at 3524. g ysda.or

Federal Criminal Defense Practice ! Seminar Cancellations: Registered participants who the program, PLEASEare unable to attend at ddubois@n notify Diane DuBois NYSDA to reduce program costs and expenses. to reduce program NYSDA Thank you Sponsored by the Office of the Federal Public Defender for the Northern District of New York and the New York State sda.org

y Defenders Association

to: Tuesday,

MCLE Skills Credits November 7, 2017 NYSDA has been certified by the New York

Email: ddubois@n 8:00 am-3:50 pm State Continuing Legal Education Board as an Accredited Provider of continuing legal edu- cation in the State of New York (2016-2019). Foley Federal Courthouse This transitional/nontransitional program has 445 Broadway, 4th Fl Courtroom been approved in accordance with the requirements of the Continuing Legal Edu- Albany, NY 12207 cation Board for a maximum of 6.0 credit (New Location) hours. No CLE credit may be earned for New York State Defenders Association York New Suite 500 Ave., Washington 194 NY 12210-2314 Albany, Fax: 518-465-3249 Tuesday, October 31, 2017 31, October Tuesday, repeat attendance at any accredited CLE

Registration Form: Federal Criminal Defense Practice Seminar — November 7, 2017 7, — November Seminar Practice Defense Criminal Federal Form: Registration 6.0 MCLE Skills Credits This seminar is intendedThis for ALL practicing Counsel. Questions? Criminal Defense Please call Federal 518-465- You MUST completeYou this and return form it by THERE IS NO FEE FOR THIS SEMINAR. PRE-REGISTRATION IS REQUIRED. Name:______Office: ______Address: ______City/State/Zip:______Email:______Telephone: ______FAX: ______activity within any one reporting cycle. Program Speakers Steven L. Kessler, Esq. is a nationally recognized authority in the field of forfeiture law, representing clients in forfeiture 8:00-8:30 am Registration Faheemah Downs is the Deputy Chief of Investigations at the and white collar criminal cases in state and federal district Public Defender Service for the District of Columbia (PDSDC) and appellate courts nationwide. He is a member of the Joint 8:30-8:45 am and has been working at PDSDC since September 2002. Rules Committee on Forteiture for the Southern and Eastern Welcome and Opening Remarks/ Faheemah has a Bachelor’s Degree in Law and Society from Districts of New York. Mr. Kessler is the author of Civil and the University of California, Santa Barbara. As Deputy Chief, NDNY Criminal Defense Updates— Criminal Forfeiture: Federal and State Practice (West she has held the positions of Lead Training Coordinator for the Lisa Peebles Group 1993 & Supp. 2016), a three-volume treatise analyz- Investigations Division and Lead Investigator for the Special ing the forfeiture and RICO statutes of all 50 states and the 8:45-10:25 am Litigation Division, while simultaneously conducting investiga- District of Columbia and the major federal forfeiture provi- tions for both juvenile and adult indigent defendants. Applying the Brakes on a Runaway sions. He received the Otto L. Walter Distinguished Writing Faheemah also assists in the development and training of Award from New York Law School in June 2000 for his one- Train: An Overview of Federal fellow staff investigators, staff attorneys, intern investigators, volume treatise, New York Criminal and Civil Forfeiture. A Forfeiture and the Supreme Court’s Criminal Justice Act investigators, and National Defender graduate of Cornell Law School, he is in his twenty-fourth New Limits in Honeycutt v United Investigator Association members. year as an adjunct law professor at New York Law School, States—Steven Kessler Jason Downs, Esq. honed his litigation skills at the Public where he teaches New York Practice. Defender Service for the District of Columbia (PDSDC). He Terence L. Kindlon has practiced criminal defense in Albany 10:25-10:40 am Break gained nearly a decade of experience working at PDSDC, serv- for 44 years. He began as an assistant public defender, entered ing as lead counsel on 26 felony jury trials against federal 10:40 am-11:30 am private practice in the late 1970’s, and retired in 2016. prosecutors. Jason was promoted to Training Director and was Approximately four weeks after his retirement, he returned Investigating the Evidence: responsible for routinely updating 200 public defenders and to the Public Defender’s Office, serving, in rapid succession, Getting the Records You Need— private attorneys on matters relating to litigation training, as (1) Director of Training, (2) Acting Public Defender and, trends in expert testimony, advances in trial techniques, and Faheemah Downs & Terence Kindlon finally, (3) Chief Assistant, the position he now holds. Over the more. He was a part of the litigation team that investigated and years, Terry has frequently argued before the state appellate 11:30 am-1:00 pm Lunch (on your own) settled the Freddie Gray civil matter. He continues to provide divisions, the New York Court of Appeals, and United States frequent lectures regarding current litigation techniques, trial Court of Appeals for the Second Circuit. He has tried more 1:00-1:50 pm procedures, and related matters. He is a faculty member of than 175 felonies to verdict in state and federal court. Impeachment of Witnesses: Methods Harvard Law School’s Trial Advocacy Workshop and an adjunct Lisa Peebles, Esq. is the Federal Public Defender for the and Mechanics—Jason Downs law professor at the University of Maryland School of Law. Northern District of New York. Lisa has been with the office of Tony Gallagher, Esq. graduated with distinction from the Federal Public Defender since its creation in 1999. Prior to 1:50-2:40 pm Duquesne University. Following decorated service in the being the Federal Public Defender, Lisa was the First Assistant Cyber Ethics: Using Social Media in United States Army during the Vietnam conflict, Tony received Defender, managing the Syracuse office. Investigation, How to Stay Out of his J.D. from the University of Baltimore School of Law. In Trouble Using Social Media, Ethical 1992, he was selected as the first Executive Director of the Paul Rudof, Esq. has been a public defender in Massachusetts Federal Defenders of Montana, Inc., a post he holds to this day. for 17 years. He is currently the Public Defender Co-Counsel at Considerations & Data Mining— As an active litigator, he has taken part in hundreds of jury and the Committee for Public Counsel Services (CPCS). Previously, Tony Gallagher non-jury trials. He has significant appellate experience, he worked as a staff attorney in the CPCS Criminal Defense 2:40-3:00 pm Break including appearances in the United States Supreme Court. Training Unit and in the Essex County office of the CPCS Public He was named Criminal Defense Lawyer of the Year in 2005 Defender Trial Unit. Paul has tried felony cases, including first 3:00-3:50 pm by the Montana Association of Criminal Defense Lawyers and degree murder cases, in Superior and District Courts through- Exposing Mistakes without Making was the 2016 recipient of the Ninth Circuit’s John Frank out the Commonwealth and has argued numerous times before Award, which is presented to outstanding attorneys practicing the Supreme Judicial Court and Massachusetts Appeals Court. Them Yourself: Cross-Examination in in federal courts in the western United States. He has been an Paul is also a faculty member at the National Criminal Defense Mis-ID Cases adjunct professor at three law schools and a guest lecturer at College in Macon, Georgia, and he has taught defenders at Paul Rudof five others. conferences and skills programs across the nation. § 852 TITLE 21—FOOD AND DRUGS Page 624 the trial or the taking of the plea of guilty for tion, that a conviction alleged in the informa- a reasonable period for the purpose of obtaining tion is invalid, or that the person is otherwise such facts. Clerical mistakes in the information not subject to an increased sentence as a matter may be amended at any time prior to the pro- of law, the court shall, at the request of the nouncement of sentence. United States attorney, postpone sentence to (2) An information may not be filed under this allow an appeal from that determination. If no section if the increased punishment which may such request is made, the court shall impose be imposed is imprisonment for a term in excess sentence as provided by this part. The person of three years unless the person either waived or may appeal from an order postponing sentence was afforded prosecution by indictment for the as if sentence had been pronounced and a final offense for which such increased punishment judgment of conviction entered. may be imposed. (e) Statute of limitations (b) Affirmation or denial of previous conviction No person who stands convicted of an offense If the United States attorney files an informa- under this part may challenge the validity of tion under this section, the court shall after any prior conviction alleged under this section conviction but before pronouncement of sen- which occurred more than five years before the tence inquire of the person with respect to date of the information alleging such prior con- whom the information was filed whether he af- viction. firms or denies that he has been previously con- victed as alleged in the information, and shall (Pub. L. 91–513, title II, § 411, Oct. 27, 1970, 84 inform him that any challenge to a prior convic- Stat. 1269.) tion which is not made before sentence is im- posed may not thereafter be raised to attack the § 852. Application of treaties and other inter- sentence. national agreements (c) Denial; written response; hearing Nothing in the Single Convention on Narcotic (1) If the person denies any allegation of the Drugs, the Convention on Psychotropic Sub- information of prior conviction, or claims that stances, or other treaties or international agree- any conviction alleged is invalid, he shall file a ments shall be construed to limit the provision written response to the information. A copy of of treatment, education, or rehabilitation as al- the response shall be served upon the United ternatives to conviction or criminal penalty for States attorney. The court shall hold a hearing offenses involving any drug or other substance to determine any issues raised by the response subject to control under any such treaty or which would except the person from increased agreement. punishment. The failure of the United States at- (Pub. L. 91–513, title II, § 412, as added Pub. L. torney to include in the information the com- 95–633, title I, § 107(a), Nov. 10, 1978, 92 Stat. 3773.) plete criminal record of the person or any facts in addition to the convictions to be relied upon EFFECTIVE DATE shall not constitute grounds for invalidating the Section effective on date the Convention on Psycho- notice given in the information required by sub- tropic Substances enters into force in the United section (a)(1) of this section. The hearing shall States [July 15, 1980], see section 112 of Pub. L. 95–633, be before the court without a jury and either set out as a note under section 801a of this title. party may introduce evidence. Except as other- wise provided in paragraph (2) of this subsection, § 853. Criminal forfeitures the United States attorney shall have the bur- (a) Property subject to criminal forfeiture den of proof beyond a reasonable doubt on any issue of fact. At the request of either party, the Any person convicted of a violation of this court shall enter findings of fact and conclu- subchapter or subchapter II of this chapter pun- sions of law. ishable by imprisonment for more than one year (2) A person claiming that a conviction alleged shall forfeit to the United States, irrespective of in the information was obtained in violation of any provision of State law— the Constitution of the United States shall set (1) any property constituting, or derived forth his claim, and the factual basis therefor, from, any proceeds the person obtained, di- with particularity in his response to the infor- rectly or indirectly, as the result of such vio- mation. The person shall have the burden of lation; proof by a preponderance of the evidence on any (2) any of the person’s property used, or in- issue of fact raised by the response. Any chal- tended to be used, in any manner or part, to lenge to a prior conviction, not raised by re- commit, or to facilitate the commission of, sponse to the information before an increased such violation; and sentence is imposed in reliance thereon, shall be (3) in the case of a person convicted of en- waived unless good cause be shown for failure to gaging in a continuing criminal enterprise in make a timely challenge. violation of section 848 of this title, the person (d) Imposition of sentence shall forfeit, in addition to any property de- scribed in paragraph (1) or (2), any of his inter- (1) If the person files no response to the infor- est in, claims against, and property or con- mation, or if the court determines, after hear- tractual rights affording a source of control ing, that the person is subject to increased pun- over, the continuing criminal enterprise. ishment by reason of prior convictions, the court shall proceed to impose sentence upon him The court, in imposing sentence on such person, as provided by this part. shall order, in addition to any other sentence (2) If the court determines that the person has imposed pursuant to this subchapter or sub- not been convicted as alleged in the informa- chapter II of this chapter, that the person forfeit Page 625 TITLE 21—FOOD AND DRUGS § 853 to the United States all property described in forfeiture and that failure to enter the order this subsection. In lieu of a fine otherwise au- will result in the property being destroyed, thorized by this part, a defendant who derives removed from the jurisdiction of the court, profits or other proceeds from an offense may be or otherwise made unavailable for forfeiture; fined not more than twice the gross profits or and other proceeds. (ii) the need to preserve the availability of (b) Meaning of term ‘‘property’’ the property through the entry of the re- quested order outweighs the hardship on any Property subject to criminal forfeiture under party against whom the order is to be en- this section includes— tered: (1) real property, including things growing on, affixed to, and found in land; and Provided, however, That an order entered pursu- (2) tangible and intangible personal prop- ant to subparagraph (B) shall be effective for not erty, including rights, privileges, interests, more than ninety days, unless extended by the claims, and securities. court for good cause shown or unless an indict- ment or information described in subparagraph (c) Third party transfers (A) has been filed. All right, title, and interest in property de- (2) A temporary restraining order under this scribed in subsection (a) of this section vests in subsection may be entered upon application of the United States upon the commission of the the United States without notice or opportunity act giving rise to forfeiture under this section. for a hearing when an information or indictment Any such property that is subsequently trans- has not yet been filed with respect to the prop- ferred to a person other than the defendant may erty, if the United States demonstrates that be the subject of a special verdict of forfeiture there is probable cause to believe that the prop- and thereafter shall be ordered forfeited to the erty with respect to which the order is sought United States, unless the transferee establishes would, in the event of conviction, be subject to in a hearing pursuant to subsection (n) of this forfeiture under this section and that provision section that he is a bona fide purchaser for value of notice will jeopardize the availability of the of such property who at the time of purchase property for forfeiture. Such a temporary order was reasonably without cause to believe that shall expire not more than fourteen days after the property was subject to forfeiture under this the date on which it is entered, unless extended section. for good cause shown or unless the party against (d) Rebuttable presumption whom it is entered consents to an extension for a longer period. A hearing requested concerning There is a rebuttable presumption at trial that an order entered under this paragraph shall be any property of a person convicted of a felony held at the earliest possible time and prior to under this subchapter or subchapter II of this the expiration of the temporary order. chapter is subject to forfeiture under this sec- (3) The court may receive and consider, at a tion if the United States establishes by a pre- hearing held pursuant to this subsection, evi- ponderance of the evidence that— dence and information that would be inadmis- (1) such property was acquired by such per- sible under the Federal Rules of Evidence. son during the period of the violation of this (4) ORDER TO REPATRIATE AND DEPOSIT.— subchapter or subchapter II of this chapter or (A) IN GENERAL.—Pursuant to its authority within a reasonable time after such period; to enter a pretrial restraining order under this and section, the court may order a defendant to re- (2) there was no likely source for such prop- patriate any property that may be seized and erty other than the violation of this sub- forfeited, and to deposit that property pending chapter or subchapter II of this chapter. trial in the registry of the court, or with the (e) Protective orders United States Marshals Service or the Sec- (1) Upon application of the United States, the retary of the Treasury, in an interest-bearing court may enter a restraining order or injunc- account, if appropriate. tion, require the execution of a satisfactory per- (B) FAILURE TO COMPLY.—Failure to comply formance bond, or take any other action to pre- with an order under this subsection, or an serve the availability of property described in order to repatriate property under subsection subsection (a) of this section for forfeiture under (p) of this section, shall be punishable as a this section— civil or criminal contempt of court, and may (A) upon the filing of an indictment or infor- also result in an enhancement of the sentence mation charging a violation of this subchapter of the defendant under the obstruction of jus- or subchapter II of this chapter for which tice provision of the Federal Sentencing criminal forfeiture may be ordered under this Guidelines. section and alleging that the property with re- (f) Warrant of seizure spect to which the order is sought would, in The Government may request the issuance of the event of conviction, be subject to forfeit- a warrant authorizing the seizure of property ure under this section; or subject to forfeiture under this section in the (B) prior to the filing of such an indictment same manner as provided for a search warrant. or information, if, after notice to persons ap- If the court determines that there is probable pearing to have an interest in the property cause to believe that the property to be seized and opportunity for a hearing, the court deter- would, in the event of conviction, be subject to mines that— forfeiture and that an order under subsection (e) (i) there is a substantial probability that of this section may not be sufficient to assure the United States will prevail on the issue of the availability of the property for forfeiture, § 853 TITLE 21—FOOD AND DRUGS Page 626 the court shall issue a warrant authorizing the feited under this section pending its disposi- seizure of such property. tion. (g) Execution (j) Applicability of civil forfeiture provisions Upon entry of an order of forfeiture under this Except to the extent that they are inconsist- section, the court shall authorize the Attorney ent with the provisions of this section, the pro- General to seize all property ordered forfeited visions of section 881(d) of this title shall apply upon such terms and conditions as the court to a criminal forfeiture under this section. shall deem proper. Following entry of an order (k) Bar on intervention declaring the property forfeited, the court may, Except as provided in subsection (n) of this upon application of the United States, enter section, no party claiming an interest in prop- such appropriate restraining orders or injunc- erty subject to forfeiture under this section tions, require the execution of satisfactory per- may— formance bonds, appoint receivers, conservators, (1) intervene in a trial or appeal of a crimi- appraisers, accountants, or trustees, or take any nal case involving the forfeiture of such prop- other action to protect the interest of the erty under this section; or United States in the property ordered forfeited. (2) commence an action at law or equity Any income accruing to or derived from prop- against the United States concerning the va- erty ordered forfeited under this section may be lidity of his alleged interest in the property used to offset ordinary and necessary expenses subsequent to the filing of an indictment or to the property which are required by law, or information alleging that the property is sub- which are necessary to protect the interests of ject to forfeiture under this section. the United States or third parties. (l) Jurisdiction to enter orders (h) Disposition of property The district courts of the United States shall Following the seizure of property ordered for- have jurisdiction to enter orders as provided in feited under this section, the Attorney General this section without regard to the location of shall direct the disposition of the property by any property which may be subject to forfeiture sale or any other commercially feasible means, under this section or which has been ordered for- making due provision for the rights of any inno- feited under this section. cent persons. Any property right or interest not exercisable by, or transferable for value to, the (m) Depositions United States shall expire and shall not revert In order to facilitate the identification and lo- to the defendant, nor shall the defendant or any cation of property declared forfeited and to fa- person acting in concert with him or on his be- cilitate the disposition of petitions for remission half be eligible to purchase forfeited property at or mitigation of forfeiture, after the entry of an any sale held by the United States. Upon appli- order declaring property forfeited to the United cation of a person, other than the defendant or States, the court may, upon application of the a person acting in concert with him or on his be- United States, order that the testimony of any half, the court may restrain or stay the sale or witness relating to the property forfeited be disposition of the property pending the conclu- taken by deposition and that any designated sion of any appeal of the criminal case giving book, paper, document, record, recording, or rise to the forfeiture, if the applicant dem- other material not privileged be produced at the onstrates that proceeding with the sale or dis- same time and place, in the same manner as pro- position of the property will result in irrep- vided for the taking of depositions under Rule 15 arable injury, harm, or loss to him. of the Federal Rules of Criminal Procedure. (i) Authority of the Attorney General (n) Third party interests With respect to property ordered forfeited (1) Following the entry of an order of forfeit- under this section, the Attorney General is au- ure under this section, the United States shall thorized to— publish notice of the order and of its intent to (1) grant petitions for mitigation or remis- dispose of the property in such manner as the sion of forfeiture, restore forfeited property to Attorney General may direct. The Government victims of a violation of this subchapter, or may also, to the extent practicable, provide di- take any other action to protect the rights of rect written notice to any person known to have innocent persons which is in the interest of alleged an interest in the property that is the justice and which is not inconsistent with the subject of the order of forfeiture as a substitute provisions of this section; for published notice as to those persons so noti- (2) compromise claims arising under this fied. section; (2) Any person, other than the defendant, as- (3) award compensation to persons providing serting a legal interest in property which has information resulting in a forfeiture under been ordered forfeited to the United States pur- this section; suant to this section may, within thirty days of (4) direct the disposition by the United the final publication of notice or his receipt of States, in accordance with the provisions of notice under paragraph (1), whichever is earlier, section 881(e) of this title, of all property or- petition the court for a hearing to adjudicate dered forfeited under this section by public the validity of his alleged interest in the prop- sale or any other commercially feasible erty. The hearing shall be held before the court means, making due provision for the rights of alone, without a jury. innocent persons; and (3) The petition shall be signed by the peti- (5) take appropriate measures necessary to tioner under penalty of perjury and shall set safeguard and maintain property ordered for- forth the nature and extent of the petitioner’s Page 627 TITLE 21—FOOD AND DRUGS § 853 right, title, or interest in the property, the time (E) has been commingled with other prop- and circumstances of the petitioner’s acquisi- erty which cannot be divided without dif- tion of the right, title, or interest in the prop- ficulty. erty, any additional facts supporting the peti- (2) Substitute property tioner’s claim, and the relief sought. (4) The hearing on the petition shall, to the ex- In any case described in any of subpara- tent practicable and consistent with the inter- graphs (A) through (E) of paragraph (1), the ests of justice, be held within thirty days of the court shall order the forfeiture of any other filing of the petition. The court may consolidate property of the defendant, up to the value of the hearing on the petition with a hearing on any property described in subparagraphs (A) any other petition filed by a person other than through (E) of paragraph (1), as applicable. the defendant under this subsection. (3) Return of property to jurisdiction (5) At the hearing, the petitioner may testify In the case of property described in para- and present evidence and witnesses on his own graph (1)(C), the court may, in addition to any behalf, and cross-examine witnesses who appear other action authorized by this subsection, at the hearing. The United States may present order the defendant to return the property to evidence and witnesses in rebuttal and in de- the jurisdiction of the court so that the prop- fense of its claim to the property and cross-ex- erty may be seized and forfeited. amine witnesses who appear at the hearing. In addition to testimony and evidence presented at (q) Restitution for cleanup of clandestine labora- the hearing, the court shall consider the rel- tory sites evant portions of the record of the criminal case The court, when sentencing a defendant con- which resulted in the order of forfeiture. victed of an offense under this subchapter or (6) If, after the hearing, the court determines subchapter II of this chapter involving the man- that the petitioner has established by a prepon- ufacture, the possession, or the possession with derance of the evidence that— intent to distribute, of amphetamine or meth- (A) the petitioner has a legal right, title, or amphetamine, shall— interest in the property, and such right, title, (1) order restitution as provided in sections or interest renders the order of forfeiture in- 3612 and 3664 of title 18; valid in whole or in part because the right, (2) order the defendant to reimburse the title, or interest was vested in the petitioner United States, the State or local government rather than the defendant or was superior to concerned, or both the United States and the any right, title, or interest of the defendant at State or local government concerned for the the time of the commission of the acts which costs incurred by the United States or the gave rise to the forfeiture of the property State or local government concerned, as the under this section; or case may be, for the cleanup associated with (B) the petitioner is a bona fide purchaser the manufacture of amphetamine or meth- for value of the right, title, or interest in the amphetamine by the defendant, or on premises property and was at the time of purchase rea- or in property that the defendant owns, re- sonably without cause to believe that the sides, or does business in; and property was subject to forfeiture under this (3) order restitution to any person injured as section; a result of the offense as provided in section the court shall amend the order of forfeiture in 3663A of title 18. accordance with its determination. (Pub. L. 91–513, title II, § 413, as added and (7) Following the court’s disposition of all pe- amended Pub. L. 98–473, title II, §§ 303, 2301(d)–(f), titions filed under this subsection, or if no such Oct. 12, 1984, 98 Stat. 2044, 2192, 2193; Pub. L. petitions are filed following the expiration of 99–570, title I, §§ 1153(b), 1864, Oct. 27, 1986, 100 the period provided in paragraph (2) for the fil- Stat. 3207–13, 3207–54; Pub. L. 104–237, title II, ing of such petitions, the United States shall § 207, Oct. 3, 1996, 110 Stat. 3104; Pub. L. 106–310, have clear title to property that is the subject of div. B, title XXXVI, § 3613(a), Oct. 17, 2000, 114 the order of forfeiture and may warrant good Stat. 1229; Pub. L. 107–56, title III, § 319(d), Oct. title to any subsequent purchaser or transferee. 26, 2001, 115 Stat. 314; Pub. L. 109–177, title VII, (o) Construction § 743(a), Mar. 9, 2006, 120 Stat. 272; Pub. L. 111–16, The provisions of this section shall be lib- § 5, May 7, 2009, 123 Stat. 1608.) erally construed to effectuate its remedial pur- REFERENCES IN TEXT poses. (p) Forfeiture of substitute property The Federal Rules of Evidence, referred to in subsec. (e)(3), are set out in the Appendix to Title 28, Judiciary (1) In general and Judicial Procedure. Paragraph (2) of this subsection shall apply, The Federal Rules of Criminal Procedure, referred to if any property described in subsection (a) of in subsec. (m), are set out in the Appendix to Title 18, this section, as a result of any act or omission Crimes and Criminal Procedure. of the defendant— AMENDMENTS (A) cannot be located upon the exercise of due diligence; 2009—Subsec. (e)(2). Pub. L. 111–16 substituted ‘‘four- teen days’’ for ‘‘ten days’’. (B) has been transferred or sold to, or de- 2006—Subsec. (q). Pub. L. 109–177, § 743(a)(1), inserted posited with, a third party; ‘‘, the possession, or the possession with intent to dis- (C) has been placed beyond the jurisdiction tribute,’’ after ‘‘manufacture’’ in introductory provi- of the court; sions. (D) has been substantially diminished in Subsec. (q)(2). Pub. L. 109–177, § 743(a)(2), inserted value; or ‘‘, or on premises or in property that the defendant § 853a TITLE 21—FOOD AND DRUGS Page 628 owns, resides, or does business in’’ after ‘‘by the defend- EFFECTIVE DATE OF 2009 AMENDMENT ant’’. Amendment by Pub. L. 111–16 effective Dec. 1, 2009, 2001—Subsec. (e)(4). Pub. L. 107–56, § 319(d)(2), added see section 7 of Pub. L. 111–16, set out as a note under par. (4). section 109 of Title 11, Bankruptcy. Subsec. (p). Pub. L. 107–56, § 319(d)(1), inserted heading and amended text of subsec. (p) generally. Prior to SAVINGS CLAUSE amendment, text read as follows: ‘‘If any of the prop- Pub. L. 109–177, title VII, § 743(b), Mar. 9, 2006, 120 erty described in subsection (a) of this section, as a re- Stat. 273, provided that: ‘‘Nothing in this section sult of any act or omission of the defendant— [amending this section] shall be interpreted or con- ‘‘(1) cannot be located upon the exercise of due dili- strued to amend, alter, or otherwise affect the obliga- gence; tions, liabilities and other responsibilities of any per- ‘‘(2) has been transferred or sold to, or deposited son under any Federal or State environmental laws.’’ with, a third party; ‘‘(3) has been placed beyond the jurisdiction of the § 853a. Transferred court; CODIFICATION ‘‘(4) has been substantially diminished in value; or ‘‘(5) has been commingled with other property Section, Pub. L. 100–690, title V, § 5301, Nov. 18, 1988, which cannot be divided without difficulty; 102 Stat. 4310, which related to denial of Federal bene- fits to drug traffickers and possessors, was renumbered the court shall order the forfeiture of any other prop- section 421 of the Controlled Substances Act by Pub. L. erty of the defendant up to the value of any property 101–647, title X, § 1002(d)(1), Nov. 29, 1990, 104 Stat. 4827, described in paragraphs (1) through (5).’’ and is classified to section 862 of this title. 2000—Subsec. (q). Pub. L. 106–310, § 3613(a)(1), (2), in in- troductory provisions, inserted ‘‘amphetamine or’’ be- § 854. Investment of illicit drug profits fore ‘‘methamphetamine’’ and substituted ‘‘shall’’ for ‘‘may’’. (a) Prohibition Subsec. (q)(2). Pub. L. 106–310, § 3613(a)(2), (3), inserted It shall be unlawful for any person who has re- ‘‘, the State or local government concerned, or both ceived any income derived, directly or indi- the United States and the State or local government rectly, from a violation of this subchapter or concerned’’ after ‘‘to reimburse the United States’’, ‘‘or the State or local government concerned, as the case subchapter II of this chapter punishable by im- may be,’’ after ‘‘costs incurred by the United States’’, prisonment for more than one year in which and ‘‘amphetamine or’’ before ‘‘methamphetamine’’. such person has participated as a principal with- Subsec. (q)(3). Pub. L. 106–310, § 3613(a)(4), substituted in the meaning of section 2 of title 18, to use or ‘‘section 3663A of title 18’’ for ‘‘section 3663 of title 18’’. invest, directly or indirectly, any part of such 1996—Subsec. (q). Pub. L. 104–237 added subsec. (q). income, or the proceeds of such income, in ac- 1986—Subsec. (c). Pub. L. 99–570, § 1864(1), substituted quisition of any interest in, or the establish- ‘‘subsection (n)’’ for ‘‘subsection (o)’’. ment or operation of, any enterprise which is Subsec. (f). Pub. L. 99–570, § 1864(2), substituted ‘‘sub- engaged in, or the activities of which affect section (e)’’ for ‘‘subsection (f)’’. interstate or foreign commerce. A purchase of Subsec. (i)(1). Pub. L. 99–570, § 1864(3), substituted securities on the open market for purposes of in- ‘‘this subchapter’’ for ‘‘this chapter’’. Subsec. (k). Pub. L. 99–570, § 1864(1), (4), which di- vestment, and without the intention of control- rected the substitution of ‘‘subsection (n)’’ for ‘‘sub- ling or participating in the control of the issuer, section (o)’’ in ‘‘the second subsection (h)’’, and di- or of assisting another to do so, shall not be un- rected the redesignation of ‘‘the second subsection (h)’’ lawful under this section if the securities of the as subsection (k), were executed to this subsection be- issuer held by the purchaser, the members of his cause the ‘‘second subsection (h)’’ had been editorially immediate family, and his or their accomplices redesignated subsec. (k) to reflect the probable intent in any violation of this subchapter or sub- of Congress. See 1984 Amendment note below. chapter II of this chapter after such purchase do Subsec. (p). Pub. L. 99–570, § 1153(b), which directed not amount in the aggregate to 1 per centum of that ‘‘section 413 of title II of the Comprehensive Drug Abuse Prevention and Control Act of 1975’’ be amended the outstanding securities of any one class, and ‘‘by redesignating subsection ‘(p)’ as subsection ‘(q)’ ’’ do not confer, either in law or in fact, the power and adding subsec. (p) was executed to this section, to elect one or more directors of the issuer. which is section 413 of the Comprehensive Drug Abuse (b) Penalty Prevention and Control Act of 1970, as the probable in- tent of Congress, by adding a subsec. (p) in view of the Whoever violates this section shall be fined prior redesignation of subsec. (p) as (o) by Pub. L. not more than $50,000 or imprisoned not more 98–473, § 2301(e)(2). See 1984 Amendment note below. than ten years, or both. 1984—Subsec. (a). Pub. L. 98–473, § 2301(d), inserted ‘‘In (c) ‘‘Enterprise’’ defined lieu of a fine otherwise authorized by this part, a de- As used in this section, the term ‘‘enterprise’’ fendant who derives profits or other proceeds from an offense may be fined not more than twice the gross includes any individual, partnership, corpora- profits or other proceeds.’’ tion, association, or other legal entity, and any Subsec. (d). Pub. L. 98–473, § 2301(e), struck out subsec. union or group of individuals associated in fact (d) which related to forfeiture of property other than although not a legal entity. that described in subsec. (a) and the conditions there- (d) Construction for, and redesignated former subsec. (e) as (d). Subsecs. (e) to (p). Pub. L. 98–473, § 2301(e)(2), which The provisions of this section shall be lib- directed that this section be amended by redesignating erally construed to effectuate its remedial pur- subsecs. (e), (f), (g), (h), (i), (l), (m), (n), (o), and (p) as poses. subsecs. (d), (e), (f), (g), (h), (i), (j), (h), (l), (m), (n), and (Pub. L. 91–513, title II, § 414, as added Pub. L. (o), respectively, was executed by redesignating sub- 98–473, title II, § 303, Oct. 12, 1984, 98 Stat. 2049.) secs. (e) to (p) as (d) to (o), respectively, to give effect to the probable intent of Congress. § 855. Alternative fine Subsec. (n)(1). Pub. L. 98–473, § 2301(f), struck out ‘‘for at least seven successive court days’’ after ‘‘to dispose In lieu of a fine otherwise authorized by this of the property’’. part, a defendant who derives profits or other Page 259 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 981

States, shall be fined under this title or impris- (2) refuses to depart from such portion of oned not more than ten years, or both. In addi- such building or premises after a request— tion, such vessel, her tackle, apparel, furniture, (A) by an employee of a foreign govern- equipment, and her cargo shall be forfeited to ment or of an international organization, if the United States. such employee is authorized to make such request by the senior official of the unit of (June 25, 1948, ch. 645, 62 Stat. 748; Pub. L. such government or organization which oc- 103–322, title XXXIII, § 330016(1)(L), Sept. 13, 1994, cupies such portion of such building or 108 Stat. 2147.) premises; HISTORICAL AND REVISION NOTES (B) by a foreign official or any member of Based on title 18, U.S.C., 1940 ed., §§ 31, 36 (June 15, the foreign official’s staff who is authorized 1917, ch. 30, title V, §§ 1, 6, 40 Stat. 221, 222; Mar. 28, 1940, by the foreign official to make such request; ch. 72, § 5, 54 Stat. 79). (C) by an official guest or any member of Section consolidates said sections of title 18, U.S.C., the official guest’s staff who is authorized by 1940 ed., with minor changes in translations and phrase- the official guest to make such request; or ology. (D) by any person present having law en- Mandatory punishment provision was rephrased in forcement powers; the alternative. The conspiracy provision of said section 36 was omit- shall be fined under this title or imprisoned not ted as covered by section 371 of this title. See reviser’s more than six months, or both. note under that section. (c) For the purpose of this section ‘‘foreign Changes in phraseology were also made. government’’, ‘‘foreign official’’, ‘‘international AMENDMENTS organization’’, and ‘‘official guest’’ shall have the same meanings as those provided in section 1994—Subsec. (b). Pub. L. 103–322 substituted ‘‘fined under this title’’ for ‘‘fined not more than $10,000’’. 1116(b) of this title. (Added Pub. L. 92–539, title IV, § 401, Oct. 24, 1972, DELEGATION OF FUNCTIONS 86 Stat. 1073; amended Pub. L. 94–467, § 7, Oct. 8, For delegation to Secretary of Homeland Security of 1976, 90 Stat. 2000; Pub. L. 103–322, title XXXIII, authority vested in President by this section, see sec- § 330016(1)(L), Sept. 13, 1994, 108 Stat. 2147; Pub. L. tion 1(m) of Ex. Ord. No. 10637, Sept. 16, 1955, 20 F.R. 104–294, title VI, § 601(a)(2), Oct. 11, 1996, 110 Stat. 7025, as amended, set out as a note under section 301 of Title 3, The President. 3498.) AMENDMENTS [§ 968. Repealed. Aug. 26, 1954, ch. 937, title V, § 542(a)(14), 68 Stat. 861] 1996—Subsec. (b). Pub. L. 104–294 substituted ‘‘fined under this title’’ for ‘‘fined not more than $500’’ in con- Section, act June 25, 1948, ch. 645, 62 Stat. 748, related cluding provisions. to exportation of war materials to certain countries. 1994—Subsec. (a). Pub. L. 103–322 substituted ‘‘fined See section 1934 of Title 22, Foreign Relations and under this title’’ for ‘‘fined not more than $10,000’’. Intercourse. 1976—Subsecs. (b), (c). Pub. L. 94–467 added subsec. (b), redesignated former subsec. (b) as (c), and struck out [§ 969. Repealed. Pub. L. 101–647, title XII, reference to section 1116(c) of this title. § 1207(a), Nov. 29, 1990, 104 Stat. 4832] CHAPTER 46—FORFEITURE Section, act June 25, 1948, ch. 645, 62 Stat. 748, related to penalties for exporting arms, liquor, and narcotics to Sec. Pacific Islands. 981. Civil forfeiture. 982. Criminal forfeiture. § 970. Protection of property occupied by foreign 983. General rules for civil forfeiture proceedings. governments 984. Civil forfeiture of fungible property. 985. Civil forfeiture of real property. (a) Whoever willfully injures, damages, or de- 986. Subpoenas for bank records. stroys, or attempts to injure, damage, or de- 987. Anti-terrorist forfeiture protection. stroy, any property, real or personal, located AMENDMENTS within the United States and belonging to or utilized or occupied by any foreign government 2006—Pub. L. 109–177, title IV, § 406(b)(1)(A), Mar. 9, or international organization, by a foreign offi- 2006, 120 Stat. 244, added item 987. 2000—Pub. L. 106–185, §§ 2(b), 7(b), Apr. 25, 2000, 114 cial or official guest, shall be fined under this Stat. 210, 215, added items 983 and 985. title, or imprisoned not more than five years, or 1992—Pub. L. 102–550, title XV, §§ 1522(b), 1523(b), Oct. both. 28, 1992, 106 Stat. 4063, 4064, added items 984 and 986. (b) Whoever, willfully with intent to intimi- 1988—Pub. L. 100–690, title VII, § 7069, Nov. 18, 1988, 102 date, coerce, threaten, or harass— Stat. 4405, substituted ‘‘forfeiture’’ for ‘‘Forfeiture’’ in (1) forcibly thrusts any part of himself or items 981 and 982. any object within or upon that portion of any § 981. Civil forfeiture building or premises located within the United States, which portion is used or occupied for (a)(1) The following property is subject to for- official business or for diplomatic, consular, or feiture to the United States: residential purposes by— (A) Any property, real or personal, involved (A) a foreign government, including such in a transaction or attempted transaction in use as a mission to an international organi- violation of section 1956, 1957 or 1960 of this zation; title, or any property traceable to such prop- (B) an international organization; erty. (C) a foreign official; or (B) Any property, real or personal, within (D) an official guest; or the jurisdiction of the United States, con- § 981 TITLE 18—CRIMES AND CRIMINAL PROCEDURE Page 260

stituting, derived from, or traceable to, any (i) section 511 (altering or removing motor proceeds obtained directly or indirectly from vehicle identification numbers); an offense against a foreign nation, or any (ii) section 553 (importing or exporting sto- property used to facilitate such an offense, if len motor vehicles); the offense— (iii) section 2119 (armed robbery of auto- (i) involves trafficking in nuclear, chemi- mobiles); cal, biological, or radiological weapons tech- (iv) section 2312 (transporting stolen motor nology or material, or the manufacture, im- vehicles in interstate commerce); or portation, sale, or distribution of a con- (v) section 2313 (possessing or selling a sto- trolled substance (as that term is defined for len motor vehicle that has moved in inter- purposes of the Controlled Substances Act), state commerce). or any other conduct described in section (G) All assets, foreign or domestic— 1956(c)(7)(B); (i) of any individual, entity, or organiza- (ii) would be punishable within the juris- tion engaged in planning or perpetrating any diction of the foreign nation by death or im- any 1 Federal crime of terrorism (as defined prisonment for a term exceeding 1 year; and in section 2332b(g)(5)) against the United (iii) would be punishable under the laws of the United States by imprisonment for a States, citizens or residents of the United term exceeding 1 year, if the act or activity States, or their property, and all assets, for- constituting the offense had occurred within eign or domestic, affording any person a the jurisdiction of the United States. source of influence over any such entity or organization; (C) Any property, real or personal, which (ii) acquired or maintained by any person constitutes or is derived from proceeds trace- with the intent and for the purpose of sup- able to a violation of section 215, 471, 472, 473, porting, planning, conducting, or concealing 474, 476, 477, 478, 479, 480, 481, 485, 486, 487, 488, any Federal crime of terrorism (as defined in 501, 502, 510, 542, 545, 656, 657, 670, 842, 844, 1005, section 2332b(g)(5) 2 against the United 1006, 1007, 1014, 1028, 1029, 1030, 1032, or 1344 of States, citizens or residents of the United this title or any offense constituting ‘‘speci- States, or their property; fied unlawful activity’’ (as defined in section (iii) derived from, involved in, or used or 1956(c)(7) of this title), or a conspiracy to com- intended to be used to commit any Federal mit such offense. crime of terrorism (as defined in section (D) Any property, real or personal, which 2332b(g)(5)) against the United States, citi- represents or is traceable to the gross receipts zens or residents of the United States, or obtained, directly or indirectly, from a viola- their property; or tion of— (iv) of any individual, entity, or organiza- (i) section 666(a)(1) (relating to Federal tion engaged in planning or perpetrating any program fraud); act of international terrorism (as defined in (ii) section 1001 (relating to fraud and false section 2331) against any international orga- statements); nization (as defined in section 209 of the (iii) section 1031 (relating to major fraud State Department Basic Authorities Act of against the United States); (iv) section 1032 (relating to concealment 1956 (22 U.S.C. 4309(b)) or against any foreign 3 of assets from conservator or receiver of in- Government. Where the property sought for sured financial institution); forfeiture is located beyond the territorial (v) section 1341 (relating to mail fraud); or boundaries of the United States, an act in (vi) section 1343 (relating to wire fraud), furtherance of such planning or perpetration must have occurred within the jurisdiction if such violation relates to the sale of assets of the United States. acquired or held by the the 1 Federal Deposit Insurance Corporation, as conservator or re- (H) Any property, real or personal, involved ceiver for a financial institution, or any other in a violation or attempted violation, or which conservator for a financial institution ap- constitutes or is derived from proceeds trace- pointed by the Office of the Comptroller of the able to a violation, of section 2339C of this Currency or the National Credit Union Admin- title. istration, as conservator or liquidating agent (2) For purposes of paragraph (1), the term for a financial institution. ‘‘proceeds’’ is defined as follows: (E) With respect to an offense listed in sub- (A) In cases involving illegal goods, illegal section (a)(1)(D) committed for the purpose of services, unlawful activities, and tele- executing or attempting to execute any marketing and health care fraud schemes, the scheme or artifice to defraud, or for obtaining term ‘‘proceeds’’ means property of any kind money or property by means of false or fraud- obtained directly or indirectly, as the result of ulent statements, pretenses, representations the commission of the offense giving rise to or promises, the gross receipts of such an of- forfeiture, and any property traceable thereto, fense shall include all property, real or per- and is not limited to the net gain or profit re- sonal, tangible or intangible, which thereby is alized from the offense. obtained, directly or indirectly. (B) In cases involving lawful goods or lawful (F) Any property, real or personal, which services that are sold or provided in an illegal represents or is traceable to the gross proceeds manner, the term ‘‘proceeds’’ means the obtained, directly or indirectly, from a viola- tion of— 2 So in original. A second closing parenthesis probably should appear. 1 So in original. 3 So in original. Probably should not be capitalized. Page 261 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 981

amount of money acquired through the illegal tended for good cause shown at a hearing con- transactions resulting in the forfeiture, less ducted in the manner provided in rule 43(e) of the direct costs incurred in providing the the Federal Rules of Civil Procedure. goods or services. The claimant shall have the (B) The application for the restraining order burden of proof with respect to the issue of di- shall set forth the nature and circumstances of rect costs. The direct costs shall not include the foreign charges and the basis for belief that any part of the overhead expenses of the en- the person arrested or charged has property in tity providing the goods or services, or any the United States that would be subject to for- part of the income taxes paid by the entity. feiture, and shall contain a statement that the (C) In cases involving fraud in the process of restraining order is needed to preserve the avail- obtaining a loan or extension of credit, the ability of property for such time as is necessary court shall allow the claimant a deduction to receive evidence from the foreign country or from the forfeiture to the extent that the loan elsewhere in support of probable cause for the was repaid, or the debt was satisfied, without seizure of the property under this subsection. any financial loss to the victim. (c) Property taken or detained under this sec- (b)(1) Except as provided in section 985, any tion shall not be repleviable, but shall be property subject to forfeiture to the United deemed to be in the custody of the Attorney States under subsection (a) may be seized by the General, the Secretary of the Treasury, or the Attorney General and, in the case of property Postal Service, as the case may be, subject only involved in a violation investigated by the Sec- to the orders and decrees of the court or the offi- retary of the Treasury or the United States cial having jurisdiction thereof. Whenever prop- Postal Service, the property may also be seized erty is seized under this subsection, the Attor- by the Secretary of the Treasury or the Postal ney General, the Secretary of the Treasury, or Service, respectively. the Postal Service, as the case may be, may— (2) Seizures pursuant to this section shall be (1) place the property under seal; made pursuant to a warrant obtained in the (2) remove the property to a place des- same manner as provided for a search warrant ignated by him; or under the Federal Rules of Criminal Procedure, (3) require that the General Services Admin- except that a seizure may be made without a istration take custody of the property and re- warrant if— move it, if practicable, to an appropriate loca- (A) a complaint for forfeiture has been filed tion for disposition in accordance with law. in the United States district court and the (d) For purposes of this section, the provisions court issued an arrest warrant in rem pursu- of the customs laws relating to the seizure, sum- ant to the Supplemental Rules for Certain Ad- mary and judicial forfeiture, condemnation of miralty and Maritime Claims; property for violation of the customs laws, the (B) there is probable cause to believe that disposition of such property or the proceeds the property is subject to forfeiture and— from the sale of such property under this sec- (i) the seizure is made pursuant to a lawful tion, the remission or mitigation of such forfeit- arrest or search; or (ii) another exception to the Fourth ures, and the compromise of claims (19 U.S.C. Amendment warrant requirement would 1602 et seq.), insofar as they are applicable and apply; or not inconsistent with the provisions of this sec- tion, shall apply to seizures and forfeitures in- (C) the property was lawfully seized by a curred, or alleged to have been incurred, under State or local law enforcement agency and this section, except that such duties as are im- transferred to a Federal agency. posed upon the customs officer or any other per- (3) Notwithstanding the provisions of rule 41(a) son with respect to the seizure and forfeiture of of the Federal Rules of Criminal Procedure, a property under the customs laws shall be per- seizure warrant may be issued pursuant to this formed with respect to seizures and forfeitures subsection by a judicial officer in any district in of property under this section by such officers, which a forfeiture action against the property agents, or other persons as may be authorized or may be filed under section 1355(b) of title 28, and designated for that purpose by the Attorney may be executed in any district in which the General, the Secretary of the Treasury, or the property is found, or transmitted to the central Postal Service, as the case may be. The Attor- authority of any foreign state for service in ac- ney General shall have sole responsibility for cordance with any treaty or other international disposing of petitions for remission or mitiga- agreement. Any motion for the return of prop- tion with respect to property involved in a judi- erty seized under this section shall be filed in cial forfeiture proceeding. the district court in which the seizure warrant (e) Notwithstanding any other provision of the was issued or in the district court for the dis- law, except section 3 of the Anti Drug Abuse Act trict in which the property was seized. of 1986, the Attorney General, the Secretary of (4)(A) If any person is arrested or charged in a the Treasury, or the Postal Service, as the case foreign country in connection with an offense may be, is authorized to retain property for- that would give rise to the forfeiture of property feited pursuant to this section, or to transfer in the United States under this section or under such property on such terms and conditions as the Controlled Substances Act, the Attorney he may determine— General may apply to any Federal judge or mag- (1) to any other Federal agency; istrate judge in the district in which the prop- (2) to any State or local law enforcement erty is located for an ex parte order restraining agency which participated directly in any of the property subject to forfeiture for not more the acts which led to the seizure or forfeiture than 30 days, except that the time may be ex- of the property; § 981 TITLE 18—CRIMES AND CRIMINAL PROCEDURE Page 262

(3) in the case of property referred to in sub- tinued by the United States in favor of State or section (a)(1)(C), to any Federal financial in- local proceedings, notice shall be sent to all stitution regulatory agency— known interested parties advising them of the (A) to reimburse the agency for payments discontinuance or dismissal. The United States to claimants or creditors of the institution; shall not be liable in any action arising out of and the seizure, detention, and transfer of seized (B) to reimburse the insurance fund of the property to State or local officials. The United agency for losses suffered by the fund as a States shall not be liable in any action arising result of the receivership or liquidation; out of a transfer under paragraph (3), (4), or (5) (4) in the case of property referred to in sub- of this subsection. section (a)(1)(C), upon the order of the appro- (f) All right, title, and interest in property de- priate Federal financial institution regulatory scribed in subsection (a) of this section shall agency, to the financial institution as restitu- vest in the United States upon commission of tion, with the value of the property so trans- the act giving rise to forfeiture under this sec- ferred to be set off against any amount later tion. (g)(1) Upon the motion of the United States, recovered by the financial institution as com- the court shall stay the civil forfeiture proceed- pensatory damages in any State or Federal ing if the court determines that civil discovery proceeding; (5) in the case of property referred to in sub- will adversely affect the ability of the Govern- section (a)(1)(C), to any Federal financial in- ment to conduct a related criminal investiga- stitution regulatory agency, to the extent of tion or the prosecution of a related criminal the agency’s contribution of resources to, or case. (2) Upon the motion of a claimant, the court expenses involved in, the seizure and forfeit- shall stay the civil forfeiture proceeding with ure, and the investigation leading directly to respect to that claimant if the court determines the seizure and forfeiture, of such property; that— (6) as restoration to any victim of the of- (A) the claimant is the subject of a related fense giving rise to the forfeiture, including, criminal investigation or case; in the case of a money laundering offense, any (B) the claimant has standing to assert a offense constituting the underlying specified claim in the civil forfeiture proceeding; and unlawful activity; or (C) continuation of the forfeiture proceeding (7) In 3 the case of property referred to in will burden the right of the claimant against subsection (a)(1)(D), to the Resolution Trust self-incrimination in the related investigation Corporation, the Federal Deposit Insurance or case. Corporation, or any other Federal financial in- stitution regulatory agency (as defined in sec- (3) With respect to the impact of civil discov- tion 8(e)(7)(D) of the Federal Deposit Insur- ery described in paragraphs (1) and (2), the court ance Act). may determine that a stay is unnecessary if a protective order limiting discovery would pro- The Attorney General, the Secretary of the tect the interest of one party without unfairly Treasury, or the Postal Service, as the case may limiting the ability of the opposing party to be, shall ensure the equitable transfer pursuant pursue the civil case. In no case, however, shall to paragraph (2) of any forfeited property to the the court impose a protective order as an alter- appropriate State or local law enforcement native to a stay if the effect of such protective agency so as to reflect generally the contribu- order would be to allow one party to pursue dis- tion of any such agency participating directly in covery while the other party is substantially un- any of the acts which led to the seizure or for- able to do so. feiture of such property. A decision by the At- (4) In this subsection, the terms ‘‘related torney General, the Secretary of the Treasury, criminal case’’ and ‘‘related criminal investiga- or the Postal Service pursuant to paragraph (2) tion’’ mean an actual prosecution or investiga- shall not be subject to review. The United tion in progress at the time at which the request States shall not be liable in any action arising for the stay, or any subsequent motion to lift out of the use of any property the custody of the stay is made. In determining whether a which was transferred pursuant to this section criminal case or investigation is ‘‘related’’ to a to any non-Federal agency. The Attorney Gen- civil forfeiture proceeding, the court shall con- eral, the Secretary of the Treasury, or the Post- sider the degree of similarity between the par- al Service may order the discontinuance of any ties, witnesses, facts, and circumstances in- forfeiture proceedings under this section in volved in the two proceedings, without requiring favor of the institution of forfeiture proceedings an identity with respect to any one or more fac- by State or local authorities under an appro- tors. priate State or local statute. After the filing of (5) In requesting a stay under paragraph (1), a complaint for forfeiture under this section, the the Government may, in appropriate cases, sub- Attorney General may seek dismissal of the mit evidence ex parte in order to avoid disclos- complaint in favor of forfeiture proceedings ing any matter that may adversely affect an on- under State or local law. Whenever forfeiture going criminal investigation or pending crimi- proceedings are discontinued by the United nal trial. States in favor of State or local proceedings, the (6) Whenever a civil forfeiture proceeding is United States may transfer custody and posses- stayed pursuant to this subsection, the court sion of the seized property to the appropriate shall enter any order necessary to preserve the State or local official immediately upon the ini- value of the property or to protect the rights of tiation of the proper actions by such officials. lienholders or other persons with an interest in Whenever forfeiture proceedings are discon- the property while the stay is in effect. Page 263 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 981

(7) A determination by the court that the able cause that the property forfeited by such claimant has standing to request a stay pursu- order or judgment of forfeiture is subject to for- ant to paragraph (2) shall apply only to this sub- feiture under this section and creates a rebutta- section and shall not preclude the Government ble presumption of the forfeitability of such from objecting to the standing of the claimant property under this section. by dispositive motion or at the time of trial. (4) A certified order or judgment of conviction (h) In addition to the venue provided for in by a court of competent jurisdiction of a foreign section 1395 of title 28 or any other provision of country concerning an unlawful drug activity law, in the case of property of a defendant which gives rise to forfeiture under this section charged with a violation that is the basis for and any certified recordings or transcripts of forfeiture of the property under this section, a testimony taken in a foreign judicial proceeding proceeding for forfeiture under this section may concerning such order or judgment of conviction be brought in the judicial district in which the shall be admissible in evidence in a proceeding defendant owning such property is found or in brought pursuant to this section. Such certified the judicial district in which the criminal pros- order or judgment of conviction, when admitted ecution is brought. into evidence, creates a rebuttable presumption (i)(1) Whenever property is civilly or crimi- that the unlawful drug activity giving rise to nally forfeited under this chapter, the Attorney forfeiture under this section has occurred. General or the Secretary of the Treasury, as the (5) The provisions of paragraphs (3) and (4) of case may be, may transfer the forfeited personal this subsection shall not be construed as limit- property or the proceeds of the sale of any for- ing the admissibility of any evidence otherwise feited personal or real property to any foreign admissible, nor shall they limit the ability of country which participated directly or indi- the United States to establish probable cause rectly in the seizure or forfeiture of the prop- that property is subject to forfeiture by any evi- erty, if such a transfer— dence otherwise admissible. (j) For purposes of this section— (A) has been agreed to by the Secretary of (1) the term ‘‘Attorney General’’ means the State; Attorney General or his delegate; and (B) is authorized in an international agree- (2) the term ‘‘Secretary of the Treasury’’ ment between the United States and the for- means the Secretary of the Treasury or his eign country; and delegate. (C) is made to a country which, if applicable, has been certified under section 481(h) 4 of the (k) INTERBANK ACCOUNTS.— (1) IN GENERAL.— Foreign Assistance Act of 1961. (A) IN GENERAL.—For the purpose of a for- A decision by the Attorney General or the Sec- feiture under this section or under the Con- retary of the Treasury pursuant to this para- trolled Substances Act (21 U.S.C. 801 et seq.), graph shall not be subject to review. The foreign if funds are deposited into an account at a country shall, in the event of a transfer of prop- foreign financial institution (as defined in erty or proceeds of sale of property under this section 984(c)(2)(A) of this title), and that subsection, bear all expenses incurred by the foreign financial institution (as defined in United States in the seizure, maintenance, in- section 984(c)(2)(A) of this title) has an inter- ventory, storage, forfeiture, and disposition of bank account in the United States with a the property, and all transfer costs. The pay- covered financial institution (as defined in ment of all such expenses, and the transfer of as- section 5318(j)(1) of title 31), the funds shall sets pursuant to this paragraph, shall be upon be deemed to have been deposited into the such terms and conditions as the Attorney Gen- interbank account in the United States, and eral or the Secretary of the Treasury may, in his any restraining order, seizure warrant, or ar- discretion, set. rest warrant in rem regarding the funds may (2) The provisions of this section shall not be be served on the covered financial institu- construed as limiting or superseding any other tion, and funds in the interbank account, up authority of the United States to provide assist- to the value of the funds deposited into the ance to a foreign country in obtaining property account at the foreign financial institution related to a crime committed in the foreign (as defined in section 984(c)(2)(A) of this country, including property which is sought as title), may be restrained, seized, or arrested. evidence of a crime committed in the foreign (B) AUTHORITY TO SUSPEND.—The Attorney country. General, in consultation with the Secretary (3) A certified order or judgment of forfeiture of the Treasury, may suspend or terminate a by a court of competent jurisdiction of a foreign forfeiture under this section if the Attorney country concerning property which is the sub- General determines that a conflict of law ex- ject of forfeiture under this section and was de- ists between the laws of the jurisdiction in termined by such court to be the type of prop- which the foreign financial institution (as erty described in subsection (a)(1)(B) of this sec- defined in section 984(c)(2)(A) of this title) is tion, and any certified recordings or transcripts located and the laws of the United States of testimony taken in a foreign judicial proceed- with respect to liabilities arising from the ing concerning such order or judgment of for- restraint, seizure, or arrest of such funds, feiture, shall be admissible in evidence in a pro- and that such suspension or termination ceeding brought pursuant to this section. Such would be in the interest of justice and would certified order or judgment of forfeiture, when not harm the national interests of the admitted into evidence, shall constitute prob- United States. (2) NO REQUIREMENT FOR GOVERNMENT TO 4 See References in Text note below. TRACE FUNDS.—If a forfeiture action is brought § 981 TITLE 18—CRIMES AND CRIMINAL PROCEDURE Page 264

