Needless to say the drugs will be destroyed when they're no longer needed as evidence, but what happens to all the confiscated money?

The answer is easy really; after the seized property has been legally forfeited, all the proceeds from the assets and funds go into an account where the United States Department of Justice takes about a fifth of the total amount to recuperate losses from the proceedings. The agencies of the state and county that helped in the bust receive equal portions of the amount remaining. The only catch, the cash must be used specifically for law enforcement purposes. The money is normally used as restitution for victims, new police cruisers, and cool tactical gear. All the equipment to help catch more criminals, but more appropriate of the situation the money can go to an anti-drug program for school kids.

Outside of the United States the protocol is a little different, in the Dominican Republic if the money doesn't come up missing first it's sometimes kindly given back to the drug trafficker.

BQ09
Sources:
http://cbs5.com/goodquestion/drug.money.seized.2.740731.html
http://www.dominicantoday.com/dr/local/2008/7/10/28608/Seized-drug-assets-vanish-in-Dominican-Republic-the-US-knows

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