Florida Defendants Challenge Asset Forfeitures in Federal Crimes

In 2007, a grand jury indicted a husband-and-wife pair of medical equipment sales representatives for federal offenses including conspiracy, fraud and money laundering. Apparently, when hospitals bought new medical equipment, many were only too happy to let the sales reps take the used equipment away. Since their employers didn't want it, the reps resold the equipment on the "gray market" in Florida.

Of at least three other sales reps charged under the scheme, two pled guilty but another was acquitted by a jury. This couple maintains their innocence. Whether the charges end up sticking or not, however, they have a big problem -- big enough that it is now before the U.S. Supreme Court.

In both Florida and federal criminal cases, the government can seize any of the defendants' property it believes can be tied to the alleged crimes. This is called civil forfeiture, and its purpose is to freeze ill-gotten gains so they don't disappear before trial. Upon conviction, the property is distributed as restitution to any victims. If acquitted, the defendants can have it returned.

In this case, the couple engaged attorneys as soon as they learned they were targets of a federal criminal investigation. Told the estimated cost would be around $500,000, they set that money aside until they were indicted two years later. When they tried to access the money, however, they learned that prosecutors had seized it and all their other property, including their home -- leaving them nothing with which to pay their attorneys.

Criminal defendants have a right to a hearing to challenge the government's determination that particular assets can be tied to criminal activity, but intermingling of assets can make that challenging in white collar cases.

Yet this couple insists that no crime even occurred. They asked for a hearing on whether prosecutors can prove their case at all, notwithstanding the grand jury's findings. Do the Constitution's due process guarantees and the Sixth Amendment's right to counsel give them the right to hire the criminal defense attorneys of their choice, instead of being forced to rely on a public defender?

As Chief Justice Roberts put it, a defendant naturally wants "to hire a lawyer who can keep him out of jail for the next 30 years." Some federal deny such petitions, while others have granted them in some cases. The Supreme Court's decision is expected sometime next spring.

Sources:

  • Miami Herald, "Indicted couple want assets freed to pay lawyers," Mark Sherman, Associated Press, Oct. 16, 2013
  • SCOTUSblog, "Argument preview: Court to consider scope of challenges to asset freezes," Amy Howe, Oct. 15, 2013

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