against funds that are restrained, seized, or ar- Pub. L. 102–393, title VI, § 638(d), Oct. 6, 1992, 106 rested under paragraph (1), it shall not be nec- Stat. 1788; Pub. L. 102–519, title I, § 104(a), Oct. 25, essary for the Government to establish that 1992, 106 Stat. 3385; Pub. L. 102–550, title XV, the funds are directly traceable to the funds §§ 1525(c)(1), 1533, Oct. 28, 1992, 106 Stat. 4065, 4066; that were deposited into the foreign financial Pub. L. 103–322, title XXXIII, § 330011(s)(2), Sept. institution (as defined in section 984(c)(2)(A) of 13, 1994, 108 Stat. 2146; Pub. L. 103–447, title I, this title), nor shall it be necessary for the § 102(b), Nov. 2, 1994, 108 Stat. 4693; Pub. L. Government to rely on the application of sec- 106–185, §§ 2(c)(1), 5(a), 6, 8(a), 20, Apr. 25, 2000, 114 tion 984. Stat. 210, 213–215, 224; Pub. L. 107–56, title III, (3) CLAIMS BROUGHT BY OWNER OF THE §§ 319(a), 320, 372(b)(1), 373(b), title VIII, § 806, Oct. FUNDS.—If a forfeiture action is instituted 26, 2001, 115 Stat. 311, 315, 339, 340, 378; Pub. L. against funds restrained, seized, or arrested 107–197, title III, § 301(d), June 25, 2002, 116 Stat. under paragraph (1), the owner of the funds de- 728; Pub. L. 107–273, div. B, title IV, § 4002(a)(2), posited into the account at the foreign finan- Nov. 2, 2002, 116 Stat. 1806; Pub. L. 109–177, title cial institution (as defined in section I, §§ 111, 120, title IV, §§ 404, 406(a)(3), Mar. 9, 2006, 984(c)(2)(A) of this title) may contest the for- 120 Stat. 209, 221, 244; Pub. L. 111–203, title III, feiture by filing a claim under section 983. § 377(3), July 21, 2010, 124 Stat. 1569; Pub. L. (4) DEFINITIONS.—For purposes of this sub- 112–186, § 3, Oct. 5, 2012, 126 Stat. 1428.) section, the following definitions shall apply: REFERENCES IN TEXT (A) INTERBANK ACCOUNT.—The term ‘‘inter- bank account’’ has the same meaning as in The Controlled Substances Act, referred to in sub- section 984(c)(2)(B). secs. (a)(1)(B)(i), (b)(4)(A), and (k)(1)(A), is title II of Pub. L. 91–513, Oct. 27, 1970, 84 Stat. 1242, as amended, (B) OWNER.— which is classified principally to subchapter I (§ 801 et (i) IN GENERAL.—Except as provided in seq.) of chapter 13 of Title 21, Food and Drugs. For com- clause (ii), the term ‘‘owner’’— plete classification of this Act to the Code, see Short (I) means the person who was the Title note set out under section 801 of Title 21 and owner, as that term is defined in section Tables. 983(d)(6), of the funds that were deposited The Federal Rules of Criminal Procedure, referred to into the foreign financial institution (as in subsec. (b)(2), (3), are set out in the Appendix to this defined in section 984(c)(2)(A) of this title. title) at the time such funds were depos- The Supplemental Rules for Certain Admiralty and ited; and Maritime Claims, referred to in subsec. (b)(2)(A), are set out as part of the Federal Rules of Civil Procedure (II) does not include either the foreign in the Appendix to Title 28, Judiciary and Judicial Pro- financial institution (as defined in sec- cedure. tion 984(c)(2)(A) of this title) or any fi- The Federal Rules of Civil Procedure, referred to in nancial institution acting as an inter- subsec. (b)(4)(A), are set out in the Appendix to Title 28, mediary in the transfer of the funds into Judiciary and Judicial Procedure. the interbank account. Section 3 of the Anti Drug Abuse Act of 1986, referred to in subsec. (e), is section 3 of Pub. L. 99–570, which is (ii) EXCEPTION.—The foreign financial in- set out as a note under section 801 of Title 21, Food and stitution (as defined in section 984(c)(2)(A) Drugs. of this title) may be considered the Section 8(e)(7)(D) of the Federal Deposit Insurance ‘‘owner’’ of the funds (and no other person Act, referred to in subsec. (e)(7), is classified to section shall qualify as the owner of such funds) 1818(e)(7)(D) of Title 12, Banks and Banking. only if— Section 481(h) of the Foreign Assistance Act of 1961, (I) the basis for the forfeiture action is referred to in subsec. (i)(1)(C), was classified to section 2291(h) of Title 22, Foreign Relations and Intercourse, wrongdoing committed by the foreign fi- prior to repeal of subsec. (h) by Pub. L. 102–583, § 6(b)(2), nancial institution (as defined in section Nov. 2, 1992, 106 Stat. 4932. Reference to section 481(h) 984(c)(2)(A) of this title); or of the Foreign Assistance Act of 1961 probably should (II) the foreign financial institution (as be to section 490(a)(1) of the Act, which is classified to defined in section 984(c)(2)(A) of this section 2291j(a)(1) of Title 22. title) establishes, by a preponderance of AMENDMENTS the evidence, that prior to the restraint, seizure, or arrest of the funds, the for- 2012—Subsec. (a)(1)(C). Pub. L. 112–186 inserted ‘‘670,’’ eign financial institution (as defined in after ‘‘657,’’. 2010—Subsec. (a)(1)(D). Pub. L. 111–203, in concluding section 984(c)(2)(A) of this title) had dis- provisions, struck out ‘‘Resolution Trust Corporation,’’ charged all or part of its obligation to after ‘‘acquired or held by the’’ and ‘‘or the Office of the prior owner of the funds, in which Thrift Supervision’’ after ‘‘Office of the Comptroller of case the foreign financial institution (as the Currency’’. defined in section 984(c)(2)(A) of this 2006—Subsec. (a)(1)(B)(i). Pub. L. 109–177, § 111, in- title) shall be deemed the owner of the serted ‘‘trafficking in nuclear, chemical, biological, or funds to the extent of such discharged radiological weapons technology or material, or’’ after obligation. ‘‘involves’’. Subsec. (a)(1)(G)(i). Pub. L. 109–177, § 120(1), which di- (Added Pub. L. 99–570, title I, § 1366(a), Oct. 27, rected amendment of cl. (i) by substituting ‘‘any Fed- 1986, 100 Stat. 3207–35; amended Pub. L. 100–690, eral crime of terrorism (as defined in section title VI, §§ 6463(a), (b), 6469(b), 6470(b), (e), (f), 2332b(g)(5))’’ for ‘‘act of international or domestic ter- 6471(c), Nov. 18, 1988, 102 Stat. 4374, 4377, 4378; rorism (as defined in section 2331)’’, was executed by making the substitution for ‘‘act of domestic or inter- Pub. L. 101–73, title IX, § 963(a), (b), Aug. 9, 1989, national terrorism (as defined in section 2331)’’, to re- 103 Stat. 504; Pub. L. 101–647, title I, § 103, title flect the probable intent of Congress. XXV, §§ 2508, 2524, 2525(a), title XXXV, § 3531, Subsec. (a)(1)(G)(ii). Pub. L. 109–177, § 120(2), which di- Nov. 29, 1990, 104 Stat. 4791, 4862, 4873, 4874, 4924; rected amendment of cl. (ii) by ‘‘striking ‘an act of Page 265 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 981 international or domestic terrorism (as defined in sec- ‘‘(ii) in the case of property involved in a viola- tion 2331)’ with ‘any Federal crime of terrorism (as de- tion of section 5313(a) or 5324 of title 31, United fined in section 2332b(g)(5)’ ’’, was executed by striking States Code, or section 1956 or 1957 of this title in- ‘‘an act of domestic or international terrorism (as de- vestigated by the Secretary of the Treasury or the fined in section 2331)’’ and inserting ‘‘any Federal crime United States Postal Service, may be seized by the of terrorism (as defined in section 2332b(g)(5)’’, to re- Secretary of the Treasury or the Postal Service; flect the probable intent of Congress. and Subsec. (a)(i)(G)(iii). Pub. L. 109–177, § 120(3), which di- ‘‘(B) subject to forfeiture to the United States rected amendment of cl. (iii) by substituting ‘‘Federal under subparagraph (C) of subsection (a)(1) of this crime of terrorism (as defined in section 2332b(g)(5))’’ section may be seized by the Attorney General, the for ‘‘act of international or domestic terrorism (as de- Secretary of the Treasury, or the Postal Service. fined in section 2331)’’, was executed by making the ‘‘(2) Property shall be seized under paragraph (1) of substitution for ‘‘act of domestic or international ter- this subsection upon process issued pursuant to the rorism (as defined in section 2331)’’, to reflect the prob- Supplemental Rules for certain Admiralty and Mari- able intent of Congress. time Claims by any district court of the United States Subsec. (a)(1)(G)(iv). Pub. L. 109–177, § 404, added cl. having jurisdiction over the property, except that sei- (iv). zure without such process may be made when— Subsec. (k). Pub. L. 109–177, § 406(a)(3), substituted ‘‘(A) the seizure is pursuant to a lawful arrest or ‘‘foreign financial institution (as defined in section search; or 984(c)(2)(A) of this title)’’ for ‘‘foreign bank’’ wherever ‘‘(B) the Attorney General, the Secretary of the appearing. Treasury, or the Postal Service, as the case may be, 2002—Subsec. (a)(1)(H). Pub. L. 107–197 added subpar. has obtained a warrant for such seizure pursuant to (H). the Federal Rules of Criminal Procedure, in which Subsec. (d). Pub. L. 107–273 substituted ‘‘proceeds event proceedings under subsection (d) of this section from the sale of such property under this section’’ for shall be instituted promptly.’’ ‘‘proceeds from the sale of this section’’. Subsec. (e)(6). Pub. L. 106–185, § 6, added par. (6) and 2001—Subsec. (a)(1)(A). Pub. L. 107–56, §§ 372(b)(1), struck out former par. (6) which read as follows: ‘‘in the 373(b), struck out ‘‘of section 5313(a) or 5324(a) of title case of property referred to in subsection (a)(1)(C), re- 31, or’’ after ‘‘transaction or attempted transaction in store forfeited property to any victim of an offense de- violation’’, substituted ‘‘, 1957 or 1960’’ for ‘‘or 1957’’, scribed in subsection (a)(1)(C); or’’. and struck out at end ‘‘However, no property shall be Subsec. (g). Pub. L. 106–185, § 8(a), amended subsec. (g) seized or forfeited in the case of a violation of section generally. Prior to amendment, subsec. (g) read as fol- 5313(a) of title 31 by a domestic financial institution ex- lows: ‘‘The filing of an indictment or information alleg- amined by a Federal bank supervisory agency or a fi- ing a violation of law, Federal, State, or local, which is nancial institution regulated by the Securities and Ex- also related to a forfeiture proceeding under this sec- change Commission or a partner, director, or employee tion shall, upon motion of the United States and for thereof.’’ good cause shown, stay the forfeiture proceeding.’’ Subsec. (a)(1)(B). Pub. L. 107–56, § 320, amended sub- 1994—Subsec. (e)(7). Pub. L. 103–322, § 330011(s)(2), par. (B) generally. Prior to amendment, subpar. (B) amended directory language of Pub. L. 101–647, read as follows: ‘‘Any property, real or personal, within § 2525(a)(2). See 1990 Amendment note below. the jurisdiction of the United States, constituting, de- Subsec. (i)(1)(C). Pub. L. 103–447, which directed sub- rived from, or traceable to, any proceeds obtained di- stitution of ‘‘section 490(a)(1) of the Foreign Assistance rectly or indirectly from an offense against a foreign Act of 1961’’ for ‘‘paragraph (1)(A) of section 481(h) of nation involving the manufacture, importation, sale, or the Foreign Assistance Act of 1961’’, could not be exe- distribution of a controlled substance (as such term is cuted because the words ‘‘paragraph (1)(A) of’’ do not defined for the purposes of the Controlled Substances appear in text. Act), within whose jurisdiction such offense would be 1992—Subsec. (a)(1)(A). Pub. L. 102–550, § 1525(c)(1), punishable by death or imprisonment for a term ex- substituted ‘‘5324(a)’’ for ‘‘5324’’. ceeding one year and which would be punishable under Subsec. (a)(1)(C). Pub. L. 102–393 inserted provisions the laws of the United States by imprisonment for a relating to sections 471, 472, 473, 474, 476, 477, 478, 479, term exceeding one year if such act or activity con- 480, 481, 485, 486, 487, 488, 501, 502, 510, 542, 545, 842, 844, stituting the offense against the foreign nation had oc- 1028, 1029, and 1030 of this title. curred within the jurisdiction of the United States.’’ Subsec. (a)(1)(F). Pub. L. 102–519 added subpar. (F). Subsec. (a)(1)(G). Pub. L. 107–56, § 806, added subpar. Subsec. (e). Pub. L. 102–550, § 1533, struck out penulti- (G). mate sentence of concluding provisions which read as Subsec. (k). Pub. L. 107–56, § 319(a), added subsec. (k). follows: ‘‘The authority granted to the Secretary of the 2000—Subsec. (a)(1). Pub. L. 106–185, § 2(c)(1)(A), sub- Treasury and the Postal Service pursuant to this sub- stituted ‘‘The’’ for ‘‘Except as provided in paragraph section shall apply only to property that has been ad- (2), the’’ in introductory provisions. ministratively forfeited.’’ Subsec. (a)(1)(C). Pub. L. 106–185, § 20(a), substituted 1990—Subsec. (a)(1)(C). Pub. L. 101–647, § 2524(1), in- ‘‘or any offense constituting ‘specified unlawful activ- serted ‘‘1032,’’ after ‘‘1014,’’ and ‘‘or a violation of sec- ity’ (as defined in section 1956(c)(7) of this title), or a tion 1341 or 1343 of such title affecting a financial insti- conspiracy to commit such offense.’’ for ‘‘or a violation tution’’ before period at end. of section 1341 or 1343 of such title affecting a financial Subsec. (a)(1)(D), (E). Pub. L. 101–647, § 2525(a)(1), institution.’’ added subpars. (D) and (E). Subsec. (a)(2). Pub. L. 106–185, §§ 2(c)(1)(B), 20(b), added Subsec. (b). Pub. L. 101–647, § 2524(2), added par. (1) and par. (2) and struck out former par. (2) which read as fol- par. (2) introductory provisions, redesignated former lows: ‘‘No property shall be forfeited under this section pars. (1) and (2) as subpars. (A) and (B) of par. (2), and to the extent of the interest of an owner or lienholder struck out former introductory provisions which read by reason of any act or omission established by that as follows: ‘‘Any property subject to forfeiture to the owner or lienholder to have been committed without United States under subsection (a)(1)(A) or (a)(1)(B) of the knowledge of that owner or lienholder.’’ this section may be seized by the Attorney General or, Subsec. (b). Pub. L. 106–185, § 5(a), amended subsec. (b) with respect to property involved in a violation of sec- generally. Prior to amendment, subsec. (b) read as fol- tion 5313(a) or 5324 of title 31 or of section 1956 or 1957 lows: of this title investigated by the Secretary of the Treas- ‘‘(b)(1) Any property— ury or the Postal Service may be seized by the Sec- ‘‘(A) subject to forfeiture to the United States retary of the Treasury or the Postal Service, in each under subparagraph (A) or (B) of subsection (a)(1) of case upon process issued pursuant to the Supplemental this section— Rules for certain Admiralty and Maritime Claims by ‘‘(i) may be seized by the Attorney General; or any district court of the United States having jurisdic- § 981 TITLE 18—CRIMES AND CRIMINAL PROCEDURE Page 266 tion over the property, except that seizure without retary of the Treasury may prescribe) or any interest such process may be made when—’’. in other property, including any deposit in a financial Subsec. (d). Pub. L. 101–647, § 3531, inserted a period at institution, traceable to such coin or currency involved end. in a transaction or attempted transaction in violation Subsec. (e)(3), (4). Pub. L. 101–647, § 2524(3), (4), struck of section 5313(a) or 5324 of title 31 may be seized and out ‘‘(if the affected financial institution is in receiver- forfeited to the United States Government. No property ship or liquidation)’’ after ‘‘subsection (a)(1)(C)’’. or interest in property shall be seized or forfeited if the Subsec. (e)(6). Pub. L. 101–647, § 2508, added par. (6). violation is by a domestic financial institution exam- Subsec. (e)(7). Pub. L. 101–647, § 2525(a)(2), as amended ined by a Federal bank supervisory agency or a finan- by Pub. L. 103–322, § 330011(s)(2), added par. (7). cial institution regulated by the Securities and Ex- Subsec. (i). Pub. L. 101–647, § 103(1), struck out intro- change Commission or a partner, director, officer, or ductory provisions which read as follows: ‘‘In the case employee thereof.’’ of property subject to forfeiture under subsection Subsec. (a)(2). Pub. L. 100–690, § 6470(e), substituted (a)(1)(B), the following additional provisions shall, to ‘‘omission’’ for ‘‘emission’’. the extent provided by treaty, apply:’’. Subsec. (b). Pub. L. 100–690, § 6463(b), which directed Subsec. (i)(1). Pub. L. 101–647, § 103(3), substituted first amendment of subsec. (b) by substituting ‘‘involved in sentence for ‘‘Notwithstanding any other provision of a violation of section 5313(a) or 5324 of title 31 or of sec- law, except section 3 of the Anti Drug Abuse Act of tion 1956 or 1957 of this title investigated by the Sec- 1986, whenever property is civilly or criminally for- retary of the Treasury’’ for ‘‘involved in a violation of feited under the Controlled Substances Act, the Attor- section 1956 or 1957 of this title investigated by the Sec- ney General may, with the concurrence of the Sec- retary of the Treasury, and any property subject to for- retary of State, equitably transfer any conveyance, feiture under subsection (a)(1)(C) of this section’’ was currency, and any other type of personal property executed by substituting the new language for ‘‘in- which the Attorney General may designate by regula- volved in a violation of section 1956 or 1957 of this title tion for equitable transfer, or any amounts realized by investigated by the Secretary of the Treasury, may be the United States from the sale of any real or personal seized by the Secretary of the Treasury, and any prop- property forfeited under the Controlled Substances Act erty subject to forfeiture under subsection (a)(1)(C) of to an appropriate foreign country to reflect generally this section’’ in introductory provisions, to reflect the the contribution of any such foreign country partici- probable intent of Congress. pating directly or indirectly in any acts which led to Pub. L. 100–690, § 6469(b)(1), inserted ‘‘or the Postal the seizure or forfeiture of such property. Such prop- Service’’ after ‘‘Secretary of the Treasury’’ in two erty when forfeited pursuant to subsection (a)(1)(B) of places in introductory provisions. this section may also be transferred to a foreign coun- Subsec. (b)(2). Pub. L. 100–690, § 6469(b)(2), substituted try pursuant to a treaty providing for the transfer of ‘‘the Attorney General, the Secretary of the Treasury, forfeited property to such foreign country.’’ or the Postal Service’’ for ‘‘the Attorney General or the Pub. L. 101–647, § 103(2), (4), (5), inserted ‘‘or the Sec- Secretary of the Treasury’’. retary of the Treasury’’ after ‘‘Attorney General’’ in Subsec. (c). Pub. L. 100–690, § 6469(b)(2), substituted two places, realigned margin, and struck out at end ‘‘the Attorney General, the Secretary of the Treasury, ‘‘Transfers may be made under this subsection during a or the Postal Service’’ for ‘‘the Attorney General or the fiscal year to a country that is subject to paragraph Secretary of the Treasury’’ in two places. (1)(A) of section 481(h) of the Foreign Assistance Act of Subsec. (d). Pub. L. 100–690, § 6469(b)(2), (3), sub- 1961 (relating to restrictions on United States assist- stituted ‘‘the Attorney General, the Secretary of the ance) only if there is a certification in effect with re- Treasury, or the Postal Service’’ for ‘‘the Attorney spect to that country for that fiscal year under para- General or the Secretary of the Treasury’’ and inserted graph (2) of that section.’’ provision that Attorney General have sole responsibil- Subsec. (i)(2) to (5). Pub. L. 101–647, § 103(2), realigned ity for disposing of petitions for remission or mitiga- margins. tion with respect to property involved in a judicial for- 1989—Subsec. (a)(1)(C). Pub. L. 101–73, § 963(a), added feiture proceeding. subpar. (C). Subsec. (e). Pub. L. 100–690, § 6469(b)(2), which directed Subsec. (e). Pub. L. 101–73, § 963(b), substituted ‘‘deter- the substitution of ‘‘the Attorney General, the Sec- mine—’’ for ‘‘determine to—’’ in introductory provi- retary of the Treasury, or the Postal Service’’ for ‘‘the sions, inserted ‘‘The United States shall not be liable in Attorney General or the Secretary of the Treasury’’ any action arising out of a transfer under paragraph was executed to reflect the probable intent of Congress (3), (4), or (5) of this subsection.’’ in closing provisions, by making the substitution in four places without re- added pars. (1) to (5), and struck out former pars. (1) gard as to whether or not the initial article ‘‘the’’ was and (2) which read as follows: capitalized. ‘‘(1) any other Federal agency; or Pub. L. 100–690, § 6469(b)(4), inserted provision that the ‘‘(2) any State or local law enforcement agency which authority granted to the Secretary of the Treasury and participated directly in any of the acts which led to the the Postal Service apply only to property that has been seizure or forfeiture of the property.’’ administratively forfeited. 1988—Subsec. (a)(1)(A). Pub. L. 100–690, § 6463(a)(1), Subsec. (g). Pub. L. 100–690, § 6471(c), inserted added subpar. (A) and struck out former subpar. (A) ‘‘, Federal, State or local,’’ after ‘‘law’’. which read as follows: ‘‘Any property, real or personal, Subsec. (i)(1). Pub. L. 100–690, § 6470(f), substituted which represents the gross receipts a person obtains, ‘‘subsection’’ for ‘‘subchapter’’ in fourth sentence. directly or indirectly, as a result of a violation of sec- EFFECTIVE DATE OF 2010 AMENDMENT tion 1956 or 1957 of this title, or which is traceable to such gross receipts.’’ Amendment by Pub. L. 111–203 effective on the trans- Subsec. (a)(1)(B). Pub. L. 100–690, § 6470(b), inserted fer date, see section 351 of Pub. L. 111–203, set out as a ‘‘, real or personal,’’ after ‘‘property’’, substituted note under section 906 of Title 2, The Congress. ‘‘constituting, derived from, or traceable to, any pro- EFFECTIVE DATE OF 2000 AMENDMENT ceeds obtained directly or indirectly from’’ for ‘‘which represents the proceeds of’’, ‘‘such offense would’’ for Amendment by Pub. L. 106–185 applicable to any for- ‘‘such offense or activity would’’, and ‘‘punishable feiture proceeding commenced on or after the date that under the laws of the United States by imprisonment’’ is 120 days after Apr. 25, 2000, see section 21 of Pub. L. for ‘‘punishable by imprisonment’’, and inserted ‘‘con- 106–185, set out as a note under section 1324 of Title 8, stituting the offense against the foreign nation’’ after Aliens and Nationality. ‘‘such act or activity’’. EFFECTIVE DATE OF 1994 AMENDMENT Subsec. (a)(1)(C). Pub. L. 100–690, § 6463(a)(2), struck out subpar. (C) which read as follows: ‘‘Any coin and Pub. L. 103–322, title XXXIII, § 330011(s)(2), Sept. 13, currency (or other monetary instrument as the Sec- 1994, 108 Stat. 2146, provided that the amendment made Page 267 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 982 by that section is effective as of the date on which sec- (3) The court, in imposing a sentence on a per- tion 2525(a)(2) of Pub. L. 101–647 took effect. son convicted of an offense under— SHORT TITLE OF 2000 AMENDMENT (A) section 666(a)(1) (relating to Federal pro- gram fraud); Pub. L. 106–185, § 1(a), Apr. 25, 2000, 114 Stat. 202, pro- (B) section 1001 (relating to fraud and false vided that: ‘‘This Act [enacting sections 983 and 985 of this title and sections 2466 and 2467 of Title 28, Judici- statements); ary and Judicial Procedure, amending this section, sec- (C) section 1031 (relating to major fraud tions 982 to 984, 986, 2232, 2254, and 3322 of this title, sec- against the United States); tion 1324 of Title 8, Aliens and Nationality, section 1621 (D) section 1032 (relating to concealment of of Title 19, Customs Duties, section 881 of Title 21, Food assets from conservator, receiver, or liquidat- and Drugs, sections 524, 2461, 2465, and 2680 of Title 28, ing agent of insured financial institution); and section 2996f of Title 42, The Public Health and (E) section 1341 (relating to mail fraud); or Welfare, repealing section 888 of Title 21, and enacting (F) section 1343 (relating to wire fraud), provisions set out as notes under section 1324 of Title 8, section 2466 of Title 28, and section 3724 of Title 31, involving the sale of assets acquired or held by Money and Finance] may be cited as the ‘Civil Asset the the 1 Federal Deposit Insurance Corporation, Forfeiture Reform Act of 2000’.’’ as conservator or receiver for a financial insti- SHORT TITLE OF 1988 AMENDMENT tution or any other conservator for a financial institution appointed by the Office of the Comp- Pub. L. 100–690, title VI, § 6181, Nov. 18, 1988, 102 Stat. 4354, provided that: ‘‘This subtitle [subtitle E troller of the Currency, or the National Credit (§§ 6181–6187) of title VI of Pub. L. 100–690, enacting sec- Union Administration, as conservator or liq- tions 5325 and 5326 of Title 31, Money and Finance, uidating agent for a financial institution, shall amending sections 1956 and 1957 of this title, sections order that the person forfeit to the United 1730d, 1829b, 1953, 1955, 3403, 3412, 3413, 3417, and 3420 of States any property, real or personal, which rep- Title 12, Banks and Banking, and sections 5312, 5318, resents or is traceable to the gross receipts ob- and 5321 of Title 31] may be cited as the ‘Money Laun- tained, directly or indirectly, as a result of such dering Prosecution Improvements Act of 1988’.’’ violation. SHORT TITLE OF 1986 AMENDMENT (4) With respect to an offense listed in sub- Pub. L. 99–570, title I, § 1351, Oct. 27, 1986, 100 Stat. section (a)(3) committed for the purpose of exe- 3207–18, provided that: ‘‘This subtitle [subtitle H cuting or attempting to execute any scheme or (§§ 1351–1367) of title I of Pub. L. 99–570, enacting this artifice to defraud, or for obtaining money or section, sections 982, 1956, and 1957 of this title and sec- property by means of false or fraudulent state- tion 5324 of Title 31, Money and Finance, amending sec- ments, pretenses, representations, or promises, tions 1952, 1961, and 2516 of this title, sections 1464, 1730, the gross receipts of such an offense shall in- 1786, 1817, 1818, 3403, and 3413 of Title 12, Banks and clude any property, real or personal, tangible or Banking, and sections 5312, 5316 to 5318, 5321, and 5322 of intangible, which is obtained, directly or indi- Title 31, and enacting provisions set out as notes under this section, sections 1464 and 1730 of Title 12, and sec- rectly, as a result of such offense. tions 5315 to 5317, 5321, and 5324 of Title 31] may be cited (5) The court, in imposing sentence on a per- as the ‘Money Laundering Control Act of 1986’.’’ son convicted of a violation or conspiracy to violate— SEVERABILITY (A) section 511 (altering or removing motor Pub. L. 99–570, title I, § 1367, Oct. 27, 1986, 100 Stat. vehicle identification numbers); 3207–39, provided that: ‘‘If any provision of this subtitle (B) section 553 (importing or exporting sto- [see Short Title of 1986 Amendment note above] or any len motor vehicles); amendment made by this Act [see Short Title of 1986 (C) section 2119 (armed robbery of auto- Amendment note set out under section 801 of Title 21, Food and Drugs], or the application thereof to any per- mobiles); son or circumstances is held invalid, the provisions of (D) section 2312 (transporting stolen motor every other part, and their application, shall not be af- vehicles in interstate commerce); or fected thereby.’’ (E) section 2313 (possessing or selling a sto- len motor vehicle that has moved in interstate § 982. Criminal forfeiture commerce); (a)(1) The court, in imposing sentence on a shall order that the person forfeit to the United person convicted of an offense in violation of States any property, real or personal, which rep- section 1956, 1957, or 1960 of this title, shall order resents or is traceable to the gross proceeds ob- that the person forfeit to the United States any tained, directly or indirectly, as a result of such property, real or personal, involved in such of- violation. fense, or any property traceable to such prop- (6)(A) The court, in imposing sentence on a erty. person convicted of a violation of, or conspiracy (2) The court, in imposing sentence on a per- to violate, section 274(a), 274A(a)(1), or 274A(a)(2) son convicted of a violation of, or a conspiracy of the Immigration and Nationality Act or sec- to violate— tion 555, 1425, 1426, 1427, 1541, 1542, 1543, 1544, or (A) section 215, 656, 657, 1005, 1006, 1007, 1014, 1546 of this title, or a violation of, or conspiracy 1341, 1343, or 1344 of this title, affecting a fi- to violate, section 1028 of this title if committed nancial institution, or in connection with passport or visa issuance or (B) section 471, 472, 473, 474, 476, 477, 478, 479, use, shall order that the person forfeit to the 480, 481, 485, 486, 487, 488, 501, 502, 510, 542, 545, United States, regardless of any provision of 555, 842, 844, 1028, 1029, or 1030 of this title, State law— shall order that the person forfeit to the United (i) any conveyance, including any vessel, ve- States any property constituting, or derived hicle, or aircraft used in the commission of from, proceeds the person obtained directly or indirectly, as the result of such violation. 1 So in original. Page 267 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 982 by that section is effective as of the date on which sec- (3) The court, in imposing a sentence on a per- tion 2525(a)(2) of Pub. L. 101–647 took effect. son convicted of an offense under— SHORT TITLE OF 2000 AMENDMENT (A) section 666(a)(1) (relating to Federal pro- gram fraud); Pub. L. 106–185, § 1(a), Apr. 25, 2000, 114 Stat. 202, pro- (B) section 1001 (relating to fraud and false vided that: ‘‘This Act [enacting sections 983 and 985 of this title and sections 2466 and 2467 of Title 28, Judici- statements); ary and Judicial Procedure, amending this section, sec- (C) section 1031 (relating to major fraud tions 982 to 984, 986, 2232, 2254, and 3322 of this title, sec- against the United States); tion 1324 of Title 8, Aliens and Nationality, section 1621 (D) section 1032 (relating to concealment of of Title 19, Customs Duties, section 881 of Title 21, Food assets from conservator, receiver, or liquidat- and Drugs, sections 524, 2461, 2465, and 2680 of Title 28, ing agent of insured financial institution); and section 2996f of Title 42, The Public Health and (E) section 1341 (relating to mail fraud); or Welfare, repealing section 888 of Title 21, and enacting (F) section 1343 (relating to wire fraud), provisions set out as notes under section 1324 of Title 8, section 2466 of Title 28, and section 3724 of Title 31, involving the sale of assets acquired or held by Money and Finance] may be cited as the ‘Civil Asset the the 1 Federal Deposit Insurance Corporation, Forfeiture Reform Act of 2000’.’’ as conservator or receiver for a financial insti- SHORT TITLE OF 1988 AMENDMENT tution or any other conservator for a financial institution appointed by the Office of the Comp- Pub. L. 100–690, title VI, § 6181, Nov. 18, 1988, 102 Stat. 4354, provided that: ‘‘This subtitle [subtitle E troller of the Currency, or the National Credit (§§ 6181–6187) of title VI of Pub. L. 100–690, enacting sec- Union Administration, as conservator or liq- tions 5325 and 5326 of Title 31, Money and Finance, uidating agent for a financial institution, shall amending sections 1956 and 1957 of this title, sections order that the person forfeit to the United 1730d, 1829b, 1953, 1955, 3403, 3412, 3413, 3417, and 3420 of States any property, real or personal, which rep- Title 12, Banks and Banking, and sections 5312, 5318, resents or is traceable to the gross receipts ob- and 5321 of Title 31] may be cited as the ‘Money Laun- tained, directly or indirectly, as a result of such dering Prosecution Improvements Act of 1988’.’’ violation. SHORT TITLE OF 1986 AMENDMENT (4) With respect to an offense listed in sub- Pub. L. 99–570, title I, § 1351, Oct. 27, 1986, 100 Stat. section (a)(3) committed for the purpose of exe- 3207–18, provided that: ‘‘This subtitle [subtitle H cuting or attempting to execute any scheme or (§§ 1351–1367) of title I of Pub. L. 99–570, enacting this artifice to defraud, or for obtaining money or section, sections 982, 1956, and 1957 of this title and sec- property by means of false or fraudulent state- tion 5324 of Title 31, Money and Finance, amending sec- ments, pretenses, representations, or promises, tions 1952, 1961, and 2516 of this title, sections 1464, 1730, the gross receipts of such an offense shall in- 1786, 1817, 1818, 3403, and 3413 of Title 12, Banks and clude any property, real or personal, tangible or Banking, and sections 5312, 5316 to 5318, 5321, and 5322 of intangible, which is obtained, directly or indi- Title 31, and enacting provisions set out as notes under this section, sections 1464 and 1730 of Title 12, and sec- rectly, as a result of such offense. tions 5315 to 5317, 5321, and 5324 of Title 31] may be cited (5) The court, in imposing sentence on a per- as the ‘Money Laundering Control Act of 1986’.’’ son convicted of a violation or conspiracy to violate— SEVERABILITY (A) section 511 (altering or removing motor Pub. L. 99–570, title I, § 1367, Oct. 27, 1986, 100 Stat. vehicle identification numbers); 3207–39, provided that: ‘‘If any provision of this subtitle (B) section 553 (importing or exporting sto- [see Short Title of 1986 Amendment note above] or any len motor vehicles); amendment made by this Act [see Short Title of 1986 (C) section 2119 (armed robbery of auto- Amendment note set out under section 801 of Title 21, Food and Drugs], or the application thereof to any per- mobiles); son or circumstances is held invalid, the provisions of (D) section 2312 (transporting stolen motor every other part, and their application, shall not be af- vehicles in interstate commerce); or fected thereby.’’ (E) section 2313 (possessing or selling a sto- len motor vehicle that has moved in interstate § 982. Criminal forfeiture commerce); (a)(1) The court, in imposing sentence on a shall order that the person forfeit to the United person convicted of an offense in violation of States any property, real or personal, which rep- section 1956, 1957, or 1960 of this title, shall order resents or is traceable to the gross proceeds ob- that the person forfeit to the United States any tained, directly or indirectly, as a result of such property, real or personal, involved in such of- violation. fense, or any property traceable to such prop- (6)(A) The court, in imposing sentence on a erty. person convicted of a violation of, or conspiracy (2) The court, in imposing sentence on a per- to violate, section 274(a), 274A(a)(1), or 274A(a)(2) son convicted of a violation of, or a conspiracy of the Immigration and Nationality Act or sec- to violate— tion 555, 1425, 1426, 1427, 1541, 1542, 1543, 1544, or (A) section 215, 656, 657, 1005, 1006, 1007, 1014, 1546 of this title, or a violation of, or conspiracy 1341, 1343, or 1344 of this title, affecting a fi- to violate, section 1028 of this title if committed nancial institution, or in connection with passport or visa issuance or (B) section 471, 472, 473, 474, 476, 477, 478, 479, use, shall order that the person forfeit to the 480, 481, 485, 486, 487, 488, 501, 502, 510, 542, 545, United States, regardless of any provision of 555, 842, 844, 1028, 1029, or 1030 of this title, State law— shall order that the person forfeit to the United (i) any conveyance, including any vessel, ve- States any property constituting, or derived hicle, or aircraft used in the commission of from, proceeds the person obtained directly or indirectly, as the result of such violation. 1 So in original. § 982 TITLE 18—CRIMES AND CRIMINAL PROCEDURE Page 268

the offense of which the person is convicted; 112 Stat. 3010; Pub. L. 106–185, § 18(b), Apr. 25, and 2000, 114 Stat. 223; Pub. L. 107–56, title III, (ii) any property real or personal— § 372(b)(2), Oct. 26, 2001, 115 Stat. 339; Pub. L. (I) that constitutes, or is derived from or is 107–273, div. B, title IV, § 4002(b)(10), Nov. 2, 2002, traceable to the proceeds obtained directly 116 Stat. 1808; Pub. L. 109–295, title V, § 551(c), or indirectly from the commission of the of- Oct. 4, 2006, 120 Stat. 1390; Pub. L. 110–161, div. E, fense of which the person is convicted; or title V, § 553(b), Dec. 26, 2007, 121 Stat. 2082; Pub. (II) that is used to facilitate, or is intended L. 111–203, title III, § 377(4), July 21, 2010, 124 to be used to facilitate, the commission of Stat. 1569; Pub. L. 112–127, § 5, June 5, 2012, 126 the offense of which the person is convicted. Stat. 371.)

(B) The court, in imposing sentence on a per- REFERENCES IN TEXT son described in subparagraph (A), shall order that the person forfeit to the United States all Sections 274 and 274A of the Immigration and Nation- ality Act, referred to in subsec. (a)(6)(A), are classified property described in that subparagraph. to sections 1324 and 1324a, respectively, of Title 8, (7) The court, in imposing sentence on a per- Aliens and Nationality. son convicted of a Federal health care offense, shall order the person to forfeit property, real or AMENDMENTS personal, that constitutes or is derived, directly 2012—Subsec. (a)(2)(B). Pub. L. 112–127 inserted ‘‘555,’’ or indirectly, from gross proceeds traceable to after ‘‘545,’’. the commission of the offense. 2010—Subsec. (a)(3). Pub. L. 111–203, in concluding (8) The court, in sentencing a defendant con- provisions, struck out ‘‘Resolution Trust Corporation,’’ victed of an offense under section 1028, 1029, 1341, after ‘‘acquired or held by the’’ and ‘‘or the Office of 1342, 1343, or 1344, or of a conspiracy to commit Thrift Supervision’’ after ‘‘Office of the Comptroller of the Currency’’. such an offense, if the offense involves tele- 2007—Subsec. (a)(6)(A). Pub. L. 110–161 substituted marketing (as that term is defined in section ‘‘555’’ for ‘‘554’’ in introductory provisions. 2325), shall order that the defendant forfeit to 2006—Subsec. (a)(6)(A). Pub. L. 109–295 inserted ‘‘554,’’ the United States any real or personal prop- before ‘‘1425,’’ in introductory provisions. erty— 2002—Subsec. (a)(8). Pub. L. 107–273 substituted (A) used or intended to be used to commit, ‘‘court’’ for ‘‘Court’’. to facilitate, or to promote the commission of 2001—Subsec. (a)(1). Pub. L. 107–56 struck out ‘‘of sec- such offense; and tion 5313(a), 5316, or 5324 of title 31, or’’ before ‘‘of sec- (B) constituting, derived from, or traceable tion 1956, 1957, or 1960 of this title’’ and struck out at end ‘‘However, no property shall be seized or forfeited to the gross proceeds that the defendant ob- in the case of a violation of section 5313(a) of title 31 by tained directly or indirectly as a result of the a domestic financial institution examined by a Federal offense. bank supervisory agency or a financial institution reg- (b)(1) The forfeiture of property under this sec- ulated by the Securities and Exchange Commission or tion, including any seizure and disposition of a partner, director, or employee thereof.’’ 2000—Subsec. (a)(6). Pub. L. 106–185, § 18(b)(2), (3), des- the property and any related judicial or admin- ignated concluding provisions of subpar. (A) as subpar. istrative proceeding, shall be governed by the (B), substituted ‘‘The court, in imposing sentence on a provisions of section 413 (other than subsection person described in subparagraph (A)’’ for ‘‘The court, (d) of that section) of the Comprehensive Drug in imposing sentence on such person’’ and ‘‘that sub- Abuse Prevention and Control Act of 1970 (21 paragraph’’ for ‘‘this subparagraph’’, and struck out U.S.C. 853). former subpar. (B), which read as follows: ‘‘The crimi- (2) The substitution of assets provisions of nal forfeiture of property under subparagraph (A), in- subsection 413(p) shall not be used to order a de- cluding any seizure and disposition of the property and any related administrative or judicial proceeding, shall fendant to forfeit assets in place of the actual be governed by the provisions of section 413 of the Com- property laundered where such defendant acted prehensive Drug Abuse Prevention and Control Act of merely as an intermediary who handled but did 1970 (21 U.S.C. 853), other than subsections (a) and (d) of not retain the property in the course of the such section 413.’’ money laundering offense unless the defendant, Subsec. (a)(6)(A). Pub. L. 106–185, § 18(b)(1)(A), inserted in committing the offense or offenses giving rise ‘‘section 274(a), 274A(a)(1), or 274A(a)(2) of the Immigra- to the forfeiture, conducted three or more sepa- tion and Nationality Act or’’ after ‘‘a person convicted rate transactions involving a total of $100,000 or of a violation of, or conspiracy to violate,’’ in introduc- tory provisions. more in any twelve month period. Subsec. (a)(6)(A)(i). Pub. L. 106–185, § 18(b)(1)(B), sub- (Added Pub. L. 99–570, title I, § 1366(a), Oct. 27, stituted ‘‘the offense of which the person is convicted’’ 1986, 100 Stat. 3207–39; amended Pub. L. 100–690, for ‘‘a violation of, or a conspiracy to violate, sub- title VI, §§ 6463(c), 6464, Nov. 18, 1988, 102 Stat. section (a)’’. 4374, 4375; Pub. L. 101–73, title IX, § 963(c), Aug. 9, Subsec. (a)(6)(A)(ii)(I), (II). Pub. L. 106–185, § 18(b)(1)(C), substituted ‘‘the offense of which the per- 1989, 103 Stat. 504; Pub. L. 101–647, title XIV, son is convicted’’ for ‘‘a violation of, or a conspiracy to §§ 1401, 1403, title XXV, § 2525(b), Nov. 29, 1990, 104 violate, subsection (a), section 274A(a)(1) or 274A(a)(2) Stat. 4835, 4874; Pub. L. 102–393, title VI, § 638(e), of the Immigration and Nationality Act, or section Oct. 6, 1992, 106 Stat. 1788; Pub. L. 102–519, title 1028, 1425, 1426, 1427, 1541, 1542, 1543, 1544, or 1546 of this I, § 104(b), Oct. 25, 1992, 106 Stat. 3385; Pub. L. title’’. 102–550, title XV, § 1512(c), Oct. 28, 1992, 106 Stat. 1998—Subsec. (a)(6), (7). Pub. L. 105–184, § 2(1)(A), 4058; Pub. L. 103–322, title XXXIII, § 330011(s)(1), which directed the amendment of subsec. (a) ‘‘by redes- Sept. 13, 1994, 108 Stat. 2145; Pub. L. 104–191, title ignating the second paragraph designated as paragraph (6) as paragraph (7)’’, was executed by redesignating II, § 249(a), (b), Aug. 21, 1996, 110 Stat. 2020; Pub. par. (6), relating to forfeitures for Federal health care L. 104–208, div. C, title II, § 217, Sept. 30, 1996, 110 offenses, as (7), to reflect the probable intent of Con- Stat. 3009–573; Pub. L. 105–184, § 2, June 23, 1998, gress. 112 Stat. 520; Pub. L. 105–318, § 6(a), Oct. 30, 1998, Subsec. (a)(8). Pub. L. 105–184, § 2(1)(B), added par. (8). Page 269 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 983

Subsec. (b)(1). Pub. L. 105–318 amended par. (1) gener- EFFECTIVE DATE OF 2000 AMENDMENT ally. Prior to amendment, par. (1) read as follows: Amendment by Pub. L. 106–185 applicable to any for- ‘‘Property subject to forfeiture under this section, any feiture proceeding commenced on or after the date that seizure and disposition thereof, and any administrative or judicial proceeding in relation thereto, shall be gov- is 120 days after Apr. 25, 2000, see section 21 of Pub. L. erned— 106–185, set out as a note under section 1324 of Title 8, ‘‘(A) in the case of a forfeiture under subsection Aliens and Nationality. (a)(1), (a)(6), or (a)(8) of this section, by subsections EFFECTIVE DATE OF 1994 AMENDMENT (c) and (e) through (p) of section 413 of the Compre- hensive Drug Abuse Prevention and Control Act of Pub. L. 103–322, title XXXIII, § 330011(s)(1), Sept. 13, 1970 (21 U.S.C. 853); and 1994, 108 Stat. 2145, provided that the amendment made ‘‘(B) in the case of a forfeiture under subsection by that section is effective as of the date on which sec- (a)(2) of this section, by subsections (b), (c), (e), and tion 1401 of Pub. L. 101–647 took effect. (g) through (p) of section 413 of such Act.’’ Subsec. (b)(1)(A). Pub. L. 105–184, § 2(2), substituted § 983. General rules for civil forfeiture proceed- ‘‘(a)(1), (a)(6), or (a)(8)’’ for ‘‘(a)(1) or (a)(6)’’. ings 1996—Subsec. (a)(6). Pub. L. 104–208 added par. (6) re- lating to criminal forfeiture for passport and visa relat- (a) NOTICE; CLAIM; COMPLAINT.— ed offenses. (1)(A)(i) Except as provided in clauses (ii) Pub. L. 104–191, § 249(a), added par. (6) relating to for- through (v), in any nonjudicial civil forfeiture feitures for Federal health care offenses. proceeding under a civil forfeiture statute, Subsec. (b)(1)(A). Pub. L. 104–191, § 249(b), inserted ‘‘or with respect to which the Government is re- (a)(6)’’ after ‘‘(a)(1)’’. 1994—Subsec. (a)(1). Pub. L. 103–322, § 330011(s)(1), quired to send written notice to interested amended directory language of Pub. L. 101–647, § 1401. parties, such notice shall be sent in a manner See 1990 Amendment note below. to achieve proper notice as soon as prac- 1992—Subsec. (a)(1). Pub. L. 102–550 substituted ticable, and in no case more than 60 days after ‘‘, 1957, or 1960’’ for ‘‘or 1957’’. the date of the seizure. Subsec. (a)(2). Pub. L. 102–393 amended par. (2) gener- ally. Prior to amendment, par. (2) read as follows: ‘‘The (ii) No notice is required if, before the 60-day court, in imposing sentence on a person convicted of a period expires, the Government files a civil ju- violation of, or a conspiracy to violate, section 215, 656, dicial forfeiture action against the property 657, 1005, 1006, 1007, 1014, 1341, 1343, or 1344 of this title, and provides notice of that action as required affecting a financial institution, shall order that the by law. person forfeit to the United States any property con- (iii) If, before the 60-day period expires, the stituting, or derived from, proceeds the person obtained Government does not file a civil judicial for- directly or indirectly, as the result of such violation.’’ Subsec. (a)(5). Pub. L. 102–519 added par. (5). feiture action, but does obtain a criminal in- 1990—Subsec. (a)(1). Pub. L. 101–647, § 1401, as amended dictment containing an allegation that the by Pub. L. 103–322, § 330011(s)(1), inserted ‘‘, 5316,’’ after property is subject to forfeiture, the Govern- ‘‘5313(a)’’, the first place appearing. ment shall either— Subsec. (a)(3), (4). Pub. L. 101–647, § 2525(b), added pars. (I) send notice within the 60 days and con- (3) and (4). Subsec. (b)(2). Pub. L. 101–647, § 1403, inserted before tinue the nonjudicial civil forfeiture pro- period at end ‘‘unless the defendant, in committing the ceeding under this section; or offense or offenses giving rise to the forfeiture, con- (II) terminate the nonjudicial civil forfeit- ducted three or more separate transactions involving a ure proceeding, and take the steps necessary total of $100,000 or more in any twelve month period’’. to preserve its right to maintain custody of 1989—Subsec. (a). Pub. L. 101–73, § 963(c)(1), designated the property as provided in the applicable existing provisions as par. (1) and added par. (2). Subsec. (b). Pub. L. 101–73, § 963(c)(2), struck out ‘‘The criminal forfeiture statute. provisions of subsections 413(c) and (e) through (p) of (iv) In a case in which the property is seized the Comprehensive Drug Abuse Prevention and Control by a State or local law enforcement agency Act of 1970 (21 U.S.C. 853(c) and (e)–(p)) shall apply to and turned over to a Federal law enforcement property subject to forfeiture under this section, to any seizure or disposition thereof, and to any administra- agency for the purpose of forfeiture under Fed- tive or judicial proceeding in relation thereto, if not in- eral law, notice shall be sent not more than 90 consistent with this section. However, the’’, added par. days after the date of seizure by the State or (1), and inserted ‘‘(2) The’’ before ‘‘substitution of as- local law enforcement agency. sets’’. (v) If the identity or interest of a party is 1988—Subsec. (a). Pub. L. 100–690, § 6463(c), amended not determined until after the seizure or turn- subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: ‘‘The court, in imposing sentence on a over but is determined before a declaration of person convicted of an offense under section 1956 or 1957 forfeiture is entered, notice shall be sent to of this title shall order that the person forfeit to the such interested party not later than 60 days United States any property, real or personal, which after the determination by the Government of represents the gross receipts the person obtained, di- the identity of the party or the party’s inter- rectly or indirectly, as a result of such offense, or est. which is traceable to such gross receipts.’’ (B) A supervisory official in the head- Subsec. (b). Pub. L. 100–690, § 6464, substituted ‘‘(p)’’ for ‘‘(o)’’ in two places and inserted at end ‘‘However, quarters office of the seizing agency may ex- the substitution of assets provisions of subsection tend the period for sending notice under sub- 413(p) not be used to order a defendant to forfeit assets paragraph (A) for a period not to exceed 30 in place of the actual property laundered where such days (which period may not be further ex- defendant acted merely as an intermediary who han- tended except by a court), if the official deter- dled but did not retain the property in the course of the mines that the conditions in subparagraph (D) money laundering offense.’’ are present. EFFECTIVE DATE OF 2010 AMENDMENT (C) Upon motion by the Government, a court Amendment by Pub. L. 111–203 effective on the trans- may extend the period for sending notice fer date, see section 351 of Pub. L. 111–203, set out as a under subparagraph (A) for a period not to ex- note under section 906 of Title 2, The Congress. ceed 60 days, which period may be further ex-

Page 269 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 983

Subsec. (b)(1). Pub. L. 105–318 amended par. (1) gener- EFFECTIVE DATE OF 2000 AMENDMENT ally. Prior to amendment, par. (1) read as follows: Amendment by Pub. L. 106–185 applicable to any for- ‘‘Property subject to forfeiture under this section, any feiture proceeding commenced on or after the date that seizure and disposition thereof, and any administrative or judicial proceeding in relation thereto, shall be gov- is 120 days after Apr. 25, 2000, see section 21 of Pub. L. erned— 106–185, set out as a note under section 1324 of Title 8, ‘‘(A) in the case of a forfeiture under subsection Aliens and Nationality. (a)(1), (a)(6), or (a)(8) of this section, by subsections EFFECTIVE DATE OF 1994 AMENDMENT (c) and (e) through (p) of section 413 of the Compre- hensive Drug Abuse Prevention and Control Act of Pub. L. 103–322, title XXXIII, § 330011(s)(1), Sept. 13, 1970 (21 U.S.C. 853); and 1994, 108 Stat. 2145, provided that the amendment made ‘‘(B) in the case of a forfeiture under subsection by that section is effective as of the date on which sec- (a)(2) of this section, by subsections (b), (c), (e), and tion 1401 of Pub. L. 101–647 took effect. (g) through (p) of section 413 of such Act.’’ Subsec. (b)(1)(A). Pub. L. 105–184, § 2(2), substituted § 983. General rules for civil forfeiture proceed- ‘‘(a)(1), (a)(6), or (a)(8)’’ for ‘‘(a)(1) or (a)(6)’’. ings 1996—Subsec. (a)(6). Pub. L. 104–208 added par. (6) re- lating to criminal forfeiture for passport and visa relat- (a) NOTICE; CLAIM; COMPLAINT.— ed offenses. (1)(A)(i) Except as provided in clauses (ii) Pub. L. 104–191, § 249(a), added par. (6) relating to for- through (v), in any nonjudicial civil forfeiture feitures for Federal health care offenses. proceeding under a civil forfeiture statute, Subsec. (b)(1)(A). Pub. L. 104–191, § 249(b), inserted ‘‘or with respect to which the Government is re- (a)(6)’’ after ‘‘(a)(1)’’. 1994—Subsec. (a)(1). Pub. L. 103–322, § 330011(s)(1), quired to send written notice to interested amended directory language of Pub. L. 101–647, § 1401. parties, such notice shall be sent in a manner See 1990 Amendment note below. to achieve proper notice as soon as prac- 1992—Subsec. (a)(1). Pub. L. 102–550 substituted ticable, and in no case more than 60 days after ‘‘, 1957, or 1960’’ for ‘‘or 1957’’. the date of the seizure. Subsec. (a)(2). Pub. L. 102–393 amended par. (2) gener- ally. Prior to amendment, par. (2) read as follows: ‘‘The (ii) No notice is required if, before the 60-day court, in imposing sentence on a person convicted of a period expires, the Government files a civil ju- violation of, or a conspiracy to violate, section 215, 656, dicial forfeiture action against the property 657, 1005, 1006, 1007, 1014, 1341, 1343, or 1344 of this title, and provides notice of that action as required affecting a financial institution, shall order that the by law. person forfeit to the United States any property con- (iii) If, before the 60-day period expires, the stituting, or derived from, proceeds the person obtained Government does not file a civil judicial for- directly or indirectly, as the result of such violation.’’ Subsec. (a)(5). Pub. L. 102–519 added par. (5). feiture action, but does obtain a criminal in- 1990—Subsec. (a)(1). Pub. L. 101–647, § 1401, as amended dictment containing an allegation that the by Pub. L. 103–322, § 330011(s)(1), inserted ‘‘, 5316,’’ after property is subject to forfeiture, the Govern- ‘‘5313(a)’’, the first place appearing. ment shall either— Subsec. (a)(3), (4). Pub. L. 101–647, § 2525(b), added pars. (I) send notice within the 60 days and con- (3) and (4). Subsec. (b)(2). Pub. L. 101–647, § 1403, inserted before tinue the nonjudicial civil forfeiture pro- period at end ‘‘unless the defendant, in committing the ceeding under this section; or offense or offenses giving rise to the forfeiture, con- (II) terminate the nonjudicial civil forfeit- ducted three or more separate transactions involving a ure proceeding, and take the steps necessary total of $100,000 or more in any twelve month period’’. to preserve its right to maintain custody of 1989—Subsec. (a). Pub. L. 101–73, § 963(c)(1), designated the property as provided in the applicable existing provisions as par. (1) and added par. (2). Subsec. (b). Pub. L. 101–73, § 963(c)(2), struck out ‘‘The criminal forfeiture statute. provisions of subsections 413(c) and (e) through (p) of (iv) In a case in which the property is seized the Comprehensive Drug Abuse Prevention and Control by a State or local law enforcement agency Act of 1970 (21 U.S.C. 853(c) and (e)–(p)) shall apply to and turned over to a Federal law enforcement property subject to forfeiture under this section, to any seizure or disposition thereof, and to any administra- agency for the purpose of forfeiture under Fed- tive or judicial proceeding in relation thereto, if not in- eral law, notice shall be sent not more than 90 consistent with this section. However, the’’, added par. days after the date of seizure by the State or (1), and inserted ‘‘(2) The’’ before ‘‘substitution of as- local law enforcement agency. sets’’. (v) If the identity or interest of a party is 1988—Subsec. (a). Pub. L. 100–690, § 6463(c), amended not determined until after the seizure or turn- subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: ‘‘The court, in imposing sentence on a over but is determined before a declaration of person convicted of an offense under section 1956 or 1957 forfeiture is entered, notice shall be sent to of this title shall order that the person forfeit to the such interested party not later than 60 days United States any property, real or personal, which after the determination by the Government of represents the gross receipts the person obtained, di- the identity of the party or the party’s inter- rectly or indirectly, as a result of such offense, or est. which is traceable to such gross receipts.’’ (B) A supervisory official in the head- Subsec. (b). Pub. L. 100–690, § 6464, substituted ‘‘(p)’’ for ‘‘(o)’’ in two places and inserted at end ‘‘However, quarters office of the seizing agency may ex- the substitution of assets provisions of subsection tend the period for sending notice under sub- 413(p) not be used to order a defendant to forfeit assets paragraph (A) for a period not to exceed 30 in place of the actual property laundered where such days (which period may not be further ex- defendant acted merely as an intermediary who han- tended except by a court), if the official deter- dled but did not retain the property in the course of the mines that the conditions in subparagraph (D) money laundering offense.’’ are present. EFFECTIVE DATE OF 2010 AMENDMENT (C) Upon motion by the Government, a court Amendment by Pub. L. 111–203 effective on the trans- may extend the period for sending notice fer date, see section 351 of Pub. L. 111–203, set out as a under subparagraph (A) for a period not to ex- note under section 906 of Title 2, The Congress. ceed 60 days, which period may be further ex- § 983 TITLE 18—CRIMES AND CRIMINAL PROCEDURE Page 270

tended by the court for 60-day periods, as nec- forth in the Supplemental Rules for Certain essary, if the court determines, based on a Admiralty and Maritime Claims or return the written certification of a supervisory official property pending the filing of a complaint, ex- in the headquarters office of the seizing agen- cept that a court in the district in which the cy, that the conditions in subparagraph (D) complaint will be filed may extend the period are present. for filing a complaint for good cause shown or (D) The period for sending notice under this upon agreement of the parties. paragraph may be extended only if there is (B) If the Government does not— reason to believe that notice may have an ad- (i) file a complaint for forfeiture or return verse result, including— the property, in accordance with subpara- (i) endangering the life or physical safety graph (A); or of an individual; (ii) before the time for filing a complaint (ii) flight from prosecution; has expired— (iii) destruction of or tampering with evi- (I) obtain a criminal indictment contain- dence; ing an allegation that the property is sub- (iv) intimidation of potential witnesses; or ject to forfeiture; and (v) otherwise seriously jeopardizing an in- (II) take the steps necessary to preserve vestigation or unduly delaying a trial. its right to maintain custody of the prop- erty as provided in the applicable criminal (E) Each of the Federal seizing agencies con- forfeiture statute, ducting nonjudicial forfeitures under this sec- tion shall report periodically to the Commit- the Government shall promptly release the tees on the Judiciary of the House of Rep- property pursuant to regulations promulgated resentatives and the Senate the number of oc- by the Attorney General, and may not take casions when an extension of time is granted any further action to effect the civil forfeiture under subparagraph (B). of such property in connection with the under- (F) If the Government does not send notice lying offense. of a seizure of property in accordance with (C) In lieu of, or in addition to, filing a civil subparagraph (A) to the person from whom the forfeiture complaint, the Government may in- property was seized, and no extension of time clude a forfeiture allegation in a criminal in- is granted, the Government shall return the dictment. If criminal forfeiture is the only for- property to that person without prejudice to feiture proceeding commenced by the Govern- the right of the Government to commence a ment, the Government’s right to continued forfeiture proceeding at a later time. The Gov- possession of the property shall be governed ernment shall not be required to return con- by the applicable criminal forfeiture statute. traband or other property that the person (D) No complaint may be dismissed on the from whom the property was seized may not ground that the Government did not have ade- legally possess. quate evidence at the time the complaint was (2)(A) Any person claiming property seized filed to establish the forfeitability of the prop- in a nonjudicial civil forfeiture proceeding erty. under a civil forfeiture statute may file a (4)(A) In any case in which the Government claim with the appropriate official after the files in the appropriate United States district seizure. court a complaint for forfeiture of property, (B) A claim under subparagraph (A) may be any person claiming an interest in the seized filed not later than the deadline set forth in a property may file a claim asserting such per- personal notice letter (which deadline may be son’s interest in the property in the manner not earlier than 35 days after the date the let- set forth in the Supplemental Rules for Cer- ter is mailed), except that if that letter is not tain Admiralty and Maritime Claims, except received, then a claim may be filed not later that such claim may be filed not later than 30 than 30 days after the date of final publication days after the date of service of the Govern- of notice of seizure. ment’s complaint or, as applicable, not later (C) A claim shall— than 30 days after the date of final publication (i) identify the specific property being of notice of the filing of the complaint. claimed; (B) A person asserting an interest in seized (ii) state the claimant’s interest in such property, in accordance with subparagraph property; and (A), shall file an answer to the Government’s (iii) be made under oath, subject to pen- complaint for forfeiture not later than 20 days alty of perjury. after the date of the filing of the claim. (D) A claim need not be made in any particu- (b) REPRESENTATION.— lar form. Each Federal agency conducting (1)(A) If a person with standing to contest nonjudicial forfeitures under this section shall the forfeiture of property in a judicial civil make claim forms generally available on re- forfeiture proceeding under a civil forfeiture quest, which forms shall be written in easily statute is financially unable to obtain rep- understandable language. resentation by counsel, and the person is rep- (E) Any person may make a claim under sub- resented by counsel appointed under section paragraph (A) without posting bond with re- 3006A of this title in connection with a related spect to the property which is the subject of criminal case, the court may authorize coun- the claim. sel to represent that person with respect to (3)(A) Not later than 90 days after a claim the claim. has been filed, the Government shall file a (B) In determining whether to authorize complaint for forfeiture in the manner set counsel to represent a person under subpara- Page 271 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 983

graph (A), the court shall take into account person did all that reasonably could be ex- such factors as— pected may include demonstrating that such (i) the person’s standing to contest the for- person, to the extent permitted by law— feiture; and (I) gave timely notice to an appropriate (ii) whether the claim appears to be made law enforcement agency of information that in good faith. led the person to know the conduct giving (2)(A) If a person with standing to contest rise to a forfeiture would occur or has oc- the forfeiture of property in a judicial civil curred; and forfeiture proceeding under a civil forfeiture (II) in a timely fashion revoked or made a statute is financially unable to obtain rep- good faith attempt to revoke permission for resentation by counsel, and the property sub- those engaging in such conduct to use the ject to forfeiture is real property that is being property or took reasonable actions in con- used by the person as a primary residence, the sultation with a law enforcement agency to court, at the request of the person, shall in- discourage or prevent the illegal use of the sure that the person is represented by an at- property. torney for the Legal Services Corporation (ii) A person is not required by this subpara- with respect to the claim. graph to take steps that the person reasonably (B)(i) At appropriate times during a rep- believes would be likely to subject any person resentation under subparagraph (A), the Legal (other than the person whose conduct gave Services Corporation shall submit a statement rise to the forfeiture) to physical danger. of reasonable attorney fees and costs to the (3)(A) With respect to a property interest ac- court. (ii) The court shall enter a judgment in quired after the conduct giving rise to the for- favor of the Legal Services Corporation for feiture has taken place, the term ‘‘innocent reasonable attorney fees and costs submitted owner’’ means a person who, at the time that pursuant to clause (i) and treat such judgment person acquired the interest in the property— as payable under section 2465 of title 28, (i) was a bona fide purchaser or seller for United States Code, regardless of the outcome value (including a purchaser or seller of of the case. goods or services for value); and (3) The court shall set the compensation for (ii) did not know and was reasonably with- representation under this subsection, which out cause to believe that the property was shall be equivalent to that provided for court- subject to forfeiture. appointed representation under section 3006A (B) An otherwise valid claim under subpara- of this title. graph (A) shall not be denied on the ground (c) BURDEN OF PROOF.—In a suit or action that the claimant gave nothing of value in ex- brought under any civil forfeiture statute for change for the property if— the civil forfeiture of any property— (i) the property is the primary residence of (1) the burden of proof is on the Government the claimant; to establish, by a preponderance of the evi- (ii) depriving the claimant of the property dence, that the property is subject to forfeit- would deprive the claimant of the means to ure; maintain reasonable shelter in the commu- (2) the Government may use evidence gath- nity for the claimant and all dependents re- ered after the filing of a complaint for forfeit- siding with the claimant; ure to establish, by a preponderance of the evi- (iii) the property is not, and is not trace- dence, that property is subject to forfeiture; able to, the proceeds of any criminal offense; and and (3) if the Government’s theory of forfeiture (iv) the claimant acquired his or her inter- is that the property was used to commit or fa- est in the property through marriage, di- cilitate the commission of a criminal offense, vorce, or legal separation, or the claimant or was involved in the commission of a crimi- was the spouse or legal dependent of a per- nal offense, the Government shall establish son whose death resulted in the transfer of that there was a substantial connection be- the property to the claimant through inher- tween the property and the offense. itance or probate, (d) INNOCENT OWNER DEFENSE.— except that the court shall limit the value of (1) An innocent owner’s interest in property any real property interest for which innocent shall not be forfeited under any civil forfeiture ownership is recognized under this subpara- statute. The claimant shall have the burden of graph to the value necessary to maintain rea- proving that the claimant is an innocent sonable shelter in the community for such owner by a preponderance of the evidence. claimant and all dependents residing with the (2)(A) With respect to a property interest in claimant. existence at the time the illegal conduct giv- (4) Notwithstanding any provision of this ing rise to forfeiture took place, the term ‘‘in- subsection, no person may assert an ownership nocent owner’’ means an owner who— interest under this subsection in contraband (i) did not know of the conduct giving rise or other property that it is illegal to possess. to forfeiture; or (5) If the court determines, in accordance (ii) upon learning of the conduct giving with this section, that an innocent owner has rise to the forfeiture, did all that reasonably a partial interest in property otherwise sub- could be expected under the circumstances ject to forfeiture, or a joint tenancy or ten- to terminate such use of the property. ancy by the entirety in such property, the (B)(i) For the purposes of this paragraph, court may enter an appropriate order— ways in which a person may show that such (A) severing the property; § 983 TITLE 18—CRIMES AND CRIMINAL PROCEDURE Page 272

(B) transferring the property to the Gov- aside a declaration of forfeiture under a civil ernment with a provision that the Govern- forfeiture statute. ment compensate the innocent owner to the (f) RELEASE OF SEIZED PROPERTY.— extent of his or her ownership interest once (1) A claimant under subsection (a) is enti- a final order of forfeiture has been entered tled to immediate release of seized property and the property has been reduced to liquid if— assets; or (A) the claimant has a possessory interest (C) permitting the innocent owner to re- in the property; tain the property subject to a lien in favor of (B) the claimant has sufficient ties to the the Government to the extent of the forfeit- community to provide assurance that the able interest in the property. property will be available at the time of the (6) In this subsection, the term ‘‘owner’’— trial; (C) the continued possession by the Gov- (A) means a person with an ownership in- ernment pending the final disposition of for- terest in the specific property sought to be feiture proceedings will cause substantial forfeited, including a leasehold, lien, mort- hardship to the claimant, such as preventing gage, recorded security interest, or valid as- the functioning of a business, preventing an signment of an ownership interest; and individual from working, or leaving an indi- (B) does not include— vidual homeless; (i) a person with only a general unse- (D) the claimant’s likely hardship from cured interest in, or claim against, the the continued possession by the Government property or estate of another; of the seized property outweighs the risk (ii) a bailee unless the bailor is identified that the property will be destroyed, dam- and the bailee shows a colorable legiti- aged, lost, concealed, or transferred if it is mate interest in the property seized; or returned to the claimant during the pend- (iii) a nominee who exercises no domin- ency of the proceeding; and ion or control over the property. (E) none of the conditions set forth in (e) MOTION TO SET ASIDE FORFEITURE.— paragraph (8) applies. (1) Any person entitled to written notice in (2) A claimant seeking release of property any nonjudicial civil forfeiture proceeding under this subsection must request possession under a civil forfeiture statute who does not of the property from the appropriate official, receive such notice may file a motion to set and the request must set forth the basis on aside a declaration of forfeiture with respect which the requirements of paragraph (1) are to that person’s interest in the property, met. which motion shall be granted if— (3)(A) If not later than 15 days after the date (A) the Government knew, or reasonably of a request under paragraph (2) the property should have known, of the moving party’s has not been released, the claimant may file a interest and failed to take reasonable steps petition in the district court in which the to provide such party with notice; and complaint has been filed or, if no complaint (B) the moving party did not know or have has been filed, in the district court in which reason to know of the seizure within suffi- the seizure warrant was issued or in the dis- cient time to file a timely claim. trict court for the district in which the prop- erty was seized. (2)(A) Notwithstanding the expiration of any (B) The petition described in subparagraph applicable statute of limitations, if the court (A) shall set forth— grants a motion under paragraph (1), the court (i) the basis on which the requirements of shall set aside the declaration of forfeiture as paragraph (1) are met; and to the interest of the moving party without (ii) the steps the claimant has taken to se- prejudice to the right of the Government to cure release of the property from the appro- commence a subsequent forfeiture proceeding priate official. as to the interest of the moving party. (B) Any proceeding described in subpara- (4) If the Government establishes that the claimant’s claim is frivolous, the court shall graph (A) shall be commenced— deny the petition. In responding to a petition (i) if nonjudicial, within 60 days of the under this subsection on other grounds, the entry of the order granting the motion; or Government may in appropriate cases submit (ii) if judicial, within 6 months of the evidence ex parte in order to avoid disclosing entry of the order granting the motion. any matter that may adversely affect an on- (3) A motion under paragraph (1) may be going criminal investigation or pending crimi- filed not later than 5 years after the date of nal trial. final publication of notice of seizure of the (5) The court shall render a decision on a pe- property. tition filed under paragraph (3) not later than (4) If, at the time a motion made under para- 30 days after the date of the filing, unless such graph (1) is granted, the forfeited property has 30-day limitation is extended by consent of the been disposed of by the Government in accord- parties or by the court for good cause shown. ance with law, the Government may institute (6) If— proceedings against a substitute sum of money (A) a petition is filed under paragraph (3); equal to the value of the moving party’s inter- and est in the property at the time the property (B) the claimant demonstrates that the re- was disposed of. quirements of paragraph (1) have been met, (5) A motion filed under this subsection shall the district court shall order that the property be the exclusive remedy for seeking to set be returned to the claimant, pending comple- Page 273 TITLE 18—CRIMES AND CRIMINAL PROCEDURE § 983

tion of proceedings by the Government to ob- shall a prisoner file a claim under a civil for- tain forfeiture of the property. feiture statute or appeal a judgment in a civil (7) If the court grants a petition under para- action or proceeding based on a civil forfeiture graph (3)— statute if the prisoner has, on three or more (A) the court may enter any order nec- prior occasions, while incarcerated or detained essary to ensure that the value of the prop- in any facility, brought an action or appeal in erty is maintained while the forfeiture ac- a court of the United States that was dis- tion is pending, including— missed on the grounds that it is frivolous or (i) permitting the inspection, photo- malicious, unless the prisoner shows extraor- graphing, and inventory of the property; dinary and exceptional circumstances. (ii) fixing a bond in accordance with rule (i) CIVIL FORFEITURE STATUTE DEFINED.—In E(5) of the Supplemental Rules for Certain this section, the term ‘‘civil forfeiture stat- Admiralty and Maritime Claims; and ute’’— (iii) requiring the claimant to obtain or (1) means any provision of Federal law pro- maintain insurance on the subject prop- viding for the forfeiture of property other than erty; and as a sentence imposed upon conviction of a (B) the Government may place a lien criminal offense; and against the property or file a lis pendens to (2) does not include— ensure that the property is not transferred (A) the Tariff Act of 1930 or any other pro- to another person. vision of law codified in title 19; (B) the Internal Revenue Code of 1986; (8) This subsection shall not apply if the (C) the Federal Food, Drug, and Cosmetic seized property— Act (21 U.S.C. 301 et seq.); (A) is contraband, currency, or other mon- (D) the Trading with the Enemy Act (50 etary instrument, or electronic funds unless U.S.C. App. 1 et seq.) or the International such currency or other monetary instrument Emergency Economic Powers Act (IEEPA) or electronic funds constitutes the assets of (50 U.S.C. 1701 et seq.); or a legitimate business which has been seized; (E) section 1 of title VI of the Act of June (B) is to be used as evidence of a violation 15, 1917 (40 Stat. 233; 22 U.S.C. 401). of the law; (C) by reason of design or other char- (j) RESTRAINING ORDERS; PROTECTIVE OR- acteristic, is particularly suited for use in il- DERS.— legal activities; or (1) Upon application of the United States, (D) is likely to be used to commit addi- the court may enter a restraining order or in- tional criminal acts if returned to the claim- junction, require the execution of satisfactory ant. performance bonds, create receiverships, ap- point conservators, custodians, appraisers, ac- (g) PROPORTIONALITY.— countants, or trustees, or take any other ac- (1) The claimant under subsection (a)(4) may tion to seize, secure, maintain, or preserve the petition the court to determine whether the availability of property subject to civil forfeit- forfeiture was constitutionally excessive. ure— (2) In making this determination, the court (A) upon the filing of a civil forfeiture shall compare the forfeiture to the gravity of complaint alleging that the property with the offense giving rise to the forfeiture. respect to which the order is sought is sub- (3) The claimant shall have the burden of es- ject to civil forfeiture; or tablishing that the forfeiture is grossly dis- (B) prior to the filing of such a complaint, proportional by a preponderance of the evi- if, after notice to persons appearing to have dence at a hearing conducted by the court an interest in the property and opportunity without a jury. for a hearing, the court determines that— (4) If the court finds that the forfeiture is (i) there is a substantial probability that grossly disproportional to the offense it shall the United States will prevail on the issue reduce or eliminate the forfeiture as necessary of forfeiture and that failure to enter the to avoid a violation of the Excessive Fines order will result in the property being de- Clause of the Eighth Amendment of the Con- stroyed, removed from the jurisdiction of stitution. the court, or otherwise made unavailable (h) CIVIL FINE.— for forfeiture; and (1) In any civil forfeiture proceeding under a (ii) the need to preserve the availability civil forfeiture statute in which the Govern- of the property through the entry of the ment prevails, if the court finds that the requested order outweighs the hardship on claimant’s assertion of an interest in the prop- any party against whom the order is to be erty was frivolous, the court may impose a entered. civil fine on the claimant of an amount equal (2) An order entered pursuant to paragraph to 10 percent of the value of the forfeited prop- (1)(B) shall be effective for not more than 90 erty, but in no event shall the fine be less than days, unless extended by the court for good $250 or greater than $5,000. cause shown, or unless a complaint described (2) Any civil fine imposed under this sub- in paragraph (1)(A) has been filed. section shall not preclude the court from im- (3) A temporary restraining order under this posing sanctions under rule 11 of the Federal subsection may be entered upon application of Rules of Civil Procedure. the United States without notice or oppor- (3) In addition to the limitations of section tunity for a hearing when a complaint has not 1915 of title 28, United States Code, in no event yet been filed with respect to the property, if § 984 TITLE 18—CRIMES AND CRIMINAL PROCEDURE Page 274

the United States demonstrates that there is EFFECTIVE DATE OF 2009 AMENDMENT probable cause to believe that the property Amendment by Pub. L. 111–16 effective Dec. 1, 2009, with respect to which the order is sought is see section 7 of Pub. L. 111–16, set out as a note under subject to civil forfeiture and that provision of section 109 of Title 11, Bankruptcy. notice will jeopardize the availability of the EFFECTIVE DATE OF 2000 AMENDMENT property for forfeiture. Such a temporary order shall expire not more than 14 days after Pub. L. 106–561, § 3(b), Dec. 21, 2000, 114 Stat. 2791, pro- the date on which it is entered, unless ex- vided that: ‘‘The amendment made by this section [amending this section] shall take effect as if included tended for good cause shown or unless the in the amendment made by section 2(a) of Public Law party against whom it is entered consents to 106–185.’’ an extension for a longer period. A hearing re- quested concerning an order entered under EFFECTIVE DATE this paragraph shall be held at the earliest Section applicable to any forfeiture proceeding com- possible time and prior to the expiration of menced on or after the date that is 120 days after Apr. the temporary order. 25, 2000, see section 21 of Pub. L. 106–185, set out as an (4) The court may receive and consider, at a Effective Date of 2000 Amendment note under section hearing held pursuant to this subsection, evi- 1324 of Title 8, Aliens and Nationality. dence and information that would be inadmis- ANTI-TERRORIST FORFEITURE PROTECTION sible under the Federal Rules of Evidence. Pub. L. 107–56, title III, § 316(a)–(c), Oct. 26, 2001, 115 (Added and amended Pub. L. 106–185, §§ 2(a), 9, Stat. 309, which provided the procedure for an owner of Apr. 25, 2000, 114 Stat. 202, 216; Pub. L. 106–561, property that had been confiscated under any provision of law relating to the confiscation of assets of sus- § 3(a), Dec. 21, 2000, 114 Stat. 2791; Pub. L. 107–56, pected international terrorists to contest such confis- title III, § 316(d), Oct. 26, 2001, 115 Stat. 310; Pub. cation, was repealed and restated as section 987 of this L. 111–16, § 3(1), May 7, 2009, 123 Stat. 1607.) title by Pub. L. 109–177, title IV, § 406(b)(1)(B), (2), Mar. 9, 2006, 120 Stat. 244, 245. REFERENCES IN TEXT The Supplemental Rules for Certain Admiralty and § 984. Civil forfeiture of fungible property Maritime Claims, referred to in subsecs. (a)(3)(A), (4)(A) and (f)(7)(A)(ii), are set out as part of the Federal Rules (a)(1) In any forfeiture action in rem in which of Civil Procedure in the Appendix to Title 28, Judici- the subject property is cash, monetary instru- ary and Judicial Procedure. ments in bearer form, funds deposited in an ac- The Federal Rules of Civil Procedure, referred to in count in a financial institution (as defined in subsec. (h)(2), are set out in the Appendix to Title 28, section 20 of this title), or precious metals— Judiciary and Judicial Procedure. (A) it shall not be necessary for the Govern- The Tariff Act of 1930, referred to in subsec. (i)(2)(A), ment to identify the specific property involved is act June 17, 1930, ch. 497, 46 Stat. 590, which is classi- fied generally to chapter 4 (§ 1202 et seq.) of Title 19, in the offense that is the basis for the forfeit- Customs Duties. For complete classification of this Act ure; and to the Code, see section 1654 of Title 19 and Tables. (B) it shall not be a defense that the prop- The Internal Revenue Code of 1986, referred to in sub- erty involved in such an offense has been re- sec. (i)(2)(B), is classified generally to Title 26, Internal moved and replaced by identical property. Revenue Code. The Federal Food, Drug, and Cosmetic Act, referred (2) Except as provided in subsection (b), any to in subsec. (i)(2)(C), is act June 25, 1938, ch. 675, 52 identical property found in the same place or ac- Stat. 1040, which is classified generally to chapter 9 count as the property involved in the offense (§ 301 et seq.) of Title 21, Food and Drugs. For complete that is the basis for the forfeiture shall be sub- classification of this Act to the Code, see section 301 of ject to forfeiture under this section. Title 21 and Tables. (b) No action pursuant to this section to for- The Trading with the Enemy Act, referred to in sub- feit property not traceable directly to the of- sec. (i)(2)(D), is act Oct. 6, 1917, ch. 106, 40 Stat. 411, which is classified to sections 1 to 6, 7 to 39 and 41 to fense that is the basis for the forfeiture may be 44 of Title 50, Appendix, War and National Defense. For commenced more than 1 year from the date of complete classification of this Act to the Code, see the offense. Tables. (c)(1) Subsection (a) does not apply to an ac- The International Emergency Economic Powers Act, tion against funds held by a financial institu- referred to in (i)(2)(D), is title II of Pub. L. 95–223, Dec. tion in an interbank account unless the account 28, 1977, 91 Stat. 1626, which is classified generally to holder knowingly engaged in the offense that is chapter 35 (§ 1701 et seq.) of Title 50, War and National the basis for the forfeiture. Defense. For complete classification of this Act to the Code, see Short Title note set out under section 1701 of (2) In this subsection— Title 50 and Tables. (A) the term ‘‘financial institution’’ includes The Federal Rules of Evidence, referred to in subsec. a foreign bank (as defined in section 1(b)(7) of (j)(4), are set out in the Appendix to Title 28, Judiciary the International Banking Act of 1978 (12 and Judicial Procedure. U.S.C. 3101(b)(7))); 1 and AMENDMENTS (B) the term ‘‘interbank account’’ means an account held by one financial institution at 2009—Subsec. (j)(3). Pub. L. 111–16 substituted ‘‘14 another financial institution primarily for the days’’ for ‘‘10 days’’. purpose of facilitating customer transactions. 2001—Subsec. (i)(2)(D). Pub. L. 107–56 inserted ‘‘or the International Emergency Economic Powers Act (d) Nothing in this section may be construed (IEEPA) (50 U.S.C. 1701 et seq.)’’ before semicolon. to limit the ability of the Government to forfeit 2000—Subsec. (a)(2)(C)(ii). Pub. L. 106–561 struck out property under any provision of law if the prop- ‘‘(and provide customary documentary evidence of such interest if available) and state that the claim is not erty involved in the offense giving rise to the frivolous’’ after ‘‘such property’’. Subsec. (j). Pub. L. 106–185, § 9, added subsec. (j). 1 See References in Text note below. Rule G TITLE 28, APPENDIX—RULES OF CIVIL PROCEDURE Page 342

