The Supreme Court just ruled the government cannot freeze assets necessary to pay for a criminal defense attorney if those assets haven’t been linked to a crime.
Sila Luis brought her case before the 8 Justices on charges of Medicare fraud for $45 million worth of nonexistent services, including kickbacks paid to patients who enrolled with her home healthcare companies. Nearly all the profits Luis made from the fraud were spent, so the government asked the court to freeze $2 million worth of Luis’ assets unconnected to the suspected fraud.
Luis argued the request would keep her from obtaining an attorney of her choice, while the government argued the money was needed to ensure she couldn’t dissipate any further assets so that funds were available for payment of any fines or restitution if ultimately convicted.
The judge granted the State’s request. In a plurality opinion though, the Supreme Court vacated the lower court’s decision, ruling the order violated Luis 6th Amendment right to the assistance of counsel. Although the government was not denying Luis’ right to counsel, restricting assets needed to hire an attorney of her choosing undermined the value of that fundamental right.
The Dissent Had It Right
The 6th Amendment grants defendants the right to assistance of counsel for his or her defense. In 1932, the Supreme Court took the 6th Amendment a step further and ruled that defendants have “a fair opportunity to secure counsel of his own choice.”
While the plurality opinion reasoned the government could only freeze tainted assets or property connected to a crime, the dissent argues the ruling rewards criminals by allowing them to spend or conceal the stolen property all the while hoarding their own untainted assets to hire an all star, and perhaps the most expensive, defense team.
According to Justice Kennedy, restraining the untainted assets needed to make a property-crime victim whole does not prevent a defendant from hiring counsel. Just because it may be more difficult to hire an attorney of the defendant’s choosing does not result in a violation of the 6th Amendment. The best example Justice Kennedy gave to compare an equivalent situation is that defendants are not exempt from federal, state, or local taxes simply because paying those may deprive them of the ability to hire a high-priced attorney.
As the Supreme Court previously reasoned in Caplin & Drysdale, Charted v. United States, the government has a right to detain a defendant to ensure presence at trial, the government has an interest in ensuring availability of assets that may be needed to pay court costs, fines, and restitution.
The Decision Raises Potential Problems for Prosecutors
Let’s take a look at Kennedy’s example: "A defendant steals $1 million and deposits the money into an account that already has $1 million of untainted assets."
Once a defendant begins to spend commingled funds, it becomes nearly impossible to ascertain with certainty which funds were which. The plurality decision argues this is not an issue because money is fungible and the government can easily trace money.
That very well seems like an easy solution, but it’s not always going to be that simple. Imagine how long it would take the government to trace funds when the numbers are in the millions, in multiple different bank accounts, or when multiple cash advances are taken.
The purpose of freezing a defendant’s assets is to ensure they can’t further dissipate those assets. The plurality decision does nothing to prevent the defendant from spending all available assets to hire a high-priced defense team, all before the government has an opportunity to prove those dollars were derived from a crime.
Ruling will Affect Forfeiture Cases
The ruling probably won't affect civil forfeiture when it comes to real property, as title to property used in connection with a crime instantly passes to the government, or even tangible stolen goods. However, it will effect when the government can take your cash. As the decision stands, the government must leave a defendant with enough money to pay for a defense attorney of their choosing.
The question becomes, to what extent? The ruling is clear that the government can’t freeze untainted assets needed to hire an attorney, but the decision made no distinction as to what amount is reasonable or how that number could be calculated. In Luis’ case, the government was asking to freeze $2 million worth of assets; that seems like a pretty excessive number when you’re thinking that money only goes towards attorney’s fees.
Giving defendants this kind of leeway with their cash could potentially open a floodgate of cases where the defendants are claiming more and more funds are needed to hire a defense team. Essentially, the decision favors criminal forfeiture, which means prosecutors will have to prove guilt beyond a reasonable doubt before holding up any of your cash.
Authored by Ashley Roncevic, LegalMatch Legal Writer and Attorney at Law
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