Car Impounded by Border Patrol, Now What?
Dealers that finance vehicles need to pay attention to who they sell a vehicle to. TIADA has recently received calls from Texas dealers that had vehicles impounded for various citizenship issues. Examples can include having an illegal immigrant as a passenger or driver, but can also include seizures for drugs, guns, or other contraband.
United States Customs and Border Patrol will assume the vehicle is being utilized for illegal purposes and attempt to utilize civil forfeiture laws to sell the vehicle and retain all sale or auction proceeds regardless of ownership. This is another example of why it is important to record that lien on time. If you are slow to record and file your lien, you may miss receiving any notice of a government sale or auction.
Vehicles seized with an illegal immigrant or narcotics inside may proceed through the Border Patrol and remain impounded until the owner attempts to reacquire the car. However, customers that may be in the country illegally with impounded vehicles likely have more serious legal issues to deal with and will not notify the lender of the vehicle status. If a lien is properly recorded, Border Patrol “should” provide notice to the lienholder as to the stats and whereabouts of a vehicle. A dealer may also utilize GPS to track the vehicle's location. However, be careful about attempting to recover the vehicle at storage yard as the government uses contractor storage facilities to store seized vehicles. What may look like a traditional repo opportunity in a commercial area may be evidence to a crime.
I received a CAFRA Seizure Notice (Civil Asset Forfeiture Reform Act), now how do I get my vehicle back? The notice will likely provide the following notice: “The Property was seized and is subject to forfeiture under the provisions of 8 USC 1324(a), 49 USC 8032, 19 USC 1607, 1608, 1609, 1610, and 19 CFR 162 & 171. This property was being utilized to smuggle undocumented aliens withing the United States in violations of Customs laws.” The notice will provide you with an “Election of Proceedings” and a “Seized Asset Claim Form.”
Be careful how you complete the claim form(s). The lienholder will need to provide all relevant documentation for ownership, registration and insurance and will then need to contact the CBP office with possible fines or recovery amounts.
What if the value of the truck exceeds the balance of the loan? Goodbye down payment! Many dealers are left facing a situation where they have to pay several thousand dollars to recover the vehicle (usually about the amount of the down payment). The position the Border Patrol takes is that the dealership is unjustly enriched if they receive the vehicle back when the vehicle is worth more than the lien that they have. The Border Patrol (and ICE and district attorneys, etc) attempt to retain all equity seized that the individual had in the vehicle. Thus, if they determine that there is “illegal” equity in the vehicle, they will demand the lien holder pay that amount to obtain possession. If it's clear that there is no equity, they usually just give it back.