Derived from Admiralty Rule 52. mental process on property in the United Subdivision (7). States as soon as practicable unless: Derived from Admiralty Rules 52 and 36 [46] U.S.C., (A) the property is in the government’s § 185. possession, custody, or control; or (B) the court orders a different time Subdivision (8). when the complaint is under seal, the ac- Derived from Admiralty Rule 52. tion is stayed before the warrant and sup- Subdivision (9). plemental process are executed, or the Derived from Admiralty Rule 54. The provision for court finds other good cause. transfer is revised to conform closely to the language (iii) The warrant and any supplemental of 28 U.S.C. §§ 1404(a) and 1406(a), though it retains the existing rule’s provision for transfer to any district for process may be executed within the district convenience. The revision also makes clear what has or, when authorized by statute, outside the been doubted: that the court may transfer if venue is district. wrongly laid. (iv) If executing a warrant on property outside the United States is required, the NOTES OF ADVISORY COMMITTEE ON RULES—1987 AMENDMENT warrant may be transmitted to an appro- priate authority for serving process where The amendments are technical. No substantive the property is located. change is intended. (4) NOTICE. Rule G. Forfeiture Actions in Rem (a) Notice by Publication. (1) SCOPE. This rule governs a forfeiture action (i) When Publication Is Required. A judg- in rem arising from a federal statute. To the ex- ment of forfeiture may be entered only if the tent that this rule does not address an issue, government has published notice of the ac- Supplemental Rules C and E and the Federal tion within a reasonable time after filing the Rules of Civil Procedure also apply. complaint or at a time the court orders. But (2) COMPLAINT. The complaint must: notice need not be published if: (a) be verified; (A) the defendant property is worth less (b) state the grounds for subject-matter ju- than $1,000 and direct notice is sent under risdiction, in rem jurisdiction over the defend- Rule G(4)(b) to every person the govern- ant property, and venue; ment can reasonably identify as a poten- (c) describe the property with reasonable tial claimant; or particularity; (B) the court finds that the cost of publi- (d) if the property is tangible, state its loca- cation exceeds the property’s value and tion when any seizure occurred and—if dif- that other means of notice would satisfy ferent—its location when the action is filed; due process. (e) identify the statute under which the for- (ii) Content of the Notice. Unless the court feiture action is brought; and orders otherwise, the notice must: (f) state sufficiently detailed facts to sup- (A) describe the property with reason- port a reasonable belief that the government able particularity; will be able to meet its burden of proof at (B) state the times under Rule G(5) to trial. file a claim and to answer; and (3) JUDICIAL AUTHORIZATION AND PROCESS. (C) name the government attorney to be (a) Real Property. If the defendant is real served with the claim and answer. property, the government must proceed under (iii) Frequency of Publication. Published no- 18 U.S.C. § 985. tice must appear: (b) Other Property; Arrest Warrant. If the de- (A) once a week for three consecutive fendant is not real property: weeks; or (i) the clerk must issue a warrant to arrest (B) only once if, before the action was the property if it is in the government’s pos- filed, notice of nonjudicial forfeiture of the session, custody, or control; same property was published on an official (ii) the court—on finding probable cause— internet government forfeiture site for at must issue a warrant to arrest the property least 30 consecutive days, or in a news- if it is not in the government’s possession, paper of general circulation for three con- custody, or control and is not subject to a secutive weeks in a district where publica- judicial restraining order; and tion is authorized under Rule G(4)(a)(iv). (iii) a warrant is not necessary if the prop- (iv) Means of Publication. The government erty is subject to a judicial restraining should select from the following options a order. means of publication reasonably calculated (c) Execution of Process. to notify potential claimants of the action: (i) The warrant and any supplemental (A) if the property is in the United process must be delivered to a person or or- States, publication in a newspaper gener- ganization authorized to execute it, who ally circulated in the district where the may be: (A) a marshal or any other United action is filed, where the property was States officer or employee; (B) someone seized, or where property that was not under contract with the United States; or seized is located; (C) someone specially appointed by the court (B) if the property is outside the United for that purpose. States, publication in a newspaper gener- (ii) The authorized person or organization ally circulated in a district where the ac- must execute the warrant and any supple- tion is filed, in a newspaper generally cir- Page 343 TITLE 28, APPENDIX—RULES OF CIVIL PROCEDURE Rule G

culated in the country where the property (D) be served on the government attor- is located, or in legal notices published ney designated under Rule G(4)(a)(ii)(C) or and generally circulated in the country (b)(ii)(D). where the property is located; or (ii) Unless the court for good cause sets a (C) instead of (A) or (B), posting a notice different time, the claim must be filed: on an official internet government forfeit- (A) by the time stated in a direct notice ure site for at least 30 consecutive days. sent under Rule G(4)(b); (b) Notice to Known Potential Claimants. (B) if notice was published but direct no- (i) Direct Notice Required. The government tice was not sent to the claimant or the must send notice of the action and a copy of claimant’s attorney, no later than 30 days the complaint to any person who reasonably after final publication of newspaper notice appears to be a potential claimant on the or legal notice under Rule G(4)(a) or no facts known to the government before the later than 60 days after the first day of end of the time for filing a claim under Rule publication on an official internet govern- G(5)(a)(ii)(B). ment forfeiture site; or (ii) Content of the Notice. The notice must (C) if notice was not published and direct state: notice was not sent to the claimant or the (A) the date when the notice is sent; claimant’s attorney: (B) a deadline for filing a claim, at least (1) if the property was in the govern- 35 days after the notice is sent; ment’s possession, custody, or control (C) that an answer or a motion under when the complaint was filed, no later Rule 12 must be filed no later than 21 days than 60 days after the filing, not count- after filing the claim; and ing any time when the complaint was (D) the name of the government attorney under seal or when the action was stayed to be served with the claim and answer. before execution of a warrant issued (iii) Sending Notice. under Rule G(3)(b); or (A) The notice must be sent by means (2) if the property was not in the gov- reasonably calculated to reach the poten- ernment’s possession, custody, or control tial claimant. when the complaint was filed, no later (B) Notice may be sent to the potential than 60 days after the government com- claimant or to the attorney representing plied with 18 U.S.C. § 985(c) as to real the potential claimant with respect to the property, or 60 days after process was ex- seizure of the property or in a related in- ecuted on the property under Rule G(3). vestigation, administrative forfeiture pro- (iii) A claim filed by a person asserting an ceeding, or criminal case. interest as a bailee must identify the bailor, (C) Notice sent to a potential claimant and if filed on the bailor’s behalf must state who is incarcerated must be sent to the the authority to do so. place of incarceration. (D) Notice to a person arrested in con- (b) Answer. A claimant must serve and file nection with an offense giving rise to the an answer to the complaint or a motion under forfeiture who is not incarcerated when Rule 12 within 21 days after filing the claim. A notice is sent may be sent to the address claimant waives an objection to in rem juris- that person last gave to the agency that diction or to venue if the objection is not arrested or released the person. made by motion or stated in the answer. (E) Notice to a person from whom the (6) SPECIAL INTERROGATORIES. property was seized who is not incarcer- (a) Time and Scope. The government may ated when notice is sent may be sent to serve special interrogatories limited to the the last address that person gave to the claimant’s identity and relationship to the de- agency that seized the property. fendant property without the court’s leave at (iv) When Notice Is Sent. Notice by the fol- any time after the claim is filed and before lowing means is sent on the date when it is discovery is closed. But if the claimant serves placed in the mail, delivered to a commer- a motion to dismiss the action, the govern- cial carrier, or sent by electronic mail. ment must serve the interrogatories within 21 (v) Actual Notice. A potential claimant who days after the motion is served. had actual notice of a forfeiture action may (b) Answers or Objections. Answers or objec- not oppose or seek relief from forfeiture be- tions to these interrogatories must be served cause of the government’s failure to send the within 21 days after the interrogatories are required notice. served. (c) Government’s Response Deferred. The gov- (5) RESPONSIVE PLEADINGS. ernment need not respond to a claimant’s mo- (a) Filing a Claim. tion to dismiss the action under Rule G(8)(b) (i) A person who asserts an interest in the until 21 days after the claimant has answered defendant property may contest the forfeit- these interrogatories. ure by filing a claim in the court where the action is pending. The claim must: (7) PRESERVING, PREVENTING CRIMINAL USE, (A) identify the specific property AND DISPOSING OF PROPERTY; SALES. claimed; (a) Preserving and Preventing Criminal Use of (B) identify the claimant and state the Property. When the government does not have claimant’s interest in the property; actual possession of the defendant property (C) be signed by the claimant under pen- the court, on motion or on its own, may enter alty of perjury; and any order necessary to preserve the property, Rule G TITLE 28, APPENDIX—RULES OF CIVIL PROCEDURE Page 344

to prevent its removal or encumbrance, or to (ii) The motion: prevent its use in a criminal offense. (A) must be decided before any motion (b) Interlocutory Sale or Delivery. by the claimant to dismiss the action; and (i) Order to Sell. On motion by a party or a (B) may be presented as a motion for person having custody of the property, the judgment on the pleadings or as a motion court may order all or part of the property to determine after a hearing or by sum- sold if: mary judgment whether the claimant can (A) the property is perishable or at risk carry the burden of establishing standing of deterioration, decay, or injury by being by a preponderance of the evidence. detained in custody pending the action; (d) Petition To Release Property. (B) the expense of keeping the property (i) If a United States agency or an agency’s is excessive or is disproportionate to its contractor holds property for judicial or fair market value; nonjudicial forfeiture under a statute gov- (C) the property is subject to a mortgage erned by 18 U.S.C. § 983(f), a person who has or to taxes on which the owner is in de- filed a claim to the property may petition fault; or for its release under § 983(f). (D) the court finds other good cause. (ii) If a petition for release is filed before (ii) Who Makes the Sale. A sale must be a judicial forfeiture action is filed against made by a United States agency that has au- the property, the petition may be filed ei- thority to sell the property, by the agency’s ther in the district where the property was contractor, or by any person the court des- seized or in the district where a warrant to ignates. seize the property issued. If a judicial for- (iii) Sale Procedures. The sale is governed feiture action against the property is later by 28 U.S.C. §§ 2001, 2002, and 2004, unless all filed in another district—or if the govern- parties, with the court’s approval, agree to ment shows that the action will be filed in the sale, aspects of the sale, or different pro- another district—the petition may be trans- cedures. ferred to that district under 28 U.S.C. § 1404. (iv) Sale Proceeds. Sale proceeds are a sub- (e) Excessive Fines. A claimant may seek to stitute res subject to forfeiture in place of mitigate a forfeiture under the Excessive the property that was sold. The proceeds Fines Clause of the Eighth Amendment by mo- must be held in an interest-bearing account tion for summary judgment or by motion maintained by the United States pending made after entry of a forfeiture judgment if: the conclusion of the forfeiture action. (i) the claimant has pleaded the defense (v) Delivery on a Claimant’s Motion. The under Rule 8; and court may order that the property be deliv- (ii) the parties have had the opportunity to ered to the claimant pending the conclusion conduct civil discovery on the defense. of the action if the claimant shows circum- stances that would permit sale under Rule (9) TRIAL. Trial is to the court unless any G(7)(b)(i) and gives security under these party demands trial by jury under Rule 38. rules. (As added Apr. 12, 2006, eff. Dec. 1, 2006; amended (c) Disposing of Forfeited Property. Upon entry Mar. 26, 2009, eff. Dec. 1, 2009.) of a forfeiture judgment, the property or pro- COMMITTEE NOTES ON RULES—2006 ceeds from selling the property must be dis- posed of as provided by law. Rule G is added to bring together the central proce- dures that govern civil forfeiture actions. Civil forfeit- (8) MOTIONS. ure actions are in rem proceedings, as are many admi- (a) Motion To Suppress Use of the Property as ralty proceedings. As the number of civil forfeiture ac- Evidence. If the defendant property was seized, tions has increased, however, reasons have appeared to a party with standing to contest the lawful- create sharper distinctions within the framework of the ness of the seizure may move to suppress use Supplemental Rules. Civil forfeiture practice will bene- of the property as evidence. Suppression does fit from distinctive provisions that express and focus not affect forfeiture of the property based on developments in statutory, constitutional, and deci- sional law. Admiralty practice will be freed from the independently derived evidence. pressures that arise when the needs of civil forfeiture (b) Motion To Dismiss the Action. proceedings counsel interpretations of common rules (i) A claimant who establishes standing to that may not be suitable for admiralty proceedings. contest forfeiture may move to dismiss the Rule G generally applies to actions governed by the action under Rule 12(b). Civil Asset Forfeiture Reform Act of 2000 (CAFRA) and (ii) In an action governed by 18 U.S.C. also to actions excluded from it. The rule refers to § 983(a)(3)(D) the complaint may not be dis- some specific CAFRA provisions; if these statutes are missed on the ground that the government amended, the rule should be adapted to the new provi- sions during the period required to amend the rule. did not have adequate evidence at the time Rule G is not completely self-contained. Subdivision the complaint was filed to establish the for- (1) recognizes the need to rely at times on other Sup- feitability of the property. The sufficiency of plemental Rules and the place of the Supplemental the complaint is governed by Rule G(2). Rules within the basic framework of the Civil Rules. Supplemental Rules A, C, and E are amended to re- (c) Motion To Strike a Claim or Answer. flect the adoption of Rule G. (i) At any time before trial, the govern- ment may move to strike a claim or answer: Subdivision (1) (A) for failing to comply with Rule G(5) Rule G is designed to include the distinctive proce- or (6), or dures that govern a civil forfeiture action. Some de- (B) because the claimant lacks standing. tails, however, are better supplied by relying on Rules Page 345 TITLE 28, APPENDIX—RULES OF CIVIL PROCEDURE Rule G

C and E. Subdivision (1) incorporates those rules for is- Subparagraph (i) recognizes two exceptions to the sues not addressed by Rule G. This general incorpora- general publication requirement. Publication is not re- tion is at times made explicit—subdivision (7)(b)(v), for quired if the defendant property is worth less than example, invokes the security provisions of Rule E. But $1,000 and direct notice is sent to all reasonably identi- Rules C and E are not to be invoked to create conflicts fiable potential claimants as required by subdivision with Rule G. They are to be used only when Rule G, (4)(b). Publication also is not required if the cost would fairly construed, does not address the issue. exceed the property’s value and the court finds that The Civil Rules continue to provide the procedural other means of notice would satisfy due process. Publi- framework within which Rule G and the other Supple- cation on a government-established internet forfeiture mental Rules operate. Both Rule G(1) and Rule A state site, as contemplated by subparagraph (iv), would be at this basic proposition. Rule G, for example, does not a low marginal publication cost, which would likely be address pleadings amendments. Civil Rule 15 applies, in the cost to compare to the property value. light of the circumstances of a forfeiture action. Subparagraph (iv) states the basic criterion for se- Subdivision (2) lecting the means and method of publication. The pur- pose is to adopt a means reasonably calculated to reach Rule E(2)(a) requires that the complaint in an admi- potential claimants. The government should choose ralty action ‘‘state the circumstances from which the from among these means a method that is reasonably claim arises with such particularity that the defendant likely to reach potential claimants at a cost reasonable or claimant will be able, without moving for a more in the circumstances. definite statement, to commence an investigation of If the property is in the United States and newspaper the facts and to frame a responsive pleading.’’ Applica- notice is chosen, publication may be where the action tion of this standard to civil forfeiture actions has is filed, where the property was seized, or—if the prop- evolved to the standard stated in subdivision (2)(f). The erty was not seized—where the property is located. complaint must state sufficiently detailed facts to sup- Choice among these places is influenced by the prob- port a reasonable belief that the government will be able location of potential claimants. able to meet its burden of proof at trial. See U.S. v. If the property is not in the United States, account Mondragon, 313 F.3d 862 (4th Cir. 2002). Subdivision (2)(f) must be taken of the sensitivities that surround publi- carries this forfeiture case law forward without change. cation of legal notices in other countries. A foreign Subdivision (3) country may forbid local publication. If potential claimants are likely to be in the United States, publi- Subdivision (3) governs in rem process in a civil for- cation in the district where the action is filed may be feiture action. Paragraph (a). Paragraph (a) reflects the provisions of the best choice. If potential claimants are likely to be 18 U.S.C. § 985. located abroad, the better choice may be publication by Paragraph (b). Paragraph (b) addresses arrest war- means generally circulated in the country where the rants when the defendant is not real property. Subpara- property is located. graph (i) directs the clerk to issue a warrant if the Newspaper publication is not a particularly effective property is in the government’s possession, custody, or means of notice for most potential claimants. Its tradi- control. If the property is not in the government’s pos- tional use is best defended by want of affordable alter- session, custody, or control and is not subject to a re- natives. Paragraph (iv)(C) contemplates a government- straining order, subparagraph (ii) provides that a war- created internet forfeiture site that would provide a rant issues only if the court finds probable cause to ar- single easily identified means of notice. Such a site rest the property. This provision departs from former could allow much more direct access to notice as to Rule C(3)(a)(i), which authorized issuance of summons any specific property than publication provides. and warrant by the clerk without a probable-cause Paragraph (b). Paragraph (b) is entirely new. For the finding. The probable-cause finding better protects the first time, Rule G expressly recognizes the due process interests of persons interested in the property. Sub- obligation to send notice to any person who reasonably paragraph (iii) recognizes that a warrant is not nec- appears to be a potential claimant. essary if the property is subject to a judicial restrain- Subparagraph (i) states the obligation to send notice. ing order. The government remains free, however, to Many potential claimants will be known to the govern- seek a warrant if it anticipates that the restraining ment because they have filed claims during the admin- order may be modified or vacated. istrative forfeiture stage. Notice must be sent, how- Paragraph (c). Subparagraph (ii) requires that the ever, no matter what source of information makes it warrant and any supplemental process be served as reasonably appear that a person is a potential claim- soon as practicable unless the property is already in ant. The duty to send notice terminates when the time the government’s possession, custody, or control. But for filing a claim expires. it authorizes the court to order a different time. The Notice of the action does not require formal service authority to order a different time recognizes that the of summons in the manner required by Rule 4 to initi- government may have secured orders sealing the com- ate a personal action. The process that begins an in plaint in a civil forfeiture action or have won a stay rem forfeiture action is addressed by subdivision (3). after filing. The seal or stay may be ordered for rea- This process commonly gives notice to potential claim- sons, such as protection of an ongoing criminal inves- ants. Publication of notice is required in addition to tigation, that would be defeated by prompt service of this process. Due process requirements have moved be- the warrant. Subparagraph (ii) does not reflect any yond these traditional means of notice, but are sat- independent ground for ordering a seal or stay, but isfied by practical means that are reasonably cal- merely reflects the consequences for execution when culated to accomplish actual notice. sealing or a stay is ordered. A court also may order a Subparagraph (ii)(B) directs that the notice state a different time for service if good cause is shown for rea- deadline for filing a claim that is at least 35 days after sons unrelated to a seal or stay. Subparagraph (iv) re- the notice is sent. This provision applies both in ac- flects the uncertainty surrounding service of an arrest tions that fall within 18 U.S.C. § 983(a)(4)(A) and in warrant on property not in the United States. It is not other actions. Section 983(a)(4)(A) states that a claim possible to identify in the rule the appropriate author- should be filed no later than 30 days after service of the ity for serving process in all other countries. Trans- complaint. The variation introduced by subparagraph mission of the warrant to an appropriate authority, (ii)(B) reflects the procedure of § 983(a)(2)(B) for non- moreover, does not ensure that the warrant will be exe- judicial forfeiture proceedings. The nonjudicial proce- cuted. The rule requires only that the warrant be trans- dure requires that a claim be filed ‘‘not later than the mitted to an appropriate authority. deadline set forth in a personal notice letter (which may be not earlier than 35 days after the date the let- Subdivision (4) ter is sent) * * *.’’ This procedure is as suitable in a Paragraph (a). Paragraph (a) reflects the traditional civil forfeiture action as in a nonjudicial forfeiture pro- practice of publishing notice of an in rem action. ceeding. Thirty-five days after notice is sent ordinarily Rule G TITLE 28, APPENDIX—RULES OF CIVIL PROCEDURE Page 346 will extend the claim time by no more than a brief pe- know of the claimant or did not have an address for the riod; a claimant anxious to expedite proceedings can claimant. file the claim before the deadline; and the government Paragraph (b). Under 18 U.S.C. § 983(a)(4)(B), which has flexibility to set a still longer period when circum- governs many forfeiture proceedings, a person who as- stances make that desirable. serts an interest by filing a claim ‘‘shall file an answer Subparagraph (iii) begins by stating the basic re- to the Government’s complaint for forfeiture not later quirement that notice must be sent by means reason- than 20 days after the date of the filing of the claim.’’ ably calculated to reach the potential claimant. No at- Paragraph (b) recognizes that this statute works within tempt is made to list the various means that may be the general procedures established by Civil Rule 12. reasonable in different circumstances. It may be rea- Rule 12(a)(4) suspends the time to answer when a Rule sonable, for example, to rely on means that have al- 12 motion is served within the time allowed to answer. ready been established for communication with a par- Continued application of this rule to proceedings gov- ticular potential claimant. The government’s interest erned by § 983(a)(4)(B) serves all of the purposes ad- in choosing a means likely to accomplish actual notice vanced by Rule 12(a)(4), see U.S. v. $8,221,877.16, 330 F.3d is bolstered by its desire to avoid post-forfeiture chal- 141 (3d Cir. 2003); permits a uniform procedure for all lenges based on arguments that a different method civil forfeiture actions; and recognizes that a motion would have been more likely to accomplish actual no- under Rule 12 can be made only after a claim is filed tice. Flexible rule language accommodates the rapid that provides background for the motion. evolution of communications technology. Failure to present an objection to in rem jurisdiction Notice may be directed to a potential claimant or to venue by timely motion or answer waives the ob- through counsel, but only to counsel already represent- jection. Waiver of such objections is familiar. An an- ing the claimant with respect to the seizure of the swer may be amended to assert an objection initially property, or in a related investigation, administrative omitted. But Civil Rule 15 should be applied to an forfeiture proceeding, or criminal case. amendment that for the first time raises an objection Subparagraph (iii)(C) reflects the basic proposition to in rem jurisdiction by analogy to the personal juris- that notice to a potential claimant who is incarcerated diction objection provision in Civil Rule 12(h)(1)(B). must be sent to the place of incarceration. Notice di- The amendment should be permitted only if it is per- rected to some other place, such as a pre-incarceration mitted as a matter of course under Rule 15(a). residence, is less likely to reach the potential claim- A claimant’s motion to dismiss the action is further ant. This provision does not address due process ques- governed by subdivisions (6)(c), (8)(b), and (8)(c). tions that may arise if a particular prison has deficient procedures for delivering notice to prisoners. See Subdivision (6) Dusenbery v. U.S., 534 U.S. 161 (2002). Subdivision (6) illustrates the adaptation of an admi- Items (D) and (E) of subparagraph (iii) authorize the ralty procedure to the different needs of civil forfeit- government to rely on an address given by a person ure. Rule C(6) permits interrogatories to be served with who is not incarcerated. The address may have been the complaint in an in rem action without limiting the given to the agency that arrested or released the per- subjects of inquiry. Civil forfeiture practice does not son, or to the agency that seized the property. The gov- require such an extensive departure from ordinary civil ernment is not obliged to undertake an independent in- practice. It remains useful, however, to permit the gov- vestigation to verify the address. ernment to file limited interrogatories at any time Subparagraph (iv) identifies the date on which notice after a claim is filed to gather information that bears is considered to be sent for some common means, with- on the claimant’s standing. Subdivisions (8)(b) and (c) out addressing the circumstances for choosing among allow a claimant to move to dismiss only if the claim- the identified means or other means. The date of send- ant has standing, and recognize the government’s right ing should be determined by analogy for means not list- to move to dismiss a claim for lack of standing. Sub- ed. Facsimile transmission, for example, is sent upon division (6) interrogatories are integrated with these transmission. Notice by personal delivery is sent on de- provisions in that the interrogatories are limited to the livery. Subparagraph (v), finally, reflects the purpose to ef- claimant’s identity and relationship to the defendant fect actual notice by providing that a potential claim- property. If the claimant asserts a relationship to the ant who had actual notice of a forfeiture proceeding property as bailee, the interrogatories can inquire into cannot oppose or seek relief from forfeiture because the the bailor’s interest in the property and the bailee’s re- government failed to comply with subdivision (4)(b). lationship to the bailor. The claimant can accelerate the time to serve subdivision (6) interrogatories by Subdivision (5) serving a motion to dismiss—the interrogatories must Paragraph (a). Paragraph (a) establishes that the first be served within 20 days after the motion is served. In- step of contesting a civil forfeiture action is to file a tegration is further accomplished by deferring the gov- claim. A claim is required by 18 U.S.C. § 983(a)(4)(A) for ernment’s obligation to respond to a motion to dismiss actions covered by § 983. Paragraph (a) applies this pro- until 20 days after the claimant moving to dismiss has cedure as well to actions not covered by § 983. ‘‘Claim’’ answered the interrogatories. is used to describe this first pleading because of the Special interrogatories served under Rule G(6) do not statutory references to claim and claimant. It func- count against the presumptive 25-interrogatory limit tions in the same way as the statement of interest pre- established by Rule 33(a). Rule 33 procedure otherwise scribed for an admiralty proceeding by Rule C(6), and is applies to these interrogatories. not related to the distinctive meaning of ‘‘claim’’ in Subdivision (6) supersedes the discovery ‘‘morato- admiralty practice. rium’’ of Rule 26(d) and the broader interrogatories per- If the claimant states its interest in the property to mitted for admiralty proceedings by Rule C(6). be as bailee, the bailor must be identified. A bailee who Subdivision (7) files a claim on behalf of a bailor must state the bail- ee’s authority to do so. Paragraph (a). Paragraph (a) is adapted from Rule The claim must be signed under penalty of perjury by E(9)(b). It provides for preservation orders when the the person making it. An artificial body that can act government does not have actual possession of the de- only through an agent may authorize an agent to sign fendant property. It also goes beyond Rule E(9) by rec- for it. Excusable inability of counsel to obtain an ap- ognizing the need to prevent use of the defendant prop- propriate signature may be grounds for an extension of erty in ongoing criminal offenses. time to file the claim. Paragraph (b). Paragraph (b)(i)(C) recognizes the au- Paragraph (a)(ii) sets the time for filing a claim. Item thority, already exercised in some cases, to order sale (C) applies in the relatively rare circumstance in which of property subject to a defaulted mortgage or to de- notice is not published and the government did not faulted taxes. The authority is narrowly confined to send direct notice to the claimant because it did not mortgages and tax liens; other lien interests may be Page 347 TITLE 28, APPENDIX—RULES OF CIVIL PROCEDURE Rule G

addressed, if at all, only through the general good- summary judgment. If material facts are disputed, pre- cause provision. The court must carefully weigh the cluding a grant of summary judgment, the court may competing interests in each case. hold an evidentiary hearing. The evidentiary hearing is Paragraph (b)(i)(D) establishes authority to order held by the court without a jury. The claimant has the sale for good cause. Good cause may be shown when the burden to establish claim standing at a hearing; proce- property is subject to diminution in value. Care should dure on a government summary judgment motion re- be taken before ordering sale to avoid diminished flects this allocation of the burden. value. Paragraph (d). The hardship release provisions of 18 Paragraph (b)(iii) recognizes that if the court ap- U.S.C. § 983(f) do not apply to a civil forfeiture action proves, the interests of all parties may be served by exempted from § 983 by § 983(i). their agreement to sale, aspects of the sale, or sale pro- Paragraph (d)(ii) reflects the venue provisions of 18 cedures that depart from governing statutory proce- U.S.C. § 983(f)(3)(A) as a guide to practitioners. In addi- dures. tion, it makes clear the status of a civil forfeiture ac- Paragraph (c) draws from Rule E(9)(a), (b), and (c). tion as a ‘‘civil action’’ eligible for transfer under 28 Disposition of the proceeds as provided by law may re- U.S.C. § 1404. A transfer decision must be made on the quire resolution of disputed issues. A mortgagee’s circumstances of the particular proceeding. The dis- claim to the property or sale proceeds, for example, trict where the forfeiture action is filed has the advan- may be disputed on the ground that the mortgage is tage of bringing all related proceedings together, avoid- not genuine. An undisputed lien claim, on the other ing the waste that flows from consideration of different hand, may be recognized by payment after an inter- parts of the same forfeiture proceeding in the court locutory sale. where the warrant issued or the court where the prop- Subdivision (8) erty was seized. Transfer to that court would serve con- solidation, the purpose that underlies nationwide en- Subdivision (8) addresses a number of issues that are forcement of a seizure warrant. But there may be off- unique to civil forfeiture actions. setting advantages in retaining the petition where it Paragraph (a). Standing to suppress use of seized was filed. The claimant may not be able to litigate, ef- property as evidence is governed by principles distinct fectively or at all, in a distant court. Issues relevant to from the principles that govern claim standing. A the petition may be better litigated where the property claimant with standing to contest forfeiture may not was seized or where the warrant issued. One element, have standing to seek suppression. Rule G does not of for example, is whether the claimant has sufficient ties itself create a basis of suppression standing that does to the community to provide assurance that the prop- not otherwise exist. erty will be available at the time of trial. Another is Paragraph (b). Paragraph (b)(i) is one element of the whether continued government possession would pre- system that integrates the procedures for determining vent the claimant from working. Determining whether a claimant’s standing to claim and for deciding a seizure of the claimant’s automobile prevents work claimant’s motion to dismiss the action. Under para- may turn on assessing the realities of local public tran- graph (c)(ii), a motion to dismiss the action cannot be sit facilities. addressed until the court has decided any government Paragraph (e). The Excessive Fines Clause of the motion to strike the claim or answer. This procedure is Eighth Amendment forbids an excessive forfeiture. U.S. reflected in the (b)(i) reminder that a motion to dismiss v. Bajakajian, 524 U.S. 321 (1998). 18 U.S.C. § 983(g) pro- the forfeiture action may be made only by a claimant vides a ‘‘petition’’ ‘‘to determine whether the forfeiture who establishes claim standing. The government, more- was constitutionally excessive’’ based on finding ‘‘that over, need not respond to a claimant’s motion to dis- the forfeiture is grossly disproportional to the offense.’’ miss until 20 days after the claimant has answered any Paragraph (e) describes the procedure for § 983(g) miti- subdivision (6) interrogatories. gation petitions and adopts the same procedure for for- Paragraph (b)(ii) mirrors 18 U.S.C. § 983(a)(3)(D). It ap- feiture actions that fall outside § 983(g). The procedure plies only to an action independently governed by is by motion, either for summary judgment or for miti- § 983(a)(3)(D), implying nothing as to actions outside gation after a forfeiture judgment is entered. The § 983(a)(3)(D). The adequacy of the complaint is meas- claimant must give notice of this defense by pleading, ured against the pleading requirements of subdivision but failure to raise the defense in the initial answer (2), not against the quality of the evidence available to may be cured by amendment under Rule 15. The issues the government when the complaint was filed. that bear on mitigation often are separate from the is- Paragraph (c). As noted with paragraph (b), paragraph sues that determine forfeiture. For that reason it may (c) governs the procedure for determining whether a be convenient to resolve the issue by summary judg- claimant has standing. It does not address the prin- ment before trial on the forfeiture issues. Often, how- ciples that govern claim standing. ever, it will be more convenient to determine first Paragraph (c)(i)(A) provides that the government whether the property is to be forfeited. Whichever time may move to strike a claim or answer for failure to is chosen to address mitigation, the parties must have comply with the pleading requirements of subdivision had the opportunity to conduct civil discovery on the (5) or to answer subdivision (6) interrogatories. As with defense. The extent and timing of discovery are gov- other pleadings, the court should strike a claim or an- erned by the ordinary rules. swer only if satisfied that an opportunity should not be afforded to cure the defects under Rule 15. Not every Subdivision (9) failure to respond to subdivision (6) interrogatories warrants an order striking the claim. But the special Subdivision (9) serves as a reminder of the need to de- role that subdivision (6) plays in the scheme for deter- mand jury trial under Rule 38. It does not expand the mining claim standing may justify a somewhat more right to jury trial. See U.S. v. One Parcel of Property Lo- demanding approach than the general approach to dis- cated at 32 Medley Lane, 2005 WL 465241 (D.Conn. 2005), covery sanctions under Rule 37. ruling that the court, not the jury, determines whether Paragraph (c)(ii) directs that a motion to strike a a forfeiture is constitutionally excessive. claim or answer be decided before any motion by the Changes Made After Publication and Comment. Rule claimant to dismiss the action. A claimant who lacks G(6)(a) was amended to delete the provision that spe- standing is not entitled to challenge the forfeiture on cial interrogatories addressed to a claimant’s standing the merits. are ‘‘under Rule 33.’’ The government was concerned Paragraph (c)(ii) further identifies three procedures that some forfeitures raise factually complex standing for addressing claim standing. If a claim fails on its issues that require many interrogatories, severely de- face to show facts that support claim standing, the pleting the presumptive 25-interrogatory limit in Rule claim can be dismissed by judgment on the pleadings. 33. The Committee Note is amended to state that the If the claim shows facts that would support claim interrogatories do not count against the limit, but that standing, those facts can be tested by a motion for Rule 33 governs the procedure. Rule G TITLE 28, APPENDIX—RULES OF CIVIL PROCEDURE Page 348

Rule G(7)(a) was amended to recognize the court’s au- Changes were made in the Committee Note to explain thority to enter an order necessary to prevent use of some of the rule text revisions, to add clarity on a few the defendant property in a criminal offense. points, and to delete statements about complex mat- Rule G(8)(c) was revised to clarify the use of three ters that seemed better left to case-law development. procedures to challenge a claimant’s standing—judg- ment on the pleadings, summary judgment, or an evi- dentiary hearing. COMMITTEE NOTES ON RULES—2009 AMENDMENT Several other rule text changes were made to add clarity on small points or to conform to Style conven- The times set in the former rule at 20 days have been tions. revised to 21 days. See the Note to Rule 6. Rule 32.2 FEDERAL RULES OF CRIMINAL PROCEDURE 42 order to produce a witness’s statement, the court must not con- sider that witness’s testimony. (As added Apr. 30, 1979, eff. Dec. 1, 1980; amended Nov. 10, 1986, eff. Dec. 10, 1986; Mar. 9, 1987, eff. Aug. 1, 1987; Apr. 25, 1989, eff. Dec. 1, 1989; Apr. 30, 1991, eff. Dec. 1, 1991; Apr. 22, 1993, eff. Dec. 1, 1993; Apr. 29, 2002, eff. Dec. 1, 2002; Apr. 25, 2005, eff. Dec. 1, 2005; Apr. 12, 2006, eff. Dec. 1, 2006; Apr. 28, 2010, eff. Dec. 1, 2010.) Rule 32.2. Criminal Forfeiture (a) Notice to the Defendant. A court must not enter a judgment of forfeiture in a criminal proceeding unless the indictment or in- formation contains notice to the defendant that the government will seek the forfeiture of property as part of any sentence in ac- cordance with the applicable statute. The notice should not be designated as a count of the indictment or information. The in- dictment or information need not identify the property subject to forfeiture or specify the amount of any forfeiture money judgment that the government seeks. (b) Entering a Preliminary Order of Forfeiture. (1) Forfeiture Phase of the Trial. (A) Forfeiture Determinations. As soon as practical after a verdict or finding of guilty, or after a plea of guilty or nolo contendere is accepted, on any count in an indictment or information regarding which criminal forfeiture is sought, the court must determine what property is subject to for- feiture under the applicable statute. If the government seeks forfeiture of specific property, the court must deter- mine whether the government has established the req- uisite nexus between the property and the offense. If the government seeks a personal money judgment, the court must determine the amount of money that the defendant will be ordered to pay. (B) Evidence and Hearing. The court’s determination may be based on evidence already in the record, including any written plea agreement, and on any additional evidence or information submitted by the parties and accepted by the court as relevant and reliable. If the forfeiture is con- tested, on either party’s request the court must conduct a hearing after the verdict or finding of guilty. (2) Preliminary Order. (A) Contents of a Specific Order. If the court finds that property is subject to forfeiture, it must promptly enter a preliminary order of forfeiture setting forth the amount of any money judgment, directing the forfeiture of specific property, and directing the forfeiture of any substitute property if the government has met the statutory criteria. The court must enter the order without regard to any third party’s interest in the property. Determining wheth- er a third party has such an interest must be deferred until any third party files a claim in an ancillary proceeding under Rule 32.2(c). (B) Timing. Unless doing so is impractical, the court must enter the preliminary order sufficiently in advance of sentencing to allow the parties to suggest revisions or 43 FEDERAL RULES OF CRIMINAL PROCEDURE Rule 32.2

modifications before the order becomes final as to the de- fendant under Rule 32.2(b)(4). (C) General Order. If, before sentencing, the court cannot identify all the specific property subject to forfeiture or calculate the total amount of the money judgment, the court may enter a forfeiture order that: (i) lists any identified property; (ii) describes other property in general terms; and (iii) states that the order will be amended under Rule 32.2(e)(1) when additional specific property is identified or the amount of the money judgment has been cal- culated. (3) Seizing Property. The entry of a preliminary order of for- feiture authorizes the Attorney General (or a designee) to seize the specific property subject to forfeiture; to conduct any discovery the court considers proper in identifying, locat- ing, or disposing of the property; and to commence proceed- ings that comply with any statutes governing third-party rights. The court may include in the order of forfeiture condi- tions reasonably necessary to preserve the property’s value pending any appeal. (4) Sentence and Judgment. (A) When Final. At sentencing—or at any time before sentencing if the defendant consents—the preliminary for- feiture order becomes final as to the defendant. If the order directs the defendant to forfeit specific property, it remains preliminary as to third parties until the ancillary proceeding is concluded under Rule 32.2(c). (B) Notice and Inclusion in the Judgment. The court must include the forfeiture when orally announcing the sen- tence or must otherwise ensure that the defendant knows of the forfeiture at sentencing. The court must also in- clude the forfeiture order, directly or by reference, in the judgment, but the court’s failure to do so may be corrected at any time under Rule 36. (C) Time to Appeal. The time for the defendant or the gov- ernment to file an appeal from the forfeiture order, or from the court’s failure to enter an order, begins to run when judgment is entered. If the court later amends or de- clines to amend a forfeiture order to include additional property under Rule 32.2(e), the defendant or the govern- ment may file an appeal regarding that property under Federal Rule of Appellate Procedure 4(b). The time for that appeal runs from the date when the order granting or denying the amendment becomes final. (5) Jury Determination. (A) Retaining the Jury. In any case tried before a jury, if the indictment or information states that the government is seeking forfeiture, the court must determine before the jury begins deliberating whether either party requests that the jury be retained to determine the forfeitability of specific property if it returns a guilty verdict. (B) Special Verdict Form. If a party timely requests to have the jury determine forfeiture, the government must Rule 32.2 FEDERAL RULES OF CRIMINAL PROCEDURE 44

submit a proposed Special Verdict Form listing each prop- erty subject to forfeiture and asking the jury to determine whether the government has established the requisite nexus between the property and the offense committed by the defendant. (6) Notice of the Forfeiture Order. (A) Publishing and Sending Notice. If the court orders the forfeiture of specific property, the government must pub- lish notice of the order and send notice to any person who reasonably appears to be a potential claimant with stand- ing to contest the forfeiture in the ancillary proceeding. (B) Content of the Notice. The notice must describe the forfeited property, state the times under the applicable statute when a petition contesting the forfeiture must be filed, and state the name and contact information for the government attorney to be served with the petition. (C) Means of Publication; Exceptions to Publication Require- ment. Publication must take place as described in Supple- mental Rule G(4)(a)(iii) of the Federal Rules of Civil Pro- cedure, and may be by any means described in Supple- mental Rule G(4)(a)(iv). Publication is unnecessary if any exception in Supplemental Rule G(4)(a)(i) applies. (D) Means of Sending the Notice. The notice may be sent in accordance with Supplemental Rules G(4)(b)(iii)–(v) of the Federal Rules of Civil Procedure. (7) Interlocutory Sale. At any time before entry of a final for- feiture order, the court, in accordance with Supplemental Rule G(7) of the Federal Rules of Civil Procedure, may order the interlocutory sale of property alleged to be forfeitable. (c) Ancillary Proceeding; Entering a Final Order of Forfeiture. (1) In General. If, as prescribed by statute, a third party files a petition asserting an interest in the property to be forfeited, the court must conduct an ancillary proceeding, but no ancil- lary proceeding is required to the extent that the forfeiture consists of a money judgment. (A) In the ancillary proceeding, the court may, on mo- tion, dismiss the petition for lack of standing, for failure to state a claim, or for any other lawful reason. For pur- poses of the motion, the facts set forth in the petition are assumed to be true. (B) After disposing of any motion filed under Rule 32.2(c)(1)(A) and before conducting a hearing on the peti- tion, the court may permit the parties to conduct discov- ery in accordance with the Federal Rules of Civil Proce- dure if the court determines that discovery is necessary or desirable to resolve factual issues. When discovery ends, a party may move for summary judgment under Federal Rule of Civil Procedure 56. (2) Entering a Final Order. When the ancillary proceeding ends, the court must enter a final order of forfeiture by amending the preliminary order as necessary to account for any third-party rights. If no third party files a timely peti- tion, the preliminary order becomes the final order of forfeit- ure if the court finds that the defendant (or any combination of defendants convicted in the case) had an interest in the 45 FEDERAL RULES OF CRIMINAL PROCEDURE Rule 33

property that is forfeitable under the applicable statute. The defendant may not object to the entry of the final order on the ground that the property belongs, in whole or in part, to a co- defendant or third party; nor may a third party object to the final order on the ground that the third party had an interest in the property. (3) Multiple Petitions. If multiple third-party petitions are filed in the same case, an order dismissing or granting one pe- tition is not appealable until rulings are made on all the peti- tions, unless the court determines that there is no just reason for delay. (4) Ancillary Proceeding Not Part of Sentencing. An ancillary proceeding is not part of sentencing. (d) Stay Pending Appeal. If a defendant appeals from a convic- tion or an order of forfeiture, the court may stay the order of for- feiture on terms appropriate to ensure that the property remains available pending appellate review. A stay does not delay the an- cillary proceeding or the determination of a third party’s rights or interests. If the court rules in favor of any third party while an appeal is pending, the court may amend the order of forfeiture but must not transfer any property interest to a third party until the decision on appeal becomes final, unless the defendant consents in writing or on the record. (e) Subsequently Located Property; Substitute Property. (1) In General. On the government’s motion, the court may at any time enter an order of forfeiture or amend an existing order of forfeiture to include property that: (A) is subject to forfeiture under an existing order of for- feiture but was located and identified after that order was entered; or (B) is substitute property that qualifies for forfeiture under an applicable statute. (2) Procedure. If the government shows that the property is subject to forfeiture under Rule 32.2(e)(1), the court must: (A) enter an order forfeiting that property, or amend an existing preliminary or final order to include it; and (B) if a third party files a petition claiming an interest in the property, conduct an ancillary proceeding under Rule 32.2(c). (3) Jury Trial Limited. There is no right to a jury trial under Rule 32.2(e). (As added Apr. 17, 2000, eff. Dec. 1, 2000; amended Apr. 29, 2002, eff. Dec. 1, 2002; Mar. 26, 2009, eff. Dec. 1, 2009.) Rule 33. New Trial (a) Defendant’s Motion. Upon the defendant’s motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires. If the case was tried without a jury, the court may take additional testimony and enter a new judgment. (b) Time to File. (1) Newly Discovered Evidence. Any motion for a new trial grounded on newly discovered evidence must be filed within 3 years after the verdict or finding of guilty. If an appeal is pending, the court may not grant a motion for a new trial until the appellate court remands the case. Lexis Advance® Research

Document:Honeycutt v. United States, 137 S. Ct. 1626

Honeycutt v. United States, 137 S. Ct. 1626

Copy Citation

Supreme Court of the United States

March 29, 2017, Argued; June 5, 2017, Decided

No. 16-142.

Reporter

137 S. Ct. 1626 * | 198 L. Ed. 2d 73 ** | 2017 U.S. LEXIS 3556 *** | 85 U.S.L.W. 4312 | 26 Fla. L.

Weekly Fed. S 623 | 2017 WL 2407468

TERRY MICHAEL HONEYCUTT, Petitioner v. UNITED STATES

Notice: The LEXIS pagination of this document is subject to change pending release of the final

published version.

Prior History: [***1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE

SIXTH CIRCUIT

United States v. Honeycutt, 816 F.3d 362, 2016 U.S. App. LEXIS 4104 (6th Cir.) (6th Cir. Tenn., Mar. 4,

2016)

Disposition: 816 F. 3d 362, reversed.

Core Terms

forfeiture, joint and several liability, tainted, conspiracy, proceeds, provisions, requires, applies, result of

the crime, co-conspirators, indirectly, jointly, limits, sales, forfeitable, mastermind, principles, untainted,

iodine Case Summary

Overview

HOLDINGS: [1]-21 U.S.C.S. § 853(a)’s limitation of forfeiture to tainted property acquired or used by the defendant, together with the plain text of 21 U.S.C.S. § 853(a)(1), foreclosed joint and several liability for coconspirators; [2]-Forfeiture pursuant to 21 U.S.C.S. § 853(a)(1) was limited to property the defendant himself actually acquired as the result of the crime; [3]-In the instant case, because the government conceded that defendant had no ownership interest in his brother's store and did not personally benefit from the sales of a product used in methamphetamine production, 21

U.S.C.S. § 853 did not require any forfeiture.

Outcome

Judgment reversed; 8-0 decision.

LexisNexis® Headnotes

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

HN1 Sentencing, Forfeitures Criminal forfeiture statutes empower the government to confiscate property derived from or used to facilitate criminal activity. Such statutes serve important governmental interests such as separating a criminal from his ill-gotten gains, returning property, in full, to those wrongfully deprived or defrauded of it, and lessening the economic power of criminal enterprises. More like this Headnote

Shepardize - Narrow by this Headnote

Torts > Procedural Matters > Multiple Defendants > Joint & Several Liability

HN2 Multiple Defendants, Joint & Several Liability A creature of tort law, joint and several liability applies when there has been a judgment against multiple defendants. If two or more defendants jointly cause harm, each defendant is held liable for the entire amount of the harm; provided, however, that the plaintiff recover only once for the full amount. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview HN3 Sentencing, Forfeitures Forfeiture under 21 U.S.C.S. § 853 applies to any person convicted of certain serious drug crimes. 21 U.S.C.S. § 853(a) limits the statute’s reach by defining the property subject to forfeiture in three separate provisions. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Controlled Substances > Delivery, Distribution & Sale >

Penalties

Criminal Law & Procedure > ... > Controlled Substances > Manufacture > Penalties

HN4 Sentencing, Forfeitures 21 U.S.C.S. § 853(a)(1) limits forfeiture to property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of the crime. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Controlled Substances > Manufacture > Penalties

Criminal Law & Procedure > ... > Controlled Substances > Delivery, Distribution & Sale >

Penalties

HN5 Sentencing, Forfeitures 21 U.S.C.S. § 853(a)(2) restricts forfeiture to property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, the crime. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN6 Sentencing, Forfeitures 21 U.S.C.S. § 853(a)(3) applies to persons convicted of engaging in a continuing criminal enterprise, a form of conspiracy, and requires forfeiture of property described in 21 U.S.C.S. § 853(a)(1) or (2) as well as any of the defendant’s interest in, claims against, and property or contractual rights affording a source of control over, the continuing criminal enterprise. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties HN7 Conspiracy, Penalties 21 U.S.C.S. § 853(a)(1), (2), and (3), by their terms, limit forfeiture under 21 U.S.C.S. § 853 to tainted property; that is, property flowing from (§ 853(a)(1)), or used in (§ 853(a)(2)), the crime itself. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN8 Sentencing, Forfeitures In addition to limiting forfeiture to tainted property, 21 U.S.C.S. § 853(a) defines forfeitable property solely in terms of personal possession or use. This is most clear in the specific text of 21 U.S.C.S. § 853(a)(1). Section 853(a)(1) limits forfeiture to property the defendant obtained as the result of the crime. At the time Congress enacted § 853(a)(1), the verb obtain was defined as to come into possession of or to get or acquire. That definition persists today. Neither the dictionary definition nor the common usage of the word obtain supports the conclusion that an individual obtains property that was acquired by someone else. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN9 Sentencing, Forfeitures 21 U.S.C.S. § 853(a)(1) provides that the forfeitable property may be obtained, directly or indirectly. The adverbs directly and indirectly modify, but do not erase, the verb obtain. In other words, these adverbs refer to how a defendant obtains the property; they do not negate the requirement that he obtain it at all. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN10 Sentencing, Forfeitures 21 U.S.C.S. § 853(a)(2) and (3) are in accord with the limitation of forfeiture to property the defendant himself obtained. Section 853(a)(2) mandates forfeiture of property used to facilitate the crime but limits forfeiture to the person’s property. Similarly, § 853(a)(3) requires forfeiture of property related to continuing criminal enterprises, but contrary to joint and several liability principles, requires the defendant to forfeit only his interest in the enterprise. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties HN11 Sentencing, Forfeitures 21 U.S.C.S. § 853(a)’s limitation of forfeiture to tainted property acquired or used by the defendant, together with the plain text of 21 U.S.C.S. § 853(a)(1), foreclose joint and several liability for coconspirators. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN12 Sentencing, Forfeitures Joint and several liability is not only contrary to 21 U.S.C.S. § 853(a), it is, for the same reasons, contrary to several other provisions of 21 U.S.C.S. § 853. Two provisions expressly incorporate the § 853(a) limitations. First, 21 U.S.C.S. § 853(c) provides that all right, title, and interest in property described in § 853(a), e.g., tainted property obtained as the result of or used to facilitate the crime, vests in the United States upon the commission of the act giving rise to forfeiture. Consistent with its text, previous judicial precedent acknowledges that § 853(c) applies to tainted property only. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN13 Sentencing, Forfeitures 21 U.S.C.S. § 853(e)(1) authorizes pretrial freezes to preserve the availability of property described in 21 U.S.C.S. § 853(a) for forfeiture. Pretrial restraints on forfeitable property are permitted only when the government proves, at a hearing, that (1) the defendant has committed an offense triggering forfeiture, and (2) the property at issue has the requisite connection to that crime. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN14 Sentencing, Forfeitures 21 U.S.C.S. § 853(d) establishes a rebuttable presumption that property is subject to forfeiture only if the government proves that such property was acquired by the defendant during the period of the violation and that there was no likely source for such property other than the crime. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties HN15 Sentencing, Forfeitures 21 U.S.C.S. § 853(p), the sole provision of 21 U.S.C.S. § 853 that permits the government to confiscate property untainted by the crime, lays to rest any doubt that the statute permits joint and several liability. That provision governs forfeiture of substitute property and applies if any property described in 21 U.S.C.S. § 853(a), as a result of any act or omission of the defendant either: (1) cannot be located upon the exercise of due diligence; (2) has been transferred or sold to, or deposited with, a third party; (3) has been placed beyond the jurisdiction of the court; (4) has been substantially diminished in value; or (5) has been commingled with other property which cannot be divided without difficulty. 21 U.S.C.S. § 853(p)(1). More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN16 Sentencing, Forfeitures Only if the government can prove that one of the five conditions set forth in 21 U.S.C.S. § 853(p) (1) was caused by the defendant may it seize any other property of the defendant, up to the value of the tainted property, rather than the tainted property itself. 21 U.S.C.S. § 853(p)(2). This provision begins from the premise that the defendant once possessed tainted property as described in 21 U.S.C.S. § 853(a), and provides a means for the government to recoup the value of the property if it has been dissipated or otherwise disposed of by any act or omission of the defendant. 21 U.S.C.S. § 853(p)(1). More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN17 Sentencing, Forfeitures 21 U.S.C.S. § 853(p)(1) demonstrates that Congress contemplated situations where the tainted property itself would fall outside the government’s reach. To remedy that situation, Congress did not authorize the government to confiscate substitute property from other defendants or coconspirators; it authorized the government to confiscate assets only from the defendant who initially acquired the property and who bears responsibility for its dissipation. Permitting the government to force other coconspirators to turn over untainted substitute property would allow the government to circumvent Congress’ carefully constructed statutory scheme, which permits forfeiture of substitute property only when the requirements of 21 U.S.C.S. § 853(p) and (a) are satisfied. There is no basis to read such an end run into the statute. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN18 Sentencing, Forfeitures Traditionally, forfeiture was an action against the tainted property itself and thus proceeded in rem; that is, proceedings in which the thing was primarily considered as the offender, or rather the offence was attached primarily to the thing The forfeiture proceeding in rem stood independent of, and wholly unaffected by any criminal proceeding in personam against the defendant. Congress altered this distinction in enacting 21 U.S.C.S. § 853 by effectively merging the in rem forfeiture proceeding with the in personam criminal proceeding and by expanding forfeiture to include not just the thing but property derived from any proceeds of the crime. 21 U.S.C.S. § 853(a)(1). But as is clear from its text and structure, § 853 maintains traditional in rem forfeiture’s focus on tainted property unless one of the preconditions of 21 U.S.C.S. § 853(p) exists. For those who find it relevant, the legislative history confirms as much: Congress altered the traditional system in order to improve the procedures applicable in forfeiture cases. By adopting an in personam aspect to criminal forfeiture, and providing for substitute-asset forfeiture, Congress made it easier for the government to hold the defendant who acquired the tainted property responsible. Congress did not, however, enact any significant expansion of the scope of property subject to forfeiture. More like this Headnote

Shepardize - Narrow by this Headnote

Governments > Legislation > Interpretation

HN19 Legislation, Interpretation A court cannot construe a statute in a way that negates its plain text. More like this Headnote

Shepardize - Narrow by this Headnote

Criminal Law & Procedure > Sentencing > Forfeitures > General Overview

Criminal Law & Procedure > ... > Delivery, Distribution & Sale > Conspiracy > Penalties

HN20 Sentencing, Forfeitures Forfeiture pursuant to 21 U.S.C.S. § 853(a)(1) is limited to property the defendant himself actually acquired as the result of the crime. More like this Headnote

Shepardize - Narrow by this Headnote

Lawyers' Edition Display

Decision

[**73] 21 U.S.C.S. § 853(a)(1)--requiring forfeiture of illegal-drug-sales proceeds--did not permit forfeiture by store manager who, along with owner, was convicted of conspiracy to distribute product used in methamphetamine production, as manager did not have ownership interest in store or personally benefit from sales.

Summary

Overview: HOLDINGS: [1]-21 U.S.C.S. § 853(a)'s limitation of forfeiture to tainted property acquired or used by the defendant, together with the plain text of 21 U.S.C.S. § 853(a)(1), foreclosed joint and several liability for coconspirators; [2]-Forfeiture pursuant to 21 U.S.C.S. § 853(a)(1) was limited to property the defendant himself actually acquired as the result of the crime; [3]-In the instant case, because the government conceded that defendant had no ownership interest in his brother's store and did not personally benefit from the sales of a product used in methamphetamine production, 21 U.S.C.S. § 853 did not require any forfeiture.

Outcome: Judgment reversed; 8-0 decision. Headnotes

[**74] Statutes 103.5 > CRIMINAL FORFEITURE -- GOVERNMENTAL INTERESTS > Headnote:

LEdHN1 1

Criminal forfeiture statutes empower the government to confiscate property derived from or used to facilitate criminal activity. Such statutes serve important governmental interests such as separating a criminal from his ill-gotten gains, returning property, in full, to those wrongfully deprived or defrauded of it, and lessening the economic power of criminal enterprises.

Torts 7Torts 9 > JOINT AND SEVERAL LIABILITY -- RECOVERY LIMIT > Headnote:

LEdHN2 2

A creature of tort law, joint and several liability applies when there has been a judgment against multiple defendants. If two or more defendants jointly cause harm, each defendant is held liable for the entire amount of the harm; provided, however, that the plaintiff recover only once for the full amount.

Forfeiture and Penalties 1 > DRUG CRIMES > Headnote:

LEdHN3 3

Forfeiture under 21 U.S.C.S. § 853 applies to any person convicted of certain serious drug crimes. 21 U.S.C.S. § 853(a) limits the statute's reach by defining the property subject to forfeiture in three separate provisions.

Forfeiture and Penalties 2 > PROPERTY LIMIT > Headnote:

LEdHN4 4

21 U.S.C.S. § 853(a)(1) limits forfeiture to property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of the crime.

Forfeiture and Penalties 2 > PROPERTY LIMIT > Headnote:

LEdHN5 5

21 U.S.C.S. § 853(a)(2) restricts forfeiture to property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, the crime.

Forfeiture and Penalties 1Forfeiture and Penalties 2 > CONSPIRACY -- FORFEITABLE PROPERTY > Headnote:

LEdHN6 6

21 U.S.C.S. § 853(a)(3) applies to persons convicted of engaging in a continuing criminal enterprise, a form of conspiracy, and requires forfeiture of property described in 21 U.S.C.S. § 853(a)(1) or (2) as well as any of the defendant's interest in, claims against, and property or contractual rights affording a source of control over, the continuing criminal enterprise.

Forfeiture and Penalties 2 > TAINTED PROPERTY > Headnote:

LEdHN7 7

21 U.S.C.S. § 853(a)(1), (2), and (3), by their terms, limit forfeiture under 21 U.S.C.S. § 853 to tainted property; that is, property flowing from (§ 853(a)(1)), or used in (§ 853(a)(2)), the crime itself.

Forfeiture and Penalties 2 > TAINTED PROPERTY -- PROPERTY OBTAINED > Headnote:

LEdHN8 8

In addition to limiting forfeiture to tainted property, 21 U.S.C.S. § 853(a) defines forfeitable property solely in terms of personal possession or use. This is most clear in the specific text of 21 U.S.C.S. § 853(a)(1). Section 853(a)(1) limits forfeiture to property the defendant obtained as the result of the crime. At the time Congress enacted § 853(a)(1), the verb obtain was defined as to come into possession of or to get or acquire. That definition persists today. Neither the dictionary definition nor the common usage of the word obtain supports the conclusion that an individual obtains property that was acquired by someone else.

Forfeiture and Penalties 2 > PROPERTY OBTAINED > Headnote:

LEdHN9 9

21 U.S.C.S. § 853(a)(1) provides that the forfeitable property may be obtained, directly or indirectly. The adverbs directly and indirectly modify, but do not erase, the verb obtain. In other words, these adverbs refer to how a defendant obtains the property; they do not negate the requirement that he obtain it at all.

Forfeiture and Penalties 2 > PROPERTY OBTAINED > Headnote:

LEdHN10 10

21 U.S.C.S. § 853(a)(2) and (3) are in accord with the limitation of forfeiture to property the defendant himself obtained. Section 853(a)(2) mandates forfeiture of property used to facilitate the crime but limits forfeiture to the person's property. Similarly, § 853(a)(3) requires forfeiture of property related to continuing criminal enterprises, but contrary to joint and several liability principles, requires the defendant to forfeit only his interest in the enterprise. Forfeiture and Penalties 2 > JOINT AND SEVERAL LIABILITY > Headnote:

LEdHN11 11

21 U.S.C.S. § 853(a)'s limitation of forfeiture to tainted property acquired or used by the defendant, together with the plain text of 21 U.S.C.S. § 853(a)(1), foreclose joint and several liability for coconspirators.

Forfeiture and Penalties 2 > JOINT AND SEVERAL LIABILITY -- TAINTED PROPERTY > Headnote:

LEdHN12 12

Joint and several liability is not only contrary to 21 U.S.C.S. § 853(a), it is, for the same reasons, contrary to several other provisions of 21 U.S.C.S. § 853. Two provisions expressly incorporate the § 853 limitations. First, 21 U.S.C.S. § 853(c) provides that all right, title, and interest in property described in § 853(a), e.g., tainted property obtained as the result of or used to facilitate the crime, vests in the United States upon the commission of the act giving rise to forfeiture. Consistent with its text, previous judicial precedent acknowledges that § 853(c) applies to tainted property only.

Injunction 149 > FREEZING OF FORFEITABLE ASSETS > Headnote:

LEdHN13 13

21 U.S.C.S. § 853(e)(1) authorizes pretrial freezes to preserve the availability of property described in 21 U.S.C.S. § 853(a) for forfeiture. Pretrial restraints on forfeitable property are permitted only when the government proves, at a hearing, that (1) the defendant has committed an offense triggering forfeiture, and (2) the property at issue has the requisite connection to that.

Evidence 380 > PRESUMPTION -- FORFEITABILITY OF PROPERTY > Headnote:

LEdHN14 14

21 U.S.C.S. § 853(d) establishes a rebuttable presumption that property is subject to forfeiture only if the government proves that such property was acquired by the defendant during the period of the violation and that there was no likely source for such property other than the crime.

