.
The inspector general reported that in several instances, Briskman valued and sold the same asset himself without supervision by anyone in the marshal’s office. In addition, he failed to publicly announce the sale of some assets, which limited their availability to the general public. In one case, an assistant U.S. Attorney from the Southern District of New York objected to a decision by Briskman to sell assets that had been seized during the Bernard Madoff case-more than one million shares of a pet prescription firm and a 5 percent stake in another investment portfolio-without announcing the sale.
While the inspector general said the arrangement did not result in personal gain for Briskman, it recommended improving internal controls to ensure that the person who appraised the value of an asset also did not sell it.
OIG also reported that:.
- The asset team provided the inspector general with a list of 55 assets it had disposed of between 2005 and 2010. In at least eight cases, the purchaser or the price was not recorded. OIG could only locate 47 files.
- In some cases, assets were poorly identified. Two examples include assets labeled as “horse” and “Nevada Matters.”
- The asset management team could not provide the inspector general with bank statements and other documentation for certain assets.
- Appraisers failed to conduct proper market research to determine the value of assets.
- Reports filed by Briskman reflected changes in the value of certain assets without an explanation of why the value had changed.
- Briskman merely filed a financial disclosure form and neither he nor his supervisor took further steps to disclose his role as a private businessman and a public employee.
The OIG made a long series of recommendations, many of which involve improving internal controls and the Marshals Service reported that most, if not all, of the recommendations, had been followed.
In their response, attorneys for Briskman disputed the OIG findings, saying that Briskman’s role had not been properly explained by OIG, that Briskman had communicated with counsel when needed and that those seeking Briskman’s advice appreciated and valued his input. They said Briskman never conducted certified business appraisals for property and that all assets were sold in a commercially appropriate manner.
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