Federal Criminal Defense Blog : Georgia Federal Criminal Defense Lawyer & Attorney : Gillen Withers & Lake Law Firm : White Collar Crime, RICO, Trial : Atlanta, Savannah, GA

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Conflicts frequently arise in criminal cases between the Government seeking forfeiture or restraint of substantial assets of the defendant on the one hand, and the defendant who seeks to use the assets alleged to be subject to forfeiture to retain counsel of his or her choice pursuant to his or her Sixth Amendment rights. The issue of access to assets to hire counsel of a defendant’s choosing can be vital to the rest of the course of proceedings. More often than not, this issue has been resolved in favor of the Government’s restraint of assets, often forcing defendants to proceed with appointed counsel. In most cases, a defendant is not provided with an opportunity prior to trial to challenge the restraint of his or her assets, when the assets are most needed to realize his or her Sixth Amendment right to counsel of his or her choice.

Well, last week the Eleventh Circuit Court of Appeals issued an opinion reinforcing the need for trial courts to hold a post-indictment, pre-trial evidentiary hearing regarding restraint of assets which will be welcomed as good news by defendants seeking access to assets with which to pay counsel. In U.S. v. Kaley, NO. 07-13010, 2009 WL 2497599 (11th Cir., August 18, 2009), the defendant husband and wife were charged with conspiracy to transport stolen property, prescription medical devices, and selling them on the black market, id. at *1. The defendants retained counsel, using a home equity line of credit on their home to obtain certificates of deposit. Id. The grand jury subsequently returned an indictment against the defendants, seeking criminal forfeiture of all property traceable to the offenses, as well as a money judgment, and the Government moved for an ex parte restraining order against the CDs and filed a notice of lis pendens against their home. Id. A magistrate judge eventually issued orders finding probable cause that the CDs and the residence were “involved in” the violations and concluding that no post-restraint hearing was necessary until trial, which orders were affirmed by the District Court, and the defendants filed an interlocutory appeal. Id. at *2.

The Eleventh Circuit noted that whether a defendant is entitled to a post-indictment, pre-trial evidentiary hearing on restraint of assets needed to pay a defendant’s counsel of his or her choice was controlled by U.S. v. Bissell, 866 F.2d 1343 (11th Cir.1989), which adopted the test set forth by the U.S. Supreme Court in Barker v. Wingo, 407 U.S. 514 (1972):

(1) the length of the delay before the defendants received their post-restraint hearing; (2) the reason for the delay; (3) the defendants' assertion of the right to such a hearing pretrial; and (4) the prejudice the defendants suffered due to the delay weighed against the strength of the United States's interest in the subject property.

Id. at *4. The Court observed that the trial court had found that the first two factors weighed in favor of the Government, finding that the 8 month delay before a hearing on the restraint was held was not significant, and that the Government’s reason for the delay—not revealing its case and witnesses prior to trial—was substantial. Id. at *6. In regard to the third factor, the Court noted that the trial court had held that the factor was neutral since, although the defendants had asserted their right to a post-restraint, pre-trial hearing, they could only demonstrate that the assets were outside the scope of the indictment by challenging the validity of the indictment on its merits, which the defendants were prohibited from doing pre-trial. Id. at *7. In regard to the fourth factor, the Eleventh Circuit noted that the trial court did not state whether it weighed in favor of, or against, a pretrial evidentiary hearing. Id. The Court proceeded to find that:

A pretrial challenge to the indictment would require the district court to hold an evidentiary hearing to determine whether the crime occurred. The court would hear the Government's case and the defendant's response, and then determine whether the crime had occurred and, thus, whether the assets were forfeitable. In many cases, such a hearing would go so far as to render the trial on the merits of the criminal charge unnecessary. In short, such a procedure would require the Government to preview its case-at the very least, the Government would have to put on enough evidence to withstand a motion to dismiss the charge. But the Bissell court undeniably contemplated some circumstances in which, despite the presence of probable cause, a pretrial hearing would be required.

Id. The Court then continued to observe that:

The court in an appropriate case may grant the defendant's request notwithstanding the fact that the return of the indictment established probable cause to seize or restrain the assets, possibly… The purpose of the hearing would not be to determine guilt or innocence but, rather, to determine the propriety of the seizure.

Id. It further stated that “the purpose of the hearing is to reduce the possibility that the court imposed the restraint improvidently.” Id. at *8 (citing Fuentes v. Shevin, 407 U.S. 67 (1972)).

            The Eleventh Circuit concluded that, notwithstanding the District Court’s determination that probable cause existed to forfeit their assets, it erred in applying the third and fourth Bissell factors. Id. It held that the third factor should weigh in favor of the defendants since they took “every available step to contest the restraints.” Id. It further held that district courts should:

[E]ngage in a more searching exposition and calculus of the fourth Bissell factor, which requires it to weigh the prejudice suffered by the defendants due to the delay before their post-restraint probable cause hearing against the strength of the United States' interest in the subject property, and take care to give the powerful forms of prejudice that the [defendants] will suffer ample consideration. 866 F.2d at 1354. As Bissell pointed out, a wrongful deprivation of a defendant's legitimate assets rendering him unable to retain his counsel of choice will severely impair his ability to defend himself. Id. at 1354. Indeed, our law is clear and unambiguous that depriving a defendant of the counsel of his choice is a serious and significant impediment to his ability to effectively navigate our nation's criminal procedures and protections. See Gonzalez-Lopez, 548 U.S. [140,] 146 [(2006)]… ; Wheat v. United States, 486 U.S. 153, 159 [ ] (1988)… ; see generally United States v. Garey, 540 F.3d 1253, 1263 (11th Cir.2008) (en banc)…

Being effectively shut out by the state from retaining the counsel of one's choice in a serious criminal case is a substantial source of prejudice, but the inequities in this case actually go beyond being able to retain the counsel of choice. The restraint of assets in the present case prohibits the [defendants] not only from retaining their counsel of choice, but also from retaining the experienced attorneys who have represented them since the grand jury investigation began in January, 2005. Losing access to long-time counsel who have already invested substantial time into learning the intricacies of the [defendants] case and preparing for trial will unquestionably cause the [defendants’] prejudice.

Id. at *8-*9. The Court reversed and remanded the case, observing:

Indeed, virtually every circuit to address this issue other than this Court has found that criminal defendants such as these are entitled, under the Due Process Clause of the Fifth Amendment, to a pretrial hearing in order to determine whether it is likely that the restrained assets will be subject to forfeiture.