[**76] Forfeiture and Penalties 2 > UNTAINTED PROPERTY -- JOINT AND SEVERAL

LIABILITY > Headnote:

LEdHN15 15

21 U.S.C.S. § 853(p), the sole provision of 21 U.S.C.S. § 853 that permits the government to confiscate property untainted by the crime, lays to rest any doubt that the statute permits joint and several liability. That provision governs forfeiture of substitute property and applies if any property described in 21 U.S.C.S. § 853(a), as a result of any act or omission of the defendant either: (1) cannot be located upon the exercise of due diligence; (2) has been transferred or sold to, or deposited with, a third party; (3) has been placed beyond the jurisdiction of the court; (4) has been substantially diminished in value; or (5) has been commingled with other property which cannot be divided without difficulty. 21 U.S.C.S. § 853(p)(1). Forfeiture and Penalties 2 > VALUE OF TAINTED PROPERTY > Headnote:

LEdHN16 16

Only if the government can prove that one of the five conditions set forth in 21 U.S.C.S. § 853(p) (1) was caused by the defendant may it seize any other property of the defendant, up to the value of the tainted property, rather than the tainted property itself. 21 U.S.C.S. § 853(p)(2). This provision begins from the premise that the defendant once possessed tainted property as described in 21 U.S.C.S. § 853(a), and provides a means for the government to recoup the value of the property if it has been dissipated or otherwise disposed of by any act or omission of the defendant. 21 U.S.C.S. § 853(p)(1).

Forfeiture and Penalties 2 > FORFEITURE OF SUBSTITUTE PROPERTY > Headnote:

LEdHN17 17

21 U.S.C.S. § 853(p)(1) demonstrates that Congress contemplated situations where the tainted property itself would fall outside the government's reach. To remedy that situation, Congress did not authorize the government to confiscate substitute property from other defendants or coconspirators; it authorized the government to confiscate assets only from the defendant who initially acquired the property and who bears responsibility for its dissipation. Permitting the government to force other coconspirators to turn over untainted substitute property would allow the government to circumvent Congress' carefully constructed statutory scheme, which permits forfeiture of substitute property only when the requirements of 21 U.S.C.S. § 853(p) and (a) are satisfied. There is no basis to read such an end run into the statute.

[**77] Forfeiture and Penalties 2 > FORFEITURE IN REM -- IN PERSONAM > Headnote:

LEdHN18 18

Traditionally, forfeiture was an action against the tainted property itself and thus proceeded in rem; that is, proceedings in which the thing was primarily considered as the offender, or rather the offence was attached primarily to the thing The forfeiture proceeding in rem stood independent of, and wholly unaffected by any criminal proceeding in personam against the defendant. Congress altered this distinction in enacting 21 U.S.C.S. § 853 by effectively merging the in rem forfeiture proceeding with the in personam criminal proceeding and by expanding forfeiture to include not just the thing but property derived from any proceeds of the crime. 21 U.S.C.S. § 853(a)(1). But as is clear from its text and structure, § 853 maintains traditional in rem forfeiture's focus on tainted property unless one of the preconditions of 21 U.S.C.S. § 853(p) exists. For those who find it relevant, the legislative history confirms as much: Congress altered the traditional system in order to improve the procedures applicable in forfeiture cases. By adopting an in personam aspect to criminal forfeiture, and providing for substitute-asset forfeiture, Congress made it easier for the government to hold the defendant who acquired the tainted property responsible. Congress did not, however, enact any significant expansion of the scope of property subject to forfeiture.

Statutes 164 > PLAIN TEXT > Headnote:

LEdHN19 19

A court cannot construe a statute in a way that negates its plain text. Forfeiture and Penalties 2 > ACQUIRED PROPERTY > Headnote:

LEdHN20 20

Forfeiture pursuant to 21 U.S.C.S. § 853(a)(1) is limited to property the defendant himself actually acquired as the result of the crime.

Syllabus

[*1628] Terry Honeycutt managed sales and inventory for a Tennessee hardware store owned by his brother, Tony Honeycutt. After they were indicted [**78] for federal drug crimes including conspiracy to distribute a product used in methamphetamine production, the Government sought judgments against each brother in the amount of $269,751.98 pursuant to the Comprehensive Forfeiture Act of 1984, which mandates forfeiture of “any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of” certain drug crimes, 21 U. S. C. §853(a)(1). Tony pleaded guilty and agreed to forfeit $200,000. Terry went to trial and was convicted. Despite conceding that Terry had no controlling interest in the store and did not stand to benefit personally from the sales of the product, the Government asked the District Court to hold him jointly and severally liable for the profits from the illegal sales and sought a judgment of $69,751.98, the outstanding conspiracy profits. The District Court declined to enter a forfeiture judgment against Terry, reasoning that he was a salaried employee who had not received [***2] any profits from the sales. The Sixth Circuit reversed, holding that the brothers, as co-conspirators, were jointly and severally liable for any conspiracy proceeds.

Held: Because forfeiture pursuant to §853(a)(1) is limited to property the defendant himself actually acquired as the result of the crime, that provision does not permit forfeiture with regard to Terry Honeycutt, who had no ownership interest in his brother's store and did not personally [*1629] benefit from the illegal sales. Pp. ___ - ___, 198 L. Ed. 2d, at 80-85.

(a) Section 853(a) limits forfeiture to property flowing from, §853(a)(1), or used in, §853(a)(2), the crime itself--providing the first clue that the statute does not countenance joint and several liability, which would require forfeiture of untainted property. It also defines forfeitable property solely in terms of personal possession or use. Section 853(a)(1), the provision at issue, limits forfeiture to property the defendant “obtained, directly or indirectly, as the result of” the crime. Neither the dictionary definition nor the common usage of the word “obtain” supports the conclusion that an individual “obtains” property that was acquired by someone else. And the adverbs “directly” and “indirectly” refer to how a defendant obtains the property; they [***3] do not negate the requirement that he obtain it at all. Sections 853(a) (2) and 853(a)(3) are in accord with this reading. Pp. ___ - ___, 198 L. Ed. 2d, at 80-83.

(b) Joint and several liability is also contrary to several other provisions of §853. Section 853(c), which applies to property “described in subsection (a),” applies to tainted property only. See Luis v. United States, 578 U. S. ___, ___, 136 S. Ct. 1083, 194 L. Ed. 2d 256. Section §853(e)(1) permits pretrial asset freezes to preserve the availability of property forfeitable under subsection (a), provided there is probable cause to think that a defendant has committed an offense triggering forfeiture and “the property at issue has the requisite connection to that crime.” Kaley v. United States , 571 U. S. ___, ___, 134 S. Ct. 1090, 188 L. Ed. 2d 46 . Section 853(d) establishes a “rebuttable presumption” that property is subject to forfeiture only if the Government proves that the defendant acquired the property “during the period of the violation” and “there was no likely source for” [**79] the property but the crime. These provisions reinforce the statute's application to tainted property acquired by the defendant and are thus incompatible with joint and several liability. Joint and several liability would also render futile §853(p)-the sole provision of §853 that permits the Government to confiscate property untainted by the crime. Pp. ___ - ___, 198 L. Ed. 2d, at 83-84.

(c) The plain text and structure of §853 leave no doubt that Congress did not, as [***4] the Government claims, incorporate the principle that conspirators are legally responsible for each other's foreseeable actions in furtherance of their common plan. See Pinkerton v. United States, 328 U. S. 640, 66 S. Ct. 1180, 90 L. Ed. 1489. Congress provided just one way for the Government to recoup substitute property when the tainted property itself is unavailable--the procedures outlined in §853(p). And as is clear from its text and structure, §853 maintains traditional in rem forfeiture's focus on tainted property unless one of §853(p)s preconditions exists. Pp. ___ - ___, 198 L. Ed. 2d, at 84-85.

816 F. 3d 362, reversed. Counsel: Adam G. Unikowsky argued the cause for petitioner.

Brian H. Fletcher argued the cause for respondent.

Judges: Sotomayor , J., delivered the opinion of the Court, in which all other Members joined, except

Gorsuch , J., who took no part in the consideration or decision of the case.

Opinion by: Sotomayor

Opinion

[*1630] Justice Sotomayor delivered the opinion of the Court.

A federal statute—21 U. S. C. §853—mandates forfeiture of “any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of” certain drug crimes. This case concerns how §853 operates when two or more defendants act as part of a conspiracy. Specifically, the issue is whether, under §853, a defendant may be held jointly and severally liable for property that his co-conspirator derived from the crime but that the defendant himself did not [***5] acquire. The Court holds that such liability is inconsistent with the statute’s text and structure.

I

Terry Michael Honeycutt managed sales and inventory for a Tennessee hardware store owned by his brother, Tony Honeycutt. After observing several “‘edgy looking folks’” purchasing an iodine-based water- purification product known as Polar Pure, Terry Honeycutt contacted the Chattanooga Police Department to inquire whether the iodine crystals in the product could be used to manufacture methamphetamine. App. to Pet. for Cert. 2a. An officer confirmed that individuals were using Polar Pure for this purpose and advised Honeycutt to cease selling it if the sales made Honeycutt “‘uncomfortable.’” Ibid. Notwithstanding the officer’s advice, the store continued to sell large quantities of Polar Pure. Although each bottle of Polar Pure contained enough iodine to purify 500 gallons of water, and despite the fact that most people have no legitimate use for the product in large quantities, the brothers sold as many as 12 bottles in a single transaction to a single customer. Over [**80] a 3-year period, the store grossed roughly $400,000 from the sale of more than 20,000 bottles of Polar Pure.

Unsurprisingly, [***6] these sales prompted an investigation by the federal Drug Enforcement Administration along with state and local law enforcement. Authorities executed a search warrant at the store in November 2010 and seized its entire inventory of Polar Pure—more than 300 bottles. A federal grand jury indicted the Honeycutt brothers for various federal crimes relating to their sale of iodine while knowing or having reason to believe it would be used to manufacture methamphetamine. Pursuant to the Comprehensive Forfeiture Act of 1984, §303, 98 Stat. 2045, 21 U. S. C. §853(a)(1), which mandates forfeiture of “any proceeds the person obtained, directly or indirectly, as the result of” drug distribution, the Government sought forfeiture money judgments against each brother in the amount of $269,751.98, which represented the hardware store’s profits from the sale of Polar Pure. Tony Honeycutt pleaded guilty and agreed to forfeit $200,000. Terry went to trial. A jury acquitted Terry Honeycutt of 3 charges but found him guilty of the remaining 11, including conspiring to and knowingly distributing iodine in violation of §§841(c)(2), 843(a)(6), and 846.

The District Court sentenced Terry Honeycutt to 60 months in prison. Despite [*1631] conceding that Terry had no “controlling [***7] interest in the store” and “did not stand to benefit personally,” the Government insisted that the District Court “hold [him] jointly liable for the profit from the illegal sales.” App. to Pet. for Cert. 60a-61a. The Government thus sought a money judgment of $69,751.98, the amount of the conspiracy profits outstanding after Tony Honeycutt’s forfeiture payment. The District Court declined to enter a forfeiture judgment, reasoning that Honeycutt was a salaried employee who had not personally received any profits from the iodine sales.

The Court of Appeals for the Sixth Circuit reversed. As co-conspirators, the court held, the brothers are “‘jointly and severally liable for any proceeds of the conspiracy.’” 816 F. 3d 362, 380 (2016). The court therefore concluded that each brother bore full responsibility for the entire forfeiture judgment. Ibid. The Court granted certiorari to resolve disagreement among the Courts of Appeals regarding whether joint and several liability applies under §853. 1 580 U. S. ___, 137 S. Ct. 588, 196 L. Ed. 2d 462 (2016).

II

HN1 LEdHN[1] [1] Criminal forfeiture statutes empower the Government to confiscate property derived from or used to facilitate criminal activity. Such statutes serve important governmental interests such as “separating a criminal [***8] from his ill-gotten gains,” “returning property, in full, to those wrongfully deprived or defrauded of it,” and “lessen[ing] the economic power” of [**81] criminal enterprises. Caplin & Drysdale, Chartered v. United States, 491 U. S. 617, 629-630, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528 (1989). The statute at issue here—§853—mandates forfeiture with respect to persons convicted of certain serious drug crimes. The question presented is whether §853 embraces joint and several liability for forfeiture judgments.

HN2 LEdHN[2] [2] A creature of tort law, joint and several liability “applies when there has been a judgment against multiple defendants.” McDermott, Inc. v. AmClyde, 511 U. S. 202, 220-221, 114 S. Ct. 1461, 128 L. Ed. 2d 148 (1994). If two or more defendants jointly cause harm, each defendant is held liable for the entire amount of the harm; provided, however, that the plaintiff recover only once for the full amount. See Restatement (Second) of Torts §875 (1977). Application of that principle in the forfeiture context when two or more defendants conspire to violate the law would require that each defendant be held liable for a forfeiture judgment based not only on property that he used in or acquired because of the crime, but also on property obtained by his co-conspirator.

An example is instructive. Suppose a farmer masterminds a scheme to grow, harvest, and distribute marijuana on local college campuses. The mastermind recruits a college student to deliver [***9] packages and pays the student $300 each month from the distribution proceeds for his services. In one year, the mastermind earns $3 million. The student, meanwhile, earns $3,600. If joint and several liability applied, the student would face a forfeiture judgment for the entire amount of the conspiracy’s proceeds: $3 million. The [*1632] student would be bound by that judgment even though he never personally acquired any proceeds beyond the $3,600. This case requires determination whether this form of liability is permitted under §853(a)(1). The Court holds that it is not.

A

HN3 LEdHN[3] [3] Forfeiture under §853 applies to “any person” convicted of certain serious drug crimes. Section 853(a) limits the statute’s reach by defining the property subject to forfeiture in three separate provisions. An understanding of how these three provisions work to limit the operation of the statute is helpful to resolving the question in this case. First, the provision at issue here, HN4 LEdHN[4] [4] §853(a)(1), limits forfeiture to “property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of” the crime. Second, HN5 LEdHN[5] [5] §853(a)(2) restricts forfeiture to “property used, or intended to be used, in any manner or part, to commit, or to facilitate [***10] the commission of,” the crime. Finally, HN6 LEdHN[6] [6] §853(a) (3) applies to persons “convicted of engaging in a continuing criminal enterprise”—a form of conspiracy— and requires forfeiture of “property described in paragraph (1) or (2)” as well as “any of [the defendant’s] interest in, claims against, and property or contractual rights affording a source of control over, the continuing criminal enterprise.” HN7 LEdHN[7] [7] These provisions, by their terms, limit forfeiture under §853 to tainted property; that is, property flowing from (§853(a)(1)), or used in (§853(a)(2)), the crime itself. The limitations of §853(a) thus provide the first clue that the statute does not countenance joint and several liability, which, by [**82] its nature, would require forfeiture of untainted property.

Recall, for example, the college student from the earlier hypothetical. The $3,600 he received for his part in the marijuana distribution scheme clearly falls within §853(a)(1): It is property he “obtained . . . as the result of” the crime. But if he were held jointly and severally liable for the proceeds of the entire conspiracy, he would owe the Government $3 million. Of the $3 million, $2,996,400 would have no connection whatsoever to the student’s participation in the crime and would have to be paid [***11] from the student’s untainted assets. Joint and several liability would thus represent a departure from §853(a)’s restriction of forfeiture to tainted property. HN8 LEdHN[8] [8] In addition to limiting forfeiture to tainted property, §853(a) defines forfeitable property solely in terms of personal possession or use. This is most clear in the specific text of §853(a) (1)—the provision under which the Government sought forfeiture in this case. Section 853(a)(1) limits forfeiture to property the defendant “obtained . . . as the result of” the crime. At the time Congress enacted §853(a)(1), the verb “obtain” was defined as “to come into possession of” or to “get or acquire.” Random House Dictionary of the English Language 995 (1966); see also 7 Oxford English Dictionary 37 (1933) (defining “obtain” as “[t]o come into the possession or enjoyment of (something) by one’s own effort, or by request; to procure or gain, as the result of purpose and effort”). That definition persists today. See Black’s Law Dictionary 1247 (10th ed. 2014) (defining “obtain” as “[t]o bring into one’s own possession; to procure, esp. through effort”); cf. Sekhar v. United States, 570 U. S. ___, ___-___, 133 S. Ct. 2720, 2725, 186 L. Ed. 2d 794, 801 (2013) (“Obtaining property requires ‘. . . the acquisition of property’”). Neither the dictionary definition nor the common usage of the word [***12] “obtain” supports the conclusion that an individual “obtains” property that was acquired by someone else. Yet joint and several liability would mean just that: The [*1633] college student would be presumed to have “obtained” the $3 million that the mastermind acquired.

HN9 LEdHN[9] [9] Section 853(a)(1) further provides that the forfeitable property may be “obtained, directly or indirectly.” The adverbs “directly” and “indirectly” modify—but do not erase—the verb “obtain.” In other words, these adverbs refer to how a defendant obtains the property; they do not negate the requirement that he obtain it at all. For instance, the marijuana mastermind might receive payments directly from drug purchasers, or he might arrange to have drug purchasers pay an intermediary such as the college student. In all instances, he ultimately “obtains” the property—whether “directly or indirectly.”

HN10 LEdHN[10] [10] The other provisions of §853(a) are in accord with the limitation of forfeiture to property the defendant himself obtained. Section 853(a)(2) mandates forfeiture of property used to facilitate the crime but limits forfeiture to “the person’s property.” Similarly, §853(a)(3) requires forfeiture of property related to continuing criminal enterprises, but contrary to joint and several liability [***13] principles, requires the defendant to forfeit only “his interest in” the enterprise.

HN11 LEdHN[11] [11] Section 853(a)’s limitation of forfeiture to tainted property acquired [**83] or used by the defendant, together with the plain text of §853(a)(1), foreclose joint and several liability for co-conspirators.

B

HN12 LEdHN[12] [12] Joint and several liability is not only contrary to §853(a), it is—for the same reasons—contrary to several other provisions of §853. Two provisions expressly incorporate the §853(a) limitations. First, §853(c) provides that “[a]ll right, title, and interest in property described in subsection (a)”—e.g., tainted property obtained as the result of or used to facilitate the crime—“vests in the United States upon the commission of the act giving rise to forfeiture.” Consistent with its text, the Court has previously acknowledged that §853(c) applies to tainted property only. See Luis v. United States, 578 U. S. ___, ___, 136 S. Ct. 1083, 194 L. Ed. 2d 256 (2016).

Second, HN13 LEdHN[13] [13] §853(e)(1) authorizes pretrial freezes “to preserve the availability of property described in subsection (a) . . . for forfeiture.” Pretrial restraints on forfeitable property are permitted only when the Government proves, at a hearing, that (1) the defendant has committed an offense triggering forfeiture, and (2) “the property at issue has the requisite connection to that crime.” Kaley v. United States , 571 U. S. ___, ___, 134 S. Ct. 1090, 1095. 188 L. Ed. 2d 46, 53 (2014) ); see also id., at ___, n. 11, 134 S. Ct. 1090, 1102. 188 L. Ed. 2d 46, 61 (“ [***14] [F]orfeiture applies only to specific assets”).

Another provision, §853(d), does not reference subsection (a) but incorporates its requirements on its own terms. HN14 LEdHN[14] [14] Section 853(d) establishes a “rebuttable presumption” that property is subject to forfeiture only if the Government proves that “such property was acquired by [the defendant] during the period of the violation” and that “there was no likely source for such property other than” the crime. Contrary to all of these provisions, joint and several liability would mandate forfeiture of untainted property that the defendant did not acquire as a result of the crime.

It would also render futile one other provision of the statute. HN15 LEdHN[15] [15] Section 853(p) —the sole provision of §853 that permits the Government to confiscate property untainted by the crime— lays to rest any doubt that the statute permits joint and several liability. That provision governs forfeiture of “substitute property” and applies [*1634] “if any property described in subsection (a), as a result of any act or omission of the defendant” either:

“(A) cannot be located upon the exercise of due diligence; “(B) has been transferred or sold to, or deposited with, a third party;

“(C) has been placed beyond the jurisdiction of the court;

“(D) has been substantially diminished [***15] in value; or

“(E) has been commingled with other property which cannot be divided without difficulty.” §853(p)(1).

HN16 LEdHN[16] [16] Only if the Government can prove that one of these five conditions was caused by the defendant may it seize “any other property of the defendant, up to the value of” the tainted property—rather than the tainted property itself. §853(p)(2). This provision begins from the premise that the defendant once possessed tainted property [**84] as “described in subsection (a),” and provides a means for the Government to recoup the value of the property if it has been dissipated or otherwise disposed of by “any act or omission of the defendant.” §853(p)(1).

HN17 LEdHN[17] [17] Section 853(p)(1) demonstrates that Congress contemplated situations where the tainted property itself would fall outside the Government’s reach. To remedy that situation, Congress did not authorize the Government to confiscate substitute property from other defendants or co-conspirators; it authorized the Government to confiscate assets only from the defendant who initially acquired the property and who bears responsibility for its dissipation. Permitting the Government to force other co-conspirators to turn over untainted substitute property would allow the Government to circumvent Congress’ carefully [***16] constructed statutory scheme, which permits forfeiture of substitute property only when the requirements of §§853(p) and (a) are satisfied. There is no basis to read such an end run into the statute.

III

Against all of this, the Government asserts the “bedrock principle of conspiracy liability” under which “conspirators are legally responsible for each other’s foreseeable actions in furtherance of their common plan.” Brief for United States 9; see also Pinkerton v. United States, 328 U. S. 640, 66 S. Ct. 1180, 90 L. Ed. 1489 (1946). Congress, according to the Government, must be presumed to have legislated against the background principles of conspiracy liability, and thus, “when the traceable proceeds of a conspiracy are unavailable, [§]853 renders conspirators jointly and severally liable for the amount of the proceeds foreseeably obtained by the conspiracy.” Brief for United States 10. Not so.

The plain text and structure of §853 leave no doubt that Congress did not incorporate those background principles. Congress provided just one way for the Government to recoup substitute property when the tainted property itself is unavailable—the procedures outlined in §853(p). And, for all the Government makes of the background principles of conspiracy liability, it fails to fully engage with the [***17] most important background principles underlying §853: those of forfeiture.

HN18 LEdHN[18] [18] Traditionally, forfeiture was an action against the tainted property itself and thus proceeded in rem; that is, proceedings in which “[t]he thing [was] primarily considered as the offender, or rather the offence [was] attached primarily to the thing.” The Palmyra, 25 U.S. 1, 12 Wheat. 1, 14, 6 L. Ed. 531 (1827). The forfeiture “proceeding in rem st[ood] independent of, and wholly unaffected by any criminal proceeding [*1635] in personam” against the defendant. Id., at 15, 6 L. Ed. 531. Congress altered this distinction in enacting §853 by effectively merging the in rem forfeiture proceeding with the in personam criminal proceeding and by expanding forfeiture to include not just the “thing” but “property . . . derived from . . . any proceeds” of the crime. §853(a)(1). But as is clear from its text and structure, §853 maintains traditional in rem forfeiture’s focus on tainted property unless one of the preconditions of §853(p) exists. For those who find it relevant, the legislative history confirms as much: Congress altered the traditional system in order to “improv[e] the procedures [**85] applicable in forfeiture cases.” S. Rep. No. 98-225, p. 192 (1983). By adopting an in personam aspect to criminal forfeiture, and providing for substitute-asset forfeiture, [***18] Congress made it easier for the Government to hold the defendant who acquired the tainted property responsible. Congress did not, however, enact any “significant expansion of the scope of property subject to forfeiture.” Ibid. 2

IV

HN20 LEdHN[20] [20] Forfeiture pursuant to §853(a)(1) is limited to property the defendant himself actually acquired as the result of the crime. In this case, the Government has conceded that Terry Honeycutt had no ownership interest in his brother’s store and did not personally benefit from the Polar Pure sales. App. to Pet. for Cert. 60a. The District Court agreed. Id., at 40a. Because Honeycutt never obtained tainted property as a result of the crime, §853 does not require any forfeiture.

The judgment of the Court of Appeals for the Sixth Circuit is reversed.

It is so ordered.

Justice Gorsuch took no part in the consideration or decision of this case.

References

21 U.S.C.S. § 853(a)(1)

26 Moore's Federal Practice §§632.2.02-632.2.04 (Matthew Bender 3d ed.)

L Ed Digest, Forfeitures and Penalties § 2

L Ed Index, Drugs and Narcotics; Fines, Forfeitures, and Penalties

Conviction or acquittal in criminal prosecution as bar to particular actions for forfeiture of property or for statutory damages or penalties--Supreme Court cases. 135 L. Ed. 2d 1133.

Supreme Court's views as to due process requirements, [***19] under Federal Constitution's Fifth and

Fourteenth Amendments, concerning forfeitures of property to government as result of unlawful conduct.

126 L. Ed. 2d 799.

Footnotes

1 Compare United States v. Van Nguyen, 602 F. 3d 886, 904 (CA8 2010) (applying joint and several liability to forfeiture under §853); United States v. Pitt, 193 F. 3d 751, 765 (CA3 1999) (same); United States v. McHan, 101 F. 3d 1027 (CA4 1996) (same); and United States v. Benevento, 836 F. 2d 129, 130 (CA2 1988) (per curiam) (same), with United States v. Cano- Flores, 796 F. 3d 83, 91, 418 U.S. App. D.C. 83 (CADC 2015) (declining to apply joint and several liability under §853).

2 Section 853(o) directs that “the provisions of [§853] shall be liberally construed to effectuate its remedial purposes.” The Government points to this as license to read joint and several liability into the statute. But HN19 LEdHN[19] [19] the Court cannot construe a statute in a way that negates its plain text, and here, Congress expressly limited forfeiture to tainted property that the defendant obtained. As explained above, that limitation is incompatible with joint and several liability. Content T ype:

Terms:

Narrow By: -None-

Date and T ime: Oct 23, 2017 11:55:21 a.m. EDT

About LexisNexis® Privacy Policy Terms & Conditions Sign Out

Copyright © 2017 LexisNexis. All rights reserved. Lexis Advance® Research

Document:Luis v. United States, 136 S. Ct. 1083

Luis v. United States, 136 S. Ct. 1083

Copy Citation

Supreme Court of the United States

November 10, 2015, Argued; March 30, 2016, Decided

No. 14-419

Reporter

136 S. Ct. 1083 * | 194 L. Ed. 2d 256 ** | 2016 U.S. LEXIS 2272 *** | 84 U.S.L.W. 4159 | 26 Fla. L.

Weekly Fed. S 49

SILA LUIS, Petitioner v. UNITED STATES

Notice: The LEXIS pagination of this document is subject to change pending release of the final

published version.

Prior History: [***1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE

ELEVENTH CIRCUIT

United States v. Luis, 564 Fed. Appx. 493, 2014 U.S. App. LEXIS 8222 (11th Cir. Fla., 2014)

Disposition: 564 Fed. Appx. 493, vacated and remanded.

Core Terms

forfeiture, tainted, plurality, forfeitable, untainted, freeze, right to counsel, cases, funds, spend, pretrial

restraint, pretrial, restraining order, restrained, probable cause, innocent, common law, dissipating,

proceeds, stolen, hire, transfers, violates, belongs, fine, constitutional right, restitution, tracing, courts,

indictment Case Summary

Overview

HOLDINGS: [1]-The government improperly froze assets of a defendant who was indicted for violations of health care laws since the assets had no connection to the charged crimes, and depriving the defendant of the untainted assets intended to pay for counsel undermined the defendant's fundamental right to the assistance of counsel of the defendant's choice at the defendant's expense; [2]-The government's non-constitutional interest in preserving the assets to provide for payment of potential criminal forfeitures or restitution if the defendant was convicted was not the equivalent of the defendant's constitutional right to the assistance of counsel of the defendant's choice.

Outcome

Judgment vacated and case remanded. 5-3 Decision; 1 Concurrence; 2 Dissents.

LexisNexis® Headnotes

Civil Procedure > Remedies > Injunctions

Criminal Law & Procedure > Criminal Offenses > Fraud > Fraud Against the Government

Governments > Federal Government > Claims By & Against

HN1 Remedies, Injunctions A federal statute provides that a court may freeze before trial certain assets belonging to a criminal defendant accused of violations of federal health care or banking laws. 18 U.S.C.S. § 1345. Those assets include: (1) property obtained as a result of the crime; (2) property traceable to the crime; and (3) other property of equivalent value. § 1345(a)(2). More like this Headnote

Shepardize - Narrow by this Headnote

Constitutional Law > ... > Fundamental Rights > Criminal Process > Assistance of Counsel

HN2 Criminal Process, Assistance of Counsel No one doubts the fundamental character of a criminal defendant’s Sixth Amendment right to the assistance of counsel. The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill in the science of law. If charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad. He is unfamiliar with the rules of evidence. Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible. He lacks both the skill and knowledge adequately to prepare his defense, even though he have a perfect one. He requires the guiding hand of counsel at every step in the proceedings against him. Without it, though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence. More like this Headnote

Shepardize - Narrow by this Headnote

Constitutional Law > ... > Fundamental Rights > Criminal Process > Assistance of Counsel

HN3 Criminal Process, Assistance of Counsel It is not surprising: first, that the U.S. Supreme Court’s opinions often refer to the right to counsel as fundamental; second, that commentators describe the right as a great engine by which an innocent man can make the truth of his innocence visible; third, that the Court has understood the right to require that the Government provide counsel for an indigent defendant accused of all but the least serious crimes; and fourth, that the Court has considered the wrongful deprivation of the right to counsel a structural error that so affects the framework within which the trial proceeds that courts may not even ask whether the error harmed the defendant. More like this Headnote

Shepardize - Narrow by this Headnote

Constitutional Law > ... > Fundamental Rights > Criminal Process > Assistance of Counsel

HN4 Criminal Process, Assistance of Counsel Given the necessarily close working relationship between lawyer and client, the need for confidence, and the critical importance of trust, the Sixth Amendment grants a defendant a fair opportunity to secure counsel of his own choice. This fair opportunity for the defendant to secure counsel of choice has limits. A defendant has no right, for example, to an attorney who is not a member of the bar, or who has a conflict of interest due to a relationship with an opposing party. And an indigent defendant, while entitled to adequate representation, has no right to have the Government pay for his preferred representational choice. More like this Headnote

Shepardize - Narrow by this Headnote

Constitutional Law > ... > Fundamental Rights > Criminal Process > Assistance of Counsel

HN5 Criminal Process, Assistance of Counsel The Sixth Amendment guarantees a defendant the right to be represented by an otherwise qualified attorney whom that defendant can afford to hire. More like this Headnote

Shepardize - Narrow by this Headnote

Lawyers' Edition Display

Decision

[**256] Court order that, under 18 U.S.C.S. § 1345, froze assets untainted by charged crime violated accused's right to counsel under Federal Constitution's Sixth Amendment insofar as order prevented accused from paying her lawyer. Summary

Overview: HOLDINGS: [1]-The government improperly froze assets of a defendant who was indicted for violations of health care laws since the assets had no connection to the charged crimes, and depriving the defendant of the untainted assets intended to pay for counsel undermined the defendant's fundamental right to the assistance of counsel of the defendant's choice at the defendant's expense; [2]-The government's non-constitutional interest in preserving the assets to provide for payment of potential criminal forfeitures or restitution if the defendant was convicted was not the equivalent of the defendant's constitutional right to the assistance of counsel of the defendant's choice.

Outcome: Judgment vacated and case remanded. 5-3 Decision; 1 Concurrence; 2 Dissents.

Headnotes

FORFEITURES AND PENALTIES §1 > CRIMINAL DEFENDANT -- FREEZING OF ASSETS > Headnote:

LEdHN[1] [1]

A federal statute provides that a court may freeze before trial certain assets belonging to a criminal defendant accused of violations of federal health care or banking laws. 18 U.S.C.S. § 1345. Those assets include: (1) property obtained as a result of the crime; (2) property traceable to the crime; and (3) other property of equivalent value. § 1345(a)(2). [Per Breyer , J., and Roberts , Ch. J., and Ginsburg and Sotomayor , JJ.]

[**257] CRIMINAL LAW §46.1 > RIGHT TO COUNSEL > Headnote:

LEdHN[2] [2]

No one doubts the fundamental character of a criminal defendant's Sixth Amendment right to the assistance of counsel. The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill in the science of law. If charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad. He is unfamiliar with the rules of evidence. Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible. He lacks both the skill and knowledge adequately to prepare his defense, even though he have a perfect one. He requires the guiding hand of counsel at every step in the proceedings against him. Without it, though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence. [Per Breyer , J., and Roberts , Ch. J., and Ginsburg and Sotomayor , JJ.]

CRIMINAL LAW §46.1 CRIMINAL LAW §46.6 CRIMINAL LAW §46.8 > RIGHT TO COUNSEL --

APPOINTMENT -- DENIAL > Headnote:

LEdHN[3] [3]

It is not surprising: first, that the U.S. Supreme Court's opinions often refer to the right to counsel as fundamental; second, that commentators describe the right as a great engine by which an innocent man can make the truth of his innocence visible; third, that the court has understood the right to require that the government provide counsel for an indigent defendant accused of all but the least serious crimes; and fourth, that the court has considered the wrongful deprivation of the right to counsel a structural error that so affects the framework within which the trial proceeds that courts may not even ask whether the error harmed the defendant. [Per Breyer , J., and Roberts , Ch. J., and Ginsburg and Sotomayor , JJ.]

CRIMINAL LAW §46.2 > COUNSEL OF CHOICE > Headnote:

LEdHN[4] [4]

Given the necessarily close working relationship between lawyer and client, the need for confidence, and the critical importance of trust, the Sixth Amendment grants a defendant a fair opportunity to secure counsel of his own choice. This fair opportunity for the defendant to secure counsel of choice has limits. A defendant has no right, for example, to an attorney who is not a member of the bar, or who has a conflict of interest due to a relationship with an opposing party. And an indigent defendant, while entitled to adequate representation, has no right to have the government pay for his preferred representational choice. [Per Breyer , J., and Roberts , Ch. J., and Ginsburg and Sotomayor , JJ.]

CRIMINAL LAW §46.2 > HIRING OF COUNSEL > Headnote:

LEdHN[5] [5]

The Sixth Amendment guarantees a defendant the right to be represented by an otherwise qualified attorney whom that defendant can afford to hire. [Per Breyer , J., and Roberts , Ch. J., and Ginsburg and Sotomayor , JJ.]

Syllabus

[**258] [*1084] A federal statute provides that a court may freeze before trial certain assets belonging to a defendant accused of violations of federal health care or banking laws. Those assets include (1) property “obtained as a result of” the crime, (2) property “traceable” to the crime, and (3), [*1085] as relevant here, other “property of equivalent value.” 18 U.S.C. §1345(a)(2). The Government has charged petitioner Luis with fraudulently obtaining nearly $45 million through crimes related to health care. In order to preserve the $2 million remaining in Luis' possession for payment of restitution and other criminal penalties, the Government secured a pretrial order prohibiting Luis from dissipating her assets, including assets unrelated to her alleged crimes. Though the District Court recognized that the order might prevent Luis from obtaining counsel of her choice, it held that the Sixth Amendment did not give her the right to use her own untainted funds for that purpose. The Eleventh Circuit affirmed.

Held: The judgment is vacated, and the case is remanded.

564 Fed. Appx. 493, vacated and remanded.

Justice Breyer , joined by The Chief Justice, Justice [***2] Ginsburg, and Justice Sotomayor , concluded that the pretrial restraint of legitimate, untainted assets needed to retain counsel of choice violates the Sixth Amendment. The nature and importance of the constitutional right taken together with the nature of the assets lead to this conclusion. Pp. ___ - ___, 194 L. Ed. 2d, at 262-270.

(a) The Sixth Amendment right to counsel grants a defendant “a fair opportunity to secure counsel of his own choice,” Powell v. Alabama, 287 U.S. 45, 53, 53 S. Ct. 55, 77 L. Ed. 158, that he “can afford to hire,” Caplin & [**259] Drysdale, Chartered v. United States, 491 U.S. 617, 624, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. This Court has consistently referred to the right to counsel of choice as “fundamental.” Pp. ___ - ___, 194 L. Ed. 2d, at 262-263.

(b) While the Government does not deny Luis' fundamental right to be represented by a qualified attorney whom she chooses and can afford to hire, it would nonetheless undermine the value of that right by taking from Luis the ability to use funds she needs to pay for her chosen attorney. The Government attempts to justify this consequence by pointing out that there are important interests on the other side of the legal equation. It wishes to guarantee that funds will be available later to help pay for statutory penalties and restitution, for example. The Government further argues that two previous cases from this Court, Caplin & Drysdale, supra, at 619, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528, and United States v. Monsanto, 491 U.S. 600, 615, 109 S. Ct. 2657, 105 L. Ed. 2d 512, support the issuance [***3] of a restraining order in this case. However, the nature of the assets at issue here differs from the assets at issue in those earlier cases. And that distinction makes a difference. Pp. ___ - ___, 194 L. Ed. 2d, at 263-270.

(1) Here, the property is untainted, i.e., it belongs to Luis. As described in Caplin & Drysdale and Monsanto, the Government may well be able to freeze before trial “tainted” assets--e.g., loot, contraband, or property otherwise associated with the planning, implementing, or concealing of a crime. As a matter of property law, the defendant's ownership interest in such property is imperfect. For example, a different federal statute provides that title to property used to commit a crime (or otherwise “traceable” to a crime) passes to the Government at the instant the crime is planned or committed. See 21 U.S.C. §853(c). But here, the Government seeks to impose restrictions upon Luis' untainted property without any showing of any equivalent governmental interest in that property. Pp. ___ - ___, 194 L. Ed. 2d, at 263-267.

(2) This distinction does not by itself answer the constitutional question because the law of property may allow a person without a present interest in a piece of [*1086] property to impose restrictions upon a current owner, say, to prevent [***4] waste. However, insofar as innocent funds are needed to obtain counsel of choice, the Sixth Amendment prohibits the court order sought here.

Three basic considerations lead to this conclusion. First, the nature of the competing interests argues against this kind of court order. On the one side is a fundamental Sixth Amendment right to assistance of counsel. On the other side is the Government's interest in securing its punishment of choice, as well as the victim's interest in securing restitution. These latter interests are important, but--compared to the right to counsel--they seem to lie somewhat further from the heart of a fair, effective criminal justice system. Second, relevant, common-law legal tradition offers virtually no significant support for the Government's position and in fact argues to the contrary. Indeed, there appears to be no decision of this Court authorizing unfettered, pretrial forfeiture of the defendant's own “innocent” property. Third, as a practical [**260] matter, accepting the Government's position could erode the right to counsel considerably. It would, in fact, unleash a principle of constitutional law with no obvious stopping place, as Congress could write more statutes authorizing restraints [***5] in other cases involving illegal behavior that come with steep financial consequences. These defendants, often rendered indigent, would fall back upon publicly paid counsel, including overworked and underpaid public defenders. The upshot is a substantial risk that accepting the Government's views would render less effective the basic right the Sixth Amendment seeks to protect. Pp. ___ - ___, 194 L. Ed. 2d, at 267-270.

(3) The constitutional line between a criminal defendant's tainted funds and innocent funds needed to pay for counsel should prove workable. Money may be fungible, but courts, which use tracing rules in cases of, e.g., fraud and pension rights, have experience separating tainted assets from untainted assets, just as they have experience determining how much money is needed to cover the costs of a lawyer. Pp. ___ - ___, 194 L. Ed. 2d, at 270.

Justice Thomas concluded that the rule that a pretrial freeze of untainted assets violates a defendant's Sixth Amendment right to counsel of choice rests strictly on the Sixth Amendment's text and common- law backdrop. Pp. ___ - ___, 194 L. Ed. 2d, at 271-278.

(a) The Sixth Amendment abolished the common-law rule that generally prohibited representation in felony cases. “The right to select counsel of one's choice” is thus “the root meaning” of the Sixth Amendment right to counsel. United States v. Gonzalez-Lopez, 548 U.S. 140, 147-148, 126 S. Ct. 2557, 165 L. Ed. 2d 409. Constitutional [***6] rights protect the necessary prerequisites for their exercise. As a result, the Sixth Amendment denies the Government unchecked power to freeze a defendant's assets before trial simply to secure potential forfeiture upon conviction. Unless the right to counsel protects the right to use lawfully owned property to pay for an attorney, the right to counsel--originally understood to protect only the right to hire counsel of choice--would be meaningless. Without pretrial protection for at least some of a defendant's assets, the Government could nullify the right to counsel of choice, eviscerating the Sixth Amendment's original meaning and purpose. The modern, judicially created right to government-appointed counsel does not obviate these concerns. Pp. ___ - ___, 194 L. Ed. 2d, at 271- 274.

(b) History confirms this textual understanding. The common-law forfeiture tradition provides an administrable rule for the Sixth Amendments protection: A criminal defendant's untainted assets are [*1087] protected from government interference before trial and judgment, but his tainted assets may be seized before trial as contraband or through a separate in rem proceeding. Reading the Sixth Amendment to track the historical line between tainted and untainted assets avoids case-by-case adjudication and [***7] ensures that the original meaning of the right to counsel does real work. Here, the incursion of the pretrial asset freeze into untainted assets, for which there is no historical tradition, violates [**261] the Sixth Amendment. Pp. ___ - ___, 194 L. Ed. 2d, at 274-276. (c) This conclusion leaves no room for an atextual balancing analysis. Pp. ___ - ___, 194 L. Ed. 2d, at 276-278.

Counsel: Howard Srebnick argued the cause for petitioner.

Michael R. Dreeben argued the cause for respondent.

Judges: Breyer , J., announced the judgment of the Court and delivered an opinion, in which Roberts

, C. J., and Ginsburg and Sotomayor , JJ., joined. Thomas , J., filed an opinion concurring in the judgment. Kennedy , J., filed a dissenting opinion, in which Alito , J., joined. Kagan , J., filed a dissenting opinion.

Opinion by: BREYER

Opinion

Justice Breyer announced the judgment of the Court and delivered an opinion in which The Chief Justice, Justice Ginsburg , and Justice Sotomayor join.

HN1 LEdHN[1] [1] A federal statute provides that a court may freeze before trial certain assets belonging to a criminal defendant accused of violations of federal health care or banking laws. See 18 U.S.C. §1345. Those assets include: (1) property “obtained as a result of” the crime, (2) property “traceable” to the crime, and (3) other “property of equivalent value.” §1345(a)(2). In this case, the Government has obtained a court order that freezes assets belonging to the third category [***8] of property, namely, property that is untainted by the crime, and that belongs fully to the defendant. That order, the defendant says, prevents her from paying her lawyer. She claims that insofar as it does so, it violates her Sixth Amendment “right . . . to have the Assistance of Counsel for [her] defence.” We agree.

I

In October 2012, a federal grand jury charged the petitioner, Sila Luis, with paying kickbacks, conspiring to commit fraud, and engaging in other crimes all related to health care. See §1349; §371; 42 U.S.C. §1320a-7b(b)(2)(A). The Government claimed that Luis had fraudulently obtained close to $45 million, almost all of which she had already spent. Believing it would convict Luis of the crimes charged, and hoping to preserve the $2 million remaining [*1088] in Luis’ possession for payment of restitution and other criminal penalties (often referred to as criminal forfeitures, which can include innocent — not just tainted — assets, a point of critical importance here), the Government sought a pretrial order prohibiting Luis from dissipating her assets. See 18 U.S.C. §1345(a)(2). And the District Court ultimately issued an order prohibiting her from “dissipating, or otherwise disposing of . . . assets, real or personal . . . up to the equivalent value [***9] of the proceeds of the Federal health care fraud ($45 million).” App. to Pet. for Cert. A-6.

The Government and Luis agree that this court order will prevent Luis from using her own untainted funds, i.e., funds not connected with the crime, to hire counsel to defend her in her criminal case. See App. 161 (stipulating “that an unquantified amount of revenue not connected to the indictment [had] flowed into some of the accounts” subject to the restraining order); ibid. (similarly stipulating that Luis used “revenue not connected to the indictment” to pay for real property that she possessed). [**262] Although the District Court recognized that the order might prevent Luis from obtaining counsel of her choice, it held “that there is no Sixth Amendment right to use untainted, substitute assets to hire counsel.” 966 F. Supp. 2d 1321, 1334 (SD Fla. 2013).

The Eleventh Circuit upheld the District Court. See 564 Fed. Appx. 493, 494 (2014) ( per curiam) (referring to, e.g., Kaley v. United States, 571 U.S. ___, 134 S. Ct. 1090, 188 L. Ed. 2d 46 (2014); Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 631, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528 (1989); United States v. Monsanto, 491 U.S. 600, 616, 109 S. Ct. 2657, 105 L. Ed. 2d 512 (1989)). We granted Luis’ petition for certiorari.

II

The question presented is “[w]hether the pretrial restraint of a criminal defendant’s legitimate, untainted assets (those not traceable to a criminal offense) needed to retain counsel of choice violates the Fifth and Sixth Amendments.” Pet. for Cert. ii. We see no reasonable way to interpret the [***10] relevant statutes to avoid answering this constitutional question. Cf. Monsanto, supra, at 614, 109 S. Ct. 2657, 105 L. Ed. 2d 512. Hence, we answer it, and our answer is that the pretrial restraint of legitimate, untainted assets needed to retain counsel of choice violates the Sixth Amendment. The nature and importance of the constitutional right taken together with the nature of the assets lead us to this conclusion.

A

HN2 LEdHN[2] [2] No one doubts the fundamental character of a criminal defendant’s Sixth Amendment right to the “Assistance of Counsel.” In Gideon v. Wainwright, 372 U.S. 335, 83 S. Ct. 792, 9 L. Ed. 2d 799 (1963), the Court explained:

“‘The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill in the science of law. If charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad. He is unfamiliar with the rules of evidence. Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible. He lacks both the skill and knowledge adequately to prepare his defense, even though he have a perfect one. He requires the guiding hand of counsel [***11] at every step in the proceedings against him. Without it, [*1089] though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence.’” Id., at 344-345, 83 S. Ct. 792, 9 L. Ed. 2d 799 (quoting Powell v. Alabama, 287 U.S. 45, 68-69, 53 S. Ct. 55, 77 L. Ed. 158 (1932)).

HN3 LEdHN[3] [3] It is consequently not surprising: first, that this Court’s opinions often refer to the right to counsel as “fundamental,” id., at 68, 53 S. Ct. 55, 77 L. Ed. 158; see Grosjean v. American Press Co., 297 U.S. 233, 243-244, 56 S. Ct. 444, 80 L. Ed. 660 (1936) (similar); Johnson v. Zerbst, 304 U.S. 458, 462-463, 58 S. Ct. 1019, 82 L. Ed. 1461 (1938) (similar); second, that commentators describe the right as a “great engin[e] by which an innocent [**263] man can make the truth of his innocence visible,” Amar, Sixth Amendment First Principles, 84 Geo. L. J. 641, 643 (1996); see Herring v. New York, 422 U.S. 853, 862, 95 S. Ct. 2550, 45 L. Ed. 2d 593 (1975); third, that we have understood the right to require that the Government provide counsel for an indigent defendant accused of all but the least serious crimes, see Gideon, supra, at 344, 83 S. Ct. 792, 9 L. Ed. 2d 799; and fourth, that we have considered the wrongful deprivation of the right to counsel a “structural” error that so “affec[ts] the framework within which the trial proceeds” that courts may not even ask whether the error harmed the defendant. United States v. Gonzalez-Lopez, 548 U.S. 140, 148, 126 S. Ct. 2557, 165 L. Ed. 2d 409 (2006) (internal quotation marks omitted); see id., at 150, 126 S. Ct. 2557, 165 L. Ed. 2d 409.

HN4 LEdHN[4] [4] Given the necessarily close working relationship between lawyer and client, the need for confidence, and the critical importance of trust, neither is it surprising that the Court has held that the Sixth Amendment grants a defendant “a fair opportunity to secure [***12] counsel of his own choice.” Powell, supra, at 53, 53 S. Ct. 55, 77 L. Ed. 158; see Gonzalez-Lopez, supra, at 150, 126 S. Ct. 2557, 165 L. Ed. 2d 409 (describing “these myriad aspects of representation”). This “fair opportunity” for the defendant to secure counsel of choice has limits. A defendant has no right, for example, to an attorney who is not a member of the bar, or who has a conflict of interest due to a relationship with an opposing party. See Wheat v. United States, 486 U.S. 153, 159, 108 S. Ct. 1692, 100 L. Ed. 2d 140 (1988). And an indigent defendant, while entitled to adequate representation, has no right to have the Government pay for his preferred representational choice. See Caplin & Drysdale, 491 U.S., at 624, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528.

We nonetheless emphasize that the constitutional right at issue here is fundamental: HN5 LEdHN[5] [5] “[T]he Sixth Amendment guarantees a defendant the right to be represented by an otherwise qualified attorney whom that defendant can afford to hire.” Ibid.

B

The Government cannot, and does not, deny Luis’ right to be represented by a qualified attorney whom she chooses and can afford. But the Government would undermine the value of that right by taking from Luis the ability to use the funds she needs to pay for her chosen attorney. The Government points out that, while freezing the funds may have this consequence, there are important interests on the other side of the legal equation: It wishes to [***13] guarantee that those funds will be available later to help pay for statutory penalties (including forfeiture of untainted assets) and restitution, should it secure convictions. And it points to two cases from this Court, Caplin & Drysdale, supra, at 619, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528, and Monsanto, 491 U.S., at 615, 109 S. Ct. 105 L. Ed. 2d 512, which, in the Government’s view, hold that the Sixth Amendment does not pose an obstacle to its doing so here. In our view, however, the nature of the assets at issue [*1090] here differs from the assets at issue in those earlier cases. And that distinction makes a difference.

1

The relevant difference consists of [**264] the fact that the property here is untainted; i.e., it belongs to the defendant, pure and simple. In this respect it differs from a robber’s loot, a drug seller’s cocaine, a burglar’s tools, or other property associated with the planning, implementing, or concealing of a crime. The Government may well be able to freeze, perhaps to seize, assets of the latter, “tainted” kind before trial. As a matter of property law the defendant’s ownership interest is imperfect. The robber’s loot belongs to the victim, not to the defendant. See Telegraph Co. v. Davenport, 97 U.S. 369, 372, 24 L. Ed. 1047 (1878) (“The great principle that no one can be deprived of his property without his assent, except by the processes of [***14] the law, requires . . . that the property wrongfully transferred or stolen should be restored to its rightful owner”). The cocaine is contraband, long considered forfeitable to the Government wherever found. See, e.g., 21 U.S.C. §881(a) (“[Controlled substances] shall be subject to forfeiture to the United States and no property right shall exist in them”); Carroll v. United States, 267 U.S. 132, 159, 45 S. Ct. 280, 69 L. Ed. 543, T.D. 3686 (1925) (describing the seizure of “contraband forfeitable property”). And title to property used to commit a crime (or otherwise “traceable” to a crime) often passes to the Government at the instant the crime is planned or committed. See, e.g., §853(c) (providing that the Government’s ownership interest in such property relates back to the time of the crime).

The property at issue here, however, is not loot, contraband, or otherwise “tainted.” It belongs to the defendant. That fact undermines the Government’s reliance upon precedent, for both Caplin & Drysdale and Monsanto relied critically upon the fact that the property at issue was “tainted,” and that title to the property therefore had passed from the defendant to the Government before the court issued its order freezing (or otherwise disposing of ) the assets.

In Caplin & Drysdale, the Court considered a [***15] post-conviction forfeiture that took from a convicted defendant funds he would have used to pay his lawyer. The Court held that the forfeiture was constitutional. In doing so, however, it emphasized that the forfeiture statute at issue provided that “‘[a]ll right, title, and interest in property [constituting or derived from any proceeds obtained from the crime] vests in the United States upon the commission of the act giving rise to [the] forfeiture.’” 491 U.S., at 625, n. 4, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528 (quoting §853(c)) (emphasis added). It added that the law had “long-recognized” as “lawful” the “practice of vesting title to any forfeitable asset[s] in the United State[s] at the time of the crim[e].” Id., at 627, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. It pointed out that the defendant did not “claim, as a general proposition, that the [vesting] provision is unconstitutional, or that Congress cannot, as a general matter, vest title to assets derived from the crime in the Government, as of the date of the criminal act in question.” Id., at 627- 628, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. And, given the vesting language, the Court explained that the defendant “did not hold good title” to the property. Id., at 627, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. The Court therefore concluded that “[t]here is no constitutional principle that gives one [**265] person [namely, the defendant] the right to give another’s [namely, the Government’s] [***16] property to a third party,” namely, the lawyer. Id., at 628, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528.

[*1091] In Monsanto, the Court considered a pretrial restraining order that prevented a not-yet- convicted defendant from using certain assets to pay for his lawyer. The defendant argued that, given this difference, Caplin & Drysdale’s conclusion should not apply. The Court noted, however, that the property at issue was forfeitable under the same statute that was at issue in Caplin & Drysdale. See Monsanto, supra, at 614, 109 S. Ct. 2657, 105 L. Ed. 2d 512. And, as in Caplin & Drysdale, the application of that statute to Monsanto’s case concerned only the pretrial restraint of assets that were traceable to the crime, see 491 U.S., at 602-603, 109 S. Ct. 2657, 105 L. Ed. 2d 512; thus, the statute passed title to those funds at the time the crime was committed (i.e., before the trial), see §853(c). The Court said that Caplin & Drysdale had already “weigh[ed] . . . th[e] very interests” at issue. Monsanto, supra, at 616, 109 S. Ct. 2657, 105 L. Ed. 2d 512. And it “rel[ied] on” its “conclusion” in Caplin & Drysdale to dispose of, and to reject, the defendant’s “similar constitutional claims.” 491 U.S., at 614, 109 S. Ct. 2657, 105 L. Ed. 2d 512.

Justice Kennedy prefers to read Caplin & Drysdale and Monsanto broadly, as holding that “the Government, having established probable cause to believe that Luis’ substitute [i.e., innocent] assets will be forfeitable upon conviction, [***17] should be permitted to obtain a restraining order barring her from spending those funds prior to trial.” Post, at ___ - ___, 194 L. Ed. 2d, at 281-282 (dissenting opinion). In other words, he believes that those cases stand for the proposition that property — whether tainted or untainted — is subject to pretrial restraint, so long as the property might someday be subject to forfeiture. But this reading asks too much of our precedents. For one thing, as discussed, Caplin & Drysdale and Monsanto involved the restraint only of tainted assets, and thus we had no occasion to opine in those cases about the constitutionality of pretrial restraints of other, untainted assets.

For another thing, Justice Kennedy ’s broad rule ignores the statutory background against which Caplin & Drysdale and Monsanto were decided. The Court in those cases referenced §853(c) more than a dozen times. And it acknowledged that whether property is “forfeitable” or subject to pretrial restraint under Congress’ scheme is a nuanced inquiry that very much depends on who has the superior interest in the property at issue. See Caplin & Drysdale, supra, at 626-628, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528; Monsanto, 491 U.S., at 616, 109 S. Ct. 2657, 105 L. Ed. 2d 512. We see this in, for example, §853(e)(1), which explicitly authorizes restraining orders or injunctions against “property described [***18] in subsection (a) of this section” (i.e., tainted assets). We see this too in §853(e)(1) (B), which requires the Government—in certain circumstances — to give “notice to persons appearing to have an interest in the property and opportunity for hearing” before obtaining a restraining order against such property. We see this in §853(c), which allows “bona fide purchaser[s] for value” to keep property [**266] that would otherwise be subject to forfeiture. And we see this in §853(n)(6)(A), which exempts certain property from forfeiture when a third party can show a vested interest in the property that is “superior” to that of the Government.

The distinction that we have discussed is thus an important one, not a technicality. It is the difference between what is yours and what is mine. In Caplin & Drysdale and Monsanto, the Government wanted to impose restrictions upon (or seize) property that the Government had probable cause to believe was the proceeds of, or traceable to, a crime. See Monsanto, supra, at 615, 109 S. Ct. 2657, 105 L. Ed. 2d 512. The relevant statute said that the Government took title [*1092] to those tainted assets as of the time of the crime. See §853(c). And the defendants in those cases consequently had to concede that the disputed property was in an important sense the Government’s at the time [***19] the court imposed the restrictions. See Caplin & Drysdale, supra, at 619-620, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528; Monsanto, supra, at 602-603, 109 S. Ct. 2657, 105 L. Ed. 2d 512.

This is not to say that the Government “owned” the tainted property outright (in the sense that it could take possession of the property even before obtaining a conviction). See post, at ___ - ___, 194 L. Ed. 2d, at 282-284 (Kennedy , J., dissenting). Rather, it is to say that the Government even before trial had a “substantial” interest in the tainted property sufficient to justify the property’s pretrial restraint. See Caplin & Drysdale, supra, at 62, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 5287 (“[T]he property rights given the Government by virtue of [§853(c)’s relation-back provision] are more substantial than petitioner acknowledges”); United States v. Stowell, 133 U.S. 1, 19, 10 S. Ct. 244, 33 L. Ed. 555 (1890) (“As soon as [the possessor of the forfeitable asset committed the violation] . . ., the forfeiture . . . took effect, and (though needing judicial condemnation to perfect it) operated from that time as a statutory conveyance to the United States of all right, title and interest then remaining in the [possessor]; and was as valid and effectual, against all the world, as a recorded deed” (emphasis added)).

If we analogize to bankruptcy law, the Government, by application of §853(c)’s relation-back provision, became something like a secured creditor with a lien on the defendant’s [***20] tainted assets superior to that of most any other party. See 4 Collier on Bankruptcy ¶506.03[1] (16th ed. 2015). For this reason, §853(c) has operated in our cases as a significant limitation on criminal defendants’ property rights in such assets — even before conviction. See Monsanto, supra, at 613, 109 S. Ct. 2657, 105 L. Ed. 2d 512 (“Permitting a defendant to use [tainted] assets for his private purposes that, under this [relation-back] provision, will become the property of the United States if a conviction occurs cannot be sanctioned”); cf. Grupo Mexicano de Desarrollo, S. A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 326, 119 S. Ct. 1961, 144 L. Ed. 2d 319 (1999) (noting that the Court had previously authorized injunctions against the further dissipation of property where, among other things, “the creditor (the Government) asserted an equitable lien on the property”). Here, by contrast, the Government [**267] seeks to impose restrictions upon Luis’ untainted property without any showing of any equivalent governmental interest in that property. Again, if this were a bankruptcy case, the Government would be at most an unsecured creditor. Although such creditors someday might collect from a debtor’s general assets, they cannot be said to have any present claim to, or interest in, the debtor’s property. See id., at 330, 119 S. Ct. 1961, 144 L. Ed. 2d 319 (“[B]efore judgment . . . an unsecured creditor has no rights [***21] at law or in equity in the property of his debtor”); see also 5 Collier on Bankruptcy ¶541.05[1][b] (“[G]eneral unsecured creditor[s]” have “no specific property interest in the goods held or sold by the debtor”). The competing property interests in the tainted- and untainted-asset contexts therefore are not “exactly the same.” Post, at ___, 194 L. Ed. 2d, at 289 (Kagan , J., dissenting). At least regarding her untainted assets, Luis can at this point reasonably claim that the property is still “mine,” free and clear.

2

This distinction between (1) what is primarily “mine” (the defendant’s) and (2) what is primarily “yours” (the Government’s) does not by itself answer the constitutional question posed, for the law of [*1093] property sometimes allows a person without a present interest in a piece of property to impose restrictions upon a current owner, say, to prevent waste. A holder of a reversionary interest, for example, can prevent the owner of a life estate from wasting the property. See, e.g., Peterson v. Ferrell, 127 N. C. 169, 170, 37 S. E. 189, 190 (1900). Those who later may become beneficiaries of a trust are sometimes able to prevent the trustee from dissipating the trust’s assets. See, e.g., Kollock v. Webb, 113 Ga. 762, 769, 39 S. E. 339, 343 (1901). And holders of a contingent, future executory interest in property (an interest that might become possessory [***22] at some point down the road) can, in limited circumstances, enjoin the activities of the current owner. See, e.g., Dees v. Cheuvronts, 240 Ill. 486, 491, 88 N. E. 1011, 1012 (1909) (“[E]quity w[ill] interfere . . . only when it is made to appear that the contingency . . . is reasonably certain to happen, and the waste is . . . wanton and conscienceless”). The Government here seeks a somewhat analogous order, i.e., an order that will preserve Luis’ untainted assets so that they will be available to cover the costs of forfeiture and restitution if she is convicted, and if the court later determines that her tainted assets are insufficient or otherwise unavailable.

The Government finds statutory authority for its request in language authorizing a court to enjoin a criminal defendant from, for example, disposing of innocent “property of equivalent value” to that of tainted property. 18 U.S.C. §1345(a)(2)(B)(i). But Luis needs some portion of those same funds to pay for the lawyer of her choice. Thus, the legal conflict arises. And, in our view, insofar as innocent (i.e., untainted) funds are needed to obtain counsel of choice, we believe that the Sixth Amendment prohibits the court order that the Government seeks.

Three basic considerations lead us to this conclusion. First, the nature of the competing interests [***23] argues against this kind of court order. On the one side we find, as we have previously explained, supra, at ___ - ___, 194 L. Ed. 2d, at 262-263, [**268] a Sixth Amendment right to assistance of counsel that is a fundamental constituent of due process of law, see Powell, 287 U.S., at 68-69, 53 S. Ct. 55, 77 L. Ed. 2d 158. And that right includes “the right to be represented by an otherwise qualified attorney whom that defendant can afford to hire.” Caplin & Drysdale, 491 U.S., at 624, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 5287. The order at issue in this case would seriously undermine that constitutional right.

On the other side we find interests that include the Government’s contingent interest in securing its punishment of choice (namely, criminal forfeiture) as well as the victims’ interest in securing restitution (notably, from funds belonging to the defendant, not the victims). While these interests are important, to deny the Government the order it requests will not inevitably undermine them, for, at least sometimes, the defendant may possess other assets — say, “tainted” property — that might be used for forfeitures and restitution. Cf. Gonzalez-Lopez, 548 U.S., at 148, 126 S. Ct. 2557, 165 L. Ed. 2d 409 (“Deprivation of the right” to counsel of the defendant’s choice “is ‘complete’ when the defendant is erroneously prevented from being represented by the lawyer he wants”). Nor do the interests in obtaining payment of a criminal forfeiture [***24] or restitution order enjoy constitutional protection. Rather, despite their importance, compared to the right to counsel of choice, these interests would seem to lie somewhat further from the heart of a fair, effective criminal justice system.

Second, relevant legal tradition offers virtually no significant support for the Government’s position. Rather, tradition [*1094] argues to the contrary. Describing the 18th-century English legal world (which recognized only a limited right to counsel), Blackstone wrote that “only” those “goods and chattels” that “a man has at the time of conviction shall be forfeited.” 4 W. Blackstone, Commentaries on the Laws of England 388 (1765) (emphasis added); see 1 J. Chitty, Practical Treatise on the Criminal Law 737 (1816) (“[T]he party indicted may sell any of [his property] . . . to assist him in preparing for his defense on the trial”). Describing the common law as understood in 19th-century America (which recognized a broader right to counsel), Justice Story wrote:

“It is well known, that at the common law, in many cases of felonies, the party forfeited his goods and chattels to the crown. The forfeiture . . . was a part, or at least a consequence, of the judgment [***25] of conviction. It is plain from this statement, that no right to the goods and chattels of the felon could be acquired by the crown by the mere commission of the offense; but the right attached only by the conviction of the offender. . . . In the contemplation of the common law, the offender’s right was not divested until the conviction.” The Palmyra, 25 U.S. 1, 12 Wheat. 1, 14, 6 L. Ed. 531 (1827).

See generally Powell, supra, at 60-61, 53 S. Ct. 55, 77 L. Ed. 2d 158 (describing the scope of the right to counsel in 18th-century Britain and colonial America).

As we have explained, supra, at ___ - ___, 194 L. Ed. 2d, at 264-265, cases such as Caplin & Drysdale and Monsanto permit the Government to freeze a defendant’s assets pretrial, [**269] but the opinions in those cases highlight the fact that the property at issue was “tainted,” i.e., it did not belong entirely to the defendant. We have found no decision of this Court authorizing unfettered, pretrial forfeiture of the defendant’s own “innocent” property — property with no connection to the charged crime. Nor do we see any grounds for distinguishing the historic preference against preconviction forfeitures from the preconviction restraint at issue here. As far as Luis’ Sixth Amendment right to counsel of choice is concerned, a restraining order might as well be a forfeiture; that is, the restraint [***26] itself suffices to completely deny this constitutional right. See Gonzalez-Lopez, supra, at 148, 126 S. Ct. 2557, 165 L. Ed. 2d 409.

Third, as a practical matter, to accept the Government’s position could well erode the right to counsel to a considerably greater extent than we have so far indicated. To permit the Government to freeze Luis’ untainted assets would unleash a principle of constitutional law that would have no obvious stopping place. The statutory provision before us authorizing the present restraining order refers only to “banking law violation[s]” and “Federal health care offense[s].” 18 U.S.C. §1345(a)(2). But, in the Government’s view, Congress could write more statutes authorizing pretrial restraints in cases involving other illegal behavior — after all, a broad range of such behavior can lead to postconviction forfeiture of untainted assets. See, e.g., §1963(m) (providing for forfeiture of innocent, substitute assets for any violation of the Racketeer Influenced and Corrupt Organizations Act).

Moreover, the financial consequences of a criminal conviction are steep. Even beyond the forfeiture itself, criminal fines can be high, and restitution orders expensive. See, e.g., §1344 ($1 million fine for bank fraud); §3571 (mail and wire fraud fines of up to $250,000 for individuals [***27] and $500,000 for organizations); United States v. Gushlak, 728 F. 3d 184, 187, 203 (CA2 2013) ($17.5 million restitution award against an individual defendant in a fraud-on-the-market case); [*1095] FTC v. Trudeau, 662 F. 3d 947, 949 (CA7 2011) ($37.6 million remedial sanction for fraud). How are defendants whose innocent assets are frozen in cases like these supposed to pay for a lawyer—particularly if they lack “tainted assets” because they are innocent, a class of defendants whom the right to counsel certainly seeks to protect? See Powell, 287 U.S., at 69, 53 S. Ct. 55, 77 L. Ed. 2d 158; Amar, 84 Geo. L. J., at 643 (“[T]he Sixth Amendment is generally designed to elicit truth and protect innocence”).

These defendants, rendered indigent, would fall back upon publicly paid counsel, including overworked and underpaid public defenders. As the Department of Justice explains, only 27 percent of county-based public defender offices have sufficient attorneys to meet nationally recommended caseload standards. Dept. of Justice, Bureau of Justice Statistics, D. Farole & L. Langton, Census of Public Defender Offices, 2007: County-based and Local Public Defender Offices, 2007, p. 10 (Sept. 2010). And as one amicus points out, “[m]any federal public defender organizations and lawyers appointed under the Criminal Justice Act serve numerous clients and have only limited resources.” Brief for New York Council [***28] of Defense [**270] Lawyers 11. The upshot is a substantial risk that accepting the Government’s views would — by increasing the government-paid-defender workload—render less effective the basic right the Sixth Amendment seeks to protect.

