How prosecutors disarm defendants by freezing their assets

Federal prosecutors can legally grab, with a judge's nod, the assets of criminal defendants before trial.

Miami criminal defense attorney will argue before the U.S. Supreme Court that the tactic - long a powerful tool for prosecutors - violates the constitutional rights of defendants.

With their assets frozen until a trial's outcome, they're effectively being stripped of the ability to hire the defense lawyer of their choice.

That will be the thrust of Howard Srebnick's argument Wednesday morning, when he appears for the first time before the nine Supreme Court justices. Their ruling, in a South Florida white-collar criminal case, could affect countless federal prosecutions nationwide.

Srebnick will argue that defendants should be allowed to keep their bank accounts and other possessions unless prosecutors can show before trial that the evidence supporting an indictment justifies the seizure of those assets.

For decades, prosecutors have only needed to point to a federal grand jury indictment to argue that defendants' assets are traceable to the criminal allegations and therefore can be seized. And judges have almost always ruled in the prosecution's favor because of the presumption that the grand jury found "probable cause" that a crime was committed.

Eventually, depending on whether a defendant is found guilty or is acquitted, frozen assets are either kept or returned by the government.
 
Although the federal government accuses Kerri and Brian Kaley of trafficking in stolen medical devices, it has been unable to identify any victims of this alleged criminal scheme. That has not stopped the Justice Department from freezing the assets they need to defend themselves.

The Supreme Court is considering whether the Kaleys have a constitutional right to challenge the order blocking access to their money before it's too late for them to mount an effective defense. A ruling in their favor would help limit the government's ability to deprive people of their liberty by depriving them of their property.

For people facing criminal charges, freedom not only is not free; it is dauntingly expensive. The Kaleys' lawyers estimate that a trial will cost $500,000 in legal fees and other expenses. The Kaleys had planned to cover the cost with money drawn from a home equity line of credit—until the government took it.

Technically, the government has not taken the money yet; it has merely "restrained" it, along with the rest of the home's value, in anticipation of a post-conviction forfeiture. But the result is the same for the Kaleys: They can no longer afford to pay the lawyers they chose and trust, the people who have been representing them for eight years and are familiar with the details of their case.

Srebnick argues that two constitutional amendments - due process of law and right to counsel - require that defendants such as his clients be given a pretrial hearing that would force prosecutors to establish the integrity of the indictment as a basis to seize the couple's assets.

If prosecutors fail to put forth compelling evidence, then "the assets needed for counsel of choice and legal expenses must be unfrozen," Srebnick argues in his briefs, written with Miami appellate lawyer Richard Strafer.

U.S. Solicitor General Donald B. Verrilli Jr. will defend the practice as a way to prevent criminals from spending ill-gotten gains that could be returned to victims or the government.

In court briefs, he argues that the purpose of the existing law - adopted by Congress in 1970 to target organized crime - is to preserve the "availability of property" before trial that may ultimately be forfeited so that it is "not dissipated before a conviction."

The solicitor general points out that the law allows for a pretrial hearing to determine whether defendants' assets are "traceable" proceeds from their crimes, but that the hearing should not allow defense attorneys to challenge the "validity" of an indictment.

The issue before the Supreme Court is whether defendants before trial have a "due process right to challenge the probable cause underlying the criminal charge," Verrilli wrote. "The Constitution guarantees no such right."
http://www.mcclatchydc.com/2013/10/13/205242/supreme-court-to-hear-challenges.html
http://reason.com/archives/2013/10/16/the-best-defense-your-money-cant-buy 
http://online.wsj.com/news/articles/SB10001424127887324110404578630561814823892