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Eleventh Circuit Restricts Challenge to Pretrial Freezing of Assets

May 3, 2012

In United States v. Kaley, the Eleventh Circuit Court of Appeals has ruled that a criminal defendant whose assets have been frozen by the government cannot challenge the strength of the government's case as a basis for unfreezing the assets.

This is an unfortunate decision for federal criminal defendants in Georgia as it allows the government to indict a defendant and then control his ability to retain counsel regardless of the strength of their evidence and whether or not a conviction in the case is even likely.

The defendant, a medical device sales representative, was being investigated for stealing medical devices from hospitals and reselling them. After retaining counsel, he obtained a home equity line of credit and then used the money to buy a certificate of deposit. When he was subsequently indicted in federal court, the indictment sought the forfeiture of the CD and the defendant’s residence on the theory that those assets were purchased with money from the alleged criminal activity. Under 21 U.S.C. 853, the District Court is authorized to restrain any property that would be subject to forfeiture if the defendant were convicted. As a result, the defendant was unable to use the funds in the CD to pay his attorney’s fees.

The defendant was granted a pretrial hearing on the issue of the freezing of his assets, however, the District Court refused to allow him to argue the fact that the government was unlikely to prevail on the charges and ruled that the defendant could only challenge whether the restrained assets were connected to the alleged criminal conduct.

The Eleventh Circuit affirmed, stating that to allow the defendant to challenge the strength of the government’s case in order to undo the asset freezing would unnecessarily force the government to reveal its evidence prior to trial. Of particular note, Judge J.L. Edmondson issued a harsh concurring opinion in which he stated that “the potential for the dominating power of the Executive Branch to be misused by the arbitrary acts of prosecutors is real…The courts must be alert.”

As stated above, this is a troubling decision for Georgia federal criminal defense attorneys and their clients as it allows the government, even in the weakest of cases, to control a defendant’s assets and effectively prevent him from retaining the attorney of his choice. Is there really any harm in forcing the government to reveal their evidence prior to trial? I do not see any harm in a court requiring there to be actual evidence before allowing the government to take control of a defendant’s assets and property.

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