3

We add that the constitutional line we have drawn should prove workable. That line distinguishes between a criminal defendant’s (1) tainted funds and (2) innocent funds needed to pay for counsel. We concede, as Justice Kennedy points out, post, at ___ - ___, 194 L. Ed. 2d, at 285-286, that money is fungible; and sometimes it will be difficult to say whether a particular bank account contains tainted or untainted funds. But the law has tracing rules that help courts implement the kind of distinction we require in this case. With the help of those rules, the victim of a robbery, for example, will likely obtain the car that the robber used stolen money to buy. See, e.g., 1 G. Palmer, Law of Restitution §2.14, p. 175 (1978) (“tracing” permits a claim against “an asset which is traceable to or the product of” tainted funds); 4 A. Scott, Law of Trusts §518, pp. 3309-3314 (1956) (describing the tracing rules governing commingled accounts). And those rules will likely also prevent Luis from benefiting from many of the [***29] money transfers and purchases Justice Kennedy describes. See post, at ___ - ___, 194 L. Ed. 2d, at 285-286.

Courts use tracing rules in cases involving fraud, pension rights, bankruptcy, trusts, etc. See, e.g., Montanile v. Board of Trustees of Nat. Elevator Industry Health Benefit Plan, 577 U.S. ___, ___-___, 136 S. Ct. 651, 193 L. Ed. 2d 556 (2016). They consequently have experience separating tainted assets from untainted assets, just as they have experience determining how much money is needed to cover the costs of a lawyer. See, e.g., 18 U.S.C. §1345(b) (“The court shall proceed as soon as practicable to the hearing and determination of [actions to freeze a defendant’s tainted or untainted assets]”); 28 U.S.C. §2412(d) (courts must determine reasonable attorneys’ fees under the Equal Access to Justice Act); see also Kaley, 571 U.S., at ___, 134 S. Ct. 1090, 1095, 188 L. Ed. 2d 46, 53, and n. 3 (“Since Monsanto, the lower courts have generally provided a hearing. . . . [to determine] whether probable cause exists to believe that the assets in dispute are traceable . . . to the crime charged in the indictment”). We therefore see little reason to worry, as Justice Kennedy seems to, that defendants [*1096] will “be allowed to circumvent [the usual forfeiture rules] by using . . . funds to pay for a high, or even the highest, priced defense team [they] can find.” Post, at ___, 194 L. Ed. 2d, at 282.

* * *

For the reasons stated, we conclude that the defendant in this case has a Sixth Amendment right [***30] to use her own “innocent” property to pay a reasonable fee for the assistance of counsel. On the assumptions made here, the District Court’s order prevents Luis from exercising that right. We consequently vacate the judgment of the Court of Appeals and remand the case for further proceedings.

It is so ordered.

APPENDIX

Title 18 U.S.C. §1345 provides:

“(a)(1) If a person is—

[**271] “(A) violating or about to violate this chapter or section 287, 371 (insofar as such violation involves a conspiracy to defraud the United States or any agency thereof), or 1001 of this title;

“(B) committing or about to commit a banking law violation (as defined in section 3322(d) of this title); or

“(C) committing or about to commit a Federal health care offense;

“the Attorney General may commence a civil action in any Federal court to enjoin such violation.

“(2) If a person is alienating or disposing of property, or intends to alienate or dispose of property, obtained as a result of a banking law violation (as defined in section 3322(d) of this title) or a Federal health care offense or property which is traceable to such violation, the Attorney General may commence a civil action in any Federal court —

“(A) to enjoin such alienation or disposition of property; or

“(B) for a [***31] restraining order to —

“(i) prohibit any person from withdrawing, transferring, removing, dissipating, or disposing of any such property or property of equivalent value; and

“(ii) appoint a temporary receiver to administer such restraining order.

“(3) A permanent or temporary injunction or restraining order shall be granted without bond.

“(b) The court shall proceed as soon as practicable to the hearing and determination of such an action, and may, at any time before final determination, enter such a restraining order or prohibition, or take such other action, as is warranted to prevent a continuing and substantial injury to the United States or to any person or class of persons for whose protection the action is brought. A proceeding under this section is governed by the Federal Rules of Civil Procedure, except that, if an indictment has been returned against the respondent, discovery is governed by the Federal Rules of Criminal Procedure.” Concur by: THOMAS

Concur

Justice Thomas , concurring in the judgment.

I agree with the plurality that a pretrial freeze of untainted assets violates a criminal defendant’s Sixth Amendment right to counsel of choice. But I do not agree with the plurality’s balancing approach. Rather, [***32] my reasoning rests strictly on the Sixth Amendment’s text and common-law backdrop.

The Sixth Amendment provides important limits on the Government’s power to freeze a criminal defendant’s forfeitable assets before trial. And, constitutional rights necessarily protect the prerequisites for their exercise. The right “to have the Assistance of Counsel,” U.S. Const., Amdt. 6, thus implies the right to use lawfully [*1097] owned property to pay for an attorney. Otherwise the right to counsel — originally understood to protect only the right to hire counsel of choice — would be meaningless. History confirms this textual understanding. The common law limited pretrial asset restraints to tainted assets. Both this textual understanding and history establish that the Sixth Amendment prevents the Government from freezing untainted assets in order to secure a potential forfeiture. The freeze here accordingly violates the Constitution.

[**272] I

The Sixth Amendment provides, “In all criminal prosecutions, the accused shall enjoy the right . . . to have the Assistance of Counsel for his defence.” As originally understood, this right guaranteed a defendant the right “to employ a lawyer to assist in his defense.” Scott v. Illinois, 440 U.S. 367, 370, 99 S. Ct. 1158, 59 L. Ed. 2d 383 (1979). The common law permitted counsel to represent defendants charged with misdemeanors, [***33] but not felonies other than treason. W. Beaney, The Right to Counsel in American Courts 8-9 (1955). The Sixth Amendment abolished the rule prohibiting representation in felony cases, but was “not aimed to compel the State to provide counsel for a defendant.” Betts v. Brady, 316 U.S. 455, 466, 62 S. Ct. 1252, 86 L. Ed. 1595 (1942), overruled by Gideon v. Wainwright, 372 U.S. 335, 83 S. Ct. 792, 9 L. Ed. 2d 799 (1963); see Beaney, supra, at 27-36. “The right to select counsel of one’s choice” is thus “the root meaning” of the Sixth Amendment right to counsel. United States v. Gonzalez-Lopez, 548 U.S. 140, 147-148, 126 S. Ct. 2557, 165 L. Ed. 2d 409 (2006).

The Sixth Amendment denies the Government unchecked power to freeze a defendant’s assets before trial simply to secure potential forfeiture upon conviction. If that bare expectancy of criminal punishment gave the Government such power, then a defendant’s right to counsel of choice would be meaningless, because retaining an attorney requires resources. The law has long recognized that the “[a]uthorization of an act also authorizes a necessary predicate act.” A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 192 (2012) (discussing the “predicate-act canon”). As Thomas Cooley put it with respect to Government powers, “where a general power is conferred or duty enjoined, every particular power necessary for the exercise of the one, or the performance of the other, is also conferred.” Constitutional Limitations 63 (1868); see 1 J. Kent, [***34] Commentaries on American Law 464 (13th ed. 1884) (“[W]henever a power is given by a statute, everything necessary to the making of it effectual or requisite to attain the end is implied”). This logic equally applies to individual rights. After all, many rights are powers reserved to the People rather than delegated to the Government. Cf. U.S. Const., Amdt. 10 (“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people”).

Constitutional rights thus implicitly protect those closely related acts necessary to their exercise. “There comes a point . . . at which the regulation of action intimately and unavoidably connected with [a right] is a regulation of [the right] itself.” Hill v. Colorado, 530 U.S. 703, 745, 120 S. Ct. 2480, 147 L. Ed. 2d 597 (2000) (Scalia , J., dissenting). The right to keep and bear arms, for example, “implies a corresponding right to obtain the bullets necessary to use them,” Jackson v. City and County of San Francisco, 746 F. 3d 953, 967 (CA9 2014) (internal quotation marks omitted), and “to acquire and maintain proficiency in their use,” [*1098] Ezell v. Chicago, 651 F. 3d 684, 704 (CA7 2011). See District of Columbia v. Heller, 554 U.S. 570, 617-618, 128 S. Ct. 2783, 171 L. Ed. 2d 637 (2008) (citing T. Cooley, General Principles of Constitutional [**273] Law 271 (2d ed. 1891) (discussing the implicit right to train with weapons)); United States v. Miller, 307 U.S. 174, 180, 59 S. Ct. 816, 83 L. Ed. 1206, 1939-1 C.B. 373 (1939) (citing 1 H. Osgood, The American Colonies in the 17th Century 499 [***35] (1904) (discussing the implicit right to possess ammunition)); Andrews v. State, 50 Tenn. 165, 178 (1871) (discussing both rights). Without protection for these closely related rights, the Second Amendment would be toothless. Likewise, the First Amendment “right to speak would be largely ineffective if it did not include the right to engage in financial transactions that are the incidents of its exercise.” McConnell v. Federal Election Comm’n, 540 U.S. 93, 252, 124 S. Ct. 619, 157 L. Ed. 2d 491 (2003) (Scalia , J., concurring in part, concurring in judgment in part, and dissenting in part).

The same goes for the Sixth Amendment and the financial resources required to obtain a lawyer. Without constitutional protection for at least some of a defendant’s assets, the Government could nullify the right to counsel of choice. As the plurality says, an unlimited power to freeze assets before trial “would unleash a principle of constitutional law that would have no obvious stopping place.” Ante, at ___, 194 L. Ed. 2d, at 269; cf. McCulloch v. Maryland, 17 U.S. 316, 4 Wheat. 316, 431, 4 L. Ed. 579 (1819) (“[T]he power to tax involves the power to destroy” and that “power to destroy may defeat and render useless the power to create”). Unless the right to counsel also protects the prerequisite right to use one’s financial resources for an attorney, I doubt that the Framers would have gone through the trouble of adopting such a flimsy “parchment [***36] barrie[r].” The Federalist No. 48, p. 308 (C. Rossiter ed. 1961) (J. Madison).

An unlimited power to freeze a defendant’s potentially forfeitable assets in advance of trial would eviscerate the Sixth Amendment’s original meaning and purpose. At English common law, forfeiture of all real and personal property was a standard punishment for felonies. See 4 W. Blackstone, Commentaries on the Laws of England 95 (1769) (Blackstone). That harsh penalty never caught on in America. See Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 682-683, 94 S. Ct. 2080, 40 L. Ed. 2d 452 (1974). The First Congress banned it. See Crimes Act of 1790, §24, 1 Stat. 117 (“[N]o conviction or judgment for any of the offences aforesaid, shall work corruption of blood, or any forfeiture of estate”). But the Constitution did not. See Art. III, §3, cl. 2 (“[N]o Attainder of Treason shall work Corruption of Blood, or Forfeiture except during the Life of the Person attainted”). If the Government’s mere expectancy of a total forfeiture upon conviction were sufficient to justify a complete pretrial asset freeze, then Congress could render the right to counsel a nullity in felony cases. That would have shocked the Framers. As discussed, before adoption of the Sixth Amendment, felony cases (not misdemeanors) were precisely when the common law denied defendants the right to counsel. See supra, [***37] at ___, 194 L. Ed. 2d, at 272. With an unlimited power to freeze assets before trial, the Government could well revive the common-law felony rule that the Sixth Amendment was designed to abolish.

The modern, judicially created [**274] right to Government-appointed counsel does not obviate these concerns. As understood in 1791, the Sixth Amendment protected a defendant’s right to retain an attorney he could afford. It is thus no answer, as the principal dissent replies, that defendants rendered indigent by a pretrial asset freeze can resort to public defenders. [*1099] Post, at ___, 194 L. Ed. 2d, at 286 (opinion of Kennedy , J.). The dissent’s approach nullifies the original understanding of the right to counsel. To ensure that the right to counsel has meaning, the Sixth Amendment limits the assets the Government may freeze before trial to secure eventual forfeiture.

II

The longstanding rule against restraining a criminal defendant’s untainted property before conviction guarantees a meaningful right to counsel. The common-law forfeiture tradition provides the limits of this Sixth Amendment guarantee. That tradition draws a clear line between tainted and untainted assets. The only alternative to this common-law reading is case-by-case adjudication to determine which freezes are “legitimate” and which are an “abuse of [***38] . . . power.” McCulloch, 17 U.S. 316, 4 L. Ed. 579, 4 Wheat., at 430. This piecemeal approach seems woefully inadequate. Such questions of degree are “unfit for the judicial department.” Ibid. But see Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 635, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528 (1989) (stating in dicta that “[c]ases involving particular abuses can be dealt with individually . . . when (and if) any such cases arise”). Fortunately the common law drew a clear line between tainted and untainted assets.

Pretrial freezes of untainted forfeitable assets did not emerge until the late 20th century. “‘[T]he lack of historical precedent’” for the asset freeze here is “‘[p]erhaps the most telling indication of a severe constitutional problem.’” Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. 477, 505-506, 130 S. Ct. 3138, 177 L. Ed. 2d 706 (2010) (quoting Free Enterprise Fund v. Public Company Accounting Oversight Bd., 537 F. 3d 667, 699, 383 U.S. App. D.C. 119 (CADC 2008) (Kavanaugh, J., dissenting)). Indeed, blanket asset freezes are so tempting that the Government’s “prolonged reticence would be amazing if [they] were not understood to be constitutionally proscribed.” Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 230, 115 S. Ct. 1447, 131 L. Ed. 2d 328 (1995); see Printz v. United States, 521 U.S. 898, 907-908, 117 S. Ct. 2365, 138 L. Ed. 2d 914 (1997) (reasoning that the lack of early federal statutes commandeering state executive officers “suggests an assumed absence of such power” given “the attractiveness of that course to Congress”).

The common law prohibited pretrial freezes of criminal defendants’ untainted assets. As the plurality notes, ante, at ___, 194 L. Ed. 2d, at 268, for in personam criminal forfeitures like that at issue here, any interference with a [***39] defendant’s property traditionally required a conviction. Forfeiture was “a part, or at least a consequence, of the judgment of conviction.” The Palmyra, 25 U.S. 1, 12 Wheat. 1, 14, 6 L. Ed. 531 (1827) (Story, J.). The defendant’s “property cannot be touched before . . . the forfeiture is completed.” 1 J. Chitty, A Practical Treatise on the Criminal Law 737 (5th ed. 1847). This rule applied equally “to money as well as [**275] specific chattels.” Id., at 736. And it was not limited to full-blown physical seizures. Although the defendant’s goods could be appraised and inventoried before trial, he remained free to “sell any of them for his own support in prison, or that of his family, or to assist him in preparing for his defence on the trial.” Id., at 737 (emphasis added). Blackstone likewise agreed that a defendant “may bona fide sell any of his chattels, real or personal, for the sustenance of himself and family between the [offense] and conviction.” 4 Blackstone 380; see Fleetwood’s Case, 8 Co. Rep. 171a, 171b, 77 Eng. Rep. 731, 732 (K. B. 1611) (endorsing this rule). At most, a court could unwind prejudgment fraudulent transfers after conviction. 4 Blackstone 381; see Jones v. Ashurt, Skin. [*1100] 357, 357-358, 90 Eng. Rep. 159 (K. B. 1693) (unwinding a fraudulent sale after conviction because it was designed to defeat forfeiture). [***40] Numerous English authorities confirm these common-law principles. Chitty, supra, at 736-737 (collecting sources).

The common law did permit the Government, however, to seize tainted assets before trial. For example, “seizure of the res has long been considered a prerequisite to the initiation of in rem forfeiture proceedings.” United States v. James Daniel Good Real Property, 510 U.S. 43, 57, 114 S. Ct. 492, 126 L. Ed. 2d 490 (1993) (emphasis added); see The Brig Ann, 13 U.S. 289, 9 Cranch 289, 291, 3 L. Ed. 734 (1815) (Story, J.). But such forfeitures were traditionally “fixed . . . by determining what property has been ‘tainted’ by unlawful use.” Austin v. United States, 509 U.S. 602, 627, 113 S. Ct. 2801, 125 L. Ed. 2d 488 (1993) (Scalia , J., concurring in part and concurring in judgment). So the civil in rem forfeiture tradition tracks the tainted-untainted line. It provides no support for the asset freeze here.

There is a similarly well-established Fourth Amendment tradition of seizing contraband and stolen goods before trial based only on probable cause. See Carroll v. United States, 267 U.S. 132, 149-152, 45 S. Ct. 280, 69 L. Ed. 543, T.D. 3686 (1925) (discussing this history); Boyd v. United States, 116 U.S. 616, 623- 624, 6 S. Ct. 524, 29 L. Ed. 746 (1886) (same). Tainted assets fall within this tradition because they are the fruits or instrumentalities of crime. So the Government may freeze tainted assets before trial based on probable cause to believe that they are forfeitable. See United States v. Monsanto, 491 U.S. 600, 602-603, 615-616, 109 S. Ct. 2657, 105 L. Ed. 2d 512 (1989). Nevertheless, our precedents require “a nexus . . . between the item to be seized and criminal behavior.” Warden, Md. Penitentiary v. Hayden, 387 U.S. 294, 307, 87 S. Ct. 1642, 18 L. Ed. 2d 782 (1967). Untainted assets almost never have such a nexus. [***41] The only exception is that some property that is evidence of crime might technically qualify as “untainted” but nevertheless has a nexus to criminal behavior. See ibid. Thus, untainted assets do not fall within the Fourth Amendment tradition either.

It is certainly the case that some early American statutes did provide for civil forfeiture of untainted substitute property. See Registry Act, §12, 1 Stat. 293 (providing for forfeiture of a ship or “the value thereof”); Collection Act of July 31, 1789, §22, 1 Stat. 42 (similar for goods); United States v. Bajakajian, 524 U.S. 321, 341, 118 S. Ct. 2028, 141 L. Ed. 2d 314 (1998) (collecting statutes). These statutes [**276] grew out of a broader “six-century-long tradition of in personam customs fines equal to one, two, three, or even four times the value of the goods at issue.” Id., at 345-346, 118 S. Ct. 2028, 141 L. Ed. 2d 314 (Kennedy , J., dissenting).

But this long tradition of in personam customs fines does not contradict the general rule against pretrial seizures of untainted property. These fines’ in personam status strongly suggests that the Government did not collect them by seizing property at the outset of litigation. As described, that process was traditionally required for in rem forfeiture of tainted assets. See supra, at ___, 194 L. Ed. 2d, at 275. There appears to be scant historical evidence, however, that forfeiture ever involved [***42] seizure of untainted assets before trial and judgment, except in limited circumstances not relevant here. Such summary procedures were reserved for collecting taxes and seizures during war. See Phillips v. Commissioner, 283 U.S. 589, 595, 51 S. Ct. 608, 75 L. Ed. 1289, 1931-1 C.B. 264 (1931); Miller v. United States, 78 U.S. 268, 11 Wall. 268, 304-306, 20 L. Ed. 135 (1871). The [*1101] Government’s right of action in tax and custom-fine cases may have been the same—“a civil action of debt.” Bajakajian, supra, at 343, n. 18, 118 S. Ct. 2028, 141 L. Ed. 2d 314; Stockwell v. United States, 80 U.S. 531, 13 Wall. 531, 543, 20 L. Ed. 491 (1871); Adams v. Woods, 6 U.S. 336, 2 Cranch 336, 341, 2 L. Ed. 297 (1805). Even so, nothing suggests trial and judgment were expendable. See Miller, supra, at 304-305, 11 Wall. 268, 304-306, 20 L. Ed. 135 (stating in dicta that confiscating Confederate property through in rem proceedings would have raised Fifth and Sixth Amendment concerns had they not been a war measure).

The common law thus offers an administrable line: A criminal defendant’s untainted assets are protected from Government interference before trial and judgment. His tainted assets, by contrast, may be seized before trial as contraband or through a separate in rem proceeding. Reading the Sixth Amendment to track the historical line between tainted and untainted assets makes good sense. It avoids case-by-case adjudication, and ensures that the original meaning of the right to counsel does real work. The asset freeze here infringes the right to counsel because it “is so broad that it differs not only in degree, but in kind, from its historical antecedents.” [***43] James Daniel Good, supra, at 82, 114 S. Ct. 492, 126 L. Ed. 2d 490 (Thomas , J., concurring in part and dissenting in part).

The dissenters object that, before trial, a defendant has an identical property interest in tainted and untainted assets. See post, at ___ - ___, 194 L. Ed. 2d, at 282-283 (opinion of Kennedy , J.); post, at ___, 194 L. Ed. 2d, at 289 (opinion of Kagan , J.). Perhaps so. I need not take a position on the matter. Either way, that fact is irrelevant. Because the pretrial asset freeze here crosses into untainted assets, for which there is no historical tradition, it is unconstitutional. Any such incursion violates the Sixth Amendment.

III

Since the asset freeze here violates the Sixth Amendment, the plurality correctly concludes that the judgment below must be reversed. But I cannot go further and endorse the plurality’s atextual balancing analysis. The Sixth Amendment guarantees the right to counsel of choice. As discussed, a pretrial freeze of untainted [**277] assets infringes that right. This conclusion leaves no room for balancing. Moreover, I have no idea whether, “compared to the right to counsel of choice,” the Government’s interests in securing forfeiture and restitution lie “further from the heart of a fair, effective criminal justice system.” Ante, at ___, 194 L. Ed. 2d, at 268. Judges are not well suited to strike the right “balance” [***44] between those incommensurable interests. Nor do I think it is our role to do so. The People, through ratification, have already weighed the policy tradeoffs that constitutional rights entail. See Heller, 554 U.S., at 634-635, 128 S. Ct. 2783, 171 L. Ed. 2d 637. Those tradeoffs are thus not for us to reevaluate. “The very enumeration of the right” to counsel of choice denies us “the power to decide . . . whether the right is really worth insisting upon.” Id., at 634, 128 S. Ct. 2783, 171 L. Ed. 2d 637. Such judicial balancing “do[es] violence” to the constitutional design. Crawford v. Washington, 541 U.S. 36, 67-68, 124 S. Ct. 1354, 158 L. Ed. 2d 177 (2004). And it is out of step with our interpretive tradition. See Aleinikoff, Constitutional Law in the Age of Balancing, 96 Yale L. J. 943, 949-952 (1987) (noting that balancing did not appear in the Court’s constitutional analysis until the mid-20th century).

The plurality’s balancing analysis also casts doubt on the constitutionality of incidental burdens on the right to counsel. For the most part, the Court’s precedents hold that a generally applicable law placing only an incidental burden on a constitutional [*1102] right does not violate that right. See R. A. V. v. St. Paul, 505 U.S. 377, 389-390, 112 S. Ct. 2538, 120 L. Ed. 2d 305 (1992) (explaining that content- neutral laws do not violate the First Amendment simply because they incidentally burden expressive conduct); Employment Div., Dept. of Human Resources of Ore. v. Smith, 494 U.S. 872, 878-882, 110 S. Ct. 1595, 108 L. Ed. 2d 876 (1990) (likewise for religion-neutral laws that burden religious exercise).

Criminal-procedure rights tend [***45] to follow the normal incidental-burden rule. The Constitution does not “forbi[d] every government-imposed choice in the criminal process that has the effect of discouraging the exercise of constitutional rights.” Chaffin v. Stynchcombe, 412 U.S. 17, 30, 93 S. Ct. 1977, 36 L. Ed. 2d 714 (1973). The threat of more severe charges if a defendant refuses to plead guilty does not violate his right to trial. See Bordenkircher v. Hayes, 434 U.S. 357, 365, 98 S. Ct. 663, 54 L. Ed. 2d 604 (1978). And, in my view, prosecutorial arguments that raise the “cost” of remaining silent do not violate a defendant’s right against self-incrimination (at least as a matter of original meaning). See Mitchell v. United States, 526 U.S. 314, 342-343, 119 S. Ct. 1307, 143 L. Ed. 2d 424 (1999) (Thomas , J., dissenting); id., at 331-336, 119 S. Ct. 1307, 143 L. Ed. 2d 424 (Scalia , J., dissenting).

The Sixth Amendment arguably works the same way. “[A] defendant may not insist on representation by an attorney he cannot afford.” Wheat v. United States, 486 U.S. 153, 159, 108 S. Ct. 1692, 100 L. Ed. 2d 140 (1988). The Constitution perhaps guarantees only a “freedom of counsel” akin to the First Amendment freedoms of speech and religion that also “depen[d] in part on one’s financial wherewithal.” Caplin & Drysdale, 491 U.S., at 628, 109 S. Ct. 2667, 105 L. Ed. 2d 528. Numerous laws make it [**278] more difficult for defendants to retain a lawyer. But that fact alone does not create a Sixth Amendment problem. For instance, criminal defendants must still pay taxes even though “these financial levies may deprive them of resources that could be used to hire an attorney.” Id., at 631-632, 109 S. Ct. 2667, 105 L. Ed. 2d 528. So I lean toward the principal dissent’s view that incidental [***46] burdens on the right to counsel of choice would not violate the Sixth Amendment. See post, at ___ - ___, ___ - ___, 194 L. Ed. 2d, at 281, 284-285 (opinion of Kennedy , J.).

On the other hand, the Court has said that the right to counsel guarantees defendants “a fair opportunity to secure counsel of [their] choice.” Powell v. Alabama, 287 U.S. 45, 52-53, 53 S. Ct. 55, 77 L. Ed. 158 (1932) (emphasis added). The state court in Powell denied the defendants such an opportunity, the Court held, by moving to trial so quickly (six days after indictment) that the defendants had no chance to communicate with family or otherwise arrange for representation. Ibid. The schedule in Powell was not designed to block counsel, which suggests the usual incidental-burden rule might be inapt in the Sixth Amendment context. I leave the question open because this case does not require an answer.

The asset freeze here is not merely an incidental burden on the right to counsel of choice; it targets a defendant’s assets, which are necessary to exercise that right, simply to secure forfeiture upon conviction. The prospect of that criminal punishment, however, is precisely why the Constitution guarantees a right to counsel. The Sixth Amendment does not permit the Government’s bare expectancy of forfeiture to void that right. When the potential of a conviction is the only [***47] basis for interfering with a defendant’s assets before trial, the Constitution requires the Government to respect the longstanding common-law protection [*1103] for a defendant’s untainted property.

For these reasons, I concur only in the judgment.

Dissent by: KENNEDY ; KAGAN

Dissent

Justice Kennedy , with whom Justice Alito joins, dissenting.

The plurality and Justice Thomas find in the Sixth Amendment a right of criminal defendants to pay for an attorney with funds that are forfeitable upon conviction so long as those funds are not derived from the crime alleged. That unprecedented holding rewards criminals who hurry to spend, conceal, or launder stolen property by assuring them that they may use their own funds to pay for an attorney after they have dissipated the proceeds of their crime. It matters not, under today’s ruling, that the defendant’s remaining assets must be preserved if the victim or the Government is to recover for the property wrongfully taken. By granting a defendant a constitutional right to hire an attorney with assets needed to make a property-crime victim whole, the plurality and Justice Thomas ignore this Court’s precedents and distort the Sixth Amendment right to counsel.

The result reached today makes little sense in cases [***48] that involve fungible assets preceded by fraud, embezzlement, or other theft. An example illustrates the point. Assume a thief steals $1 million and then wins another $1 million in a lottery. After putting the sums in separate accounts, [**279] he or she spends $1 million. If the thief spends his or her lottery winnings, the Government can restrain the stolen funds in their entirety. The thief has no right to use those funds to pay for an attorney. Yet if the thief heeds today’s decision, he or she will spend the stolen money first; for if the thief is apprehended, the $1 million won in the lottery can be used for an attorney. This result is not required by the Constitution.

The plurality reaches its conclusion by weighing a defendant’s Sixth Amendment right to counsel of choice against the Government’s interest in preventing the dissipation of assets forfeitable upon conviction. In so doing, it — like Justice Thomas — sweeps aside the decisions in Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528 (1989), and United States v. Monsanto, 491 U.S. 600, 109 S. Ct. 2657, 105 L. Ed. 2d 512 (1989), both of which make clear that a defendant has no Sixth Amendment right to spend forfeitable assets (or assets that will be forfeitable) on an attorney. The principle the Court adopted in those cases applies with equal force here. Rather than apply that principle, however, [***49] the plurality and concurrence adopt a rule found nowhere in the Constitution or this Court’s precedents—that the Sixth Amendment protects a person’s right to spend otherwise forfeitable assets on an attorney so long as those assets are not related to or the direct proceeds of the charged crime. Ante, at ___, 194 L. Ed. 2d, at 261 (plurality opinion); ante, at ___, 194 L. Ed. 2d, at 271 (Thomas , J., concurring in judgment). The reasoning in these separate opinions is incorrect, and requires this respectful dissent.

I

This case arises from petitioner Sila Luis’ indictment for conspiring to commit health care fraud against the United States. The Government alleges that, as part of her illegal scheme, Luis used her health care companies to defraud Medicare by billing for services that were not medically necessary or actually provided. The charged crimes, the Government maintains, resulted in the payment of $45 million in improper Medicare benefits to Luis’ companies.

[*1104] The same day Luis was indicted, the Government initiated a civil action under 18 U.S.C. §1345 to restrain Luis’ assets before her criminal trial, including substitute property of an amount equivalent to the value of the proceeds of her alleged crimes. To establish its entitlement to a restraining order, [***50] the Government showed that Luis and her co-conspirators were dissipating the illegally obtained assets. In particular, they were transferring money involved in the scheme to various individuals and entities, including shell corporations owned by Luis’ family members. As part of this process, Luis opened and closed well over 40 bank accounts and withdrew large amounts of cash to hide the conspiracy’s proceeds. Luis personally received almost $4.5 million in funds and used at least some of that money to purchase luxury items, real estate, and automobiles, and to travel. Based on this and other evidence, the District Court entered an order prohibiting Luis from spending up to $45 million of her assets.

Before the Court of Appeals for the Eleventh Circuit, Luis argued that the Sixth Amendment required that she be allowed to spend the restrained [**280] substitute assets on an attorney. The Court of Appeals disagreed, concluding that “[t]he arguments made by Luis . . . are foreclosed by the United States Supreme Court decisions in . . . Caplin & Drysdale [and] Monsanto.” 564 Fed. Appx. 493, 494 (2014) ( per curiam). In my view the Court of Appeals was correct, and its judgment should be affirmed.

II

A

In Caplin & Drysdale, a law firm had represented [***51] a defendant charged with running a massive drug-distribution scheme. The defendant pleaded guilty and agreed to forfeit his assets. The law firm then sought to recover a portion of the forfeited assets for its legal fees. The firm argued that, when a defendant needs forfeitable assets to pay for an attorney, the forfeiture of those assets violates the defendant’s Sixth Amendment right to be represented by his counsel of choice.

The Court rejected the firm’s argument. The Sixth Amendment, the Court explained, “guarantees defendants in criminal cases the right to adequate representation, but those who do not have the means to hire their own lawyers have no cognizable complaint so long as they are adequately represented by attorneys appointed by the courts.” Caplin & Drysdale, 491 U.S., at 624, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. As for the right to choose one’s own attorney, the Court observed that “nothing in [the forfeiture statute] prevents a defendant from hiring the attorney of his choice, or disqualifies any attorney from serving as a defendant’s counsel.” Id., at 625, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. Even defendants who possess “nothing but assets the Government seeks to have forfeited . . . may be able to find lawyers willing to represent them, hoping that their fees will be paid in the event of acquittal, or via some [***52] other means that a defendant might come by in the future.” Ibid. The burden imposed by forfeiture law, the Court concluded, is thus “a limited one.” Ibid.

Caplin & Drysdale also repudiated the firm’s contention that the Government has only a modest interest in forfeitable assets that may be used to retain an attorney. In light of the importance of separating criminals from their ill-gotten gains and providing restitution to victims of crime, the Court found “a strong governmental interest in obtaining full recovery of all forfeitable assets, an interest that overrides any Sixth Amendment interest in permitting criminals to use assets adjudged [*1105] forfeitable to pay for their defense.” Id., at 631, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528.

The same day the Court decided Caplin & Drysdale it decided Monsanto, which addressed the pretrial restraint of a defendant’s assets “where the defendant seeks to use those assets to pay an attorney.” 491 U.S., at 602, 109 S. Ct. 2657, 105 L. Ed. 2d 512. The Court rejected the notion that there is a meaningful distinction, for Sixth Amendment purposes, between the restraint of assets before trial and the forfeiture of assets after trial: “[I]f the Government may, post-trial, forbid the use of forfeited assets to pay an attorney, then surely no constitutional violation occurs when, after [***53] probable cause is adequately established, the Government [**281] obtains an order barring a defendant from frustrating that end by dissipating his assets prior to trial.” Id., at 616, 109 S. Ct. 2657, 105 L. Ed. 2d 512. The Court noted, moreover, that “it would be odd to conclude that the Government may not restrain property . . . in [a defendant’s] possession, based on a finding of probable cause, when we have held that (under appropriate circumstances), the Government may restrain persons where there is a finding of probable cause.” Id., at 615-616, 109 S. Ct. 2657, 105 L. Ed. 2d 512. When a defendant himself can be restrained pretrial, there is “no constitutional infirmity” in a similar pretrial restraint of a defendant’s property “to protect its ‘appearance’ at trial and protect the community’s interest in full recovery of any ill-gotten gains.” Id., at 616, 109 S. Ct. 2657, 105 L. Ed. 2d 512. B

The principle the Court announced in Caplin & Drysdale and Monsanto controls the result here. Those cases establish that a pretrial restraint of assets forfeitable upon conviction does not contravene the Sixth Amendment even when the defendant possesses no other funds with which to pay for an attorney. The restraint itself does not prevent a defendant from seeking to convince his or her counsel of choice to take on the representation without advance [***54] payment. See Caplin & Drysdale, 491 U.S., at 625, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. It does not disqualify any attorney the defendant might want. Ibid. And it does not prevent a defendant from borrowing funds to pay for an attorney who is otherwise too expensive. To be sure, a pretrial restraint may make it difficult for a defendant to secure counsel who insists that high defense costs be paid in advance. That difficulty, however, does not result in a Sixth Amendment violation any more than high taxes or other government exactions that impose a similar burden. See, e.g., id., at 631-632, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528 (“Criminal defendants . . . are not exempted from federal, state, and local taxation simply because these financial levies may deprive them of resources that could be used to hire an attorney”).

The pretrial restraint in Monsanto was no more burdensome than the pretrial restraint at issue here. Luis, like the defendant in Monsanto, was not barred from obtaining the assistance of any particular attorney. She was free to seek lawyers willing to represent her in the hopes that their fees would be paid at some future point. In short, §1345’s authorization of a pretrial restraint of substitute assets places no greater burden on a defendant like Luis than the forfeiture and pretrial restraint [***55] statute placed on the defendant in Monsanto.

In addition, the Government has the same “strong . . . interest in obtaining full recovery of all forfeitable assets” here as it did in Caplin & Drysdale and Monsanto. See Caplin & Drysdale, supra, at 631, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. If Luis is convicted, the Government has a right to recover Luis’ substitute assets — the money she kept for [*1106] herself while spending the taxpayer dollars she is accused of stealing. Just as the Government has an interest in ensuring Luis’ presence at trial — an interest that can justify a defendant’s pretrial detention — so too does the Government have an interest in ensuring the availability of her [**282] substitute assets after trial, an interest that can justify pretrial restraint.

One need look no further than the Court’s concluding words in Monsanto to know the proper result here: “[N]o constitutional violation occurs when, after probable cause [to believe that a defendant’s assets will be forfeitable] is adequately established, the Government obtains an order barring a defendant from . . . dissipating his assets prior to trial.” 491 U.S., at 616, 109 S. Ct. 2657, 105 L. Ed. 2d 512. The Government, having established probable cause to believe that Luis’ substitute assets will be forfeitable upon conviction, [***56] should be permitted to obtain a restraining order barring her from spending those funds prior to trial. Luis should not be allowed to circumvent that restraint by using the funds to pay for a high, or even the highest, priced defense team she can find.

III

The plurality maintains that Caplin & Drysdale and Monsanto do not apply because “the nature of the assets at issue here differs from the assets at issue in those earlier cases.” Ante, at ___, 194 L. Ed. 2d, at 263. According to the plurality, the property here “belongs to the defendant, pure and simple.” Ibid. It states that, while “title to property used to commit a crime . . . often passes to the Government at the instant the crime is planned or committed,” title to Luis’ untainted property has not passed to the Government. Ante, at ___, 194 L. Ed. 2d, at 264. “That fact,” the plurality concludes, “undermines the Government’s reliance upon precedent, for both Caplin & Drysdale and Monsanto relied critically upon the fact that the property at issue was ‘tainted,’ and that title to the property therefore had passed from the defendant to the Government before the court issued its order freezing (or otherwise disposing of) the assets.” Ibid.

These conclusions depend upon a key premise: [***57] The Government owns tainted assets before a defendant is convicted. That premise is quite incorrect, for the common law and this Court’s precedents establish that the opposite is true. The Government does not own property subject to forfeiture, whether tainted or untainted, until the Government wins a judgment of forfeiture or the defendant is convicted. As Blackstone noted with emphasis, “goods and chattels are forfeited by conviction.” 4 W. Blackstone, Commentaries on the Laws of England 380 (1769) (Blackstone). Justice Story likewise observed that “no right to the goods and chattels of the felon could be acquired by the crown by the mere commission of the offence; but the right attached only by the conviction of the offender.” The Palmyra, 25 U.S. 1, 12 Wheat. 1, 14, 6 L. Ed. 531 (1827); ibid. (“In the contemplation of the common law, the offender’s right was not devested until the conviction”).

These authorities demonstrate that Caplin & Drysdale and Monsanto cannot be distinguished based on “the nature of the assets at issue.” Title to the assets in those cases did not pass from the defendant to the Government until conviction. As a result, the assets restrained before conviction in Monsanto were on the same footing as the assets restrained [***58] here: There was probable cause to believe that the assets would belong to the Government upon conviction. But when the court issued its restraining order, they did not. The Government had no greater ownership [*1107] interest in Monsanto’s [**283] tainted assets than it has in Luis’ substitute assets.

The plurality seeks to avoid this conclusion by relying on the relation-back doctrine. In its view the doctrine gives the Government title to tainted assets upon the commission of a crime rather than upon conviction or judgment of forfeiture. Even assuming, as this reasoning does, that the relation-back doctrine applies only to tainted assets — but see United States v. McHan, 345 F.3d 262, 270-272 (CA4 2003) — the doctrine does not do the work the plurality’s analysis requires.

The relation-back doctrine, which is incorporated in some forfeiture statutes, see, e.g., 21 U.S.C. §853(c), has its origins in the common law. Under this legal construct, the Government’s title to certain types of forfeitable property relates back to the time at which the defendant committed the crime giving rise to the forfeiture. See 4 Blackstone 375 (“forfeiture [of real estates] relates backwards to the time of the treason committed; so as to avoid all intermediate sales and incumbrances”); United States v. 92 Buena Vista Ave., 507 U.S. 111, 125, 113 S. Ct. 1126, 122 L. Ed. 2d 469 (1993) (plurality [***59] opinion). The doctrine’s purpose is to prevent defendants from avoiding forfeiture by transferring their property to third parties. The doctrine, however, does not alter the time at which title to forfeitable property passes to the Government. Title is transferred only when a conviction is obtained or the assets are otherwise forfeited; it is only once this precondition is met that relation back to the time of the offense is permitted. See ibid. (The relation-back doctrine’s “fictional and retroactive vesting” is “not self- executing”); id., at 132, 113 S. Ct. 1126, 122 L. Ed. 2d 469 (Scalia , J., concurring in judgment) (“The relation-back rule applies only in cases where the Government’s title has been consummated by seizure, suit, and judgment, or decree of condemnation, whereupon the doctrine of relation carries back the title to the commission of the offense” (internal quotation marks, brackets, and citations omitted)); United States v. Grundy, 7 U.S. 337, 3 Cranch 337, 350-351, 2 L. Ed. 459 (1806) (Marshall, C. J., opinion for the Court) (a forfeitable asset does not “ves[t] in the government until some legal step shall be taken for the assertion of its right”); 4 Blackstone 375 (“But, though after attainder the forfeiture relates back to the time of the treason committed, yet it does not take effect unless [***60] an attainder be had”). In short, forfeitable property does not belong to the Government in any sense before judgment or conviction. Cf. ante, at ___, 194 L. Ed. 2d, at 266 (plurality opinion). Until the Government wins a judgment or conviction, “someone else owns the property.” 92 Buena Vista Ave., supra, at 127, 113 S. Ct. 1126, 122 L. Ed. 2d 469.

The plurality is correct to note that Caplin & Drysdale discussed the relation-back provision in the forfeiture statute at issue. The Caplin & Drysdale Court did not do so, however, to suggest that forfeitable assets can be restrained only when the assets are tainted. Rather, the Court referred to the provision to rebut the law firm’s argument that the United States has less of an interest in forfeitable property than robbery victims have in their stolen property. 491 U.S., at 627-628, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. More to the point, central to the Court’s decision was its observation that, because [**284] the Government obtained “title to [the defendant’s] assets upon conviction,” it would be “peculiar” to hold that the Sixth Amendment still gave the defendant the right to pay his attorney with those assets. Id., at 628, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. Monsanto reinforced that view, holding that the pretrial restraint of assets — money to which the Government does not yet have title — is permissible even when the defendant [***61] wants to use those assets to pay for counsel. 491 U.S., at 616, 109 S. Ct. 2657, 105 L. Ed. 2d 512. [*1108] True, the assets in Caplin & Drysdale and Monsanto happened to be derived from the criminal activity alleged; but the Court’s reasoning in those cases was based on the Government’s entitlement to recoup money from criminals who have profited from their crimes, not on tracing or identifying the actual assets connected to the crime. For this reason, the principle the Court announced in those cases applies whenever the Government obtains (or will obtain) title to assets upon conviction. Nothing in either case depended on the assets being tainted or justifies refusing to apply the rule from those cases here.

The plurality makes much of various statutory provisions that, in its view, give the United States a superior interest before trial in tainted assets but not untainted ones. See ante, at ___ - ___, 194 L. Ed. 2d, at 265-266. That view, however, turns not on any reasoning specific to the Sixth Amendment but rather on Congress’ differential treatment of tainted versus untainted assets. The plurality makes no attempt to explain why Congress’ decision in §1345 to permit the pretrial restraint of substitute assets is not also relevant to its analysis. More to the point, Congress’ statutory treatment [***62] of property is irrelevant to a Sixth Amendment analysis. The protections afforded by the Sixth Amendment should not turn on congressional whims. The plurality’s concern over the implications of the Government’s position appears animated by a hypothetical future case where a defendant’s assets are restrained not to return stolen funds but, for example, to pay a fine. That case, however, is not the case before the Court. Section 1345 authorizes pretrial restraints to preserve substitute assets, not to provide for fines greater than the amounts stolen. The holdings in Caplin & Drysdale and Monsanto, and what should be the holding today, thus, do not address the result in a case involving a fine. The governmental interests at stake when a fine is at issue are quite separate and distinct from the interests implicated here. This case implicates the Government’s interest in preventing the dissipation, transfer, and concealment of stolen funds, as well as its interest in preserving for victims any funds that remain. Those interests justify, in cases like this one, the pretrial restraint of substitute assets.

IV

The principle the plurality and Justice Thomas announce today — that a defendant has a right to pay for an attorney with forfeitable [***63] assets so long as those assets are not related to or the direct proceeds of the crime alleged — has far-reaching implications. There is no clear explanation why this principle does not extend to the exercise of other constitutional rights. “If defendants have a right to spend forfeitable assets on attorney’s [**285] fees, why not on exercises of the right to speak, practice one’s religion, or travel?” Caplin & Drysdale, 491 U.S., at 628, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. Nor does either opinion provide any way to distinguish between the restraint at issue here and other governmental interferences with a defendant’s assets. If the restraint of Luis’ assets violates the Sixth Amendment, could the same be said of any imposition on a criminal defendant’s assets? Cf. id., at 631, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528 (“[S]eizures of assets to secure potential tax liabilities . . . may impair a defendant’s ability to retain counsel . . . [y]et these assessments have been upheld against constitutional attack”). If a defendant is fined in a prior matter, is the Government barred from collecting the fine if it will leave the defendant unable to afford a particular attorney in a current case? No explanation is provided for what, if any, limits there are on the invented exemption for attorney’s fees.

[*1109] The result today also creates arbitrary distinctions [***64] between defendants. Money, after all, is fungible. There is no difference between a defendant who has preserved his or her own assets by spending stolen money and a defendant who has spent his or her own assets and preserved stolen cash instead. Yet the plurality and concurrence — for different reasons — find in the Sixth Amendment the rule that greater protection is given to the defendant who, by spending, laundering, exporting, or concealing stolen money first, preserves his or her remaining funds for use on an attorney.

The true winners today are sophisticated criminals who know how to make criminal proceeds look untainted. They do so every day. They “buy cashier’s checks, money orders, nonbank wire transfers, prepaid debit cards, and traveler’s checks to use instead of cash for purchases or bank deposits.” Dept. of Treasury, National Money Laundering Risk Assessment 2015, p. 3. They structure their transactions to avoid triggering recordkeeping and reporting requirements. Ibid. And they open bank accounts in other people’s names and through shell companies, all to disguise the origins of their funds. Ibid.

The facts of this case illustrate the measures one might take to conceal or dispose of ill-gotten [***65] gains. In declarations relied on by the District Court, the Federal Bureau of Investigation (FBI) Special Agent investigating the case explained that “Luis transferred monies or caused the transfer of monies received from Medicare to . . . family members and companies owned by family members,” including $1,471,000 to her husband, and over a million dollars to her children and former daughter-in-law. App. 72-73. She also “used Medicare monies for foreign travel,” including approximately 31 trips to Mexico, “where she owns several properties and has numerous bank accounts.” Id., at 73. She “transferred Medicare monies overseas through international wire transfers to Mexico.” Ibid. And the Government was “able to trace Medicare proceeds going into [all but one of the] bank account[s] owned by Defendant Luis and/or her companies listed in the Court’s” temporary restraining order. Id., at 74. No doubt Luis would have enjoyed her travel and expenditures even more had she known that, were her alleged wrongs discovered, a majority of the Justices would insist that she be allowed to pay her chosen [**286] legal team at the price they set rather than repay her victim.

Notwithstanding that the Government established probable [***66] cause to believe that Luis committed numerous crimes and used the proceeds of those crimes to line her and her family’s pockets, the plurality and Justice Thomas reward Luis’ decision to spend the money she is accused of stealing rather than her own. They allow Luis to bankroll her private attorneys as well as “the best and most industrious investigators, experts, paralegals, and law clerks” money can buy — a legal defense team Luis claims she cannot otherwise afford. See Corrected Motion to Modify the Restraining Order in No. 12- Civ-23588, p. 13 (SD Fla., Nov. 16, 2012). The Sixth Amendment does not provide such an unfettered right to counsel of choice. It is well settled that the right to counsel of choice is limited in important respects. A defendant cannot demand a lawyer who is not a member of the bar. Wheat v. United States, 486 U.S. 153, 159, 108 S. Ct. 1692, 100 L. Ed. 2d 140 (1988). Nor may a defendant insist on an attorney who has a conflict of interest. Id., at 159, 164, 108 S. Ct. 1692, 100 L. Ed. 2d 140. And, as quite relevant here, “a defendant may not insist on representation by an attorney he cannot afford.” Id., at 159, 108 S. Ct. 1692, 100 L. Ed. 2d 140. As noted earlier, [*1110] “those who do not have the means to hire their own lawyers have no cognizable complaint so long as they are adequately represented by attorneys appointed by the courts.” Caplin & Drysdale, 491 U.S., at 624, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. As a result of the [***67] District Court’s order, Luis simply cannot afford the legal team she desires unless they are willing to represent her without advance payment. For Sixth Amendment purposes, the only question here is whether Luis’ right to adequate representation is protected. That question is not before the Court. Neither Luis nor the plurality nor Justice Thomas suggests that Luis will receive inadequate representation if she is not able to use the restrained funds. And this is for good reason. Given the large volume of defendants in the criminal justice system who rely on public representation, it would be troubling to suggest that a defendant who might be represented by a public defender will receive inadequate representation. See generally T. Giovanni & R. Patel, Gideon at 50: Three Reforms to Revive the Right to Counsel 1 (2013), online at http://www.brennancenter.org/sites/default/files/publications/Gideon_Report_040913.pdf (as last visited Mar. 28, 2016). Since Luis cannot afford the legal team she desires, and because there is no indication that she will receive inadequate representation as a result, she does not have a cognizable Sixth Amendment complaint.

The plurality does warn that accepting the Government’s position “would — by increasing the government-paid-defender workload — render less effective [***68] the basic right the Sixth Amendment seeks to protect.” Ante, at ___, 194 L. Ed. 2d, at 270. Public-defender offices, the plurality suggests, already lack sufficient attorneys to meet nationally recommended caseload standards. Ibid. But concerns about the caseloads of public-defender offices do not justify a constitutional command to treat a defendant accused of committing a lucrative [**287] crime differently than a defendant who is indigent from the outset. The Constitution does not require victims of property crimes to fund subsidies for members of the private defense bar.

Because the rule announced today is anchored in the Sixth Amendment, moreover, it will frustrate not only the Federal Government’s use of §1345 but also the States’ administration of their forfeiture schemes. Like the Federal Government, States also face criminals who engage in money laundering through extensive enterprises that extend to other States and beyond. Where a defendant has put stolen money beyond a State’s reach, a State should not be precluded from freezing the assets the defendant has in hand. The obstacle that now stands in the States’ way is not found in the Constitution. It is of the Court’s making.

Finally, the plurality posits that its decision “should prove workable” [***69] because courts “have experience separating tainted assets from untainted assets, just as they have experience determining how much money is needed to cover the costs of a lawyer.” Ante, at ___ - ___, 194 L. Ed. 2d, at 270. Neither of these assurances is adequate.

As to the first, the plurality cites a number of sources for the proposition that courts have rules that allow them to implement the distinction it adopts. Ibid. Those rules, however, demonstrate the illogic of the conclusion that there is a meaningful difference between the actual dollars stolen and the dollars of equivalent value in a defendant’s bank account. The plurality appears to agree that, if a defendant is indicted for stealing $1 million, the Government can obtain an order preventing the defendant from spending the $1 million he or she is believed to have stolen. The situation gets more complicated, however, [*1111] when the defendant deposits the stolen $1 million into an account that already has $1 million. If the defendant then spends $1 million from the account, it cannot be determined with certainty whether the money spent was stolen money rather than money the defendant already had. The question arises, then, whether the Government can restrain [***70] the remaining million.

One of the treatises on which the plurality relies answers that question. The opinion cites A. Scott’s Law of Trusts to support the claim that “the law has tracing rules that help courts implement the kind of distinction . . . require[d] in this case.” Ante, at ___ - ___, 194 L. Ed. 2d, at 270. The treatise says that, if a “wrongdoer has mingled misappropriated money with his own money and later makes withdrawals from the mingled fund,” assuming the withdrawals do not result in a zero balance, a person who has an interest in the misappropriated money can recover it from the amount remaining in the account. 4 A. Scott, Law of Trusts §518, pp. 3309-3310 (1956). Based on this rule, one would expect the plurality to agree that, in the above hypothetical, the Government could restrain up to the full amount of the stolen funds—that is, the full $1 million — without having to establish whether the $1 million the defendant spent was stolen money or not. If that is so, it is hard to see why its opinion treats as different a situation where the defendant has two bank accounts — one with the $1 million from before the [**288] crime and one with the stolen $1 million. If the defendant spends the money in the latter account, [***71] the Government should be allowed to freeze the money in the former account in the same way it could if the defendant spent the money out of a single, commingled account. The Sixth Amendment provides no justification for the decision to mandate different treatment in these all-but- identical situations.

The plurality sees “little reason to worry” about defendants circumventing forfeiture because courts can use rules like the tracing rule discussed above. Ante, at ___, 194 L. Ed. 2d, at 270. It also asserts that these rules “will likely . . . prevent Luis from benefiting from many of [her] money transfers and purchases.” Ibid. That proposition is doubtful where, as here, “a lot of money was taken out in cash from the defendant’s bank accounts” because “[y]ou can’t trace cash.” App. 155. Even were that not the case, this assertion fails to appreciate that it takes time to trace tainted assets. As the FBI agent testified, at the time of the hearing both the tracing and the FBI’s analysis were “still ongoing.” Ibid. The whole purpose of a pretrial restraint under §1345 is to maintain the status quo in cases, like this one, where a defendant is accused of committing crimes that involve fungible property, e.g., a banking law violation or [***72] a federal health care offense. The plurality’s approach serves to benefit the most sophisticated of criminals whose web of transfers and concealment will take the longest to unravel. For if the Government cannot establish at the outset that every dollar subject to restraint is derived from the crime alleged, the defendant can spend that money on whatever defense team he or she desires.

Of equal concern is the assertion that a defendant’s right to counsel of choice is limited to only those attorneys who charge a “reasonable fee.” Ante, at ___, 194 L. Ed. 2d, at 270. If Luis has a right to use the restrained substitute assets to pay for the counsel of her choice, then why can she not hire the most expensive legal team she can afford? In the plurality’s view, the reason Luis can use the restrained funds for an attorney is because they are still hers. But if that is so, then she should be able to use all $2 million of her remaining assets to pay for a lawyer. The plurality’s willingness to curtail the very right it recognizes reflects the [*1112] need to preserve substitute assets from further dissipation.

* * *

Today’s ruling abandons the principle established in Caplin & Drysdale and Monsanto. In its place is an approach [***73] that creates perverse incentives and provides protection for defendants who spend stolen money rather than their own.

In my respectful view this is incorrect, and the judgment of the Court of Appeals should be affirmed.

Justice Kagan , dissenting.

I find United States v. Monsanto, 491 U.S. 600, 109 S. Ct. 2657, 105 L. Ed. 2d 512 (1989), a troubling decision. It is one thing to hold, as this Court did in Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528 (1989), that a convicted felon has no Sixth Amendment [**289] right to pay his lawyer with funds adjudged forfeitable. Following conviction, such assets belong to the Government, and “[t]here is no constitutional principle that gives one person the right to give another’s property to a third party.” Id., at 628, 109 S. Ct. 2646, 109 S. Ct. 2667, 105 L. Ed. 2d 528. But it is quite another thing to say that the Government may, prior to trial, freeze assets that a defendant needs to hire an attorney, based on nothing more than “probable cause to believe that the property will ultimately be proved forfeitable.” Monsanto, 491 U.S., at 615, 109 S. Ct. 2657, 105 L. Ed. 2d 512. At that time, “the presumption of innocence still applies,” and the Government’s interest in the assets is wholly contingent on future judgments of conviction and forfeiture. Kaley v. United States, 571 U.S. ___, ___, 134 S. Ct. 1090, 188 L. Ed. 2d 46 (2014). I am not altogether convinced that, in this decidedly different circumstance, the Government’s interest in recovering the proceeds of crime ought to trump the defendant’s (often highly [***74] consequential) right to retain counsel of choice.

But the correctness of Monsanto is not at issue today. Petitioner Sila Luis has not asked this Court either to overrule or to modify that decision; she argues only that it does not answer the question presented here. And because Luis takes Monsanto as a given, the Court must do so as well.

On that basis, I agree with the principal dissent that Monsanto controls this case. See ante, at ___ - ___, 194 L. Ed. 2d, at 281-282 (opinion of Kennedy , J.). Because the Government has established probable cause to believe that it will eventually recover Luis’s assets, she has no right to use them to pay an attorney. See Monsanto, 491 U.S., at 616, 109 S. Ct. 2657, 105 L. Ed. 2d 512 (“[N]o constitutional violation occurs when, after probable cause is adequately established, the Government obtains an order barring a defendant from . . . dissipating his assets prior to trial”).

The plurality reaches a contrary result only by differentiating between the direct fruits of criminal activity and substitute assets that become subject to forfeiture when the defendant has run through those proceeds. See ante, at ___ - ___, 194 L. Ed. 2d, at 263-264. But as the principal dissent shows, the Government’s and the defendant’s respective legal interests in those two kinds of property, prior to [***75] a judgment of guilt, are exactly the same: The defendant maintains ownership of either type, with the Government holding only a contingent interest. See ante, at ___ - ___, 194 L. Ed. 2d, at 282- 284. Indeed, the plurality’s use of the word “tainted,” to describe assets at the pre-conviction stage, makes an unwarranted assumption about the defendant’s guilt. See ante, at ___, 194 L. Ed. 2d, at 263 (characterizing such assets as, for example, “robber’s loot”). Because the Government has not yet shown that the defendant committed the crime charged, it also has not [*1113] shown that allegedly tainted assets are actually so.

And given that money is fungible, the plurality’s approach leads to utterly arbitrary distinctions as among criminal defendants who are in fact guilty. See ante, at ___, 194 L. Ed. 2d, at 285 (opinion of Kennedy , J.). The thief who immediately dissipates his ill-gotten gains and thereby preserves his other assets is no more deserving of chosen counsel than the one who spends those two pots of money in reverse order. Yet the plurality would [**290] enable only the first defendant, and not the second, to hire the lawyer he wants. I cannot believe the Sixth Amendment draws that irrational line, much as I sympathize with the plurality’s effort to cabin Monsanto. Accordingly, I would [***76] affirm the judgment below.

References

U.S.C.S., Constitution, Amendment 6; 18 U.S.C.S. § 1345

27 Moore's Federal Practice §§644.30, 644.36 (Matthew Bender 3d ed.)

L Ed Digest, Criminal Law §§46.2, 46.8

L Ed Index, Attorneys at Law; Attorneys' Fees

Actual, potential, or alleged conflict of interest involving accused's counsel as affecting accused's federal

right to counsel under Federal Constitution's Sixth Amendment--Supreme Court cases. 152 L. Ed. 2d

1121.

Accused's right to counsel under the Federal Constitution--Supreme Court cases. 93 L. Ed. 137, 2 L. Ed.

2d 1644, 9 L. Ed. 2d 1260, 18 L. Ed. 2d 1420.

Content T ype: Cases

Terms:

Narrow By: custom: custom

Date and T ime: Oct 23, 2017 12:00:46 p.m. EDT About LexisNexis® Privacy Policy Terms & Conditions Sign Out

Copyright © 2017 LexisNexis. All rights reserved. Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920...

134 S.Ct. 1090 West Headnotes (11) Supreme Court of the United States

Kerri L. KALEY, et vir, Petitioners [1] Forfeitures v. Nature and purpose of forfeiture in general UNITED STATES. Criminal forfeitures help to ensure that crime does not pay and at once punish wrongdoing, No. 12–464. | Argued Oct. 16, deter future illegality, and lessen the economic 2013. | Decided Feb. 25, 2014. power of criminal enterprises; the Government also uses forfeited property to recompense Synopsis victims of crime, improve conditions in Background: Defendants who had been charged with crime-damaged communities, and support law conspiracy to transport stolen property, transportation of enforcement activities like police training. stolen property, obstruction of justice and money laundering Comprehensive Crime Control Act of 1984, § moved to vacate protective order that prevented them from 303(a), 21 U.S.C.A. § 853(a). transferring assets described in forfeiture count of indictment, as allegedly interfering with their ability to retain criminal 1 Cases that cite this headnote defense counsel of their choice. The United States District Court for the Southern District of Florida, Kenneth A. Marra, [2] Forfeitures J., denied the motion, and defendants appealed. The Court Property Subject to Forfeiture of Appeals for the Eleventh Circuit, Marcus, Circuit Judge, 579 F.3d 1246, reversed and remanded, and denied rehearing There is a strong governmental interest in en banc. On remand, the District Court, denied defendants' obtaining full recovery of all forfeitable assets. motion to vacate pre-trial protective order restraining their Comprehensive Crime Control Act of 1984, § assets, and defendants filed interlocutory appeal. The Court 303(a), 21 U.S.C.A. § 853(a). of Appeals, 677 F.3d 1316, affirmed. Certiorari was granted. 1 Cases that cite this headnote

[3] Forfeitures [Holding:] The United States Supreme Court, Justice Kagan, Disposition of Property Pending Forfeiture held that defendants were not entitled to challenge grand jury's probable cause determination at pre-trial post-restraint A pre-trial restraining order or injunction to hearing; abrogating United States v. E–Gold, Ltd., 521 F.3d preserve the availability of forfeitable property 411, United States v. Dejanu, 37 Fed.Appx. 870, United while criminal proceedings are pending, issued States v. Michelle's Lounge, 39 F.3d 684, and United States upon application of the United States, prevents v. Monsanto, 924 F.2d 1186. a defendant from spending or transferring specified property, including to pay an attorney for legal services. Comprehensive Crime Control Affirmed and remanded. Act of 1984, § 303(e)(1), 21 U.S.C.A. § 853(e) (1). Chief Justice Roberts filed a dissenting opinion in which Justices Breyer and Sotomayor joined. Cases that cite this headnote

[4] Forfeitures Disposition of Property Pending Forfeiture

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 1 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... For a pre-trial asset restraint to be permissible Limitations on judicial review of evidence under federal law, there must be probable cause A challenge to the reliability or competence of to think (1) that the defendant has committed the evidence supporting a grand jury's finding an offense permitting forfeiture, and (2) that the of probable cause will not be heard. U.S.C.A. property at issue has the requisite connection to Const.Amend. 4. that crime. Comprehensive Crime Control Act of 1984, § 303(e)(1), 21 U.S.C.A. § 853(e)(1). 4 Cases that cite this headnote

3 Cases that cite this headnote [8] Criminal Law Issuance [5] Forfeitures If the person charged is not yet in custody, a Disposition of Property Pending Forfeiture grand jury indictment triggers issuance of an Defendants who were charged with scheme to arrest warrant without further inquiry into the steal prescription medical devices and resell case's strength. them for profit were not entitled to challenge grand jury's prior determination that probable 1 Cases that cite this headnote cause supported their prosecution at pre- trial hearing considering legality of pre-trial [9] Arrest protective order that prohibited defendants from Presentation to magistrate, etc.; transferring allegedly forfeitable assets, even arraignment though defendants claimed they needed those If a person is arrested without a warrant, assets to obtain counsel of their choosing, a grand jury indictment eliminates her since grand jury's determination of probable Fourth Amendment right to a prompt judicial cause was conclusive and full adversarial assessment of probable cause to support any hearing on issue would provide little benefit; detention. U.S.C.A. Const.Amend. 4. abrogating United States v. E–Gold, Ltd., 521 F.3d 411, United States v. Dejanu, 37 Fed.Appx. Cases that cite this headnote 870, United States v. Michelle's Lounge, 39 F.3d 684, and United States v. Monsanto, 924 F.2d 1186. U.S.C.A. Const.Amend. 6; [10] Forfeitures Comprehensive Crime Control Act of 1984, § Proceedings 303(e)(1), 21 U.S.C.A. § 853(e)(1). Even if the Mathews balancing test applied to determination of whether defendants were Cases that cite this headnote entitled to challenge grand jury's determination of probable cause at a pre-trial hearing [6] Criminal Law considering legality of pre-trial protective Issuance order prohibiting defendants from transferring allegedly forfeitable assets, based on defendants' An indictment fair upon its face, and returned by claim that those assets were required to obtain a properly constituted grand jury, conclusively counsel of their choice, defendants would determines the existence of probable cause to not be entitled to challenge the grand jury's believe the defendant perpetrated the offense probable cause determination at the pre-trial alleged. U.S.C.A. Const.Amend. 4. post-restraint hearing; while defendants had 2 Cases that cite this headnote constitutional right to retain counsel of their own choosing, government had substantial interest in freezing potentially forfeitable assets without [7] Indictment and Information

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 2 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... an evidentiary hearing about probable cause proceeds, the Government obtained a § 853(e)(1) restraining underlying the charges since such a hearing order against their assets. The Kaleys moved to vacate the would consume significant time and resources, order, intending to use a portion of the disputed assets for their and a full adversarial hearing on the probable legal fees. The District Court allowed them to challenge the cause determination would provide little benefit, assets' traceability to the offenses in question but not the facts since the probable cause decision was hard to supporting the underlying indictment. The Eleventh Circuit undermine or reverse. U.S.C.A. Const.Amends. affirmed. 6, 14; Comprehensive Crime Control Act of 1984, § 303(e)(1), 21 U.S.C.A. § 853(e)(1). Held : When challenging the legality of a § 853(e)(1) pre- trial asset seizure, a criminal defendant who has been indicted 14 Cases that cite this headnote is not constitutionally entitled to contest a grand jury's determination of probable cause to believe the defendant [11] Indictment and Information committed the crimes charged. Pp. 1096 – 1105. Degree of proof (a) In Monsanto, this Court held that the Government may Probable cause is not a high bar, as it seize assets before trial that a defendant intends to use requires only the kind of fair probability on to pay an attorney, so long as probable cause *1093 which reasonable and prudent people, not legal exists “to believe that the property will ultimately be technicians, act; that is why a grand jury's proved forfeitable.” 491 U.S., at 615, 109 S.Ct. 2657. The finding of probable cause to think that a person question whether indicted defendants like the Kaleys are committed a crime can be made reliably without constitutionally entitled to a judicial re-determination of the an adversary hearing. U.S.C.A. Const.Amend. 4. grand jury's probable cause conclusion in a hearing to lift 8 Cases that cite this headnote an asset restraint has a ready answer in the fundamental and historic commitment of the criminal justice system to entrust probable cause findings to a grand jury. A probable cause finding sufficient to initiate a prosecution for a serious crime is “conclusive[e],” Gerstein v. Pugh, 420 U.S. 103, 117, n. *1092 Syllabus * 19, 95 S.Ct. 854, 43 L.Ed.2d 54, and, as a general matter, “a challenge to the reliability or competence of the evidence” * The syllabus constitutes no part of the opinion of the supporting that finding “will not be heard,” United States v. Court but has been prepared by the Reporter of Decisions Williams, 504 U.S. 36, 54, 112 S.Ct. 1735, 118 L.Ed.2d 352. for the convenience of the reader. See United States v. A grand jury's probable cause finding may, on its own, effect Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 a pre-trial restraint on a person's liberty. Gerstein, 420 U.S., S.Ct. 282, 50 L.Ed. 499. at 117, n. 19, 95 S.Ct. 854. The same result follows when it Title 21 U.S.C. § 853(e)(1) empowers courts to enter pre-trial works to restrain a defendant's property. restraining orders to “preserve the availability of [forfeitable] property” while criminal proceedings are pending. Such pre- The Kaleys' alternative rule would have strange and trial asset restraints are constitutionally permissible whenever destructive consequences. Allowing a judge to decide anew probable cause exists to think that a defendant has committed what the grand jury has already determined could result an offense permitting forfeiture and that the assets in dispute in two inconsistent findings governing different aspects of are traceable or otherwise sufficiently related to the crime one criminal proceeding, with the same judge who found charged. United States v. Monsanto, 491 U.S. 600, 109 S.Ct. probable cause lacking presiding over a trial premised on its 2657, 105 L.Ed.2d 512. existence. That legal dissonance could not but undermine the criminal justice system's integrity, especially the grand jury's After a grand jury indicted petitioners, Kerri and Brian constitutional role. Pp. 1096 – 1100. Kaley, for reselling stolen medical devices and laundering the

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 3 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... (b) The balancing test of Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18—which requires a court to weigh Donald B. Verrilli, Jr., Solicitor General (Counsel of (1) the burdens that a requested procedure would impose on Record), Mythili Raman, Acting Assistant Attorney General, the government against (2) the private interest at stake, as Michael R. Dreeben, Deputy Solicitor General, Elaine J. viewed alongside (3) “the risk of an erroneous deprivation” Goldenberg, Assistant to the Solicitor General, Sonja M. of that interest without the procedure and “the probable value, Ralston, Attorney, Department of Justice, Washington D.C., if any, of [the] additional ... procedural safeguar[d],” id., at for Respondent. 335, 96 S.Ct. 893—if applicable here, tips against the Kaleys. Opinion Because the Government's interest in freezing potentially forfeitable assets without an adversarial hearing about the Justice KAGAN delivered the opinion of the Court. probable cause underlying criminal charges and the Kaleys' interest in retaining counsel of their own choosing are both A federal statute, 21 U.S.C. § 853(e), authorizes a court to substantial, the test's third prong is critical. It boils down to the freeze an indicted defendant's assets prior to trial if they would “probable value, if any,” of a judicial hearing in uncovering be subject to forfeiture upon conviction. In United States v. mistaken grand jury probable cause findings. But when the Monsanto, 491 U.S. 600, 615, 109 S.Ct. 2657, 105 L.Ed.2d legal standard is merely probable cause and the grand jury has 512 (1989), we approved the constitutionality of such an order already made that finding, a full-dress hearing will provide so long as it is “based on a finding of probable cause to believe little benefit. See Florida v. Harris, 568 U.S. ––––, ––––, that the property will ultimately be proved forfeitable.” And 133 S.Ct. 1050, 1055, 185 L.Ed.2d 61. A finding of probable we held that standard to apply even when a defendant seeks cause to think that a person committed a crime “can be [made] to use the disputed property to pay for a lawyer. reliably without an adversary hearing,” Gerstein, 420 U.S., at 120, 95 S.Ct. 854, and the value of requiring additional In this case, two indicted defendants wishing to hire an “formalities and safeguards” would “[i]n most cases ... be attorney challenged a pre-trial restraint on their property. The too slight,” id., at 121–122, 95 S.Ct. 854. The experience of trial court convened a hearing to consider the seizure's legality several Circuits corroborates this view. Neither the Kaleys under Monsanto. The question presented is whether criminal nor their amici point to a single case in two decades where defendants are constitutionally entitled at such a hearing to courts, holding hearings of the kind they seek, have found contest a grand jury's prior determination of probable cause the absence of probable cause to believe that an indicted to believe they committed the crimes charged. We hold that defendant committed the crime charged. Pp. 1100 – 1105. they have no right to relitigate that finding.

677 F.3d 1316, affirmed and remanded. I KAGAN, J., delivered the opinion of the Court, in which SCALIA, KENNEDY, THOMAS, GINSBURG, and ALITO, JJ., joined. ROBERTS, C.J., filed a dissenting A opinion, in which BREYER and SOTOMAYOR, JJ., joined. [1] [2] Criminal forfeitures are imposed upon conviction to confiscate assets used in or gained from certain serious Attorneys and Law Firms crimes. See 21 U.S.C. § 853(a). Forfeitures help to ensure that crime does not pay: They at once punish wrongdoing, Howard Srebnick, Miami, FL, for Petitioners. deter future illegality, and “lessen the economic power” of criminal enterprises. Caplin & Drysdale, Chartered v. United *1094 Michael R. Dreeben, Washington, DC, for States, 491 U.S. 617, 630, 109 S.Ct. 2646, 105 L.Ed.2d 528 Respondent. (1989); see id., at 634, 109 S.Ct. 2646 (“Forfeiture provisions are powerful weapons in the war on crime”). The Government Howard Srebnick, Counsel of Record, Black, Srebnick, Kornspan & Stumpf, P.A., G. Richard Strafer, G. Richard also uses forfeited property to recompense victims of crime, Strafer, P.A., Miami, FL, for Petitioners. improve conditions in crime-damaged communities, and

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 4 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... support law enforcement activities like police training. See divided over extending the hearing to the first issue. Some id., at 629–630, 109 S.Ct. 2646. 1 Accordingly, “there is a have considered, while others have barred, a defendant's strong governmental interest in obtaining full recovery of all attempt to challenge the probable cause underlying a criminal forfeitable assets.” Id., at 631, 109 S.Ct. 2646. charge. 4 This case raises the question whether an indicted defendant has a constitutional right to contest the grand jury's 1 Between January 2012 and April 2013, for example, prior determination of that matter. the Department of Justice returned over $1.5 billion in forfeited assets to more than 400,000 crime victims. 3 At oral argument, the Government agreed that a See Dept. of Justice, Justice Department Returned $1.5 defendant has a constitutional right to a hearing on that Billion to Victims of Crime Since January 2012 (Apr. question. See Tr. of Oral Arg. 45. We do not opine on 26, 2013), online at http://www.justice.gov/opa/pr/2013/ the matter here. April/13–crm–480.html (as visited Feb. 21, 2014 and 4 available in the Clerk of the Court's case file). Compare United States v. E–Gold, Ltd., 521 F.3d 411 (C.A.D.C.2008) (holding that a defendant is entitled to [3] [4] In line with that interest, § 853(e)(1) empowers raise such a challenge); United States v. Dejanu, 37 courts to enter pre-trial restraining orders or injunctions to Fed.Appx. 870, 873 (C.A.9 2002) (same); United States “preserve the availability of [forfeitable] property” while v. Michelle's Lounge, 39 F.3d 684, 700 (C.A.7 1994) criminal proceedings are pending. Such an order, issued (same); United States v. Monsanto, 924 F.2d 1186 (C.A.2 “[u]pon application of the United States,” prevents a 1991) (en banc) (same), with United States v. Jamieson, defendant from spending or transferring specified property, 427 F.3d 394, 406–407 (C.A.6 2005) (prohibiting a including to pay an attorney *1095 for legal services. Ibid. defendant from raising such a challenge); United States In Monsanto, our principal case involving this procedure, v. Farmer, 274 F.3d 800, 803–806 (C.A.4 2001) (same); we held a pre-trial asset restraint constitutionally permissible United States v. Jones, 160 F.3d 641, 648–649 (C.A.10 whenever there is probable cause to believe that the property 1998) (same). is forfeitable. See 491 U.S., at 615, 109 S.Ct. 2657. That determination has two parts, reflecting the requirements for B forfeiture under federal law: There must be probable cause to think (1) that the defendant has committed an offense The grand jury's indictment in this case charges a scheme permitting forfeiture, and (2) that the property at issue has to steal prescription medical devices and resell them for the requisite connection to that crime. See § 853(a). The profit. The indictment accused petitioner Kerri Kaley, a sales Monsanto Court, however, declined to consider “whether the representative for a subsidiary of Johnson & Johnson, and Due Process Clause requires a hearing” to establish either or petitioner Brian Kaley, her husband, with transporting stolen both of those aspects of forfeitability. Id., at 615, n. 10, 109 medical devices across state lines and laundering the proceeds 2 S.Ct. 2657. of that activity. 5 The Kaleys have contested those allegations throughout this litigation, arguing that the medical devices at 2 The forfeiture statute itself requires a hearing when the issue were unwanted, excess hospital inventory, which they Government seeks to restrain the assets of someone who could lawfully take and market to others. has not yet been indicted. See 21 U.S.C. § 853(e)(1)(B). That statutory provision is not at issue in this case, which 5 An earlier version of the indictment did not include the involves a pair of indicted defendants. money laundering charge. In its superseding indictment, Since Monsanto, the lower courts have generally provided the Government also accused Jennifer Gruenstrass, a hearing to any indicted defendant seeking to lift an asset another sales representative, of transporting stolen restraint to pay for a lawyer. In that hearing, they have property and money laundering. Her case went to trial, uniformly allowed the defendant to litigate the second issue and she was acquitted. Several other sales representatives stated above: whether probable cause exists to believe that the participating in the Kaleys' activity entered guilty pleas assets in dispute are traceable or otherwise sufficiently related (each to a charge of shipping stolen goods) during the Government's investigation. to the crime charged in the indictment. 3 But the courts have

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 5 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... Immediately after obtaining the indictment, the Government day the Court decided both those cases, it cast the die on this sought a restraining order under § 853(e)(1) to prevent the one too. Kaleys from transferring any assets traceable to or involved in the alleged offenses. *1096 Included among those assets In Caplin & Drysdale, we considered whether the Fifth is a $500,000 certificate of deposit that the Kaleys intended and Sixth Amendments exempt from forfeiture money that to use for legal fees. The District Court entered the requested a convicted defendant has agreed to pay his attorney. See order. Later, in response to the Kaleys' motion to vacate the 491 U.S., at 623–635, 109 S.Ct. 2646. We conceded a asset restraint, the court denied a request for an evidentiary factual premise of the constitutional claim made in the case: hearing and confirmed the order, except as to $63,000 that Sometimes “a defendant will be unable to retain the attorney it found (based on the parties' written submissions) was not of his choice,” if he cannot use forfeitable assets. Id., at connected to the alleged offenses. 625, 109 S.Ct. 2646. Still, we held, the defendant's claim was “untenable.” Id., at 626, 109 S.Ct. 2646. “A defendant On interlocutory appeal, the Eleventh Circuit reversed and has no Sixth Amendment right to spend another person's remanded for further consideration of whether some kind money” for legal fees—even if that is the only way to hire a of evidentiary hearing was warranted. See 579 F.3d 1246 preferred lawyer. Ibid. Consider, we submitted, the example (2009). The District Court then concluded that it should hold of a “robbery suspect” who wishes to “use funds he has stolen a hearing, but only as to “whether the restrained assets are from a bank to retain an attorney to defend him if he is traceable to or involved in the alleged criminal conduct.” App. apprehended.” Ibid. That money is “not rightfully his.” Ibid. to Pet. for Cert. 43, n. 5. The Kaleys informed the court that Accordingly, we concluded, the Government does not violate they no longer disputed that issue; they wished to show only the Constitution if, pursuant to the forfeiture statute, “it seizes that the “case against them is ‘baseless.’ ” Id., at 39; see the robbery proceeds and refuses to permit the defendant to App. 107 (“We are not contesting that the assets restrained use them” to pay for his lawyer. Ibid. were ... traceable to the conduct. Our quarrel is whether that conduct constitutes a crime”). Accordingly, the District Court And then, we confirmed in Monsanto what our “robbery affirmed the restraining order, and the Kaleys took another suspect” hypothetical indicated: Even prior to conviction (or appeal. The Eleventh Circuit this time affirmed, holding that trial)—when the presumption of innocence still applies—the the Kaleys were not entitled at a hearing on the asset freeze “to Government could constitutionally *1097 use § 853(e) to challenge the factual foundation supporting the grand jury's freeze assets of an indicted defendant “based on a finding probable cause determination[ ]”—that is, “the very validity of probable cause to believe that the property will ultimately of the underlying indictment.” 677 F.3d 1316, 1317 (2012). be proved forfeitable.” 491 U.S., at 615, 109 S.Ct. 2657. In Monsanto, too, the defendant wanted to use the property We granted certiorari in light of the Circuit split on the at issue to pay a lawyer, and maintained that the Fifth and question presented, 568 U.S. ––––, 133 S.Ct. 1580, 185 Sixth Amendments entitled him to do so. We disagreed. We L.Ed.2d 575 (2013), and we now affirm the Eleventh Circuit. first noted that the Government may sometimes “restrain persons where there is a finding of probable cause to believe that the accused has committed a serious offense.” Id., at 615–616, 109 S.Ct. 2657. Given that power, we could find II “no constitutional infirmity in § 853(e)'s authorization of This Court has twice considered claims, similar to the Kaleys', a similar restraint on [the defendant's] property” in order that the Fifth Amendment's right to due process and the to protect “the community's interest” in recovering “ill- Sixth Amendment's right to counsel constrain the way the gotten gains.” Id., at 616, 109 S.Ct. 2657. Nor did the federal forfeiture statute applies to assets needed to retain an defendant's interest in retaining a lawyer with the disputed attorney. See Caplin & Drysdale, 491 U.S. 617, 109 S.Ct. assets change the equation. Relying on Caplin & Drysdale, 2646, 105 L.Ed.2d 528; Monsanto, 491 U.S. 600, 109 S.Ct. we reasoned: “[I]f the Government may, post-trial, forbid 2657, 105 L.Ed.2d 512. We begin with those rulings not as the use of forfeited assets to pay an attorney, then surely mere background, but as something much more. On the single no constitutional violation occurs when, after probable cause is adequately established, the Government obtains an order

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 6 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... barring a defendant from frustrating that end by dissipating without any review, oversight, or second-guessing—whether his assets prior to trial.” Ibid. So again: With probable cause, probable cause exists to think that a person committed a a freeze is valid. crime.

[5] The Kaleys little dispute that proposition; their argument [8] [9] And that inviolable grand jury finding, we have is instead about who should have the last word as to probable decided, may do more than commence a criminal proceeding cause. A grand jury has already found probable cause to (with all the economic, reputational, and personal harm that think that the Kaleys committed the offenses charged; that is entails); the determination may also serve the purpose of why an indictment issued. No one doubts that those crimes immediately depriving the accused of her freedom. If the are serious enough to trigger forfeiture. Similarly, no one person charged is not yet in custody, an indictment triggers contests that the assets in question derive from, or were used “issuance of an arrest warrant without further inquiry” into in committing, the offenses. See supra, at 1096. The only the case's strength. Gerstein, 420 U.S., at 117, n. 19, 95 S.Ct. question is whether the Kaleys are constitutionally entitled to 854; see Kalina v. Fletcher, 522 U.S. 118, 129, 118 S.Ct. a judicial re-determination of the conclusion the grand jury 502, 139 L.Ed.2d 471 (1997). Alternatively, if the person already reached: that probable cause supports this criminal was arrested without a warrant, an indictment eliminates her prosecution (or alternatively put, that the prosecution is not Fourth Amendment right to a prompt judicial assessment of “baseless,” as the Kaleys believe, supra, at 1096). And that probable cause to support any detention. See Gerstein, 420 question, we think, has a ready answer, because a fundamental U.S., at 114, 117, n. 19, 95 S.Ct. 854. In either situation, and historic commitment of our criminal justice system is to this Court—relying on the grand jury's “historical role of entrust those probable cause findings to grand juries. protecting individuals from unjust persecution”—has “let [that body's] judgment substitute for that of a neutral and [6] [7] This Court has often recognized the grand jury's detached magistrate.” Ibid. The grand jury, all on its own, singular role in finding the probable cause necessary to may effect a pre-trial restraint on a person's liberty by finding initiate a prosecution for a serious crime. See, e.g., Costello probable cause to support a criminal charge. 6 v. United States, 350 U.S. 359, 362, 76 S.Ct. 406, 100 L.Ed. 397 (1956). “[A]n indictment ‘fair upon its face,’ and returned 6 The grand jury's unreviewed finding similarly may play by a ‘properly constituted grand jury,’ ” we have explained, a significant role in determining a defendant's eligibility “conclusively determines the existence of probable cause” for release before trial under the Bail Reform Act of to believe the defendant perpetrated the offense alleged. 1984, 18 U.S.C. § 3141 et seq. That statute creates a Gerstein v. Pugh, 420 U.S. 103, 117, n. 19, 95 S.Ct. 854, rebuttable presumption that a defendant is ineligible for 43 L.Ed.2d 54 (1975) (quoting Ex parte United States, 287 bail if “there is probable cause to believe” she committed U.S. 241, 250, 53 S.Ct. 129, 77 L.Ed. 283 (1932)). And certain serious crimes. §§ 3142(e)(2)–(3), (f). The Courts “conclusively” has meant, case in and case out, just that. We of Appeal have uniformly held that presumption to have found no “authority for looking into and revising the operate whenever an indictment charges those offenses. judgment of the grand jury upon the evidence, for the purpose Relying on our instruction that an indictment returned of determining whether or not the finding was founded upon by a proper grand jury “conclusively determines the sufficient proof.” Costello, 350 U.S., at 362–363, 76 S.Ct. existence of probable cause,” the courts have denied 406 (quoting United States v. Reed, 27 F.Cas. 727, 738 (No. defendants' calls for any judicial reconsideration of that issue. United States v. Contreras, 776 F.2d 51, 54 (C.A.2 16,134) (C.C.N.D.N.Y.1852) (Nelson, J.)). To the contrary, 1985) (quoting Gerstein v. Pugh, 420 U.S. 103, 117, n. “the whole history of the grand jury institution” demonstrates 19, 95 S.Ct. 854, 43 L.Ed.2d 54 (1975)); see, e.g., United that “a challenge to the reliability or competence of the States v. Suppa, 799 F.2d 115, 117–119 (C.A.3 1986); evidence” supporting a grand jury's finding of probable cause United States v. Vargas, 804 F.2d 157, 162–163 (C.A.1 “will not be heard.” United States v. Williams, 504 U.S. 1986) (per curiam); United States v. Hurtado, 779 F.2d 36, 54, 112 S.Ct. 1735, 118 L.Ed.2d 352 (1992) (quoting 1467, 1477–1479 (C.A.11 1985). Costello, 350 U.S., at 364, 76 S.Ct. 406, and *1098 Bank of The dissent, while conceding this point, notes that Nova Scotia v. United States, 487 U.S. 250, 261, 108 S.Ct. courts may consider the “weight of the evidence” 2369, 101 L.Ed.2d 228 (1988)). The grand jury gets to say— in deciding whether a defendant has rebutted the

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 7 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... presumption. See post, at 1109 – 1110, and n. 3 circumstances, locking up the defendant), but not for the (opinion of ROBERTS, C.J.). And so they may, along one at issue here. with a host of other factors relating to the defendant's And indeed, the alternative rule the Kaleys seek would dangerousness or risk of flight. See § 3142(g). But have strange and destructive consequences. The Kaleys here that is because the Bail Reform Act so allows—not demand a do-over, except with a different referee. They wish because (as argued here) the Constitution compels the inquiry. And even that provision of the statute a judge to decide anew the exact question the grand jury cuts against the dissent's position, because it enables has already answered—whether there is probable cause to courts to consider only an evidentiary issue different think the Kaleys committed the crimes charged. But suppose from the probable cause determination. When it comes the judge performed that task and came to the opposite to whether probable cause supports a charge—i.e., conclusion. Two inconsistent findings would then govern the issue here—courts making bail determinations are different aspects of one criminal proceeding: Probable cause stuck, as all agree, with the grand jury's finding. would exist to bring the Kaleys to trial (and, if otherwise The same result follows when, as here, an infringement on the appropriate, hold them in prison), but not to restrain their defendant's property depends on a showing of probable cause property. And assuming the prosecutor continued to press the that she committed a crime. If judicial review of the grand charges, 8 the same judge who found probable cause lacking jury's probable cause determination is not warranted (as we would preside over a trial premised on its presence. That legal have so often held) to put a defendant on trial or place her in dissonance, if sustainable at all, could not but undermine the custody, then neither is it needed to freeze her property. The criminal justice system's integrity—and especially the grand grand jury that is good enough—reliable enough, protective jury's integral, constitutionally prescribed role. For in this new enough—to inflict those other grave consequences through world, every prosecution involving a pre-trial asset freeze its probable cause findings must needs be adequate to impose would potentially pit the judge against the grand jury as to the this one too. Indeed, Monsanto already noted the absence of case's foundational issue. 9 any reason to hold property seizures to different rules: As described earlier, the Court partly based its adoption of the 8 A prosecutor, of course, might drop the case because of probable cause standard on the incongruity of subjecting an the court's ruling, especially if he thought that decision asset freeze to any *1099 stricter requirements than apply to would bring into play an ethical standard barring any an arrest or ensuing detention. See supra, at 1108; 491 U.S., charge “that the prosecutor knows is not supported at 615, 109 S.Ct. 2657 (“[I]t would be odd to conclude that by probable cause.” ABA Model Rule of Professional the Government may not restrain property” on the showing Conduct 3.8(a) (2013). But then the court would have often sufficient to “restrain persons ”). By similar token, effectively done what we have long held it cannot: the probable cause standard, once selected, should work no overrule the grand jury on whether to bring a defendant differently for the single purpose of freezing assets than for to trial. See supra, at 1097 – 1098. 7 all others. So the longstanding, unvarying rule of criminal 9 The dissent argues that the same is true when a judge procedure we have just described applies here as well: The hears evidence on whether frozen assets are traceable grand jury's determination is conclusive. to a crime, because that allegation also appears in the indictment. See post, at 1108 – 1109; supra, at 1095, 7 Contrary to the dissent's characterization, see post, and n. 3. But the tracing of assets is a technical matter at 1110 – 1111, nothing in our reasoning depends far removed from the grand jury's core competence on viewing one consequence of a probable cause and traditional function—to determine whether there determination (say, detention) as “greater” than another is probable cause to think the defendant committed (say, the asset freeze here). (We suspect that would vary a crime. And a judge's finding that assets are not from case to case, with some defendants seeing the loss traceable to the crime charged in no way casts doubt of liberty as the more significant deprivation and others on the prosecution itself. So that determination does not the loss of a chosen lawyer.) We simply see no reason similarly undermine the grand jury or create internal to treat a grand jury's probable cause determination as contradictions within the criminal justice system. conclusive for all other purposes (including, in some

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 8 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... The Kaleys counter (as does the dissent, post, at 1108 – 1109) of a grand jury's determination of probable cause to think that apparently inconsistent findings are not really so, because a defendant committed a crime. In combination, those the prosecutor could have presented scantier evidence to the settled propositions signal defeat for the Kaleys because, in judge than he previously offered the grand jury. Suppose, for contesting the seizure of their property, they seek only to example, that at the judicial hearing the prosecutor put on only relitigate such a grand jury finding. “one witness instead of all five”; then, the Kaleys maintain, the judge's decision of no probable cause would mean only that “the Government did not satisfy its burden[ ] on that III one day in time.” Tr. of Oral Arg. 12, *1100 18; see Reply Brief 11–12. But we do not think that hypothetical solves the The Kaleys would have us undertake a different analysis, problem. As an initial matter, it does not foreclose a different which they contend would lead to a different conclusion. fact pattern: A judge could hear the exact same evidence as the They urge us to apply the balancing test of Mathews v. grand jury, yet respond to it differently, thus rendering what Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), to even the Kaleys must concede is a contradictory finding. And assess whether they have received a constitutionally sufficient when the Kaleys' hypothetical is true, just what does it show? opportunity to challenge the seizure of their assets. See Consider that the prosecutor in their example has left home Brief for Petitioners 32–64. Under that three-pronged test some of the witnesses he took to the grand jury—presumably (reordered here for expositional purposes), a court must weigh because, as we later discuss, he does not yet wish to reveal (1) the burdens that a requested procedure would impose on their identities or likely testimony. See infra, at 1101 – 1102. the Government against (2) the private interest at stake, as The judge's ruling of no probable cause therefore would not viewed alongside (3) “the risk of an erroneous deprivation” of mean that the grand jury was wrong: As the Kaleys concede, that interest without the procedure and “the probable value, if the grand jury could have heard more than enough evidence to any, of [the] additional ... procedural safeguard[ ].” Mathews, find probable cause that they committed the crimes charged. 424 U.S., at 335, 96 S.Ct. 893. Stressing the importance of The Kaleys would win at the later hearing despite, not because their interest in retaining chosen counsel, the Kaleys argue of, the case's true merits. And we would then see still less that the Mathews balance tilts hard in their favor. It thus reason for a judge to topple the grand jury's (better supported) overrides—or so the Kaleys claim—all we have previously finding of probable cause. 10 held about the finality of grand jury findings, entitling them to an evidentiary hearing before a judge to contest the probable

10 The dissent claims as well that the hearing the Kaleys cause underlying the indictment. seek “would not be mere relitigation” of the grand jury's decision because they could now “tell their side of the The Government battles with the Kaleys over whether story.” Post, at 1109. But the same could be said of an Mathews has any application to this case. This Court devised adversarial hearing on an indictment's validity, which the test, the Government notes, in an administrative *1101 everyone agrees is impermissible because it “look[s] setting—to decide whether a Social Security recipient was into and revise[s]” the grand jury's judgment. See ibid. entitled to a hearing before her benefits were terminated. (quoting Costello v. United States, 350 U.S. 359, 362, And although the Court has since employed the approach in 76 S.Ct. 406, 100 L.Ed. 397 (1956)). The lesson of our other contexts, the Government reads Medina v. California, precedents, as described above, is that a grand jury's 505 U.S. 437, 112 S.Ct. 2572, 120 L.Ed.2d 353 (1992), finding is “conclusive”—and thus precludes subsequent as foreclosing its use here. In that case, we held that “the proceedings on the same matter—even though not Mathews balancing test does not provide the appropriate arising from adversarial testing. See supra, at 1097 – framework for assessing the validity of state procedural rules 1098; see also infra, at 1114 – 1115. which ... are part of the criminal process,” reasoning that Our reasoning so far is straightforward. We held in Monsanto because the “Bill of Rights speaks in explicit terms to many that the probable cause standard governs the pre-trial seizure aspects of criminal procedure,” the Due Process Clause “has of forfeitable assets, even when they are needed to hire limited operation” in the field. Id., at 443, 112 S.Ct. 2572. a lawyer. And we have repeatedly affirmed a corollary of That settles that, asserts the Government. See Brief for United that standard: A defendant has no right to judicial review

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 9 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... States 18. But the Kaleys argue that Medina addressed a 559–561, 97 S.Ct. 837, 51 L.Ed.2d 30 (1977) (“There is State's procedural rule and relied on federalism principles not no general constitutional right to discovery in a criminal implicated here. Further, they claim that Medina concerned case”). And sometimes (particularly in organized crime and a criminal proceeding proper, not a collateral action seizing drug trafficking prosecutions, in which forfeiture questions property. See Reply Brief 1–5. As to that sort of action, the often arise), that sneak preview might not just aid the Kaleys contend, Mathews should govern. defendant's preparations but also facilitate witness tampering *1102 or jeopardize witness safety. Alternatively, to ensure [10] We decline to address those arguments, or to define the the success of its prosecution, the Government could hold respective reach of Mathews and Medina, because we need back some of its evidence at the hearing or give up on not do so. Even if Mathews applied here—even if, that is, the pre-trial seizure entirely. But if the Government took its balancing inquiry were capable of trumping this Court's that tack, it would diminish the likelihood of ultimately repeated admonitions that the grand jury's word is conclusive recovering stolen assets to which the public is entitled. 11 —the Kaleys still would not be entitled to the hearing they So any defense counsel worth his salt—whatever the merits seek. That is because the Mathews test tips against them, and of his case—would put the prosecutor to a choice: “Protect so only reinforces what we have already said. As we will your forfeiture by providing discovery” or “protect your explain, the problem for the Kaleys comes from Mathews ' conviction by surrendering the assets.” 12 It is small wonder prescribed inquiry into the requested procedure's usefulness that the Government wants to avoid that lose-lose dilemma. in correcting erroneous deprivations of their private interest. In light of Monsanto's holding that a seizure of the Kaleys' 11 property is erroneous only if unsupported by probable cause, The dissent says not to worry—the Government can the added procedure demanded here is not sufficiently likely obtain the assets after conviction by using 21 U.S.C. § to make any difference. 853(c)'s “relation-back” provision. See post, at 1112 – 1113. That provision is intended to aid the Government in recovering funds transferred to a third party—here, the To begin the Mathews analysis, the Government has a Kaleys' lawyer—subsequent to the crime. But forfeiture substantial interest in freezing potentially forfeitable assets applies only to specific assets, so in the likely event that without an evidentiary hearing about the probable cause the third party has spent the money, the Government underlying criminal charges. At the least, such an adversarial must resort to a State's equitable remedies—which may proceeding—think of it as a pre-trial mini-trial (or maybe or may not even be available—to force him to disgorge a pre-trial not-so-mini-trial)—could consume significant an equivalent amount. See Tr. of Oral Arg. 48–49. prosecutorial time and resources. The hearing presumably And indeed, if the Government could easily recover would rehearse the case's merits, including the Government's such monies, then few lawyers would agree to represent theory and supporting evidence. And the Government also defendants like the Kaleys, and the dissent's proposed might have to litigate a range of ancillary questions relating holding would be for naught. to the conduct of the hearing itself (for example, could the 12 Compare Cassella, Criminal Forfeiture Procedure, 32 Kaleys subpoena witnesses or exclude certain evidence?). Am. J. Crim. L. 55, 63 (2004) (explaining that “defendants tend to demand the hearing ... to afford Still more seriously, requiring a proceeding of that kind defense counsel an early opportunity to discover the could undermine the Government's ability either to obtain nature of the Government's criminal case and to cross- a conviction or to preserve forfeitable property. To ensure examine some of the Government's witnesses”) with a favorable result at the hearing, the Government could May, Attorney Fees and Government Forfeiture, 34 choose to disclose all its witnesses and other evidence. Champion 20, 23 (Apr. 2010) (advising that “[e]ven if But that would give the defendant knowledge of the defense counsel cannot prevail on the facts or the law, he Government's case and strategy well before the rules of may be able to prevail anyway” because “[s]ometimes the government will decide to give up its restraint on a criminal procedure—or principles of due process, see, e.g., piece of property rather than engage in litigation that will Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d result in early discovery”). 215 (1963)—would otherwise require. See Fed. Rules Crim. Proc. 26.2(a), 16(a)(2); Weatherford v. Bursey, 429 U.S. 545,

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 10 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... For their part, however, defendants like the Kaleys have his property to pay his preferred lawyer. He urged the Court a vital interest at stake: the constitutional right to retain to hold that the Government could seize assets needed for counsel of their own choosing. See Wheat v. United States, that purpose only after conviction. But we instead decided 486 U.S. 153, 159, 108 S.Ct. 1692, 100 L.Ed.2d 140 (1988) that the Government could act “after probable cause [that the (describing the scope of, and various limits on, that right). assets are forfeitable] is adequately established.” 491 U.S., This Court has recently described that right, separate and at 616, 109 S.Ct. 2657. And that means in a case like this apart from the guarantee to effective representation, as “the one—where the assets' connection to the allegedly illegal root meaning” of the Sixth Amendment. United States v. conduct is not in dispute, see supra, at 1096 —that a pre- Gonzalez–Lopez, 548 U.S. 140, 147–148, 126 S.Ct. 2557, trial seizure is wrongful only when there is no probable cause 165 L.Ed.2d 409 (2006); cf. Powell v. Alabama, 287 U.S. to believe the defendants committed the crimes charged. Or 45, 53, 53 S.Ct. 55, 77 L.Ed. 158 (1932) (“It is hardly to put the same point differently, such a freeze is erroneous necessary to say that, the right to counsel being conceded, —notwithstanding the weighty burden it imposes on the a defendant should be afforded a fair opportunity to secure defendants' ability to hire a chosen lawyer—only when the counsel of his own choice”). 13 Indeed, we have held that grand jury should never have issued the indictment. the wrongful deprivation of choice of counsel is “structural error,” immune from review for harmlessness, because it The Mathews test's remaining prong—critical when the “pervades the entire trial.” Gonzalez–Lopez, 548 U.S., at 150, governmental and private interests both have weight—thus 126 S.Ct. 2557. Different lawyers do all kinds of things boils down to the “probable value, if any,” of a judicial differently, sometimes “affect[ing] whether and on what hearing in uncovering mistaken grand jury findings of terms the defendant ... plea bargains, or decides instead to probable cause. 424 U.S., at 335, 96 S.Ct. 893. The Kaleys go to trial”—and if the latter, possibly affecting whether (and the dissent) contend that such proceedings will serve an she gets convicted or what sentence she receives. Ibid. So important remedial function because grand juries hear only a for defendants like the Kaleys, *1103 having the ability to “one-sided presentation[ ]” of evidence. Brief for Petitioners retain the “counsel [they] believe[ ] to be best”—and who 57; see post, at 1113 – 1114. And that argument rests on a might in fact be superior to any existing alternatives—matters generally sound premise: that the adversarial process leads profoundly. Id., at 146, 126 S.Ct. 2557. to better, more accurate decision-making. But in this context —when the legal standard is merely probable cause and the grand jury has already made that finding—both our 13 Still, a restraint on assets could not deprive the Kaleys precedents and other courts' experience indicate that a full- of representation sufficient to ensure fair proceedings. dress hearing will provide little benefit. The Sixth Amendment would require the appointment of effective counsel if the Kaleys were unable to hire a lawyer. See Strickland v. Washington, 466 U.S. 668, [11] This Court has repeatedly declined to require the 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984); Gideon v. use of adversarial procedures to make probable cause Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d determinations. Probable cause, we have often told litigants, 799 (1963). The vast majority of criminal defendants is not a high bar: It requires only the “kind of ‘fair proceed with appointed counsel. And the Court has never probability’ on which ‘reasonable and prudent [people,] not thought, as the dissent suggests today, that doing so risks legal technicians, act.’ ” Florida v. Harris, 568 U.S. ––––, the “fundamental fairness of the actual trial.” Post, at ––––, 133 S.Ct. 1050, 1055, 185 L.Ed.2d 61 (2013) (quoting 1111; see post, at 1114 – 1115. If it does, the right Illinois v. Gates, 462 U.S. 213, 231, 238, 103 S.Ct. 2317, way to start correcting the problem is not by adopting 76 L.Ed.2d 527 (1983)); see Gerstein, 420 U.S., at 121, 95 the dissent's position, but by ensuring that the right to S.Ct. 854 (contrasting probable cause to reasonable-doubt and effective counsel is fully vindicated. preponderance standards). That is why a grand jury's finding And yet Monsanto held, crucially for the last part of our of probable cause to think that a person committed a crime Mathews analysis, that an asset freeze depriving a defendant “can be [made] reliably without an adversary hearing,” id., of that interest is erroneous only when unsupported by a at 120, 95 S.Ct. 854; it is and “has always been thought finding of probable cause. Recall that Monsanto considered sufficient to hear only the prosecutor's side,” United States a case just like this one, where the defendant wanted to use v. Williams, 504 U.S. 36, 51, 112 S.Ct. 1735, 118 L.Ed.2d

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 11 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... 352 (1992). So, for example, we have held the “confrontation those, the defendant lost outright. The last involved a not- and cross-examination” of witnesses unnecessary in a grand yet-indicted defendant (so no grand jury finding); there, the jury proceeding. Gerstein, 420 U.S., at 121–122, 95 S.Ct. District Court's ruling for him was reversed on appeal. See Tr. 854. Similarly, we have declined to require the presentation of of Oral Arg. 15, 36. To be sure, a kind of selection bias might exculpatory evidence, see Williams, 504 U.S., at 51, 112 S.Ct. affect those statistics: Perhaps a prosecutor with a very weak 1735, and we have allowed the introduction of hearsay alone, case would choose to abandon an asset freeze rather than face see Costello, 350 U.S., at 362–364, 76 S.Ct. 406. On each a difficult hearing. See id., at 16, 37. But the Kaleys and their occasion, we relied on the same reasoning, stemming from amici have also failed to offer any anecdotes of that kind; our recognition that probable cause served only a gateway and we suspect that the far more common reason a prosecutor function: Given the relatively undemanding “nature of the relinquishes a freeze is just to avoid premature discovery. See determination,” the value of requiring *1104 any additional supra, at 1101 – 1102. So experience, as far as anyone has “formalities and safeguards” would “[i]n most cases ... be too discerned it, cuts against the Kaleys: It confirms that even slight.” Gerstein, 420 U.S., at 121–122, 95 S.Ct. 854. under Mathews, they have no right to revisit the grand jury's finding. 14 We can come out no differently here. The probable cause determinations the Kaleys contest are simply those 14 As against all this—all we have formerly held and underlying the charges in the indictment. No doubt the Kaleys all other courts have actually found—the dissent cites could seek to poke holes in the evidence the Government nothing: not a single decision of ours suggesting, nor offered the grand jury to support those allegations. No doubt, a single decision of a lower court demonstrating, that too, the Kaleys could present evidence of their own, which formal, adversarial procedures are at all likely to correct might cast the Government's in a different light. (Presumably, any grand jury errors. The dissent argues only that the Kaleys would try in those two ways to show that they a hearing will have “probable value” for the Kaleys did not steal, but instead lawfully obtained the medical because “the deprivation of [their] right” to chosen devices they later resold. See supra, at 1095 – 1096.) Our counsel, once accomplished, is “effectively permanent.” criminal justice system of course relies on such contestation Post, at 1113 – 1114. But that argument confuses two at trial when the question becomes whether a defendant is different parts of the Mathews inquiry. The dissent's guilty beyond peradventure. But as we have held before, an point well underscores the importance of the Kaleys' adversarial process is far less useful to the threshold finding interest: As we have readily acknowledged, if the grand jury made a mistake, the Kaleys have suffered a serious of probable cause, which determines only whether adequate injury, which cannot later be corrected. See supra, at grounds exist to proceed to trial and reach that question. The 1102 – 1103. (We note, though, that the dissent, in probable cause decision, by its nature, is hard to undermine, asserting that injury's uniqueness, understates the losses and still harder to reverse. So the likelihood that a judge that always attend a mistaken indictment, which no holding an evidentiary hearing will repudiate the grand jury's ultimate verdict can erase.) But the dissent's argument decision strikes us, once more, as “too slight” to support a about what is at stake for the Kaleys says nothing constitutional requirement. Gerstein, 420 U.S., at 122, 95 about the crucial, last prong of Mathews, which asks S.Ct. 854. whether and to what extent the adversarial procedures they request will in fact correct any grand jury errors. The evidence from other courts corroborates that view, over That part of the analysis is what requires our decision, and over and over again. In the past two decades, the courts and the dissent's view that the Government overreached in several Circuits have routinely held the kind of hearing in this particular case cannot overcome it. the Kaleys seek. See supra, at 1095, and n. 4. Yet neither the Kaleys nor their amici (mostly lawyers' associations) *1105 IV have found a single case in which a judge found an absence of probable cause to believe that an indicted defendant When we decided Monsanto, we effectively resolved this case committed the crime charged. One amicus cites 25 reported too. If the question in a pre-trial forfeiture case is whether cases involving pre-trial hearings on asset freezes. See Brief there is probable cause to think the defendant committed the for New York Council of Defense Lawyers 4, n. 2. In 24 of

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 12 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... crime alleged, then the answer is: whatever the grand jury other sales representatives occasionally obtained outmoded or decides. And even if we test that proposition by applying surplus devices from staff members at the medical facilities Mathews, we arrive at the same place: In considering such they served, when, for example, those devices were no longer findings of probable cause, we have never thought the value of needed because they had been superseded by newer models. enhanced evidentiary procedures worth their costs. Congress Kaley sold the unwanted devices to a Florida company, of course may strike its own balance and give defendants dividing the proceeds among the sales representatives. like the Kaleys the kind of hearing they want. Indeed, Congress could disapprove of Monsanto itself and hold pre- Kaley learned in January 2005 that a federal grand jury trial seizures of property to a higher standard than probable was investigating those activities as a conspiracy to sell cause. But the Due Process Clause, even when combined with stolen prescription medical devices. Kaley and her husband a defendant's Sixth Amendment interests, does not command (who allegedly helped ship the products to Florida) retained those results. Accordingly, the Kaleys cannot challenge the counsel, who immediately set to work preparing their grand jury's conclusion that probable cause supports the defense against any impending charges. Counsel regularly charges against them. The grand jury gets the final word. discussed the investigation with the Kaleys, helped review documents demanded by the grand *1106 jury, and met We therefore affirm the judgment of the Eleventh Circuit and with prosecutors in an attempt to ward off an indictment. remand the case for further proceedings consistent with this Nonetheless preparing for the worst, the Kaleys applied for a opinion. $500,000 equity line of credit on their home to pay estimated legal fees associated with a trial. They used that money to It is so ordered. purchase a $500,000 certificate of deposit, which they set aside until it would be needed to pay their attorneys for the trial. Chief Justice ROBERTS, with whom Justice BREYER and Justice SOTOMAYOR join, dissenting. In February 2007, the grand jury returned a seven- An individual facing serious criminal charges brought by the count indictment charging the Kaleys and another sales United States has little but the Constitution and his attorney representative, Jennifer Gruenstrass, with violations of standing between him and prison. He might readily give all federal law. The indictment alleged that a “money judgment” he owns to defend himself. of over $2 million and the $500,000 certificate of deposit were subject to forfeiture under 18 U.S.C. § 981(a)(1)(C) because We have held, however, that the Government may effectively those assets constituted “proceeds” of the alleged crimes. remove a defendant's primary weapon of defense—the Armed with this indictment, the prosecution obtained an ex attorney he selects and trusts—by freezing assets he needs to parte order pursuant to 21 U.S.C. § 853(e), thereby freezing pay his lawyer. That ruling is not at issue. But today the Court all of the Kaleys' assets listed in the indictment, including the goes further, holding that a defendant may be hobbled in this certificate of deposit set aside for legal fees. The Government way without an opportunity to challenge the Government's did not seek to freeze any of Gruenstrass's assets. decision to freeze those needed assets. I cannot subscribe to that holding and respectfully dissent. The Kaleys moved to vacate the order, requesting a hearing at which they could argue that there was no probable cause to believe their assets were forfeitable, because their alleged I conduct was not criminal. They argued they were entitled to such a hearing because the restraining order targeted The facts of this case are important. They highlight the funds they needed and had set aside to retain for trial the significance to a defendant of being able to hire his counsel of same counsel who had been preparing their defense for choice, and the potential for unfairness inherent in giving the two years. And they contended that the prosecution was prosecutor the discretion to take that right away. Kerri Kaley baseless because the Government could not identify anyone worked as a sales representative for a Johnson & Johnson who claimed ownership of the medical devices alleged to subsidiary, selling prescription medical devices. Kaley and have been “stolen.” During a telephone conference with a

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 13 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... Magistrate Judge on the motion, the prosecution conceded The issues at stake here implicate fundamental constitutional that it had been able to trace only $140,000 in allegedly principles. The Sixth Amendment provides that “[i]n all criminal proceeds to the Kaleys, which led the Magistrate criminal prosecutions, the accused shall enjoy the right ... to Judge to question the lawfulness of restraining the listed have the Assistance of Counsel for his defence.” In many assets. ways, this is the most precious right a defendant has, because it is his attorney who will fight for the other rights the Just two business days after that conference, the Government defendant enjoys. United States v. Cronic, 466 U.S. 648, obtained a superseding indictment that added a count of 653–654, 104 S.Ct. 2039, 80 L.Ed.2d 657 (1984). And more conspiracy to commit money laundering under 18 U.S.C. than 80 years ago, we found it “hardly necessary to say § 1956(h). Adding that charge enabled the Government that, the right to counsel being conceded, a defendant should to proceed under a much broader forfeiture provision be afforded a fair opportunity to secure counsel of his own than the one in the original indictment. While the civil choice.” Powell v. Alabama, 287 U.S. 45, 53, 53 S.Ct. 55, 77 forfeiture provision in § 981(a)(1)(C) authorized forfeiture L.Ed. 158 (1932). of property that “constitutes or is derived from proceeds traceable to” a qualifying criminal violation, the criminal Indeed, we recently called the “right to select counsel of one's forfeiture provision now invoked by the Government— § choice.... the root meaning of the constitutional guarantee” 982(a)(1)—authorizes forfeiture of property “involved in” of the Sixth Amendment. United States v. Gonzalez–Lopez, a qualifying offense, or “any property traceable to such 548 U.S. 140, 147–148, 126 S.Ct. 2557, 165 L.Ed.2d 409 property.” The superseding indictment alleged that a sum of (2006). The Amendment requires “that a particular guarantee more than $2 million, the certificate of deposit reserved to of fairness be provided—to wit, that the accused be defended pay legal expenses, and now the Kaleys' home were subject by the counsel he believes to be best.” Id., at 146, 126 S.Ct. to forfeiture. And again, the Government sought an order 2557. An individual's right to counsel of choice is violated freezing substantially all those assets. “whenever the defendant's choice is wrongfully denied,” and such error “pervades the entire trial.” Id., at 150, 126 S.Ct. The Kaleys objected, repeating the arguments they had 2557. A violation of this right is therefore a “structural previously raised, and also contending that the prosecutors error,” ibid.; that is, one of the very few kinds of errors that were being vindictive in adding the money laundering charge “undermine the fairness of a criminal proceeding as a whole.” and seeking broader forfeiture. The District Court nonetheless United States v. Davila, 569 U.S. ––––, ––––, 133 S.Ct. 2139, entered the broader order requested by the Government, and 2149, 186 L.Ed.2d 139 (2013). the restraint on the Kaleys' assets remains in place. It is of course true that the right to counsel of choice is While the Kaleys' appeal from that denial was pending, (like most rights) not absolute. A defendant has no right the Government proceeded to trial separately against their to choose counsel he cannot afford, counsel who is not a codefendant Gruenstrass. As the Government had not sought member of the bar, or counsel with an impermissible conflict to freeze Gruenstrass's assets, she was represented by her of interest. Wheat v. United States, 486 U.S. 153, 159, 108 chosen counsel. Her counsel argued that the Government was S.Ct. 1692, 100 L.Ed.2d 140 (1988). And a district court need pitching a fraud without a victim, because no Government not always shuffle its calendar to accommodate a defendant's witness *1107 took the stand to claim ownership of the preferred counsel if it has legitimate reasons not to do so. allegedly stolen devices. The jury acquitted Gruenstrass on all Morris v. Slappy, 461 U.S. 1, 11–12, 103 S.Ct. 1610, 75 charges in less than three hours—a good omen for the Kaleys L.Ed.2d 610 (1983). But none of those limitations is imposed and their counsel as they prepared for their own trial. at the unreviewable discretion of a prosecutor—the party who wants the defendant to lose at trial.

This Court has held that the prosecution may freeze assets II a defendant needs to retain his counsel of choice upon “a finding of probable cause to believe that the assets are forfeitable.” United States v. Monsanto, 491 U.S. 600, 615,

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 14 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989). The Kaleys do has committed an offense giving rise to forfeiture and (2) not challenge that holding here. But the Court in Monsanto the targeted assets have the requisite connection to the acknowledged and reserved the crucial question whether a alleged criminal conduct. 21 U.S.C. § 853(e)(1)(A). The defendant had the right to be heard before the Government Solicitor General concedes—and all Courts of Appeals to could take such action. Id., at 615, n. 10, 109 S.Ct. 2657. 1 have considered the issue have held—that “defendants are entitled to show that the assets that are restrained are not actually the proceeds of the charged criminal offense,” Tr. of 1 Because the District Court in Monsanto had imposed the Oral Arg. 45; that is, that the second prong of the required restraining order after an “extensive, 4–day hearing on showing is not satisfied. But by listing property in the the question of probable cause,” it was “pointless” for this Court to decide whether a hearing was required to indictment and alleging that it is subject to forfeiture—as “adequately establish[ ]” probable cause. 491 U.S., at required to restrain assets before trial under § 853(e)(1)(A)— 615, n. 10, 616, 109 S.Ct. 2657. the grand jury found probable cause to believe those assets were linked to the charged offenses, just as it found probable There was good reason for that caution. The possibility that cause to believe the Kaleys committed the underlying crimes. a prosecutor could elect to hamstring his target by preventing App. 60–61 (separate indictment section alleging criminal him from paying his counsel of choice raises substantial forfeiture, including of the certificate of deposit); see United concerns about the fairness of the entire proceeding. “A fair States v. Jones, 160 F.3d 641, 645 (C.A.10 1998); United trial in a *1108 fair tribunal is a basic requirement of due States v. Monsanto, 924 F.2d 1186, 1197 (C.A.2 1991) process.” In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, (en banc); Dept. of Justice, Asset Forfeiture Policy Manual 99 L.Ed. 942 (1955). Issues concerning the denial of counsel 128 (2013) (“That the indictment alleges that property is of choice implicate the overall fairness of the trial because subject to forfeiture indicates that the grand jury has made they “bear[ ] directly on the ‘framework within which the trial a probable cause determination.”). Neither the Government proceeds.’ ” Gonzalez–Lopez, supra, at 150, 126 S.Ct. 2557 nor the majority gives any reason why the District Court (quoting Arizona v. Fulminante, 499 U.S. 279, 310, 111 S.Ct. may reconsider the grand jury's probable cause finding as to 1246, 113 L.Ed.2d 302 (1991)). traceability—and in fact constitutionally must, if asked—but may not do so as to the underlying charged offenses. 2

III 2 The majority's only response is to characterize the grand Notwithstanding the substantial constitutional issues at jury's finding of traceability as merely a “technical stake, the majority believes that syllogistic-type reasoning matter.” Ante, at 1099, n. 9. But the indictment draws no effectively resolves this case. Ante, at 1100. The majority's distinction between the grand jury's finding of probable cause to believe that the Kaleys committed a crime and reasoning goes like this: First, to freeze assets prior to its finding of probable cause to believe that certain assets trial, the Government must show probable cause to believe are traceable to that crime. Both showings must be made that a defendant has committed an offense giving rise to to justify a pretrial asset restraint under Monsanto, and forfeiture. Second, grand jury determinations of probable there is nothing in that case or the indictment that justifies cause are nonreviewable. Therefore, the Kaleys cannot treating one grand jury finding differently than the other. “relitigate [the] grand jury finding” of probable cause to In any event, the hearing the Kaleys seek would not be mere avoid a pretrial restraint of assets they need to retain their relitigation of the grand jury proceedings. At that hearing, counsel of choice. Ibid. I do not view the matter as nearly the District Court would consider the merits *1109 of the so “straightforward,” and neither did the multiple Courts of prosecution to determine whether there is probable cause to Appeals since Monsanto that have granted defendants the believe the Kaleys' assets are forfeitable, not to determine type of hearing the Kaleys request. See ante, at 1095, n. 4. whether the Kaleys may be tried at all. If the judge agrees with the Kaleys, he will merely hold that the Government has To begin with, the majority's conclusion is wrong on its own not met its burden at that hearing to justify freezing the assets terms. To freeze assets prior to trial, the Government must the Kaleys need to pay their attorneys. The Government may show probable cause to believe both that (1) a defendant

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 15 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... proceed with the prosecution, but the Kaleys will have their Indeed, in the bail context—the pretrial determination that chosen counsel at their side. is perhaps the closest analogue to the pretrial restraint of assets at issue here—we allow judicial inquiries into the Even though the probable cause standard applies at both the underlying merits of the indicted charges, without concern indictment stage and the pretrial asset restraint hearing, the about intruding into the province of the grand jury. An judge's determination will be based on different evidence than indictment charging sufficiently serious crimes gives rise that previously presented to the grand jury. For its part, the to a rebuttable presumption that a defendant is not eligible Government may choose to put on more or less evidence at for pretrial release. See 18 U.S.C. §§ 3142(e)(3) and (f). the hearing than it did before the grand jury. And of course Such a defendant is nonetheless entitled to an evidentiary the Kaleys would have the opportunity to tell their side of hearing at which he may contest (among other things) “the the story—something the grand jury never hears. See United weight of the evidence against” him, § 3142(g)(2). Yet no States v. Williams, 504 U.S. 36, 51–52, 112 S.Ct. 1735, 118 one would say that the district court encroached on the grand L.Ed.2d 352 (1992). Here, much of what the Kaleys want jury's role if the court determined that it would not authorize to present comes from Gruenstrass's trial—evidence that the pretrial detention because of the weakness *1110 of the grand jury obviously could not have considered. So even prosecution's case. See, e.g., United States v. Hurtado, 779 if the judge determined that probable cause to justify the F.2d 1467, 1479–1480 (C.A.11 1985) (recognizing that in pretrial asset restraint had not been adequately established, considering the “weight of the evidence” to decide whether that determination would not in any way amount to “looking the presumption is rebutted, “it may well be necessary to open into and revising the judgment of the grand jury upon the up the issue of probable cause since that too is a question of evidence, for the purpose of determining whether or not evidentiary weight”). That makes sense, because the district the finding was founded upon sufficient proof.” Ante, at court has considered the underlying merits of the charges 1097 (quoting Costello v. United States, 350 U.S. 359, 362– based on different information and for a different purpose 363, 76 S.Ct. 406, 100 L.Ed. 397 (1956) (internal quotation than the grand jury did. Such a defendant would be granted marks omitted)). The judge's decision based on the evidence pretrial release, but would still have to show up for trial. 3 presented at the hearing would have no necessary legal or logical consequence for the underlying prosecution because it 3 The majority cites cases in which courts have correctly would be based on different evidence and used for a different rejected requests for a judicial redetermination of the purpose. grand jury's probable cause finding for purposes of determining whether the rebuttable presumption of The majority warns that allowing a judge to consider pretrial detention is triggered. See ante, at 1098, n. 6. the underlying merits of the prosecution for purposes of But those cases do not question the judge's authority determining whether a defendant's assets may be restrained to consider the underlying merits of the Government's pretrial could create “legal dissonance” with the grand jury's case (including what the grand jury has alleged in the indictment, which “could not but undermine the criminal indictment) for purposes of determining whether that justice system's integrity.” Ante, at 1099. But as explained, presumption has been rebutted. E.g., United States v. such a judicial finding based on different evidence with both Dominguez, 783 F.2d 702, 706 (C.A.7 1986) (“evidence sides present would not contradict the grand jury's probable probative of guilt is admitted at a detention hearing only cause finding based on what was before it. That finding would to support or challenge the weight of the government's case against the defendant”); see also United States still suffice to accomplish its purpose—to call for a trial on the v. Jones, 583 F.Supp.2d 513, 517 (S.D.N.Y.2008) merits of the charges. Rather than creating “dissonance,” the (releasing a defendant pretrial after determining that “the traditional roles of the principal actors in our justice system weight of the evidence now overcomes the presumption would remain respected: The grand jury decides whether a of detention”). The majority notes that this inquiry in defendant should be required to stand trial, the judge decides the bail context is authorized by statute, but that does pretrial matters and how the trial should proceed, and the jury not alter the crucial point: Where the prosecutor seeks decides whether the defendant is guilty of the crime. to use the indictment to impose another significant pretrial consequence on a defendant, judges are allowed to inquire into the underlying merits of the prosecution

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 16 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... (including the very same matters the grand jury has (1990) (admissibility of testimony about a prior crime considered) as part of the inquiry into whether that of which the defendant was acquitted). This case is not consequence is justified, and that has not resulted in about such questions, but about the collateral issue of “dissonance” or the undermining of the grand jury's role. the pretrial deprivation of property a defendant needs to In any event, few things could do more to “undermine the exercise his right to counsel of choice. Mathews therefore provides the relevant inquiry. criminal justice system's integrity,” ante, at 1099, than to allow the Government to initiate a prosecution and then, at I suspect that, for the Kaleys, that right could hardly be its option, disarm its presumptively innocent opponent by more precious than it is now. In addition to potentially losing depriving him of his counsel of choice—without even an the property the Government has already frozen—including opportunity to be heard. That is the result of the Court's their home—the Kaleys face maximum prison terms of five decision in this case, and it is fundamentally at odds with our years (18 U.S.C. § 371), ten years (§ 2314), and 20 years constitutional tradition and basic notions of fair play. (§ 1956(h)) for the charges in the superseding indictment. The indictment means they must stand trial on those charges. But the Kaleys plainly have an urgent interest in having their chosen counsel—who has worked with them since the grand IV jury's investigation began, two years before the indictment— The majority is no more persuasive in applying the due mount their best possible defense at trial. process balancing test set forth in Mathews v. Eldridge, 424 The majority alludes to our cases recognizing that indictments U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). 4 As an may result in the temporary deprivation of a defendant's initial matter, the majority gives short shrift to the Kaleys' liberty without judicial review, and suggests that indictments interests at stake. “The presumption of innocence, although therefore must also be “good enough” to deprive a defendant not articulated in the Constitution, is a basic component of of property without judicial review. Ante, at 1098 – 1099. a fair trial under our system of criminal justice.” Estelle v. Even if this greater-includes-the-lesser reasoning might be Williams, 425 U.S. 501, 503, 96 S.Ct. 1691, 48 L.Ed.2d valid in other contexts, it is not when the property at issue is 126 (1976). Whatever serious *1111 crimes the grand needed to hire chosen counsel. In the context of a prosecution jury alleges the Kaleys committed, they are presumptively for serious crimes, it is far from clear which interest is greater innocent of those charges until final judgment. Their right —the interest in temporary liberty pending trial, or the interest to vindicate that presumption by choosing the advocate they in using one's available means to avoid imprisonment for believe will best defend them is, as explained, at the very core many years after trial. Retaining one's counsel of choice of the Sixth Amendment. ensures the fundamental fairness of the actual trial, and thus may be far more valuable to a criminal defendant than pretrial 4 Under our due process precedents, it is clear that release. the Mathews test applies in this case, rather than the inquiry set forth in Medina v. California, 505 U.S. 437, As for the Government's side, the Court echoes the 112 S.Ct. 2572, 120 L.Ed.2d 353 (1992). We held in Government's concerns that a hearing would place demands Medina that Mathews is inapplicable when “assessing the on its resources and interfere with its desire to keep its trial validity of state procedural rules” that “are part of the strategy close to the vest. These concerns are somewhat criminal process.” Id., at 443, 112 S.Ct. 2572. We have therefore applied Medina rather than Mathews only when curious in light of the majority's emphasis on how easy it considering such due process challenges, including, for is to make a probable cause showing. And they are even example, the allocation of burdens of proof or what type more surprising in light of the extensive discovery obligations of evidence may be admitted. See, e.g., id., at 443– already imposed on the Government by Federal Rule of 446, 112 S.Ct. 2572 (burden of proving incompetence Criminal Procedure 16 and Brady v. Maryland, 373 U.S. 83, to stand trial); Patterson v. New York, 432 U.S. 197, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). The emphasis the 202, 97 S.Ct. 2319, 53 L.Ed.2d 281 (1977) (burden of Government places on pretrial secrecy evokes an outdated proving affirmative defense); Dowling v. United States, conception of the criminal trial as “a poker game in which 493 U.S. 342, 352, 110 S.Ct. 668, 107 L.Ed.2d 708 players enjoy an absolute right always to conceal their cards

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 17 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... until played.” Williams v. Florida, 399 U.S. 78, 82, 90 S.Ct. deal of flexibility in structuring them. Judges need not apply 1893, 26 L.Ed.2d 446 (1970). the Federal Rules of Evidence during the hearings, and they can take many steps, including in camera proceedings, to Moreover, recall that the Government concedes that due ensure that witness safety and grand jury secrecy are fully process guarantees defendants a hearing to contest the preserved. See Monsanto, 924 F.2d, at 1198; United States v. traceability of the restrained assets to the charged conduct. If a E–Gold, Ltd., 521 F.3d 411, 418–419 (C.A.D.C.2008). defendant requests such a hearing, the Government will likely be required to reveal something about its case to demonstrate Moreover, experience in the Second Circuit, where that the assets have the requisite connection to the charged defendants have for more than 20 years been afforded the type offenses. of hearing the Kaleys seek, indicates that such hearings do not occur so often as to raise substantial concerns about taxing In any event, these concerns are exaggerated. What the the resources of the Government and lower courts. See Brief Government would be required to show in a pretrial restraint for New York Council of Defense Lawyers as Amicus Curiae hearing is similar to pretrial showings prosecutors make in 4–9. As the majority notes, only 25 reported cases appear to other contexts on a daily basis. As mentioned above, when have addressed such hearings. Id., at 4. This relative rarity is the Government seeks an order detaining a defendant pending unsurprising. To even be entitled to the hearing, defendants trial, it routinely makes an extensive evidentiary showing must first show a genuine need to use the assets to retain —voluntarily disclosing much of its evidence and trial counsel of choice. See United States v. Bonventre, 720 F.3d strategy—in support of that relief. See Brief for California 126, 131 (C.A.2 2013). And defendants too have an incentive Attorneys for Criminal Justice as Amicus Curiae 11–18. The not to tip their hands as to trial strategy—perhaps to an even Government makes similar showings in the context of other greater extent than the Government, given that defendants pretrial motions, such as motions to admit hearsay evidence bear comparatively few discovery obligations at a criminal under the co-conspirator exception, or to *1112 discover trial. In light of the low bar of the probable cause standard, attorney-client communications made in furtherance of a many defendants likely conclude that the possible benefits of future crime. Id., at 19–28. the hearing are not worth the candle.

In those contexts, as in this one, the decision how much For those hearings that do occur, they are by all appearances to “show its hand” rests fully within the Government's ably controlled by district judges to keep them manageable discretion. If it has a strong case and believes that pretrial and to limit the potential for excess or abuse. See Brief restraint is necessary to preserve the assets for forfeiture, for New York Council of Defense Lawyers as Amicus the Government may choose to make a strong evidentiary Curiae 6–8. In addition, where such hearings are allowed, showing and have little concern about doing so. In a closer prosecutors and defense counsel often reach agreements case, where the Government is more concerned about tipping concerning the scope and conditions of any protective order its hand, it may elect to forgo a pretrial restraint of those that accommodate the interests of both sides. See id., at assets the defendant needs to pay his counsel. I see no great 8–9. When the right at stake is as fundamental as hiring burden on the Government in allowing it to strike this balance one's counsel of choice—the “root meaning” of the Sixth as it sees fit when considering a pretrial asset restraint that Amendment, Gonzalez–Lopez, 548 U.S., at 147–148, 126 would deprive a defendant of his right to counsel of choice. S.Ct. 2557—the Government's interest in saving the time In the end, it is a bit much to argue that the Government has and expense of a limited number of such proceedings is not discretion to deprive a defendant—without a hearing—of the particularly compelling. counsel he has chosen to present his defense, simply to avoid the mere possibility of a premature peek at some aspect of The Government does have legitimate interests that are served what the Government intends to do at trial. by forfeiture of allegedly tainted assets. *1113 Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 629, The majority also significantly underestimates the amount of 109 S.Ct. 2646, 105 L.Ed.2d 528 (1989). And imposing a control judges can exercise in these types of hearings. The pretrial restraint on such assets does increase the likelihood Circuits that allow such hearings have afforded judges a great

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 18 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... that they will be available if the defendant is convicted. 5 We have thus consistently recognized that the “fundamental But that interest is protected in other ways that mitigate the instrument for judicial judgment” is “an adversary proceeding concern that defendants will successfully divert forfeitable in which both parties may participate.” Carroll v. President assets from the Government's reach if afforded a hearing. and Comm'rs of Princess Anne, 393 U.S. 175, 183, 89 S.Ct. The relation-back provision in 21 U.S.C. § 853(c) provides 347, 21 L.Ed.2d 325 (1968). In the present context, some that title to forfeitable assets, once adjudged forfeitable, defendants (like the Kaleys) may be able to show that the vests in the Government as of the time the offense was theory of prosecution is legally defective through an argument committed. Section 853(c) then provides that the Government that almost certainly was not presented to the grand jury. And may seek a “special verdict of forfeiture” as to any forfeited as discussed above, supra, at 1100 – 1102, prosecutors in property that was subsequently transferred to a third party. some cases elect not to freeze needed assets, or they negotiate The Government protests that recovery of such assets will tailored protective orders to serve the interests of both sides— often be complicated and subject to the vagaries of state law. something they would be unlikely to do if the hearings were Tr. of Oral Arg. 49–50. But such complaints of administrative rote exercises. inconvenience carry little weight in this particular context, when the Government knows exactly where the money has Given the risk of an erroneous restraint of assets needed gone: to an attorney who is, after all, an officer of the court, to retain chosen counsel, the “probable value” of the and on notice that the Government claims title to the assets. “additional safeguard” a pretrial hearing would provide is significant. That is because the right to counsel of choice is inherently transient, and the deprivation of that right 5 The Government and the majority place particular effectively permanent. In our cases suggesting *1114 that emphasis on the use of forfeited assets to provide little would be gained by requiring an adversary hearing on restitution to victims of crime. See Brief for United States 41–42, and n. 14; ante, at 1094, n. 1. It is worth probable cause or imposing stricter evidentiary requirements noting in this respect that in prosecuting the other sales in grand jury proceedings, we have noted that the grand jury representatives that participated with the Kaleys in the is not where the ultimate question of “the guilt or innocence allegedly fraudulent conduct, the Government's position of the accused is adjudicated.” United States v. Calandra, as to who exactly is the “victim” has shifted frequently. 414 U.S. 338, 343, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974); See Brief for Petitioners 9–11 (hospitals); id., at 18, 21– see United States v. Williams, 504 U.S. 36, 51, 112 S.Ct. 23 (their employers); Tr. of Oral Arg. 43–44 (hospitals). 1735, 118 L.Ed.2d 352 (1992) (explaining that the grand jury As one prosecutor forthrightly acknowledged at the hears only from the prosecutor because “ ‘the finding of an sentencing hearing of an alleged co-conspirator, “we indictment is only in the nature of an enquiry or accusation, can't make restitution.” Brief for Petitioners 11. which is afterwards to be tried and determined’ ” (quoting 4 And we are not talking about all of a defendant's assets that W. Blackstone, Commentaries 300 (1769))). If the grand jury are subject to forfeiture—only those that the defendant can considers incomplete or incompetent evidence in deciding to show are necessary to secure his counsel of choice. Here, for return an indictment, the defendant still has the full trial on the example, the Kaleys have identified as needed to pay counsel merits, with all its “formalities and safeguards,” Gerstein v. only a discrete portion of the assets the Government seeks. Pugh, 420 U.S. 103, 122, 95 S.Ct. 854, 43 L.Ed.2d 54 (1975), The statistics cited by the Court on the total amount of assets to prove his innocence. recovered by the Government and provided as restitution for victims, ante, at 1094, n. 1, are completely beside the point. Here, by contrast, the Government seeks to use the grand jury's probable cause determination to strip the Kaleys of their The majority ultimately concludes that a pretrial hearing of counsel of choice. The Kaleys can take no comfort that they the sort the Kaleys seek would be a waste of time. Ante, at will be able to vindicate that right in a future adversarial 1103 – 1105. No. It takes little imagination to see that seizures proceeding. Once trial begins with someone other than chosen based entirely on ex parte proceedings create a heightened counsel, the right is lost, and it cannot be restored based on risk of error. Common sense tells us that secret decisions what happens at trial. “The fundamental requirement of due based on only one side of the story will prove inaccurate process is the opportunity to be heard ‘at a meaningful time more often than those made after hearing from both sides. and in a meaningful manner.’ ” Mathews, 424 U.S., at 333, 96

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 19 Kessler, Steven 12/4/2014 For Educational Use Only

Kaley v. U.S., 134 S.Ct. 1090 (2014) 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. 1920... (1975) S.Ct. 893 (quoting Armstrong v. Manzo, 380 U.S. 545, 552, 85 . Today's decision erodes that confidence by permitting S.Ct. 1187, 14 L.Ed.2d 62 (1965)). If the Kaleys are to have the Government to deprive a criminal defendant of his right any opportunity to meaningfully challenge that deprivation, to counsel of choice, without so much as a chance to be heard they must have it before the trial begins. on why such a significant pretrial deprivation is unwarranted.

* * * The majority wraps up its analysis by blandly noting that Congress is of course free to extend broader protection to The issues presented here implicate some of the most criminal defendants. Ante, at 1104 – 1105. Not very likely. fundamental precepts underlying the American criminal In this area it is to the courts that those charged with crime justice system. A person accused by the United States of must turn. committing a crime is presumed innocent until proven guilty beyond a reasonable doubt. But he faces a foe of powerful Federal prosecutors, when they rise in court, represent the might and vast resources, intent on seeing him behind bars. people of the United States. But so do defense lawyers—one That individual has the right to choose the advocate he at a time. In my view, the Court's opinion pays insufficient believes will most ably defend his liberty at trial. respect to the importance of an independent bar as a check on prosecutorial abuse and government overreaching. Granting The trial is governed by rules designed to ensure that, the Government the *1115 power to take away a defendant's whatever the ultimate verdict, we can be confident to the chosen advocate strikes at the heart of that significant role. I extent possible that justice was done, within the bounds of would not do it, and so respectfully dissent. the Constitution. That confidence is grounded in our belief in the adversary system. “The very premise of our adversary Parallel Citations system of criminal justice is that partisan advocacy on both sides of a case will best promote the ultimate objective that 188 L.Ed.2d 46, 82 USLW 4110, 14 Cal. Daily Op. Serv. the guilty be convicted and the innocent go free.” Herring v. 1920, 2014 Daily Journal D.A.R. 2232, 24 Fla. L. Weekly New York, 422 U.S. 853, 862, 95 S.Ct. 2550, 45 L.Ed.2d 593 Fed. S 544

End of Document © 2014 Thomson Reuters. No claim to original U.S. Government Works.

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 20 516us1$$5z 10-22-98 10:36:31 PAGES OPINPGT

OCTOBER TERM, 1995 29

Syllabus

LIBRETTI v. UNITED STATES certiorari to the united states court of appeals for the tenth circuit

No. 94–7427. Argued October 3, 1995—Decided November 7, 1995 During petitioner Libretti’s trial on federal drug and related charges, he entered into a plea agreement with the Government, whereby, among other things, he pleaded guilty to engaging in a continuing criminal enterprise under 21 U. S. C. § 848; agreed to surrender numerous items of his property to the Government under § 853, which provides for crimi- nal forfeiture of drug-tainted property; and waived his constitutional right to a jury trial. At the colloquy on the plea agreement, the trial judge explained the consequences of Libretti’s waiver of the latter right, but did not expressly advise him as to the existence and scope of his right under Federal Rule of Criminal Procedure 31(e) to a jury determi- nation of forfeitability. After sentencing Libretti to imprisonment and other penalties, the judge entered a forfeiture order as to the property in question despite Libretti’s objection to what he saw as a failure to find any factual basis for the entire forfeiture. The Court of Appeals rejected both of Libretti’s challenges to the forfeiture order, ruling that Federal Rule of Criminal Procedure 11(f) does not require a district court to ascertain a factual basis for a stipulated forfeiture of assets and that Libretti had waived his Rule 31(e) right to a jury determination of forfeitability. Held: 1. Rule 11(f)—which forbids a court to enter judgment upon “a plea of guilty” without assuring that there is “a factual basis” for the plea—does not require a district court to inquire into the factual basis for a stipulated forfeiture of assets embodied in a plea agreement. Pp. 37–48. (a) The Rule’s plain language precludes its application to a forfeit- ure provision contained in a plea agreement. The Rule applies only to “a plea of guilty,” which refers to a defendant’s admission of guilt of a substantive criminal offense as charged in an indictment and his waiver of the right to a jury determination on that charge. See, e. g., United States v. Broce, 488 U. S. 563, 570. In contrast, forfeiture is an element of the sentence imposed following a plea of guilty, and thus falls outside Rule 11(f)’s scope. That forfeiture operates as punishment for criminal conduct, not as a separate substantive offense, is demonstrated by the 516us1$$5z 10-22-98 10:36:31 PAGES OPINPGT

30 LIBRETTI v. UNITED STATES

Syllabus

text of the relevant statutory provisions, see, e. g., §§ 848(a) and 853(a), by legislative history, and by this Court’s precedents, see, e. g., Alex- ander v. United States, 509 U. S. 544, 558. Caplin & Drysdale, Char- tered v. United States, 491 U. S. 617, 628, n. 5, distinguished. In light of such weighty authority, the Court is not persuaded by Libretti’s in- sistence that the forfeiture for which § 853 provides is, in essence, a hybrid that shares elements of both a substantive charge and a criminal punishment. Pp. 38–41. (b) Libretti’s policy arguments for construing Rule 11(f) to reach asset forfeiture provisions of plea agreements—that the Rule’s factual basis inquiry (1) is essential to ensuring that a forfeiture agreement is knowing and voluntary, (2) will protect against government overreach- ing, and (3) is necessary to ensure that the rights of third-party claim- ants are fully protected—are rejected. Pp. 41–44. (c) The District Court did not rest its forfeiture order solely on the stipulation contained in the plea agreement. There is ample evidence that the District Judge both understood the statutory requisites for criminal forfeiture and concluded that they were satisfied on the facts at the time the sentence was imposed. Pp. 44–48. 2. On the facts of this case, Libretti’s waiver of a jury determination as to the forfeitability of his property under Rule 31(e)—which provides that, “[i]f the indictment...alleges that...property is subject to criminal forfeiture, a special verdict shall be returned as to the extent of the . . . property”—was plainly adequate. That waiver was accom- plished by the plea agreement, in which Libretti agreed to forfeiture and waived his right to a jury trial, together with the plea colloquy, which made it abundantly clear that the plea agreement would end any proceedings before the jury and would lead directly to sentencing by the court. Accordingly, Libretti cannot now complain that he did not receive the Rule 31(e) special verdict. The Court rejects his argument that the Rule 31(e) right to a jury determination of forfeitability has both a constitutional and a statutory foundation, and cannot be waived absent specific advice from the district court as to the existence and scope of this right and an express, written waiver. Given that the right, as an aspect of sentencing, does not fall within the Sixth Amend- ment right to a jury determination of guilt or innocence, see, e. g., McMillan v. Pennsylvania, 477 U. S. 79, 93, but is merely statutory in origin, the plea agreement need not make specific reference to Rule 31(e). Nor must the district court specifically advise a defendant that a guilty plea will result in waiver of the Rule 31(e) right, since that right is not among the information that must be communicated to a 516us1$$5z 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 31

Opinion of the Court

defendant under Rule 11(c) in order to ensure that a guilty plea is valid. Pp. 48–51. 38 F. 3d 523, affirmed.

O’Connor, J., delivered the opinion of the Court, Parts I and II–A of which were joined by Rehnquist, C. J., and Scalia, Kennedy, Souter, Thomas, Ginsburg, and Breyer, JJ., Parts II–B and II–C of which were joined by Rehnquist, C. J., and Kennedy, Souter, Ginsburg, and Breyer, JJ., and Parts III and IV of which were joined by Rehnquist, C. J., and Scalia, Kennedy, Thomas, and Breyer, JJ. Souter, J., post, p. 52, and Ginsburg, J., post, p. 53, filed opinions concurring in part and concurring in the judgment. Stevens, J., filed a dissenting opinion, post, p. 54.

Sara Sun Beale, by appointment of the Court, 514 U. S. 1095, argued the cause for petitioner. With her on the briefs was Paul K. Sun, Jr. Malcolm L. Stewart argued the cause for the United States. With him on the brief were Solicitor General Days, Assistant Attorney General Harris, Deputy Solicitor Gen- eral Dreeben, and DavidS.Kris.* Justice O’Connor delivered the opinion of the Court.† Petitioner Joseph Libretti pleaded guilty to engaging in a continuing criminal enterprise, in violation of 84 Stat. 1265, 21 U. S. C. § 848 (1988 ed. and Supp. V), and agreed to forfeit numerous items of his property to the Government. We must decide whether Federal Rule of Criminal Procedure 11(f) requires the District Court to determine whether a factual basis exists for a stipulated asset forfeiture embodied in a plea agreement, and whether the Federal Rule of Crimi-

*Briefs of amici curiae urging reversal were filed for the Forfeiture Endangers American Rights Foundation by Brenda Grantland; and for the National Association of Criminal Defense Lawyers by David B. Smith and Richard J. Troberman. †Justice Scalia and Justice Thomas join all but Parts II–B and II–C of this opinion. Justice Souter and Justice Ginsburg join only Parts I and II. 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

32 LIBRETTI v. UNITED STATES

Opinion of the Court nal Procedure 31(e) right to a special jury verdict on forfeit- ure can only be waived following specific advice from the District Court as to the existence and scope of this right and an express, written waiver.

I In May 1992, Joseph Libretti was charged in a multicount superseding indictment with violations of various federal drug, firearms, and money-laundering laws. Included in the indictment was a count alleging that Libretti engaged in a continuing criminal enterprise (CCE), in violation of 21 U. S. C. § 848, by operating a cocaine and marijuana distri- bution organization in Wyoming and Colorado from 1984 to 1992. Conviction under § 848 subjects a defendant to, among other penalties, “the forfeiture prescribed in sec- tion 853.” 1 21 U. S. C. § 848(a). Accordingly, the indict-

1 Section 853(a) provides for criminal forfeiture of drug-tainted property: “(a) Property subject to criminal forfeiture. Any person convicted of a violation of this subchapter or subchapter II of this chapter punishable by imprisonment for more than one year shall forfeit to the United States, irrespective of any provision of State law— “(1) any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of such violation; “(2) any of the person’s property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, such viola- tion; and “(3) in the case of a person convicted of engaging in a continuing crimi- nal enterprise in violation of section 848 of this title, the person shall forfeit, in addition to any property described in paragraph (1) or (2), any of his interest in, claims against, and property or contractual rights afford- ing a source of control over, the continuing criminal enterprise. “The court, in imposing sentence on such person, shall order, in addition to any other sentence imposed pursuant to this subchapter or subchapter II of this chapter, that the person forfeit to the United States all property described in this subsection. In lieu of a fine otherwise authorized by this part, a defendant who derives profits or other proceeds from an 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 33

Opinion of the Court ment further alleged that the Government was entitled to forfeiture of property that was obtained from or used to facil- itate Libretti’s drug offenses, including, but not limited to, various assets specified in the indictment. See Fed. Rule Crim. Proc. 7(c)(2) (“No judgment of forfeiture may be en- tered in a criminal proceeding unless the indictment or the information shall allege the extent of the interest or prop- erty subject to forfeiture”). Trial began in September 1992. The Government pre- sented testimony from 18 witnesses, including several indi- viduals who had purchased cocaine or marijuana from Li- bretti, to establish Libretti’s involvement in the possession and distribution of considerable amounts of narcotics. The testimony also reflected Libretti’s purchase of a home, an automobile, and dozens of automatic and semiautomatic weapons during a time when he had only modest sources of legitimate income. Finally, the testimony revealed that Libretti stored large amounts of money and drugs in safety deposit boxes and storage facilities away from his home. Following four days of testimony, Libretti and the Govern- ment entered into a plea agreement, by the terms of which Libretti agreed to plead guilty to the CCE count of the in- dictment (count 6). The Government in return agreed not to pursue additional charges against Libretti and to recom- mend that he be sentenced to the mandatory minimum of 20 years’ imprisonment. Paragraph 10 of the plea agreement provided that Libretti would “transfer his right, title, and interest in all of his assets to the Division of Criminal Investigation of the Wyo- offense may be fined not more than twice the gross profits or other proceeds.” In addition, § 853(p) provides that, when property subject to forfeiture under subsection (a) cannot be recovered for various reasons, “the court shall order the forfeiture of any other property of the defendant up to the value of” the forfeitable but unrecoverable assets. 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

34 LIBRETTI v. UNITED STATES

Opinion of the Court

ming Attorney General including, but not limited to: all real estate; all personal property, including guns, the computer, and every other item now in the possession of the United States; all bank accounts, investments, retirement accounts, cash, cashier’s checks, travelers checks and funds of any kind.” Two other paragraphs of the plea agreement also made refer- ence to the contemplated forfeiture. Paragraph 2 described the maximum statutory penalty for the offense to which Li- bretti agreed to plead guilty, which included “forfeiture of all known assets as prescribed in 21 U. S. C. § 853 and assets which are discovered at any later time up to $1,500,000.” In paragraph 9, Libretti agreed to “identify all assets that were used to facilitate his criminal activity” and to “provide com- plete financial disclosure forms requiring the listing of assets and financial interests.” Finally, Libretti acknowledged in the agreement “that by pleading guilty to Count Six of the Indictment, he waive[d] various constitutional rights, includ- ing the right to a jury trial.” It is beyond dispute that Libretti received a favorable plea agreement. The Gov- ernment recommended that Libretti receive the minimum sentence for conviction under § 848, and agreed to drop all other counts in the indictment. One of those counts charged Libretti with use of a firearm equipped with a silencer during the commission of a drug offense, which mandates a 30-year sentence consecutive to the term of imprisonment on the underlying drug offense. 18 U. S. C. § 924(c)(1). Li- bretti also faced a potential fine of up to $2 million. 21 U. S. C. §§ 848(a), 853(a). At the subsequent hearing on the plea agreement, the trial judge advised Libretti of his rights, including his right to a jury trial. The court also clarified the consequences of Libretti’s plea, including the facts that a plea of guilty would mean “the end of this trial,” that “the jury [would] not . . . decide whether [he’s] guilty or not,” and that “all the prop- erty that’s described in . . . Count 6 could be forfeited to 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 35

Opinion of the Court the United States.” App. 87, 88. Libretti was then placed under oath. He admitted that his plea was voluntary and indicated that he had read and understood the significance of the indictment and the plea agreement, including the fact that “all of [his] property could be forfeited, the property that is owned by [him] by reason of any drug transaction.” Id., at 100. Libretti’s only question about the plea agree- ment pertained to paragraph 2, which provided for future forfeiture of assets up to $1,500,000. The District Court as- sured Libretti that future forfeiture would be limited to sub- sequently discovered drug-tainted assets, and that his future legitimate income would not be forfeited. Id., at 88–89. After a lengthy exchange, in which the court reviewed each subparagraph describing the violations that composed the CCE charge and Libretti acknowledged each factual allega- tion, the District Court found that the guilty plea was volun- tary and factually based. Id., at 121. Following preparation of a presentence report, the District Court held a sentencing hearing, at which Libretti was sen- tenced to 20 years’ imprisonment, to be followed by 5 years of supervised release, and ordered to pay a $5,000 fine as well as a mandatory $50 assessment and to perform 500 hours of community service. The Government filed a motion for forfeiture of Libretti’s assets, in keeping with the plea agree- ment. Libretti’s counsel offered no objection at the sentenc- ing hearing, declaring that the forfeiture statute was “a harsh law” and “a bitter pill dealt by Congress,” but conced- ing that it was “a pill we must swallow.” Id., at 149. At the conclusion of the hearing, however, Libretti stated on the record that he “would just like to object to what [he saw] as a failure to find any factual basis for the whole forfeiture.” Id., at 154. The District Judge noted the objection, but re- plied that “the evidence that I heard before me in the two [sic] days of trial I think is sufficient to warrant the granting of forfeiture. I think I have no alternative.” Ibid. On December 23, 1992, the District Court entered an order 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

36 LIBRETTI v. UNITED STATES

Opinion of the Court of forfeiture pursuant to 21 U. S. C. § 853. The order listed specific property to be forfeited, including a parcel of real property in Wyoming, two condominiums, two automobiles, a mobile home, a diamond ring, various firearms, cash, sev- eral bank accounts, and a number of cashier’s and traveler’s checks. App. 155–164. One check was forfeited as a substi- tute asset. Id., at 162. Libretti filed an appeal from the order of forfeiture. While this appeal was pending, the District Court enter- tained third-party claims to some of the property ordered forfeited. See 21 U. S. C. § 853(n). Following a March 1993 hearing, the court amended its forfeiture order to return cer- tain property to the third-party claimants. The court also modified its order with respect to Libretti, stating that “it may be unjust to enforce the specific forfeiture provisions in the plea agreement” and reasoning that Libretti’s concession to forfeiture in the plea agreement provided insufficient basis for the order of forfeiture. App. 309. The court ordered a Magistrate to conduct a hearing at which Libretti would be given the opportunity to show, by a preponderance of the evidence, that any portion of his property was not subject to forfeiture. Upon motion by the Government, the District Court stayed the proceedings before the Magistrate Judge pending resolution of Libretti’s appeal. The Court of Appeals for the Tenth Circuit rejected both of Libretti’s challenges to the forfeiture order. 38 F. 3d 523 (1994). The court ruled first that the District Court lacked jurisdiction to consider Libretti’s claims to the property or- dered forfeited at the third-party hearing, because Libretti had filed a notice of appeal. After noting the divergence in the Courts of Appeals regarding the applicability of Rule 11(f) to forfeiture provisions in plea agreements, the court rejected Libretti’s contention that Rule 11(f) requires a dis- trict court to ascertain a factual basis for a stipulated forfeit- ure of assets. This conclusion, the Court of Appeals rea- soned, follows from the fact that forfeiture “is a part of the 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 37

Opinion of the Court sentence, not a part of the substantive offense.” Id., at 528. The Court of Appeals also determined that Libretti had waived his Rule 31(e) right to a jury determination of forfeit- ability, despite the fact that the District Court did not ex- pressly advise Libretti of the existence and scope of that right during his plea colloquy. Id., at 530–531. We granted certiorari to resolve disagreement among the Circuits as to the applicability of Rule 11(f) to asset forfeiture provisions contained in plea agreements 2 and the requisites for waiver of the right to a jury determination of forfeitability under Rule 31(e).3 514 U. S. 1035 (1995). II Libretti insists that the District Court’s forfeiture order must be set aside (or at least modified), because the court neglected to establish a “factual basis” for forfeiture of the

2 Compare United States v. Reckmeyer, 786 F. 2d 1216, 1222 (CA4) (Rule 11(f) applies to forfeiture provisions in plea agreements), cert. denied, 479 U. S. 850 (1986), and United States v. Roberts, 749 F. 2d 404, 409 (CA7 1984) (same), cert. denied, 470 U. S. 1058 (1985), with United States v. Boatner, 966 F. 2d 1575, 1581 (CA11 1992) (Rule 11(f) does not apply to stipulated forfeiture provisions in plea agreements), United States v. Bachynsky, 949 F. 2d 722, 730–731 (CA5 1991) (Rule 11(f) does not apply to forfeiture provisions, but a forfeiture order will be upheld only if the record provides a factual basis for forfeiture), cert. denied, 506 U. S. 850 (1992), and 38 F. 3d 523, 528 (CA10 1994) (case below). 3 Compare, e. g., id., at 531 (“specific reference to” the Rule 31(e) right to a special jury verdict is not required when a defendant’s “unambiguous plea agreement” and “knowing and voluntary plea” establish waiver); United States v. Robinson, 8 F. 3d 418, 421 (CA7 1993) (“[A] defendant’s waiver of his statutory right [under Rule 31(e)] to have a jury determine which portion of his property is subject to forfeiture is only valid if know- ingly and voluntarily made”); United States v. Garrett, 727 F. 2d 1003, 1012 (CA11 1984) (a defendant has a constitutional right to a jury trial to determine forfeitability; waiver of that right must be in writing), aff’d on other grounds, 471 U. S. 773 (1985); United States v. Zang, 703 F. 2d 1186, 1194–1195 (CA10 1982) (“The parties can waive their right to a special verdict [under Rule 31(e)] by not making a timely request”), cert. denied, 464 U. S. 828 (1983). 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

38 LIBRETTI v. UNITED STATES

Opinion of the Court property covered by the order under Federal Rule of Crimi- nal Procedure 11(f). Absent such a finding, Libretti argues, even his concession to forfeiture in the plea agreement can- not authorize the forfeiture.

A Libretti’s first claim is that the Rule by its very terms applies to a forfeiture provision contained in a plea agree- ment. Accordingly, our analysis must begin with the text of Rule 11(f): “Determining Accuracy of Plea. Notwithstanding the acceptance of a plea of guilty, the court should not enter a judgment upon such plea without making such inquiry as shall satisfy it that there is a factual basis for the plea.” By its plain terms, the Rule applies only to a “plea of guilty.” Our precedent makes clear that this language refers to a defendant’s admission of guilt of a substantive criminal of- fense as charged in an indictment and his waiver of the right to a jury determination on that charge. See, e. g., United States v. Broce, 488 U. S. 563, 570 (1989) (“By entering a plea of guilty, the accused is not simply stating that he did the discrete acts described in the indictment; he is admitting guilt of a substantive crime”); North Carolina v. Alford, 400 U. S. 25, 32 (1970); Boykin v. Alabama, 395 U. S. 238, 242 (1969); McCarthy v. United States, 394 U. S. 459, 466 (1969). With this definition in mind, we have held that a district judge satisfies the requirements of Rule 11(f) when he “de- termine[s] ‘that the conduct which the defendant admits con- stitutes the offense charged in the indictment or information or an offense included therein to which the defendant has pleaded guilty.’ ” Id., at 467 (quoting Advisory Committee’s Notes on Fed. Rule Crim. Proc. 11, 18 U. S. C. App., p. 730). A forfeiture provision embodied in a plea agreement is of an entirely different nature. Forfeiture is an element of the 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 39

Opinion of the Court sentence imposed following conviction or, as here, a plea of guilty, and thus falls outside the scope of Rule 11(f). The text of the relevant statutory provisions makes clear that Congress conceived of forfeiture as punishment for the com- mission of various drug and racketeering crimes. A person convicted of engaging in a continuing criminal enterprise “shall be sentenced ...totheforfeiture prescribed in section 853.” 21 U. S. C. § 848(a) (emphasis added). Forfeiture is imposed “in addition to any other sentence.” 21U.S.C. § 853(a) (emphasis added). See also 18 U. S. C. § 1963 (for- feiture is imposed “in addition to any other sentence” for a violation of the Racketeer Influenced and Corrupt Organiza- tions Act (RICO)). The legislative history of the Compre- hensive Crime Control Act of 1984, Pub. L. 98–473, Tit. II, 98 Stat. 1976, also characterizes criminal forfeiture as pun- ishment. See, e. g., S. Rep. No. 98–225, p. 193 (1983) (crimi- nal forfeiture “is imposed as a sanction against the defendant upon his conviction”). Congress plainly intended forfeiture of assets to operate as punishment for criminal conduct in violation of the federal drug and racketeering laws, not as a separate substantive offense. Our precedents have likewise characterized criminal for- feiture as an aspect of punishment imposed following convic- tion of a substantive criminal offense. In Alexander v. United States, 509 U. S. 544 (1993), we observed that the criminal forfeiture authorized by the RICO forfeiture statute “is clearly a form of monetary punishment no different, for Eighth Amendment purposes, from a traditional ‘fine.’ ” Id., at 558. Similarly, in United States v. $8,850, 461 U. S. 555 (1983), we recognized that a “criminal proceeding . . . may often include forfeiture as part of the sentence.” Id., at 567. And in Austin v. United States, 509 U. S. 602 (1993), we con- cluded that even the in rem civil forfeiture authorized by 21 U. S. C. §§ 881(a)(4) and (a)(7) is punitive in nature, so that forfeiture imposed under those subsections is subject to the limitations of the Eighth Amendment’s Excessive Fines 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

40 LIBRETTI v. UNITED STATES

Opinion of the Court

Clause. 509 U. S., at 619–622. Libretti himself conceded below that criminal forfeiture “is a part of the sentence, not a part of the substantive offense.” 38 F. 3d, at 528. It is true, as Libretti points out, that we said in Caplin & Drysdale, Chartered v. United States, 491 U. S. 617 (1989), that “forfeiture is a substantive charge in the indictment against a defendant.” Id., at 628, n. 5. That statement re- sponded to the defendant’s claim that his Sixth Amendment right to counsel “for his defense” could be transformed into a defense to a forfeiture count in the indictment. We in- tended only to suggest that a defendant cannot escape an otherwise appropriate forfeiture sanction by pointing to his need for counsel to represent him on the underlying charges. Elsewhere in that opinion we recognized that forfeiture is a “criminal sanction,” id., at 634, and is imposed as a sentence under § 853, id., at 620, n. 1. Libretti nonetheless insists that the criminal forfeiture for which § 853 provides is not “simply” an aspect of sentencing, but is, in essence, a hybrid that shares elements of both a substantive charge and a punishment imposed for criminal activity. In support of this contention, Libretti points to three Federal Rules of Criminal Procedure that, according to him, treat forfeiture as a substantive criminal charge. Rule 7(c)(2) provides that “[n]o judgment of forfeiture may be en- tered in a criminal proceeding unless the indictment or the information shall allege the extent of the interest or prop- erty subject to forfeiture.” If the indictment or information alleges that a defendant’s property is subject to forfeiture, “a special verdict shall be returned as to the extent of the interest or property subject to forfeiture, if any.” Fed. Rule Crim. Proc. 31(e). And a finding of forfeitability must be embodied in a judgment. Fed. Rule Crim. Proc. 32(d)(2) (“When a verdict contains a finding of criminal forfeiture, the judgment must authorize the Attorney General to seize the interest or property subject to forfeiture on terms that the court considers proper”). 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 41

Opinion of the Court

Although the procedural safeguards generated by these Rules are unique in the realm of sentencing, they do not change the fundamental nature of criminal forfeiture. The fact that the Rules attach heightened procedural protections to imposition of criminal forfeiture as punishment for certain types of criminal conduct cannot alter the simple fact that forfeiture is precisely that: punishment. The Advisory Committee’s “assumption” that “the amount of the interest or property subject to criminal forfeiture is an element of the offense to be alleged and proved,” Advisory Committee’s Notes on Fed. Rule Crim. Proc. 31, 18 U. S. C. App., p. 786, does not persuade us otherwise. The Committee’s assump- tion runs counter to the weighty authority discussed above, all of which indicates that criminal forfeiture is an element of the sentence imposed for a violation of certain drug and racketeering laws. Moreover, even supposing that the Com- mittee’s assumption is authoritative evidence with respect to the amendments to Rules 7, 31, and 32, it has no bearing on the proper construction of Rule 11. Tome v. United States, 513 U. S. 150 (1995), is not to the contrary. The Tome plural- ity treated the Advisory Committee’s Notes on Federal Rule of Evidence 801(d)(1)(B) as relevant evidence of the drafters’ intent as to the meaning of that Rule. 513 U. S., at 160– 163. In contrast, Libretti seeks to use the Note appended to Rule 31 to elucidate the meaning of an entirely distinct Rule. We cannot agree that the Advisory Committee’s Notes on the 1972 amendment to Rule 31(e) shed any particu- lar light on the meaning of the language of Rule 11(f), which was added by amendment to Rule 11 in 1966.

B Libretti next advances three policy arguments for con- struing Rule 11(f) to reach asset forfeiture provisions of plea agreements. First, he claims, Rule 11(f)’s factual basis in- quiry is essential to ensuring that a forfeiture agreement is knowing and voluntary. Next, Libretti declares that a Rule 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

42 LIBRETTI v. UNITED STATES

Opinion of the Court

11(f) inquiry will protect against Government overreaching. And lastly, Libretti insists that a factual basis inquiry is nec- essary to ensure that the rights of third-party claimants are fully protected. We consider these contentions in turn. We are unpersuaded that the Rule 11(f) inquiry is neces- sary to guarantee that a forfeiture agreement is knowing and voluntary. Whether a stipulated asset forfeiture is “factu- ally based” is a distinct inquiry from the question whether the defendant entered an agreement to forfeit assets know- ingly and voluntarily. Libretti correctly points out that Rule 11(f) is intended to ensure that a defendant’s “plea of guilty” is knowing and voluntary. McCarthy, 394 U. S., at 472 (the Rule 11 inquiry is “designed to facilitate a more accurate determination of the voluntariness of [a] plea”); Advisory Committee’s Notes on Fed. Rule Crim. Proc. 11, 18 U. S. C. App., p. 730 (Rule 11(f) protects defendants who do not “realiz[e] that [their] conduct does not actually fall within the charge”). But a “plea of guilty” and a forfeiture provi- sion contained in a plea agreement are different matters altogether. Forfeiture, as we have said, is a part of the sentence. If the voluntariness of a defendant’s concession to imposition of a particular sentence is questionable, the relevant inquiry is whether the sentencing stipulation was informed and uncoerced on the part of the defendant, not whether it is factually sound. Libretti’s second argument—that a Rule 11(f) factual basis inquiry is necessary to prevent prosecutorial overreaching— proves equally unavailing. As Libretti properly observes, § 853 limits forfeiture by establishing a factual nexus re- quirement: Only drug-tainted assets may be forfeited. Li- bretti suggests that failure to ensure, by means of a Rule 11(f) inquiry, that this factual nexus exists will open the door to voluntary forfeiture agreements that exceed the forfeiture authorized by statute, particularly in light of the Govern- ment’s direct financial interest in forfeiture as a source of revenue and the disparity in bargaining power between the 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 43

Opinion of the Court

Government and a defendant. We recognized in Caplin & Drysdale that the broad forfeiture provisions carry the po- tential for Government abuse and “can be devastating when used unjustly.” 491 U. S., at 634. Nonetheless, we con- cluded that “[c]ases involving particular abuses can be dealt with individually by the lower courts, when (and if) any such cases arise.” Id., at 635. However valid Libretti’s concern about prosecutorial overreaching may be, Rule 11(f) simply does not, on its face, address it. We do not mean to suggest that a district court must simply accept a defendant’s agreement to forfeit property, particularly when that agreement is not accompanied by a stipulation of facts supporting forfeiture, or when the trial judge for other reasons finds the agreement problematic. In this regard, we note that the Department of Justice recently issued a Revised Policy Regarding Forfeiture by Settlement and Plea Bargaining in Civil and Criminal Actions, Directive 94–7 (Nov. 1994), to instruct that, among the procedures necessary to ensure a valid forfeiture agreement, “[t]he set- tlement to forfeit property must be in writing and the de- fendant must concede facts supporting the forfeiture.” Id., at 13. In this case, however, we need not determine the precise scope of a district court’s independent obligation, if any, to inquire into the propriety of a stipulated asset forfeit- ure embodied in a plea agreement. We note that the Sen- tencing Guidelines direct only that a district court “may” ac- cept an agreement reached by the parties as to a specific, appropriate sentence, as long as the sentence is within the applicable guideline range or departs from that range “for justifiable reasons.” United States Sentencing Commission, Guidelines Manual § 6B1.2(c)(2) (Nov. 1993). Libretti’s plea agreement correctly recognized that the District Court was not bound by the parties’ agreement as to the appropriate sentence: “[T]he sentencing judge is neither a party to nor bound by this plea agreement and is free to impose whatever sentence he feels is justified.” App. 81, ¶ 11. 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

44 LIBRETTI v. UNITED STATES

Opinion of the Court

Libretti finally argues that a Rule 11(f) factual basis in- quiry is essential to preserving third-party claimants’ rights. A defendant who has no interest in particular assets, the argument goes, will have little if any incentive to resist for- feiture of those assets, even if there is no statutory basis for their forfeiture. Once the Government has secured a stipu- lation as to forfeitability, third-party claimants can establish their entitlement to return of the assets only by means of the hearing afforded under 21 U. S. C. § 853(n). This hearing, Libretti claims, is inadequate to safeguard third-party rights, since the entry of a forfeiture order deprives third- party claimants of the right to a jury trial and reverses the burden of proof. He concludes that insisting on a factual basis inquiry before entry of the forfeiture order will lessen the need for third-party hearings following a broad-ranging forfeiture agreement, and may even result in the conserva- tion of scarce judicial resources. Whatever the merits of this argument as a matter of policy, Congress has deter- mined that § 853(n), rather than Rule 11(f), provides the means by which third-party rights must be vindicated. Third-party claimants are not party to Rule 11(f) proceed- ings, and Libretti’s assertion that their interests are best protected therein fits poorly within our adversary system of justice. C Contrary to the suggestion of the dissent, post, at 57, the District Court did not rest its forfeiture order on nothing more than Libretti’s stipulation that certain assets were for- feitable. In fact, there is ample evidence that the District Court both understood the statutory requisites for criminal forfeiture and concluded that they were satisfied on the facts of this case at the time the sentence was imposed. First, the District Judge correctly recognized the factual nexus requirement established by § 853. App. 89 (change-of-plea hearing) (“[I]t has to be the product of a drug transaction to be forfeited”). Count 6 of the indictment specified numerous 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 45

Opinion of the Court items of property alleged to be subject to forfeiture under that statute, including a parcel of real property in Wyoming; two automobiles; over $100,000 in cash proceeds from drug transactions; $12,000 in cash that Libretti had stored inside a paint can at his home; a diamond ring; “[a]ll United States currency and travelers checks” recovered from Libretti’s storage lockers, safes, home, and person; a mobile home; a computer system; four bank accounts; two GNMA invest- ment certificates; bonds; three cashier’s checks; and the con- tents of two safe deposit boxes. Additional property was identified in a bill of particulars and a restraining order is- sued, and subsequently amended, by the District Court pur- suant to 21 U. S. C. § 853(e) (“Upon application of the United States, the court may enter a restraining order...topre- serve the availability of property described in subsection (a) of this section for forfeiture under this section”). After one week of trial, the parties submitted to the court an agree- ment which set out, in detail, specific items of property to be forfeited following Libretti’s plea of guilty, including “all real estate; all personal property, including guns, the computer, and every other item now in the possession of the United States; all bank accounts, investments, retirement accounts, cash, cashier’s checks, travelers checks and funds of any kind.” App. 81. The plea agreement also explained that the maximum penalty for the offense to which Libretti agreed to plead guilty included “forfeiture of all known assets as prescribed in 21 U. S. C. § 853 and assets which are discovered at any later time up to $1,500,000.” App. 79. Before issuing the order of forfeiture, the trial judge lis- tened to four days of testimony, in which Government wit- nesses detailed numerous drug transactions with Libretti. See, e. g., 2 Tr. 124–126, 137–139; 3 id., at 271–272; 4 id., at 495–501; 5 id., at 946–949. One witness recounted Libretti’s purchase of a home in 1985 with a $100,000 down payment, at a time during which he was earning an annual salary of approximately $20,000. 2 id., at 179–180, 210–216; App. 123 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

46 LIBRETTI v. UNITED STATES

Opinion of the Court

(Presentence Report, Prosecutor’s Statement ¶ 6); Presen- tence Report ¶ 37. Another told of Libretti’s purchase of a sports car with a check for $19,114. 5 Tr. 907–913. Other witnesses described Libretti’s possession, in his capacity as a federal firearms dealer, of numerous automatic and semi- automatic firearms, later determined to be worth at least $243,000. See, e. g., 2 id., at 140–141, 156–162; 5 id., at 844– 853; App. 123 (Presentence Report, Prosecutor’s Statement ¶ 9). One witness testified that Libretti admitted having “quite a bit of money stashed away” in safe deposit boxes, 5 Tr. 834, and on at least one occasion had “a couple thou- sand” dollars in cash “sitting around,” id., at 835. Other witnesses established that Libretti often stored cash and drugs in safe deposit boxes and storage facilities away from his home. See, e. g., 2 id., at 155–156; 4 id., at 718–720, 738– 743. One of Libretti’s drug customers testified that he broke into a storage facility at which Libretti had rented a storage locker and discovered a briefcase containing a large amount of cash (later estimated in the presentence report to be approximately $150,000), a large block of cocaine, and five large trash bags, at least one of which was filled with mari- juana. Id., at 558–566, 588–589. Prior to sentencing, the court received the presentence in- vestigation report, which contained, among other things, a summary of Libretti’s legitimate income during the relevant time periods. During 1985 and 1986, Libretti worked as a restaurant and grocery store manager, earning approxi- mately $20,000 per year. In early 1987, he was employed as a temporary stock broker and was paid on commission only. Later that year, he managed a Tenneco thrift store. In 1989, Libretti reported an income of approximately $50,000 from his firearms business. During 1988 and 1989, Libretti also owned a partnership interest in two condominiums; he reported that the rental income did not meet his expenses and thus he did not earn a profit. Between June 1989 and his arrest in December 1991, Libretti worked as a full-time 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 47

Opinion of the Court accounting supervisor, earning a salary of approximately $40,000 per year. Presentence Report ¶¶ 35–37. Included in the presentence report was a prosecutor’s statement detailing the amounts of cocaine and marijuana involved in Libretti’s drug operation and various sums of money Libretti earned from his drug dealing. App. 122– 135. The statement described Libretti’s substantial expend- itures, including the $100,000 cash deposit on a house in 1985 ($72,000 of which was derived from Libretti’s sale of drugs) and the purchase of a $20,000 mortgage in 1986 (again, alleg- edly with proceeds from his distribution of drugs). Id., at 123. Paragraph 12 reported that Libretti had opened a safe deposit box in 1987 in which he placed $48,000 in cash. On another occasion, Libretti placed approximately $10,000 into an account bearing his brother’s name. Id., at 124–125. The statement described Libretti’s practice of storing large amounts of cash and drugs in safes, storage lockers, and safe deposit boxes. Id., at 124, 129. Libretti also stored drugs, a weapon, and a cashier’s check for $65,000 in his personal locker at his place of employment. Id., at 129. The state- ment related Libretti’s investment of at least $243,000 in nu- merous firearms. Id., at 123–124. These funds again re- portedly derived from Libretti’s drug distribution activities; the statement indicated that “Libretti’s gun business was used to launder drug proceeds” and served as a means by which Libretti could “justify his income since [he] was not working at times during the conspiracy and, when he was working, was not bringing in the money that would pay for the Lakewood house and other investments.” Id., at 127. Finally, the statement suggested that substantial sums of cash derived from Libretti’s drug activities were never re- covered by law enforcement authorities. Id., at 134. De- fense counsel conceded at the sentencing hearing that “the [presentence] report of Mr. Libretti’s background, education, financial circumstances are [sic] accurate.” Id., at 138. In light of these facts, defense counsel acknowledged that “the 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

48 LIBRETTI v. UNITED STATES

Opinion of the Court forfeiture is going to take regular money and illegal money under the substitute assets” provision of § 853. Id., at 149. In view of the plea agreement, the indictment, and the amended restraining order, the trial judge issued an order forfeiting to the Government the Wyoming lot, both condo- miniums, both automobiles, $8,000 in cash proceeds of Libret- ti’s drug transactions, the diamond ring, the mobile home, all firearms, an IRA account, three bank accounts, bonds, two GNMA certificates, and several cashier’s and traveler’s checks. One check was ordered forfeited as a substitute asset “for assets dissipated and otherwise expended by Li- bretti.” Id., at 162. It is not, as Libretti maintains, implausible that the court concluded on the record before it that the forfeiture order was appropriate. Following Libretti’s objection to the for- feiture order for lack of factual foundation, the trial judge replied that “the evidence that I heard before me in the two [sic] days of trial I think is sufficient to warrant the granting of forfeiture.” Id., at 154. We cannot say that the District Judge, despite his subsequent uncertainty, erred in issuing the forfeiture order on the facts before him.

III Libretti also challenges the adequacy of his waiver of a jury determination as to the forfeitability of his property under Federal Rule of Criminal Procedure 31(e). The right, he argues, has both a constitutional and a statutory founda- tion, and cannot be waived absent specific advice from the district court as to the nature and scope of this right and an express, written agreement to forgo the jury determination on forfeitability. We disagree. Federal Rule of Criminal Procedure 31(e) provides that, “[i]f the indictment or the information alleges that an inter- est or property is subject to criminal forfeiture, a special verdict shall be returned as to the extent of the interest or property subject to forfeiture, if any.” Libretti would have 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 49

Opinion of the Court us equate this statutory right to a jury determination of for- feitability with the familiar Sixth Amendment right to a jury determination of guilt or innocence. See, e. g., United States v. Gaudin, 515 U. S. 506, 511 (1995) (“The Constitution gives a criminal defendant the right to demand that a jury find him guilty of all the elements of the crime with which he is charged”). Without disparaging the importance of the right provided by Rule 31(e), our analysis of the nature of criminal forfeiture as an aspect of sentencing compels the conclusion that the right to a jury verdict on forfeitability does not fall within the Sixth Amendment’s constitutional protection. Our cases have made abundantly clear that a defendant does not enjoy a constitutional right to a jury determination as to the appropriate sentence to be imposed. See, e. g., McMillan v. Pennsylvania, 477 U. S. 79, 93 (1986) (“[T]here is no Sixth Amendment right to jury sentencing, even where the sentence turns on specific findings of fact”); Cabana v. Bullock, 474 U. S. 376, 385 (1986) (“The decision whether a particular punishment ...isappropriate in any given case is not one that we have ever required to be made by a jury”); Spaziano v. Florida, 468 U. S. 447, 459 (1984) (no right to a jury determination as to the imposition of the death penalty). Given that the right to a jury determination of forfeitabil- ity is merely statutory in origin, we do not accept Libretti’s suggestion that the plea agreement must make specific refer- ence to Rule 31(e). Nor must the district court specifically advise a defendant that a plea of guilty will result in waiver of the Rule 31(e) right. Federal Rule of Criminal Procedure 11(c) details the information a district court must communi- cate to a defendant in order to ensure that a guilty plea is valid. Advisory Committee’s Notes on 1974 Amendment of Fed. Rule Crim. Proc. 11(c), 18 U. S. C. App., p. 731 (the Rule “codifies . . . the requirements of Boykin v. Alabama, 395 U. S. 238 . . . (1969), which held that a defendant must be apprised of the fact that he relinquishes certain constitu- 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

50 LIBRETTI v. UNITED STATES

Opinion of the Court tional rights by pleading guilty”) (emphasis added). Spe- cific advice regarding the Rule 31(e) right is not among the Rule 11(c) safeguards, and we decline Libretti’s invitation to expand upon the required plea colloquy. That is not to say, however, that a trial judge may not mention the nature and scope of the Rule 31(e) right during a plea colloquy. In fact, the Advisory Committee’s Notes make plain that “a judge is free to” inform a defendant about specific conse- quences that might follow from a plea of guilty if the judge “feels a consequence of a plea of guilty in a particular case is likely to be of real significance to the defendant.” Advisory Committee’s Notes on 1974 Amendment of Fed. Rule Crim. Proc. 11, 18 U. S. C. App., p. 731. On these facts, Libretti’s waiver of a jury determination as to the scope of forfeiture was plainly adequate. In the plea agreement, Libretti “acknowledge[d] that by pleading guilty to Count Six of the Indictment, he waive[d] various constitutional rights, including the right to a jury trial and a speedy trial.” App. 80. He stipulated to the forfeiture of specific assets. Id., at 80–81. The District Court engaged Libretti in an extensive colloquy at his change-of-plea hear- ing, during which the court reviewed with Libretti the con- sequences of his guilty plea, including the fact that the plea would result in dismissal of the jury. Libretti’s responses made clear that he fully understood the nature and conse- quences of his guilty plea and was prepared to be sentenced in accordance with the plea agreement. At the sentencing hearing, neither Libretti nor his counsel specifically objected to resolution of forfeiture issues by the court without a jury. See, e. g., id., at 150, 154. In addition, Libretti was represented by counsel at all stages of trial and sentencing. Apart from the small class of rights that require specific advice from the court under Rule 11(c), it is the responsibility of defense counsel to inform a defendant of the advantages and disadvantages of a plea agreement and the attendant statutory and con- 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 51

Opinion of the Court stitutional rights that a guilty plea would forgo. Libretti has made no claim of ineffectiveness of counsel before this Court. As we noted in Broce, “[a] failure by counsel to pro- vide advice may form the basis of a claim of ineffective as- sistance of counsel, but absent such a claim it cannot serve as the predicate for setting aside a valid plea.” 488 U. S., at 574. Of course, a district judge must not mislead a defendant regarding the procedures to be followed in determining whether the forfeiture contemplated in a plea agreement will be imposed, nor should the court permit a defendant’s obvi- ous confusion about those procedures to stand uncorrected. On this record, however, we find no hint that Libretti labored under any misapprehension. Although the District Judge did not spell out for Libretti that, had he declined to enter a plea of guilty, and had the trial gone forward, the jury would eventually have been required to determine which of Libret- ti’s assets were forfeitable, when viewed in its entirety, the plea colloquy made it abundantly clear that the plea agree- ment would end any proceedings before the jury and would lead directly to sentencing by the court. As the Court of Appeals observed, “there is no evidence at [the change-of- plea] hearing that [Libretti] wanted a jury trial on the for- feiture issue, or thought he was going to have one.” 38 F. 3d, at 531. Taken together, the plea agreement and the plea colloquy waived Libretti’s right to insist on a jury deter- mination of forfeitability under Rule 31(e).

IV For these reasons, we reject Libretti’s challenges to the District Court’s forfeiture order. Under the plain language of Rule 11(f), the District Court is not obliged to inquire into the factual basis for a stipulated forfeiture of assets embod- ied in a plea agreement. And because Libretti agreed to this forfeiture and waived his “right to a jury trial,” he can- not now complain that he did not receive the special jury 516us1$$5J 10-22-98 10:36:31 PAGES OPINPGT

52 LIBRETTI v. UNITED STATES

Opinion of Souter, J. verdict on forfeitability for which Rule 31(e) provides. Ac- cordingly, the judgment of the Court of Appeals is affirmed. It is so ordered. Justice Souter, concurring in part and concurring in the judgment. I join in the judgment and Parts I and II of the Court’s opinion. I would not reach the question of a Sixth Amend- ment right to trial by jury on the scope of forfeiture or whether the Constitution obliges a trial court to advise a defendant of whatever jury trial right he may have. In cases like this one, any such right to instruction will be satis- fied by the court’s obligatory advice to the defendant of the right to jury trial generally. See Fed. Rule Crim. Proc. 11(c)(3) (“Before accepting a plea of guilty . . . the court must address the defendant personally in open court and inform the defendant of, and determine that the defendant under- stands, . . . that the defendant has . . . the right to be tried by a jury”). It is reasonable to understand the scope of the right as covering all matters charged in the indictment, which under Rule 7(c)(2) will include the forfeiture claim. Since a defendant will have been provided a copy of the in- dictment, see Fed. Rule Crim. Proc. 10 (“The defendant shall be given a copy of the indictment or information before being called upon to plead”), and will have heard it read or summa- rized, see ibid. (“Arraignment shall be conducted in open court and shall consist of reading the indictment or informa- tion to the defendant or stating to the defendant the sub- stance of the charge”), he will naturally understand that his right to jury trial covers a verdict on the forfeiture claim. If, in speaking to the defendant or in other statements within his hearing, the court should affirmatively say or sug- gest that the right to jury trial would not extend to the for- feiture, that would be error under the current law, whatever the constitutional status of that right may be. While there is some reason to argue that the court’s colloquy with the 516us1$$5M 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 53

Opinion of Ginsburg, J. defendant in this case was misleading, see App. 87 (“[I]f you plead guilty . . . . the jury is not going to decide whether you’re guilty or not”), I think Justice Ginsburg is right to conclude otherwise, for the reasons given in her separate opinion.

Justice Ginsburg, concurring in part and concurring in the judgment. Rule 11(f), I agree for reasons the Court states, does not impose on district courts an obligation to find a “factual basis” for asset forfeitures stipulated in a plea agreement. I therefore join in Parts I and II of the Court’s opinion and concur in the judgment. But the jury-trial right for which Rule 31(e) provides, as I see it, must be known in order to be given up voluntarily. I therefore set out briefly my view of the second issue the Court decides. At the plea hearing, the District Court carefully and com- prehensively informed Libretti that his guilty plea would waive his right to jury trial on the crimes charged in the indictment. The court did not then refer to the unusual jury-trial right on criminal forfeiture provided by Rule 31(e) of the Federal Rules of Criminal Procedure: “If the indictment or the information alleges that an in- terest or property is subject to criminal forfeiture, a special verdict shall be returned as to the extent of the interest or property subject to forfeiture, if any.”

See also Fed. Rule Crim. Proc. 7(c)(2) (“No judgment of for- feiture may be entered in a criminal proceeding unless the indictment or the information shall allege the extent of the interest or property subject to forfeiture”); Fed. Rule Crim. Proc. 11(c)(1) (court must address defendant personally in open court and inform him of “the nature of the charge” when plea of guilty is offered). Just as intelligent waiver of trial by jury on the underlying offense requires that the defendant be advised of the right, 516us1$$5P 10-22-98 10:36:31 PAGES OPINPGT

54 LIBRETTI v. UNITED STATES

Stevens, J., dissenting so waiver of the extraordinary jury-trial right on forfeiture should turn on the defendant’s awareness of the right his plea will override. That right, uncommon as it is, may not be brought home to a defendant through a bare reading of the forfeiture clause in the indictment. Clarity, however, is easily achieved. In cases like Libretti’s, trial judges can readily avoid unknowing relinquishment of the procedural right to a jury verdict on forfeiture by routinely apprising defendants, at plea hearings, of Rule 31(e)’s atypical special- verdict requirement. Failure to mention Rule 31(e) at Libretti’s plea hearing is not cause for revisiting the forfeiture of his property, how- ever, because at least two pretrial references were made to Rule 31(e)’s requirement. First, there was a brief exchange between court and counsel on the need for a special-verdict form. 1 Tr. 8. Second, and more informative, the trial judge explained to the jurors during voir dire that the indict- ment included “a provision for a forfeiture of all property of any kind constituting or derived from proceeds that Mr. Libretti received directly or indirectly from engaging in said continuing criminal enterprise. And that’s a subject matter on which the jury will be required at the end of the case to answer a specific question relating to it.” Id., at 188.

In view of this statement to the lay triers—telling them in Libretti’s presence that they would be called upon specifi- cally to decide the matter of forfeiture—Libretti cannot persuasively plead ignorance of the special-verdict right Rule 31(e) prescribes.

Justice Stevens, dissenting. While I agree with the Court’s conclusions (1) that Federal Rule of Criminal Procedure 11(f) does not create a duty to determine that there is a factual basis for a forfeiture of 516us1$$5I 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 55

Stevens, J., dissenting assets pursuant to 21 U. S. C. § 853 and (2) that the record in this case does establish a factual basis for forfeiting the assets described in Count 6 of the indictment, I believe it important to emphasize the underlying proposition that the law—rather than any agreement between the parties— defines the limits on the district court’s authority to forfeit a defendant’s property. Moreover, entirely apart from Rule 11(f), the district court has a legal obligation to determine that there is a factual basis for the judgment entered upon a guilty plea. For that reason, the Court of Appeals was plainly wrong in holding that simply because the defendant unequivocally agreed to “ ‘forfeit all property,’ ” the law au- thorized the forfeiture of all of his assets. 38 F. 3d 523, 526 (CA10 1994). The facts of this case well illustrate the particular need for the district court to determine independently that a fac- tual basis supports forfeiture judgments that it enters pursu- ant to plea agreements. As the Court correctly notes, this defendant received a favorable plea agreement. The record demonstrates that the facts would have supported a much longer term of imprisonment than was actually imposed. In such circumstance, it is not unthinkable that a wealthy de- fendant might bargain for a light sentence by voluntarily “forfeiting” property to which the government had no statu- tory entitlement. This, of course, is not the law. No matter what a defendant may be willing to pay for a favorable sen- tence, the law defines the outer boundaries of a permissible forfeiture. A court is not free to exceed those boundaries solely because a defendant has agreed to permit it to do so. As Judge Cudahy aptly put it, “[t]he mere fact that the de- fendant has agreed that an item is forfeitable, in a plea agree- ment, does not make it so.” United States v. Roberts, 749 F. 2d 404, 409 (CA7 1984). The proposition that the law alone defines the limits of a court’s power to enter a judgment can be traced to this Court’s early precedents. In Bigelow v. Forrest, 9 Wall. 339 516us1$$5I 10-22-98 10:36:31 PAGES OPINPGT

56 LIBRETTI v. UNITED STATES

Stevens, J., dissenting

(1870), the Court explained that a court “transcend[s] its ju- risdiction” when it orders the forfeiture of property beyond that authorized by statute. Id., at 351. In a similar vein, Ex parte Lange, 18 Wall. 163 (1874), concluded that a judg- ment imposing punishment in excess of statutory authoriza- tion is not merely voidable, but “void.” Id., at 178. Pre- cisely because extrastatutory punishments implicate the very power of a court to act, the district court must, entirely apart from the specific procedure mandated by Rule 11(f), satisfy itself that there is a factual basis for any judgment entered pursuant to a guilty plea that threatens to exceed statutory bounds.1 Were a court to do otherwise, it would permit the parties to define the limits of its power. In sum, Rule 11(f) does not create a substantive right. Instead, it prescribes a procedure that is intended to pro- tect every defendant’s pre-existing right not to receive any sentence beyond statutorily prescribed limits. Rule 11(f) states that if there is no factual basis for the guilty plea, the court has no power to “enter a judgment upon such plea . . . .” In so stating, the Rule does not impliedly authorize courts to impose sentences upon a plea of guilty greater than the maximum prescribed for the admitted offense. The pre-existing substantive limits on the court’s power to im- pose a judgment upon a plea of guilty, which apply to the forfeiture aspect of the judgment as well as to the finding of guilt, preclude such a result. Nothing in the Rule suggests otherwise. Because the foregoing thoughts are implicit in this Court’s independent examination of the record to assure itself that there is indeed a factual basis for the forfeiture of the prop- erty described in Count 6, and for the further conclusion that the forfeiture order does not extend beyond the line that the law has drawn, I endorse almost all of the Court’s opinion.

1 Of course, the court’s power to act is not similarly implicated when it imposes a sentence that is arguably erroneous but nonetheless within the range authorized by statute. 516us1$$5I 10-22-98 10:36:31 PAGES OPINPGT

Cite as: 516 U. S. 29 (1995) 57

Stevens, J., dissenting

Nevertheless, I do not agree with the Court’s disposition of the case because I believe the opinion of the Court of Ap- peals can fairly be read to approve of the forfeiture of all petitioner’s property, rather than just the assets described in Count 6.2 Although the majority marshals ample support for much of the forfeiture authorized here, the record simply does not provide a factual basis for the whole of it. For example, nothing in the Court’s opinion provides a basis for concluding that the small bank account that petitioner opened while a young boy, and which had not been augmented since 1975, should be subject to forfeiture. Nor can all of his assets necessarily be deemed subject to forfeiture as “substitute assets.” As the Court recognizes, the District Court deter- mined that only one check was subject to forfeiture on that basis. Ante, at 48. The sole basis for the wholesale forfeiture affirmed here stems from one paragraph in the defendant’s plea agreement which states his willingness to “transfer his right, title, and interest in all of his assets to the Division of Criminal Inves- tigation of the Wyoming Attorney General.” 3 App. 81. As I have explained, however, a defendant’s bare stipulation does not determine what property a court may forfeit. The district court must independently make that determination. Here, the record reveals that the District Court had not de- termined that a factual basis existed for the sweeping for- feiture it ordered. Indeed, the District Court subsequently sought to hold a hearing for the very purpose of determining whether a factual basis existed. The District Court was precluded from undertaking that necessary inquiry only be- cause this pro se petitioner filed an early notice of appeal

2 Moreover, I agree with Justice Ginsburg that the jury trial right that Rule 31(e) provides must be known in order to be given up voluntarily. 3 The record does not make clear why the property would be transferred to state, rather than federal, law enforcement authorities. 516us1$$5I 10-22-98 10:36:31 PAGES OPINPGT

58 LIBRETTI v. UNITED STATES

Stevens, J., dissenting that divested the court of jurisdiction. However, that juris- dictional bar did not, and could not, relieve the District Court of its prior duty to find a factual basis for its forfeiture judgment. Because the District Court had not assured itself that its judgment fell within the bounds established by law, and be- cause the record does not support the conclusion that it did, I would vacate and remand for further proceedings consist- ent with this opinion. Caplin Drysdale Chartered v. United States/Dissent Blackmun

Justice BLACKMUN, with whom Justice BRENNAN, Despite the absence of any indication that Congress in- Justice MARSHALL, and Justice STEVENS join, dis- tended to use the forfeiture weapon against legitimate senting. #fn-s [1] attorney’s fees, the majority-all the while purporting to Those jurists who have held forth against the result the “respect” the established practice of construing a statute to avoid constitutional problems, Monsanto, 491 U.S., at majority reaches in these cases have been guided by one core insight: that it is unseemly and unjust for the Gov- 611, 109 S.Ct., at 2664 contends that it is constrained to conclude that the Act reaches attorney’s fees. The Court ernment to beggar those it prosecutes in order to disable their defense at trial. The majority trivializes “the bur- cannot follow its usual practice here, we are told, because this is not a “close cas[e]" in which “statutory language is den the forfeiture law imposes on a criminal defendant.” Caplin & Drysdale, Chartered v. United States, 491 U.S. ambiguous.” Ibid. The majority finds unambiguous lan- 617, 625, 109 S.Ct. 2646, 2652, 105 L.Ed.2d 528. In- guage in 21 U.S.C. § 853(a), which provides that when stead, it should heed the warnings of our District Court a defendant is convicted of certain crimes, the defendant judges, whose day-to-day exposure to the criminal-trial “shall forfeit to the United States” any property derived process enables them to understand, perhaps far better from proceeds of the crime or used to facilitate the crime. I agree that § 853(a) is broad in language and is cast in than we, the devastating consequences of attorney’s fee [3] forfeiture for the integrity of our adversarial system of mandatory terms. But I do not agree with the major- justice. [1] ity’s conclusion that the lack of an express exemption for attorney’s fees in § 853(a) makes the Act as a whole un- The criminal-forfeiture statute we consider today could ambiguous. have been interpreted to avoid depriving defendants of the ability to retain private counsel-and should have been The majority succeeds in portraying the Act as “unam- so interpreted, given the grave “constitutional and ethical biguous” by making light of its most relevant provisions. problems” raised by the forfeiture of funds used to pay le- As Judge Winter observed, the broad mandatory lan- gitimate counsel fees. United States v. Badalamenti, 614 guage of § 853(a) applies by its terms only to " 'any per- F.Supp. 194, 196 (SDNY 1985). But even if Congress in son convicted' of the referenced crimes.” United States fact required this substantial incursion on the defendant’s v. Monsanto, 852 F.2d 1400, 1410 (CA2 1988). Be- cause third parties to whom assets have been transferred choice of counsel, the Court should have recognized that the Framers stripped Congress of the power to do so when in return for services rendered are not “person[s] con- victed,” however, forfeiture of property in their posses- they added the Sixth Amendment to our Constitution. sion is controlled by § 853(c) rather than by § 853(a). * The majority acknowledges, as it must, that no language Section 853(c) provides: “Any such property that is sub- in the Comprehensive Forfeiture Act of 1984 (Act), ch. sequently transferred to a person other than the defendant 3, 98 Stat. 2040, as amended, codified in relevant part at may be the subject of a special verdict of forfeiture and 21 U.S.C. § 853 et seq. (1982 ed., Supp. V), expressly thereafter shall be ordered forfeited to the United States” provides for the forfeiture of attorney’s fees, and that the (emphasis added) if the third party fails to satisfy cer- legislative history contains no substantive discussion of tain requirements for exemption. Thus, § 853(c) does the question. United States v. Monsanto, 491 U.S. 600, not, like § 853(a), provide that all property defined as 608-609, and n. 8, 109 S.Ct. 2657, 2662-2663, and n. forfeitable under § 853 “must” or “shall” be forfeited: [4] 8, 105 L.Ed.2d 512. [2] The fact that “the legislative his- forfeitable property held by a third party presumptively tory and congressional debates are similarly silent on the “shall be orde ed forfeited” only if it is included in the use of forfeitable assets to pay stockbroker’s fees, laundry special verdict, and its inclusion in the verdict is discre- bills, or country club memberships,” id., at 608-609, 109 tionary. [5] S.Ct., at 2663, means nothing, for one cannot believe that Congress was unaware that interference with the payment There is also considerable room for discretion in the lan- of attorney’s fees, unlike interference with these other ex- guage of § 853(e)(1), which controls the Government’s penditures, would raise Sixth Amendment concerns. See use of postindictment protective orders to prevent the Edward J. DeBartolo Corp. v. Florida Gulf Coast Build- preconviction transfer of potentially forfeitable assets to ing & Construction Trades Council, 485 U.S. 568, 575, third parties. That section provides: 108 S.Ct. 1392, 1397, 99 L.Ed.2d 645 (1988). “Upon application of the United States, the court may en-

1 2 ter a restraining order or injunction . . . or take any other cluded forfeiture authority designed to strip these offend- action to preserve the availability of property . . . for ers and organizations of their economic power.” Ibid.; see forfeiture under this section . . . upon the filing of an also H.R.Rep. No. 98-845, pt. 1, p. 6 (1984) (criminal indictment or information charging a violation . . . for forfeiture statutes are “a bold attempt to attack the eco- which criminal forfeiture may be ordered . . . and al- nomic base of the criminal activity”). [7] leging that the property with respect to which the order Congress also had a more traditional punitive goal in is sought would, in the event of conviction, be subject to mind: to strip convicted criminals of all assets purchased forfeiture under this section” (emphasis added). with the proceeds of their criminal activities. Particularly The Senate Report makes clear that a district court may in the area of drug trafficking, Congress concluded that hold a hearing to “consider factors bearing on the rea- crime had become too lucrative for criminals to be de- sonableness of the order sought.” S.Rep. No. 98-225, p. terred by conventional punishments. “Drug dealers have 202 (1983), 1984 U.S.Code Cong. & Admin.News pp. been able to accumulate huge fortunes as a result of their 3182, 3385. Even if the court chooses to enter an order illegal activities. The sad truth is that the financial penal- ex parte at the Government’s request, it may “modify the ties for drug dealing are frequently only seen by dealers order” if it later proves to be unreasonable. Id., at 203, as a cost of doing business.” House Report, at 2. The im- 1984 U.S.Code Cong. & Admin.News at 3386. In the age of convicted drug dealers returning home from their course of this process, the court may also consider the prison terms to all the comforts their criminal activity can circumstances of any third party whose interests are im- buy is one Congress could not abide. [8] plicated by the restraining order. Id., at 206, n. 42, 1984 Finally, Congress was acutely aware that defendants, if U.S.Code Cong. & Admin.News at 3389, n. 42. Thus, unhindered, routinely would defeat the purposes of the the Government does not have an absolute right to an or- Act by sheltering their assets in order to preserve them der preserving the availability of property by barring its for their own future use and for the continued use of their transfer to third parties. Preconviction injunctive relief is criminal organizations. The purpose of § 853(c) is to “to available, but at the discretion of the district court. permit the voiding of certain pre-conviction transfers and The majority does not deny that §§ 853(c) and 853(e)(1) so close a potential loophole in current law whereby the contain discretionary language. It argues, however, that criminal forfeiture sanction could be avoided by transfers the exercise of discretion must be “cabined by the pur- that were not 'arms’ length' transactions.” Senate Report, poses” of the Act. Monsanto, 491 U.S., at 613, 109 S.Ct., at 200-201, 1984 U.S.Code Cong. & Admin.News at at 2665. That proposition, of course, is unassailable: I 3383-3384. agree that discre ion created by the Act cannot be used to With these purposes in mind, it becomes clear that a dis- defeat the purposes of the Act. The majority errs, how- trict court acts within the bounds of its statutory discre- ever, in taking an overly broad view of the Act’s purposes. tion when it exempts from preconviction restraint and Under the majority’s view, the Act aims to preserve the postconviction forfeiture those assets a defendant needs availability of all potentially forfeitable property during to retain private counsel for his criminal trial. Assets used the preconviction period, and to achieve the forfeiture of to retain counsel by definition will be unavailable to the all such property upon conviction. Ibid. This view of the defendant or his criminal organization after trial, even if Act’s purposes effectively writes all discretion out of §§ the defendant is eventually acquitted. See Cloud, Gov- 853(c) and 853(e)(1), because any exercise of discretion ernment Intrusions Into the Attorney-Client Relationship: will diminish the Government’s postconviction “take.” The Impact of Fee Forfeitures on the Balance of Power But a review of the legislative history of the Act demon- in the Adversary System of Criminal Justice, 36 Emory strates that the Act does not seek forfeiture of property L.J. 817, 832 (1987). Thus, no important and legiti- for its own sake merely to maximize the amount of money mate purpose is served by employing § 853(c) to require the Government collects. [6] The central purposes of the postconviction forfeiture of funds used for legitimate at- Act, properly understood, are fully served by an approach torney’s fees, or by employing § 853(e)(1) to bar pre- to forfeiture that leaves ample room for the exercise of conviction payment of fees. The Government’s interests statutory discretion. are adequately protected so long as the district court su- pervises transfers to the attorney to make sure they are Congress’ most systematic goal for criminal forfeiture [9] was to prevent the profits of criminal activity from be- made in good faith. See Comment, 61 N.Y.U.L.Rev. 124, 138-139 (1986). All that is lost is the Government’s ing poured into future such activity, for “it is through power to punish the defendant before he is convicted. economic power that [criminal activity] is sustained and [10] grows.” Senate Report, at 191. “Congress recognized That power is not one the Act intended to grant. in its enactment of statutes specifically addressing orga- A careful analysis of the language of the Act and its leg- nized crime and illegal drugs that the conviction of indi- islative history thus proves that “a construction of the vidual racketeers and drug dealers would be of only lim- statute is fairly possible by which the [constitutional] ited effectiveness if the economic power bases of crimi- question may be avoided.” Crowell v. Benson, 285 U.S. nal organizations or enterprises were left intact, and so in- 22, 62, 52 S.Ct. 285, 297, 76 L.Ed. 598 (1932). [11] In- 3 deed, the prudentially preferable construction is also the by the Sixth Amendment. United States v. Harvey, 814 only one that gives full effect to the discretionary lan- F.2d 905, 923 (CA4 1987), rev'd sub nom. in rE for- guage in §§ 853(c) and 853(e)(1). Thus, “if anything feituRE hearing as tO caplin & drysdale, chartered, 837 remains of the canon that statutes capable of differing in- F.2d 637 (Ca4 1988) (en banc). terpretations should be construed to avoid constitutional The right to retain private counsel serves to foster the trust issues . . . it surely applies here.” United States v. Mon- between attorney and client that is necessary for the at- santo, 852 F.2d, at 1409. torney to be a truly effective advocate. See ABA Stan- The majority has decided otherwise, however, and for dards for Criminal Justice 4-3.1, p. 4-29 (commentary) that reason is compelled to reach the constitutional issue it (2d ed.1980). Not only are decisions crucial to the de- could have avoided. But the majority pauses hardly long fendant’s liberty placed in counsel’s hands, see Faretta v. enough to acknowledge “the Sixth Amendment’s protec- California, 422 U.S. 806, 95 S.Ct. 2525, 45 L.Ed.2d 562 tion of one’s right to retain counsel of his choosing,” let (1975), but the defendant’s perception of the fairness of alone to explore its “full extent.” Caplin & Drysdale, 491 the process, and his willingness to acquiesce in its results, U.S., at 626, 109 S.Ct., at 2652. Instead, id., at 624, depend upon his confidence in his counsel’s dedication, 109 S.Ct., at 2652, it moves rapidly from the observa- loyalty, and ability. Cf. Joint Anti-Fascist Refugee Com- tion that " '[a] defendant may not insist on representa- mittee v. McGrath, 341 U.S. 123, 171-172, 71 S.Ct. tion by an attorney he cannot afford,' " quoting Wheat 624, 648-649, 95 L.Ed. 817 (1951) (Frankfurter, J., con- v. United States, 486 U.S. 153, 159, 108 S.Ct. 1692, curring). When the Government insists upon the right to 1697, 100 L.Ed.2d 140 (1988), to the conclusion that choose the defendant’s counsel for him, that relationship the Government is free to deem the defendant indigent of trust is undermined: counsel is too readily perceived by declaring his assets “tainted” by criminal activity the as the Government’s agent rather than his own. Indeed, Government has yet to prove. That the majority implic- when the Court in Faretta held that the Sixth Amendment itly finds the Sixth Amendment right to counsel of choice prohibits a court from imposing appointed counsel on a so insubstantial that it can be outweighed by a legal fiction defendant who prefers to represent himself, its decision demonstrates, still once again, its " 'apparent unawareness was predicated on the insight that "[t]o force a lawyer on of the function of the independent lawyer as a guardian a defendant can only lead him to believe that the law con- of our f eedom.' " See id., at 172, 108 S.Ct., at 1704 trives against him.” 422 U.S., at 834, 95 S.Ct., at 2540. (STEVENS, J., dissenting), quoting Walters v. National The right to retain private counsel also serves to assure Assn. of Radiation Survivors, 473 U.S. 305, 371, 105 some modicum of equality between the Government and S.Ct. 3180, 3215, 87 L.Ed.2d 220 (1985) (STEVENS, those it chooses to prosecute. The Government can be J., dissenting). expected to “spend vast sums of money . . . to try de- Over 50 years ago, this Court observed: “It is hardly nec- fendants accused of crime,” Gideon v. Wainwright, 372 essary to say that the right to counsel being conceded, a U.S., at 344, 83 S.Ct., at 796, and of course will devote defendant should be afforded a fair opportunity to secure greater resources to complex cases in which the punitive counsel of his own choice.” Powell v. Alabama, 287 U.S. stakes are high. Precisely for this reason, “there are few 45, 53, 53 S.Ct. 55, 58, 77 L.Ed. 158 (1932). For years, defendants charged with crime, few indeed, who fail to that proposition was settled; the controversial question hire the best lawyers they can get to prepare and present was whether the defendant’s right to use his own funds their defenses.” Ibid. But when the Government provides to retain his chosen counsel was the outer limit of the for appointed counsel, there is no guarantee that levels right protected by the Sixth Amendment. See, e.g., Chan- of compensation and staffing will be even average. [12] dler v. Fretag, 348 U.S. 3, 9, 75 S.Ct. 1, 4, 99 L.Ed. Where cases are complex trials long, and stakes high, that 4 (1954). The Court’s subsequent decisions have made problem is exacerbated. “Despite the legal profession’s clear that an indigent defendant has the right to appointed commitment to pro bono work,” United States v. Bas- counsel, see, e.g., Gideon v. Wainwright, 372 U.S. 335, sett, 632 F.Supp. 1308, 1316 (Md.1986), aff'd on other 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), and that the Sixth grounds sub nom. United States v. Harvey, 814 F.2d 905 Amendment guarantees at least minimally effective assis- (CA4 1987), even the best intentioned of attorneys may tance of counsel, see, e.g., Strickland v. Washington, 466 have no choice but to decline the task of representing de- U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). But fendants in cases for which they will not receive adequate while court appointment of effective counsel plays a cru- compensation. See, e.g., United States v. Rogers, 602 cial role in safeguarding the fairness of criminal trials, it F.Supp. 1332, 1349 (Colo.1985). Over the long haul, has never defined the outer limits of the Sixth Amend- the result of lowered compensation levels will be that tal- ment’s demands. The majority’s decision in Caplin & ented attorneys will “decline to enter criminal practice. . Drysdale reveals that it has lost track of the distinct role . . This exodus of talented attorneys could devastate the of the right to counsel of choice in protecting the integrity criminal defense bar.” Winick, Forfeiture of Attorneys’ of the judicial process, a role that makes “the right to be Fees under RICO and CCE and the Right to Counsel of represented by privately retained counsel . . . the pri- Choice: The Constitutional Dilemma and How to Avoid mary, preferred component of the basic right” protected It, 43 U. Miami L.Rev. 765, 781 (1989). Without the 4 defendant’s right to retain private counsel, the Govern- [to private counsel] is 'Do not represent this defendant or ment too readily could defeat its adversaries simply by you will lose your fee.' That being the kind of message outspending them. [13] lawyers are likely to take seriously, the defendant will find The right to privately chosen and compensated counsel it difficult or impossible to secure representation.” United also serves broader institutional interests. The “virtual States v. Badalamenti, 614 F.Supp., at 196. socialization of criminal defense work in this country” The resulting relationship between the defendant and his that would be the result of a widespread abandonment of court-appointed counsel will likely begin in distrust, and the right to retain chosen counsel, Brief for Committees be exacerbated to the extent that the defendant perceives on Criminal Advocacy and Criminal Law of the Associ- his new-found “indigency” as a form of punishment im- ation of the Bar of the City of New York et al. as Amici posed by the Government in order to weaken his de- Curiae in No. 88-454, p. 9, too readily would standard- fense. If the defendant had been represented by pri- ize the provision of criminal-defense services and dimin- vate counsel earlier in the proceedings, the defendant’s ish defense counsel’s independence. There is a place in sense that the Government has stripped him of his de- our system of criminal justice for the maverick and the fenses will be sharpened by the concreteness of his loss. risk taker and for approaches that might not fit into the Appointed counsel may be inexperienced and undercom- structured environment of a public defender’s office, or pensated and, for that reason, may not have adequate op- that might displease a judge whose preference for non- portunity or resources to deal with the special problems confrontational styles of advocacy might influence the presented by what is likely to be a complex trial. The al- judge’s appointment decisions. See Bazelon, The De- ready scarce resources of a public defender’s office will fective Assistance of Counsel, 42 U.Cin.L.Rev. 1, 6-7 be stretched to the limit. Facing a lengthy trial against (1973); S. Kadish, S. Schulhofer, & M. Paulsen, Crimi- a better armed adversary, the temptation to recommend nal Law and its Processes 32 (4th ed.1983); cf. Sacher a guilty plea will be great. The result, if the defendant v. United States, 343 U.S. 1, 8-9, 72 S.Ct. 451, 455, is convicted, will be a sense, often well grounded, that 96 L.Ed. 717 (1952) (“The nature of the proceedings justice was not done. presupposes, or at least stimulates, zeal in the opposing Even if the defendant finds a private attorney who is “so lawyers”). There is also a place for the employment of foolish, ignorant, beholden or idealistic as to take the “specialized defense counsel” for technical and complex business,” ibid., the attorney-client relationship will be cases, see United States v. Thier, 801 F.2d 1463, 1476 undermined by the forfeiture statute. Perhaps the attor- (CA5 1986) (concurring opinion), modification not rel- ney will be willing to violate ethical norms by working on evant here, 809 F.2d 249 (CA5 1987). The choice of a contingent-fee basis in a criminal case. See Caplin & counsel is the primary means for the defendant to estab- Drysdale, 491 U.S., at 633, n. 10, 109 S.Ct., at 2656, n. lish the kind of defense he will put forward. See United 10. But if he is not-and we should question the integrity States v. Laura, 607 F.2d 52, 56 (CA3 1979). Only a of any criminal-defense attorney who would violate the healthy, independent defense bar can be expected to meet ethical norms of the profession by doing so-the attorney’s the demands of the varied circumstances faced by crim- own interests will dictate that he remain ignorant of the inal defendants, and assure that the interests of the indi- source of the assets from hich he is paid. Under § 853(c), vidual defendant are not unduly “subordinat[ed] . . . to a third-party transferee may keep assets if “the transferee the needs of the system.” Bazelon, 42 U.C n.L.Rev., at 7. establishes . . . that he is a bona fide purchaser for value In sum, our chosen system of criminal justice is built upon of such property who at the time of purchase was reason- a truly equal and adversarial presentation of the case, and ably without cause to believe that the property was sub- upon the trust that can exist only when counsel is inde- ject to forfeiture under this section.” The less an attorney pendent of the Government. Without the right, reason- knows, the greater the likelihood that he can claim to have ably exercised, to counsel of choice, the effectiveness of been an “innocent” third party. The attorney’s interest in that system is imperiled. knowing nothing is directly adverse to his client’s inter- Had it been Congress’ express aim to undermine the ad- est in full disclosure. The result of the conflict may be versary system as we know it, it could hardly have found a less vigorous investigation of the defendant’s circum- a better engine of destruction than attorney’s-fee forfei- stances, leading in turn to a failure to recognize or pursue ture. The main effect of forfeitures under the Act, of avenues of inquiry necessary to the defense. Other con- course, will be to deny the defendant the right to retain flicts of interest are also likely to develop. The attorney counsel, and therefore the right to have his defense de- who fears for his fee will be tempted to make the Gov- ernment’s waiver of fee forfeiture the sine qua non for signed and presented by an attorney he has chosen and trusts. [14] If the Government restrains the defendant’s as- any plea agreement, a position which conflicts with his client’s best interests. See United States v. Badalamenti, sets before trial, private counsel will be unwilling to con- tinue, or to take on, the defense. Even if no restraining 614 F.Supp., at 196-197; United States v. Bassett, 632 F.Supp., at 1316, n. 5. order is entered, the possibility of forfeiture after convic- tion will itself substantially diminish the likelihood that Perhaps most troubling is the fact that forfeiture statutes private counsel will agree to take the case. The “message place the Government in the position to exercise an in- 5 tolerable degree of power over any private attorney who ity of an accused to defend himself at trial is an advantage takes on the task of representing a defendant in a for- for the government. But it is not a legitimate government feiture case. The decision whether to seek a restrain- interest that can be used to justify invasion of a consti- ing order rests with the prosecution, as does the decision tutional right.” United States v. Monsanto, 852 F.2d, at whether to waive forfeiture upon a plea of guilty or a con- 1403 (Feinberg, C.J., concurring). And the legitimate in- viction at trial. The Government will be ever tempted terests the Government asserts are extremely weak, far to use the forfeiture weapon against a defense attorney too weak to justify the Act’s substantial erosion of the who is particularly talented or aggressive on the client’s defendant’s Sixth Amendment rights. behalf the attorney who is better than what, in the Gov- The Government claims a property interest in forfeitable ernment’s view, the defendant deserves. The specter of assets, predicated on the relation-back provision, § the Government’s selectively excluding only the most tal- 853(c), which employs a legal fiction to grant the Gov- ented defense counsel is a serious threat to the equality ernment title in all forfeitable property as of the date of of forces necessary for the adversarial system to perform the crime. The majority states: “Permitting a defendant at its best. See United States v. Monsanto, 852 F.2d, at to use assets for his private purposes that, under this pro- (concurring opinion); United States v. Rogers, 602 1404 vision, will become the property of the United States if F.Supp., at 1347, 1350; Cloud, 36 Emory L.J., at 829. conviction occurs, cannot be sanctioned.” Monsanto, 491 An attorney whose fees are potentially subject to forfei- U.S., at 613, 109 S.Ct., at 2665. But the Government’s ture will be forced to operate in an environment in which insistence that it has a paramount interest in the defen- the Government is not only the defendant’s adversary, but dant’s resources “simply begs the constitutional question also his own. rather than answering it. Indeed, the ultimate constitu- The long-term effects of the fee-forfeiture practice will tional issue might well be framed precisely as whether be to decimate the private criminal-defense bar. As the Congress may use this wholly fictive device of property use of the forfeiture mechanism expands to new cate- law to cut off this fundamental right of the accused in gories of federal crimes and spreads to the States, only a criminal case. If the right must yield here to counter- one class of defendants will be free routinely to retain pri- vailing governmental interests, the relation-back device vate counsel: the affluent defendant accused of a crime undoubtedly could be used to implement the governmen- that generates no economic gain. As the number of pri- tal interests, but surely it cannot serve as a substitute for vate clients diminishes, only the most idealistic and the them.” In re Forfeiture Hearing as to Caplin & Drysdale, least skilled of young lawyers will be attracted to the field, Chartered, 837 F.2d at 652 (dissenting opinion). while the remainder seek greener pastures elsewhere. See Furthermore, the relation-back fiction gives the Govern- Winick, 43 U.Miami L.Rev., at 781-782. ment no property interest whatsoever in the defendant’s In short, attorney’s-fee forfeiture substantially under- assets before the defendant is convicted. In most in- mines every interest served by the Sixth Amendment right stances, the assets the Government attempts to reach by to chosen counsel, on the individual and institutional lev- using the forfeiture provisions of the Act are derivative els, over the short term and the long haul. proceeds of crime, property that was not itself acquired We have recognized that although there is a “presumption illegally, but was purchased with the profits of criminal in favor of [the defendant’s] counsel of choice,” Wheat activity. Prior to conviction, sole title to such assets-not v. United States, 486 U.S., at 158, 160, 108 S.Ct., at merely possession, as is the case in the majority’s bank 1696, 1697-1698, the right to counsel of choice is not robbery example, Caplin & Drysdale, 491 U.S., at 626, 109 S.Ct., at 2652-2653 rests in the defendant; no other absolute. Some substantial and legitimate governmental [15] interests may require the courts to disturb the defendant’s party has any present legal claim to them. Yet it is choice of counsel, as "[w]hen a defendant’s selection of in the preconviction period that the forfeiture threat (or counsel, under the particular facts and circumstances of the force of a § 853(e)(1) restraining order) deprives the a case, gravely imperils the prospect of a fair trial,” id., at defendant of use of the assets to retain counsel. The Gov- 166, 108 S.Ct., at 1700-1701 (MARSHALL, J., dissent- ernment’s interest in the assets at the time of their re- ing), or threatens to undermine the orderly disposition of straint is no more than an interest in safeguarding fictive the case, see Ungar v. Sarafite, 376 U.S. 575, 589, 84 property rights, one which hardly weighs at all against the S.Ct. 841, 849, 11 L.Ed.2d 921 (1964). But never be- defendant’s formidable Sixth Amendment right to retain fore today has the Court suggested that the Government’s counsel for his defense. naked desire to deprive a defendant of " 'the best coun- The majority contends, of course, that assets are only re- sel money can buy,' " Caplin & Drysdale, 491 U.S., at strained upon a finding of probable cause to believe that 630, 109 S.Ct., at 2655, quoting Morris v. Slappy, 461 the property ultimately will be proved forfeitable, and that U.S. 1, 23, 103 S.Ct. 1610, 1622, 75 L.Ed.2d 610 (1983) because “the Government may restrain persons where (BRENNAN, J., opinion concurring in result), is itself a there is a finding of probable cause that the accused has legitimate Government interest that can justify the Gov- committed a serious offense,” the Government necessar- ernment’s interference with the defendant’s right to cho- ily has the right to restrain property the defendant seeks sen counsel-and for good reason. "[W]eakening the abil- to use to retain counsel on a showing of probable cause 6 1 NOTES

as well. Monsanto, 491 U.S., at 615−616, 109 S.Ct., at defeat the defendant’s right to the assistance of his chosen 2666, citing United States v. Salerno, 481 U.S. 739, 107 counsel. S.Ct. 2095, 95 L.Ed.2d 697 (1987). Neither the major- In my view, the Act as interpreted by the majority is in- ity’s premise nor its conclusion is well founded. consistent with the intent of Congress, and seriously un- Although obtaining a restraining order requires a showing dermines the basic fairness of our criminal-justice sys- of probable cause, the practical effects of the threat of tem. That a majority of this Court has upheld the con- forfeiture are felt long before the indictment stage. Any stitutionality of the Act as so interpreted will not deter attorney who is asked to represent the target of a drug or Congress, I hope, from amending the Act to make clear racketeering investigation-or even a routine tax investiga- that Congress did not intend this result. This Court has tion, as the facts of Caplin & Drysdale demonstrate-must the power to declare the Act constitutional, but it cannot think ahead to the possibility that the defendant’s assets thereby make it wise. will turn out to be forfeitable. While the defendant is not I dissent. formally restrained from using his assets to pay counsel during this period, the reluctance of any attorney to rep- resent the defendant in the face of the forfeiture threat effectively strips the defendant of the right to retain coun- 1 Notes sel. The threat of forfeiture does its damage long before the Government must come forward with a showing of ^1 See, e.g., United States v. Rogers, 602 F.Supp. probable cause. 1332 (Colo.1985); United States v. Badalamenti, 614 F.Supp. 194 (SDNY 1985); United States v. Reckmeyer, But even if the majority were correct that no defendant 631 F.Supp. 1191, 1197 (ED Va.1986), aff'd on other is ever deprived of the right to retain counsel without a grounds sub nom. United States v. Harvey, 814 F.2d 905 showing of probable cause, the majority’s analogy to per- (CA4 1987), rev'd sub nom. In re Forfeiture Hearing as missible pretrial restraints would fail. The Act gives the to Caplin & Drysdale, Chartered, 837 F.2d 637 (CA4 Government the right to seek a restraining order solely on 1988) (en banc); United States v. Bassett, 632 F.Supp. the basis of the indictment, which signifies that there has 1308, 1317 (Md.1986), aff'd on other grounds sub nom. been a finding of probable cause to believe that the assets United States v. Harvey, 814 F.2d 905 (CA4 1987); are tainted. When a defendant otherwise is incarcerated United States v. Ianniello, 644 F.Supp. 452 (SDNY before trial, in contrast, the restraint cannot be justified 1985); United States v. Estevez, 645 F.Supp. 869 (ED by the fact of the indictment alone. In addition, there Wis.1986), app. dism'd for untimeliness, 852 F.2d 239 must be a showing that other alternatives will not “reason- (CA7 1988). ably assure the appearance of the person [for trial] and the safety of any other person and the community.” 18 U.S.C. ^2 Indeed, the strongest statement on the question is the § 3142(e) (1982 ed., Supp. V). No equivalent individu- comment in the House Report: “Nothing in this section alized showing that the defendant will likely dissipate his is intended to interfere with a person’s Sixth Amendment assets or fraudulently transfer them to third parties is nec- right to counsel.” H.R.Rep. No. 98-845, pt. 1, p. 19, n. 1 essary under the majority’s reading of § 853(e)(1). Fur- (1984). Even if the majority were correct that this state- thermore, the potential danger resulting from the failure ment is “nothing more than an exhortation for the courts to restrain assets differs in kind and severity from the dan- to tread carefully in this delicate area,” United States v. ger faced by the public when a defendant who is believed Monsanto, 491 U.S., at 609, n. 8, 109 S.Ct., at 2662, n. to be violent remains at large before trial. 8, the majority does not explain why it proceeds to ignore Congress’ exhortation to construe the statute to avoid im- Finally, even if the Government’s asserted interests were plicating Sixth Amendment concerns. entitled to some weight, the manner in which the Gov- ernment has chosen to protect them undercuts its posi- ^3 As the majority acknowledges, so did Judge Winter, tion. Under § 853(c), a third-party transferee may keep whose interpretation of the Act Caplin & Drysdale and assets if he was “reasonably without cause to believe that Monsanto adopt in their briefs to this Court. See Mon- the property was subject to forfeiture.” Most legitimate santo, 491 U.S., at 607, 109 S.Ct., at 2662; United States providers of services will meet the requirements for this v. Monsanto, 852 F.2d 1400, 1409-1410 (CA2 1988) statutory exemption. The exception is the defendant’s at- (en banc) (Winter, J., concurring). torney, who cannot do his job (or at least cannot do his job ^4 This language differs from the language in Federal well) withou asking questions that will reveal the source Rule of Criminal Procedure 31(e), which was promul- of the defendant’s assets. It is difficult to put great weight gated in 1972 to provide procedural rules for Congress’ on the Government’s interest in increasing the amount of earlier forays into criminal forfeiture. The Rule provides: property available for forfeiture when the means chosen “If the indictment or the information alleges that an inter- are so starkly underinclusive, and the burdens fall almost est or property is subject to criminal forfeiture, a special [16] exclusively upon the exercise of a constitutional right. verdict shall be returned as to the extent of the interest or Interests as ephemeral as these should not be permitted to property subject to forfeiture, if any.” (Emphasis added.) Congress’ decision to depart from mandatory language in 7

§ 853(c), where it fashioned a special verdict provision trial to be the product of criminal activity cannot be chan- for assets transferred to third parties, is significant. neled into further criminal activity-not to strip defendants ^5 That the Act is mandatory in its treatment of forfeiture of their assets on no more than a showing of probable of property in the defendant’s hands, but not in its treat- cause that they are “tainted.” See United States v. Bassett, ment of property transferred to third parties, is consistent 632 F.Supp., at 1316; Comment, 61 N.Y.U.L.Rev. 124, with the distinction between civil forfeiture and crimi- 139 (1986). For its contrary view, the majority relies on nal forfeiture. The theory (or, more properly, the fiction) nothing more than the rhetoric of the en banc Court of underlying civil forfeiture is that the property subject to Appeals’ majority opinion in Caplin & Drysdale. forfeiture is itself tainted by having been used in an un- ^8 Congress’ desire to maximize punishment, however, lawful manner. The right of the Government to take pos- cannot be viewed as a blanket authorization of Gov- session does not depend on the Government’s ultimately ernment action that punishes the defendant before he is convicting the person who used the property in an un- proved guilty. lawful way, nor is it diminished by the innocence or bona ^9 Judge Winter noted that the same logic suggests that fides of the party into whose hands the property falls. See the forfeiture of assets the defendant uses to support him- United States v. Stowell, 133 U.S. 1, 10 S.Ct. 244, 33 self and his family is unduly harsh and is not necessary to L.Ed. 555 (1890). Criminal forfeiture, in contrast, is achieve the goals of the Act. United States v. Monsanto, penal in nature: it is predicated on the adjudicated guilt 852 F.2d, at 1405. The majority chides Judge Winter of the defendant, and has punishment of the defendant for suggesting that, once it is established that there is dis- as its express purpose. See generally Cloud, Forfeiting cretion to exclude assets used to pay attorney’s fees and Defense Attorneys’ Fees: Applying an Institutional Role normal living expenses from forfeiture, the necessary re- Theory to Define Individual Constitutional Rights, 1987 sult is that such assets must be excluded. Monsanto, 491 Wis.L.Rev. 1, 18-19. Where the purpose of forfeiture U.S., at 612−613, 109 S.Ct., at 2664-2665. I find it ex- is to punish the defendant, the Government’s penal inter- ceedingly unlikely that a district court, instructed that it ests are weakest when the punishment also burdens third had the discretion to permit a defendant to retain coun- parties. sel, would ever choose not to do so. Normal equitable ^6 In adopting this view of the Act, the majority ignores considerations, combined with a proper regard for Sixth the Government’s concession at oral argument before the Amendment interests, would weigh so strongly in favor of en banc Court of Appeals for the Second Circuit that that result that any “slippage” from permissive to manda- the Act was not enacted as a revenue-raising measure. tory language on Judge Winter’s part seems to me entirely See United States v. Monsanto, 852 F.2d, at 1407, and accurate as a predictive matter. n. 1 (Winter, J., concurring). Thus, although the Gov- ^10 The majority states in Monsanto, 491 U.S., at ernment’s interest in “using the profits of crime to fund 610−611, 109 S.Ct., at 2664, that another forfeiture [law-enforcement] activities” should perhaps not be “dis- statute contemporaneous with the Act contains “the pre- counted,” Caplin & Drysdale, ante, 491 U.S., at 629, 109 cise exemption from forfeiture which respondent asks us S.Ct., at 2654, it is not dispositive. Nor does Congress’ to imply into § 853,” and suggests that this is evidenc willingness to return forfeited funds to victims of crime that “Congress understood what it was doing in omit- instead of using them for law-enforcement purposes in- ting such an exemption” from the Act. This argument is dicate that restitution is a primary goal of the Act. See makeweight. The express exemption to which the major- ibid. Restitution, in any event, is not a likely result in ity refers involves the use of proceeds from publications the typical case for which the Act was designed: one in and other accounts of a crime to: which the property forfeited consists of derivative pro- ceeds of illegal activity, rather than of stolen property "(i) satisfy a money judgment rendered in any court in that is readily traceable to a particular victim. See Cloud, favor of a victim of any offense for which such defen- 1987 Wis.L.Rev., at 20. dant has been convicted, or a legal representative of such victim; and ^7 The majority contends that “the desire to lessen the economic power of organized crime and drug enterprises "(ii) pay for legal representation of the defendant in mat- . . . includes the use of such economic power to re- ters arising from the offense for which such defendant tain private counsel.” Caplin & Drysdale, 491 U.S., at has been convicted, but no more than 20 percent of 630, 109 S.Ct., at 2654-2655. “The notion that the Gov- the total proceeds may be so used.” Pub.L. 98-473, § ernment has a legitimate interest in depriving criminals"- 1406(c)(1)(B), 98 Stat. 2175, codified as 18 U.S.C. § before they are convicted-"of economic power, even in- 3681(c)(1)(B) (1982 ed., Supp. V) (emphasis added). sofar as that power is used to retain counsel of choice” When this provision is read in context, it is clear that it is more than just “somewhat unsettling,” as the majority concerns payment of attorney’s fees related to postcon- suggests. Ibid. That notion is constitutionally suspect, viction civil suits brought against convicted defendants by and-equally important for present purposes-completely their victims. It does not, therefore, constitute the “pre- foreign to Congress’ stated goals. The purpose of the cise exemption” sought in these cases. Indeed, the provi- relation-back provision is to assure that assets proved at sion cuts against the result the majority reaches. In light 8 1 NOTES of Congress’ decision to permit a convicted criminal to ^15 Other analogies the majority and the Government use wealth he has obtained by publicizing his crime to hire have drawn are also inapt. We do not deal with contra- counsel to resist his victim’s damages claims, it would be band, which the Government is free to seize because the bizarre to think that Congress intended to be more puni- law recognizes no right to possess it. See One 1958 Ply- tive when it comes to a defendant’s need for counsel prior mouth Sedan v. Pennsylvania, 380 U.S. 693, 699, 85 to conviction, when the defendant’s own liberty is at stake. S.Ct. 1246, 1250, 14 L.Ed.2d 170 (1965). Nor do we ^11 For this reason, I need not rely on NLRB v. Catholic deal with instrumentalities of crime, which may have ev- Bishop of Chicago, 440 U.S. 490, 500, 99 S.Ct. 1313, identiary value, and may also traditionally be seized by the Government and retained even if the defendant is not 1318, 59 L.Ed.2d 533 (1979), in which the Court held that even the broadest statutory language may be inter- proved guilty, unless a party with a rightful claim to the property comes forward to refute the Government’s con- preted as excluding cases that would raise serious consti- tutional questions, absent a clear expression of an affirma- tention that the property was put to an unlawful use. See Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. tive intention of Congress to include those cases. See also Edward J. DeBartolo Corp. v. Florida Gulf Coast Build- 663, 679, 94 S.Ct. 2080, 2089, 40 L.Ed.2d 452 (1974); ing & Construction Trades Council, 485 U.S. 568, 108 Comment, 48 U.Chi.L.Rev. 960, 963-964 (1981). As to S.Ct. 1392, 99 L.Ed.2d 645 (1988). Under the Catholic the analogy to “jeopardy assessments” under the In ernal Bishop approach, however, there could be no doubt that Revenue Code, the Internal Revenue Service in that situ- “the required 'clearest indication in the legislative history' ation has a legal claim to the sums at issue at the time of " or statutory language is absent here. 485 U.S., at 578, the assessment, based upon substantive provisions of the 108 S.Ct., at 1399. Code. Here, in contrast, the Government’s claim will not arise until after conviction. In addition, even if a jeopardy ^12 “Even in the federal courts under the Criminal Jus- assessment were to deprive a taxpayer of the funds neces- tice Act of 1964, 18 U.S.C. § 3006A, which provides sary to file a challenge to the assessment in the Tax Court, one of the most generous compensation plans, the rates the proceeding in that court is civil, and the Sixth Amend- for appointed counsel . . . are low by American stan- ment therefore does not apply. I agree with Judge Phillips dards. Consequently, the majority of persons willing to when he observes that the constitutionality of a jeopardy accept appointments are the young and inexperienced.” assessment that deprived the defendant of the funds nec- Argersinger v. Hamlin, 407 U.S. 25, 57, n. 21, 92 essary to hire counsel to ward off a criminal challenge S.Ct. 2006, 2022, n. 21, 32 L.Ed.2d 530 (1972) (Pow- is not to be assumed. See United States v. Harvey, 814 ell, J., concurring in result). Indeed, there is evidence that F.2d, at 926. “Congress did not design [the Criminal Justice Act] to be compensatory, but merely to reduce financial burdens on ^16 Certainly criminal defendants “are not exempted from federal, state, and local taxation simply because assigned counsel.” See Winick, Forfeiture of Attorneys’ Fees under RICO and CCE and the Right to Counsel of these financial levies may deprive them of resources that could be used to hire an attorney.” Caplin & Drysdale, Choice: The Constitutional Dilemma and How to Avoid − It, 43 U. Miami L.Rev. 765, 773, and n. 40 (1989). 491 U.S., at 631 632, 109 S.Ct., at 2655-2656. The Government’s interest in raising revenue need not stand ^13 That the Government has this power when the defen- aside merely because the individual being taxed would dant is indigent is unfortunate, but "[i]t is an irrelevancy rather spend the money by participating in a constitution- once recognized.” United States v. Harvey, 814 F.2d, at ally protected activity. But I doubt that we would hesitate 923. to reject as an undue burden on the exercise of a consti- ^14 There is reason to fear that, in addition to depriv- tutional right a system that generally exempted personal- ing a defendant of counsel of choice, there will be cir- service transactions from taxation, but taxed payments cumstances in which the threat of forfeiture will deprive to criminal-defense attorneys. In such circumstances, a the defendant of any counsel. If the Government chooses clear-headed analysis of the Government’s action would not to restrain transfers by employing § 853(e)(1), it is likely reveal that burdening the exercise of the defen- likely that the defendant will not qualify as “indigent” un- dant’s Sixth Amendment right was not the unfortunate der the Criminal Justice Act. Potential private counsel consequence of the Government’s action, but its very pur- will be aware of the threat of forfeiture, and, as a result, pose. will likely refuse to take the case. Although it is to be hoped that a solution will be developed for a defendant [1] * who “falls between the cracks” in this manner, there is no guarantee that accommodation will be made in an orderly fashion, and that trial preparation will not be substantially delayed because of the difficulties in securing counsel. For discussions of this problem, see United States v. Ian- niello, 644 F.Supp., at 456-457; United States v. Badala- menti, 614 F.Supp., at 197. 9

2 Text and image sources, contributors, and licenses

2.1 Text

• Caplin Drysdale Chartered v. United States/Dissent Blackmun Source: https://en.wikisource.org/wiki/Caplin_Drysdale_Chartered_ v._United_States/Dissent_Blackmun?oldid=4311566 Contributors: SDrewthbot and BenchBot

2.2 Images

2.3 Content license

• Creative Commons Attribution-Share Alike 3.0 Kessler, Steven 10/19/2017 For Educational Use Only

UNITED STATES OF AMERICA, Plaintiff - Appellee, v...., --- Fed.Appx. ---- (2017)

entire amount of the wire-fraud proceeds, we vacate the forfeiture money judgment entered by the district court 2017 WL 4679564 and remand for that court to reconsider its forfeiture This case was not selected for ruling in light of Honeycutt. publication in West's Federal Reporter. See Fed. Rule of Appellate Procedure 32.1 generally governing citation of judicial I. BACKGROUND decisions issued on or after Jan. 1, 2007. Defendant and her husband, James Cobb, were indicted See also U.S. Ct. of App. 11th Cir. Rule 36-2. for one count of conspiracy to commit mail and wire United States Court of Appeals, fraud, four counts of wire fraud, and four counts of Eleventh Circuit. aggravated identity theft. These counts arose out of a scheme in which the couple used stolen identities to file UNITED STATES OF fraudulent tax returns and receive the tax refunds for their AMERICA, Plaintiff - Appellee, personal benefit. Defendant signed a plea agreement in v. which she pled guilty to one count each of wire fraud ENESHIA CARLYLE, Defendant - Appellant. and aggravated identity theft, though she did not plead guilty to the conspiracy charge. The agreement included No. 15-12977 a provision that Defendant agreed to a forfeiture money | judgment of “not less than $610,000.00, representing the (October 18, 2017) amount of proceeds obtained as a result of the scheme.” 1 D.C. Docket No. 8:14-cr-00123-CEH-MAP-2 Defendant also agreed to waive any challenges to the Appeal from the United States District Court for the forfeiture, including that the forfeiture constituted an Middle District of Florida excessive fine. The district court accepted Defendant's guilty pleas and adjudged her guilty of both counts. Before MARCUS, JORDAN, and JULIE CARNES, Circuit Judges. 1 At the time Defendant signed the agreement, the Opinion Government knew the scheme had brought in at least $610,000, but did not yet know the full amount of the PER CURIAM: proceeds of the scheme. The Government filed a motion for a forfeiture money Defendant Eneshia Carlyle appeals the forfeiture money judgment against Defendant, arguing that it was entitled judgment entered against her on the ground that she to “$1,820,759.00, representing the proceeds obtained as a cannot be held jointly and severally liable for the entire result of the wire fraud scheme to which she pled guilty.” amount of proceeds from a wire-fraud scheme, and that The Government stated that Defendant would be held even if she could be held jointly and severally liable, the jointly and severally liable with Cobb for the full amount forfeiture money judgment violates the Excessive Fines of the judgment. Defendant made several objections to the Clause of the Eighth Amendment. Government's motion, including that she had only agreed to a forfeiture money judgment amount of $610,000, and While Defendant's appeal was pending in our Court, the that the amount the Government was seeking violated Supreme Court decided Honeycutt v. United States, 137 S. the Eighth Amendment's Excessive Fines Clause because Ct. 1626 (2017). Addressing a forfeiture statute related to it was grossly disproportionate to her offenses and the drug crimes, the Supreme Court rejected joint and several amount contemplated in the plea agreement. liability, holding that a coconspirator-defendant can be liable only for the property he acquired from the criminal The district court found that “at least $1,820,759.00 in activity. 137 S. Ct. at 1635. Given that decision and the proceeds was obtained from the wire fraud scheme to Government's concession that the district court erred by which [Defendant] pled guilty,” and, holding Defendant holding Defendant jointly and severally liable for the

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 Kessler, Steven 10/19/2017 For Educational Use Only

UNITED STATES OF AMERICA, Plaintiff - Appellee, v...., --- Fed.Appx. ---- (2017) jointly and severally liable with Cobb, granted the 3 “Excessive bail shall not be required, nor excessive Government's motion for a forfeiture money judgment in fines imposed, nor cruel and unusual punishments the greater amount. 2 Defendant was also sentenced to inflicted.” U.S. CONST. amend. VIII. 138 months' imprisonment and 3 years' supervised release. The constitutionality of the particular forfeiture amount is not our immediate concern, however. Instead, we 2 In Cobb's appeal, this Court affirmed the district focus on whether the forfeiture imposed by the district court's finding that the amount paid out by the IRS court complied with the appropriate statutory authority. was $1,820,759. United States v. Cobb, 842 F.3d 1213, Defendant contends that the district court erred in holding 1220–21 (11th Cir. 2016). Defendant notes in her reply her jointly and severally liable with Cobb. Before the brief that she accordingly abandons her challenges district court, Defendant argued that she played a lesser to the factual basis for calculating $1,820,759 as the role in the offense than did her husband and that she had overall loss calculation of the scheme. only agreed to a forfeiture amount of $610,000 in her plea After filing a notice of appeal of the conviction, forfeiture agreement. order, and sentence, Defendant's appointed counsel filed a motion to withdraw as counsel and submitted an Since the filing of Defendant's reply brief, the Supreme accompanying brief, pursuant to Anders v. California, 386 Court issued its decision in Honeycutt, and Defendant U.S. 738 (1967), arguing that there were no issues of has filed supplemental authority, relying on that decision arguable merit for appeal. This Court denied counsel's to support her argument that the district court erred in Anders motion and ordered further briefing as to whether applying joint and several liability as to the forfeiture the forfeiture money judgment violated the Eighth imposed. 4 In Honeycutt, the Supreme Court concluded Amendment's Excessive Fines Clause. that the statutory language of 21 U.S.C. § 853—which addresses forfeiture in the context of drug crimes—limits forfeiture under that provision to property the defendant II. DISCUSSION himself actually acquired as a result of the crime, and so Whether a forfeiture order is excessive under the Eighth a defendant who did not receive any of the proceeds of Amendment is an issue we review de novo. United States the crime cannot be subject to joint and several liability v. Seher, 562 F.3d 1344, 1370 (11th Cir. 2009). Forfeiture on the entire forfeiture amount. Honeycutt, 137 S. Ct. orders imposed at the end of a criminal proceeding solely at 1630, 1635. Defendant argues that the same reasoning because of a conviction are considered fines subject to applies here, and because she did not plead guilty to the 3 the Eighth Amendment's prohibition of excessive fines. conspiracy, she should only be liable for the $610,000 she Id. at 1371. “A forfeiture order violates the Excessive admitted to receiving rather than the full proceeds of the Fines Clause if it ‘is grossly disproportional to the conspiracy. gravity of a defendant's offense.’ ” Id. (quoting United States v. Bajakajian, 524 U.S. 321, 337 (1998)). Whether 4 Defendant also argued in her brief that the cases the a particular forfeiture is “grossly disproportional” is Government relied on in support of joint and several determined through looking principally at three factors: liability are inapposite. “(1) whether the defendant falls into the class of persons at whom the criminal statute was principally directed; Citing Honeycutt, the Government now likewise concedes (2) other penalties authorized by the legislature (or the that Defendant cannot be held jointly and severally liable Sentencing Commission); and (3) the harm caused by the for the entire amount of proceeds from the wire-fraud defendant.” Id. (quoting U.S. v. Browne, 505 F.3d 1229, scheme simply because she was a coconspirator. The 1281 (2007)). The impact of the fine on the individual Government therefore asks us to vacate the forfeiture defendant is not considered, and it is strongly presumed money judgment and remand to the district court to make that the forfeiture is constitutional if the forfeiture amount factual findings regarding the amount of proceeds directly is within the rage of fines prescribed by Congress. Id. obtained by Defendant.

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Kessler, Steven 10/19/2017 For Educational Use Only

UNITED STATES OF AMERICA, Plaintiff - Appellee, v...., --- Fed.Appx. ---- (2017)

remanding to the district court to reconsider its forfeiture Although the forfeiture statute at issue in Honeycutt, 21 U.S.C. § 853, is not the same forfeiture statute at issue ruling). here, 18 U.S.C. § 981(a)(1)(C), the two statutes are largely the same in terms of their pertinent language, and so it At any rate, given the Honeycutt decision and its likely appears that the Supreme Court's decision would apply applicability to the statute at issue here, we vacate the forfeiture judgment as to Defendant and remand to the statute at issue in the present case. Compare 21 U.S.C. § 853(a)(1) (“Any person convicted of a violation ... to the district court to determine in the first instance shall forfeit ... any property constituting, or derived from, the applicability of Honeycutt to the present case and any proceeds the person obtained, directly or indirectly, to conduct any fact-finding necessary to determine the appropriate amount of monetary forfeiture to be imposed as the result of such violation.”) with 18 U.S.C. § 981(a) (1)(C) (“The following property is subject to forfeiture on Defendant. to the United States ... Any property, real or person, which constitutes or is derived from proceeds traceable to VACATED AND REMANDED. a violation.”). Indeed, the Third Circuit has so held. See United States v. Gjeli, 867 F.3d 418, 427–28 & n.16 (3d Cir. All Citations 2017) (concluding that Honeycutt applies with equal force to a forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C), and --- Fed.Appx. ----, 2017 WL 4679564

End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 Lexis Advance® Research

Document:United States v. Ylli Gjeli, 2017 U.S. App. LEXIS 14894

United States v. Ylli Gjeli, 2017 U.S. App. LEXIS 14894

Copy Citation

United States Court of Appeals for the Third Circuit

June 12, 2017, Submitted Under Third Circuit LAR 34.1(a); August 11, 2017, Opinion Filed

Nos. 15-1892 & 15-2521

Reporter

2017 U.S. App. LEXIS 14894 * | 2017 WL 3443691

UNITED STATES OF AMERICA v. YLLI GJELI, a/k/a Willie, Ylli Gjeli, Appellant in No. 15-1892, FATMIR

MUSTAFARAJ, a/k/a Tony Fatmir, Mustafaraj, Appellant in No. 15-2521

Subsequent History: As Amended August 23, 2017.

Prior History: [*1] On Appeal from the United States District Court for the Eastern District of

Pennsylvania. D.C. No. 2-13-cr-00421-001 & 002. District Judge: Honorable William H. Yohn, Jr.

United States v. Gjeli, 2015 U.S. Dist. LEXIS 46135 (E.D. Pa., Apr. 7, 2015)

Core Terms

sentencing, district court, forfeiture, extortionate, extend credit, Counts, acquitted, calculation,

conspiracy, dangerous weapon, collection, racketeering, enhancement, firearm, illegal gambling,

offenses, enhanced sentence, statutory maximum, forfeiture order, indictment, grouping, violence,

preliminary order, sentencing court, base offense, constituting, sharking, plenary, levels

Case Summary Overview

HOLDINGS: [1]-The trial court had ample basis for deciding by a preponderance of the evidence that the dangerous weapon enhancement applied, given that the testimony by a victim with reference to the axe was corroborated by a codefendant; [2]-The trial court did not err by declining to decide whether second defendant had participated in criminal acts designated as three groups because such an objection would not have affected sentencing; [3]-Even if the challenged sentencing groups should have been excluded altogether, it would not have affected the resulting

Guidelines range for defendants, as, even without those groups, each defendant was subject to a five-level increase based on the remaining Groups affecting his sentence; [4]-The trial court erred in imposing joint and several liability in its final order of forfeiture given recently decided case law.

Outcome

Affirmed in part, vacated and remanded in part.

LexisNexis® Headnotes

Criminal Law & Procedure > Sentencing > Sentencing Guidelines >

Adjustments & Enhancements

Criminal Law & Procedure > ... > Appeals > Standards of Review > De Novo Review

HN1 Sentencing Guidelines, Adjustments & Enhancements An appellate court's review of a Sixth Amendment challenge to the imposition of the sentencing enhancement is plenary, as it is a question of law. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Criminal Law & Procedure > Sentencing > Imposition of Sentence > Statutory Maximums

HN2 Imposition of Sentence, Statutory Maximums The Sixth Amendment guarantee of a right to trial by jury means that any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt. an Apprendi violation thus occurs whenever an enhanced sentence exceeds the statutory maximum that could have been imposed without application of the enhancement. The "statutory maximum" for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant. More like this Headnote

Shepardize - Narrow by this Headnote (0) Criminal Law & Procedure > Sentencing > Imposition of Sentence > Factors

HN3 Imposition of Sentence, Factors A jury's verdict of acquittal does not prevent the sentencing court from considering conduct underlying the acquitted charge, so long as that conduct has been proved by a preponderance of the evidence. That is because the jury cannot be said to have necessarily rejected any facts when it returns a general verdict of not guilty. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Criminal Law & Procedure > Sentencing > Sentencing Guidelines >

Adjustments & Enhancements

HN4 Sentencing Guidelines, Adjustments & Enhancements A dangerous weapon is defined as an instrument capable of inflicting death or serious bodily injury. U.S. Sentencing Guidelines Manual § 1B1.1, cmt., application n. 1(D). An axe is undoubtedly such an instrument. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Criminal Law & Procedure > Sentencing > Sentencing Guidelines

HN5 Sentencing, Sentencing Guidelines The base offense level for a RICO conspiracy is the greater of either 19 or the level applicable to the underlying racketeering activity. U.S. Sentencing Guidelines Manual § 2E1.1. To calculate the latter number, an court must launch on a journey through the Guidelines' labyrinthine provisions for grouping offenses. A sentencing court treats each underlying offense as if contained in a separate count of conviction. U.S. Sentencing Guidelines Manual § 2E1.1, cmt., application n.1. After identifying the underlying racketeering offenses the court then groups together closely related ones, in accordance with Chapter 3 of the Guidelines. U.S. Sentencing Guidelines Manual § 3D1.2. Once those offenses are grouped, the court assigns a base offense level to each "Group" based on the nature of the grouping and of the offenses grouped. U.S. Sentencing Guidelines Manual § 3D1.3. In assigning the base offense level to each Group, the court looks to the highest offense level of the underlying offenses in that Group. U.S. Sentencing Guidelines Manual § 3D1.3. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Criminal Law & Procedure > Sentencing > Sentencing Guidelines

HN6 Sentencing, Sentencing Guidelines After the offense level has been determined for each Group, the sentencing court must then determine the combined offense level of all the Groups. To do so, the court takes the offense level applicable to the Group with the highest offense level and increases that offense level by the amount indicated in a table included in the U.S. Sentenging Guidelines. U.S. Sentencing Guidelines Manual § 3D1.4. That table requires the court to assign "Units" to each Group. One Unit is assigned to the Group with the highest offense level. U.S. Sentencing Guidelines Manual § 3D1.4(a). Then, one additional Unit is added for each Group that is equally serious or from 1 to 4 levels less serious than the Group with the highest offense level. And one-half Unit is added for any Group that is 5 to 8 levels less serious than the Group with the highest offense level. U.S. Sentencing Guidelines Manual § 3D1.4(b). Any Group that is 9 or more levels less serious than the Group with the highest offense level" is to be disregarded. U.S. Sentencing Guidelines Manual § 3D1.4(c). Based on the total number of Units, the base offense level can be increased up to a maximum of 5 levels, if the sum of the Units is 5 or greater. U.S. Sentencing Guidelines Manual § 3D1.4. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Criminal Law & Procedure > ... > Appeals > Standards of Review > De Novo Review

Criminal Law & Procedure > Sentencing > Sentencing Guidelines

HN7 Standards of Review, De Novo Review An appellate court will exercise plenary review over a district court's interpretation of the U.S. Sentencing Guidelines. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Criminal Law & Procedure > Sentencing > Imposition of Sentence

Criminal Law & Procedure > Sentencing > Presentence Reports

HN8 Sentencing, Imposition of Sentence Fed. R. Crim. P. 32(i)(3)(B) requires a sentencing court to rule on any disputed portion of a presentence report or determine that a ruling is unnecessary either because the matter will not affect sentencing, or because the court will not consider the matter in sentencing. The Rule is strictly enforced. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Criminal Law & Procedure > Sentencing > Forfeitures

HN9 Sentencing, Forfeitures A defendant cannot be held jointly and severally liable for property that his co-conspirator derived from the crime but that the defendant himself did not acquire. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Governments > Courts > Judicial Precedent

HN10 Courts, Judicial Precedent A change in the law occurring after a relevant event in a case will be given effect while the case is on direct review. More like this Headnote

Shepardize - Narrow by this Headnote (0)

Counsel: Edson A. Bostic , Tieffa N. Harper , Office of the Federal Public Defender, For the District of

Delaware, Wilmington, DE, Attorneys for Appellant Ylli Gjeli. Alison Brill, Office of the Federal Public Defender, For the District of New Jersey, Trenton, NJ; Richard

Coughlin, For the District of New Jersey, Office of Federal Public Defender, Camden, NJ;

Eugene P. Tinari , Attorneys for Appellant Fatmir Mustafaraj.

Louis D. Lappen , Robert A. Zauzmer , Salvatore L. Astolfi , Katherine E. Driscoll , Jerome M.

Maiatico, Office of the United States Attorney, For the Eastern District of Pennsylvania, Philadelphia, PA,

Attorneys for Appellee.

Judges: Before: JORDAN , KRAUSE , Circuit Judges and STEARNS * , District Judge.

Opinion by: JORDAN

Opinion

OPINION OF THE COURT

JORDAN , Circuit Judge.

Ylli Gjeli and Fatmir Mustafaraj were tried together and convicted of a number of racketeering-related offenses in connection with a loan sharking and illegal gambling operation in Philadelphia. The District Court entered preliminary [*2] orders of forfeiture making both men jointly and severally liable for more than $5 million of the proceeds from the criminal operation. Gjeli and Mustafaraj appeal the forfeiture orders and their sentences. During the pendency of this appeal, the Supreme Court issued its opinion in Honeycutt v. United States, reviewing one of the forfeiture statutes at issue here and holding that joint and several liability is unauthorized. 137 S. Ct. 1626, 1630, 198 L. Ed. 2d 73 (2017). In light of that holding, we will remand this case for the District Court to reconsider the forfeiture orders. As to all other issues on appeal, we will affirm.

I. Background

In August 2013, a grand jury in the Eastern District of Pennsylvania returned a 26-count indictment against nine co-defendants, including Gjeli and Mustafaraj. The indictment described a violent criminal enterprise, in operation since at least 2002, that made money for its members through "loan sharking, extortion, illegal gambling, and the collection of unlawful debts[.]" 1 (App. at 106.) Gjeli was a "leader and 'boss' of the enterprise who directed other members in the loan sharking activities and illegal gambling business." (App. at 110.) Mustafaraj was a "leader and 'muscle' in the enterprise who regularly assisted [*3] ... Gjeli and directed other members" of the enterprise. (Id.)

The indictment charged all of the co-defendants with being members of a RICO conspiracy in violation of 18 U.S.C. § 1962(d). Gjeli and Mustafaraj were also charged with a number of other crimes stemming from the enterprise. Five of the defendants eventually pled guilty, and four, including Gjeli and Mustafaraj, went to trial. The jury found Gjeli guilty on ten counts and Mustafaraj guilty on twelve. 2 The jury did not, however, convict on all counts. In particular, it acquitted Gjeli and Mustafaraj of making an extortionate extension of credit, which was charged in Count 13, and possession of a firearm in furtherance of a crime of violence, which was charged in Count 26. 3 Those specific counts were based on an incident involving Anthony Rodi, a loan recipient with a gambling problem. Rodi testified at trial that, in January 2011, when he asked Mustafaraj and Gjeli for money, they wielded an axe and threatened that higher-ups in their organization in New York would cut Rodi's arm off if he was unable to pay back the loan. Rodi said that Gjeli then instructed Mustafaraj to "go and get it" (App. at 2445), and Mustafaraj left and returned with a firearm that [*4] Gjeli pointed at Rodi's head. A co-defendant, George Markakis, who ran the sports betting side of the RICO enterprise, testified that he had expressed concern about Rodi's mounting debts from football betting in 2012, but that Mustafaraj had assured him concern about Rodi's mounting debts from football betting in 2012, but that Mustafaraj had assured him "they had [Rodi] under control and not to worry about it." (App. at 3589.) Markakis told the jury that Mustafaraj explained that he (Mustafaraj) and Gjeli had "scared" Rodi with "a machete and a pistol." (App. at 3589.)

At the sentencing hearings for each man, the District Court announced its conclusions under the United States Sentencing Guidelines, after working through calculations involving the grouping of offenses. The imprisonment range for both turned out to be 135 to 168 months. Gjeli was sentenced to 168 months and Mustafaraj to 147.

The Indictment had contained notices of forfeiture for the charges of engaging in a racketeering conspiracy, making extortionate credit transactions, illegal gambling, and possessing a firearm in furtherance of a crime of violence. Pursuant to Rule 32.2 of the Federal Rules of Criminal Procedure, those notices alerted Gjeli and Mustafaraj that the government could seek forfeiture at sentencing in the event of conviction on those counts. Following the verdicts, the government [*5] filed motions seeking preliminary orders of forfeiture. The District Court granted those motions, and neither Gjeli nor Mustafaraj objected to the entry of the preliminary orders. At each man's sentencing hearing, the District Court made statements regarding forfeiture, but the judgments themselves did not reference the forfeiture orders.

II. Discussion 4

The Defendants raise three issues on appeal. First, they dispute the application of a dangerous weapon enhancement that was used to calculate their Guidelines range. Second, they argue that the calculation of their base offense level under the Guidelines' grouping provisions was incorrect. Finally, they raise a number of challenges to the District Court's entry of the forfeiture orders. We address each of those issues in turn.

A. Application of Sentencing Enhancement 5

Gjeli and Mustafaraj argue that the District Court violated the Constitution by considering at sentencing their use of an axe to threaten Anthony Rodi. In their view, making that incident the basis of a dangerous weapons enhancement to their sentencing range was contrary to the Sixth Amendment. 6 They say that the use of the axe constitutes acquitted conduct because it was one of the acts that [*6] formed the basis of Count 26, of which they were found not guilty. 7 Citing Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct. 2348, 147 L. Ed. 2d 435 (2000), they contend that relying on acquitted conduct violates the Sixth Amendment right to trial by jury. Their argument is unavailing.

In Apprendi, the Supreme Court held thatHN2 the Sixth Amendment guarantee of a right to trial by jury means that "any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt." 530 U.S. at 490. The Court has applied Apprendi numerous times, in each case concluding "that the defendant's constitutional rights had been violated [*7] because the judge had imposed a sentence greater than the maximum he could have imposed ... without the challenged factual finding." Blakely v. Washington, 542 U.S. 296, 303, 124 S. Ct. 2531, 159 L. Ed. 2d 403 (2004) (citing Apprendi, 530 U.S. at 491-97, and Ring v. Arizona, 536 U.S. 584, 603-09, 122 S. Ct. 2428, 153 L. Ed. 2d 556 (2002)). What has come to be called an Apprendi violation thus occurs whenever an enhanced sentence exceeds the statutory maximum that could have been imposed without application of the enhancement. See Blakely, 542 U.S. at 303 ("Our precedents make clear ... that the 'statutory maximum' for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant." (emphasis omitted)).

No Apprendi error occurred here. Neither Gjeli nor Mustafaraj complain that the sentences they received went beyond the statutory maximum to which they were exposed, and clearly their sentences do not. 8 Their argument, rather, is that the District Court's application of the dangerous weapon enhancement for use of the axe was a violation of their Sixth Amendment rights because it relied on acquitted conduct. But that argument ignores that they were never charged with a crime for which the use of an axe was an element. The only count against Gjeli and Mustafaraj that has as an element anything to do with a weapon was Count 26, [*8] which charged them with possession of a firearm in furtherance of a crime of violence. 9 True enough, they were acquitted on that charge, and it is also true that the alleged firearm crime happened to have occurred during the same incident in which the axe true that the alleged firearm crime happened to have occurred during the same incident in which the axe was used. But that does not mean that the acquittal was about the axe. It was not, because the charge itself was not about the axe. In short, use of the axe was never charged and therefore did not constitute conduct of which they were acquitted.

Even if the District Court in its discretion had relied on acquitted conduct, though, HN3 "a jury's verdict of acquittal does not prevent the sentencing court from considering conduct underlying the acquitted charge, so long as that conduct has been proved by a preponderance of the evidence." United States v. Ciavarella, 716 F.3d 705, 735-36 (3d Cir. 2013) (quoting United States v. Watts, 519 U.S. 148, 157, 117 S. Ct. 633, 136 L. Ed. 2d 554 (1997)). That is because "the jury cannot be said to have necessarily rejected any facts when it returns a general verdict of not guilty." Watts, 519 U.S. at 155. The District Court here had ample basis for deciding by a preponderance of the evidence that the dangerous weapon enhancement should apply, given that "the testimony [by Mr. Rodi] with reference to the [axe] [*9] ... was corroborated by Mr. Markakis." (App. at 5243-44.)

"We find no clear error in the District Court's factual findings because there is sufficient evidence in the record to support the finding" that a dangerous weapon, namely the axe, was used. 10 Ciavarella, 716 F.3d at 736. Therefore, the argument that the District Court's application of the dangerous weapon enhancement violated the Sixth Amendment fails.

B. RICO Grouping under the Guidelines

The Sentencing Guidelines lay out a method for determining a numerical offense level for federal crimes, which, when combined with a defendant's criminal history score, yield a sentencing range. HN5 The base offense level for a RICO conspiracy is the greater of either 19 or the level applicable to the underlying racketeering activity. See U.S.S.G. § 2E1.1. To calculate the latter number, we must launch on a journey through the Guidelines' labyrinthine provisions for grouping offenses. A sentencing court "treat[s] each underlying offense as if contained in a separate count of conviction ... ." Id. § 2E1.1, cmt. (n.1). After identifying the underlying racketeering offenses the court then groups together closely related ones, in accordance with Chapter 3 of the Guidelines. Id. § 3D1.2. Once those offenses are grouped, the court assigns a base [*10] offense level to each "Group" based on the nature of the grouping and of the offenses grouped. Id. § 3D1.3. In assigning the base offense level to each Group, the court looks to the highest offense level of the underlying offenses in that Group. Id. § 3D1.3.

HN6 After the offense level has been determined for each Group, the sentencing court must then determine the combined offense level of all the Groups. To do so, the court "tak[es] the offense level applicable to the Group with the highest offense level and increas[es] that offense level by the amount indicated" in a table included in the Guidelines. Id. § 3D1.4. That table requires the court to assign "Units" to each Group. Id. One Unit is assigned to the Group with the highest offense level. Id. § 3D1.4(a). Then, one additional Unit is added "for each Group that is equally serious or from 1 to 4 levels less serious" than the Group with the highest offense level. Id. And one-half Unit is added for "any Group that is 5 to 8 levels less serious than the Group with the highest offense level." Id. § 3D1.4(b). "[A]ny Group that is 9 or more levels less serious than the Group with the highest offense level" is to be disregarded. Id. § 3D1.4(c). Based on the total number of Units, the base offense level can be increased [*11] up to a maximum of 5 levels, if the sum of the Units is 5 or greater. Id. § 3D1.4.

For both Gjeli and Mustafaraj, the highest offense level applicable to the groupings was 28, and the groupings' Units aggregated to 8.5 Units. So a 5 level increase in offense level was added to 28, making the total offense level for each man 33.

Mustafaraj makes two arguments with respect to the District Court's calculation of his offense level. First, he claims that the District Court erred by declining to decide a "contested issue" (Mustafaraj Br. at 36), namely whether he had participated in criminal acts that were designated as Groups 10, 11, and 12 in the calculation. Second, he argues that, even if he had participated in those crimes, the District Court erred by including Groups 10, 11, and 12 in the calculation at all. Gjeli joins that second argument. Our review of the District Court's calculations is plenary. 11 See United States v. Grier, 475 F.3d 556, 570 (3d Cir. 2007) (en banc) (HN7 "[T]his Court will ... exercise plenary review over a district court's interpretation of the Guidelines.").

As to the first argument, Mustafaraj says that the District Court should have ruled on the exclusion of the contested Groups pursuant to Federal Rule of Criminal Procedure 32. That Rule HN8 requires a sentencing court [*12] to "rule on [any disputed portion of a presentence report] or determine that a ruling is unnecessary either because the matter will not affect sentencing, or because the court will not consider the matter in sentencing[.]" Fed. R. Crim. P. 32(i)(3)(B). The Rule is "strictly enforced[,]" United States v. Electrodyne Sys. Corp., 147 F.3d 250, 255 (3d Cir. 1998), and the District Court here did as instructed: it found that the precise objection "[would] not affect sentencing." Fed. R. Crim. P. 32(i)(3) instructed: it found that the precise objection "[would] not affect sentencing." Fed. R. Crim. P. 32(i)(3) (B). That satisfies Rule 32. Cf. United States v. Campbell, 295 F.3d 398, 406 (3d Cir. 2002) (declining to find a Rule 32 violation where a party raised his objections for the first time at sentencing and the sentencing court ruled on them on the record).

Mustafaraj's second argument, the one joined by Gjeli, is that the District Court should have excluded the contested Groups altogether. Even if that argument had merit, however, it is irrelevant. As the District Court pointed out, excluding the contested Groups would not have affected the resulting Guidelines range for either man because, even without them, each was subject to the five-level increase based on the remaining Groups affecting his sentence. (See App. at 5097 (recognizing that even if the District Court excluded the Groups "that would only delete two units, so [the defendant] would still have 6.5 units, and therefore, there would be a [*13] five-point enhancement").) Therefore, the Court's conclusion that ruling on the matter was unnecessary was sufficient. Fed. R. Crim. P. 32(i)(3)(B). Furthermore, any error in this regard — and we are not implying there was any — was harmless, as it did not affect either man's sentence. 12 See Fed. R. Crim. P. 52(a) ("Any error ... that does not affect substantial rights must be disregarded."). We thus reject Mustafaraj and Gjeli's challenges to the calculations associated with the RICO conspiracy.

C. Forfeiture

Gjeli and Mustafaraj argue that the District Court never announced the amount of forfeiture at sentencing and failed to include a final order of forfeiture in the judgment, as required by Federal Rule of Criminal Procedure 32.2(b)(4)(B). 13 The government takes a different view of the record and contends that the District Court did ensure that both men knew of the forfeiture at sentencing, although the government does agree that the Court failed to include the final order of forfeiture in the judgment. Indeed, a review of the judgments confirms that a clerical error occurred — the forfeiture orders are not included — so we must at least remand for the District Court to correct that error under Federal Rule of Criminal Procedure 36. 14

In addition to that problem, the parties agree that forfeiture was imposed jointly and severally and that such liability is no longer permissible in light of Honeycutt v. United States. 137 S. Ct. 1626, 198 L. Ed. 2d 73 (2017). Neither Gjeli nor Mustafaraj objected to joint and several liability, and the District Court quite rightly relied on our then-controlling decision in United States v. Pitt, 193 F.3d 751 (3d Cir. 1999), in imposing that form of liability. 15 That, however, was before the Supreme Court decided Honeycutt. In Honeycutt, the text and structure of 21 U.S.C. § 853 led the Court to conclude that HN9 a defendant cannot "be held jointly and severally liable for property that his co-conspirator derived from the crime but that the defendant himself did not acquire." 137 S. Ct. at 1630. That holding effectively overturns our decision in Pitt. Id. at 1631 n.1.

The statute at issue in Honeycutt was the basis for forfeiture for certain counts of conviction in this case, and therefore obviously affects the forfeiture ruling here. And while the forfeiture based on other counts of [*15] conviction was rooted in a different criminal forfeiture statute, 18 U.S.C. § 1963, and in a civil forfeiture statute, 18 U.S.C. § 981(a)(1)(C), a review of the text and structure of those statutes reveals that they are substantially the same as the one under consideration in Honeycutt. 16 We thus see no reason why the holding in Honeycutt does not apply with equal force to those statutes. Joint and several liability therefore cannot be imposed in these cases. Instead, "[f]orfeiture ... is limited to property [each] defendant himself actually acquired as the result of the crime." Honeycutt, 137 S. Ct. at 1635. We will therefore remand for the District Court to reconsider its forfeiture rulings and include any final orders of forfeiture in the final written judgment as to each defendant.

III. Conclusion

For the foregoing reasons, we will affirm in part and vacate and remand in part.

Footnotes * Honorable Richard G. Stearns , United States District Court Judge for the District of Massachusetts, sitting by designation.

1 The loan sharking portion of the enterprise worked by lending large sums of cash at extreme interest rates, the majority of which were between 104% and 156% per year, but which were sometimes as high as 395% per year. The defendants would exert pressure on loan recipients who were unable to make payments, including by visiting their homes and places of employment, and threatening violence. The gambling business involved sports betting and significantly overlapped with the loan sharking, as the gamblers were often in need of funds.

2 Gjeli was found guilty of racketeering conspiracy in violation of 18 U.S.C. § 1962(d) (Count 1); collection of unlawful debt, in violation of 18 U.S.C. § 1962(c) (Counts 4, 10, 11); making extortionate extensions of credit, in violation of 18 U.S.C. § 892 (Counts 14 to 16); collection of extensions of credit by extortionate means, in violation of 18 U.S.C. § 894(a)(1) (Counts 23 and 24); and operating an illegal gambling business, in violation of 18 U.S.C. § 1955(a) (Count 25).

Mustafaraj was found guilty of racketeering conspiracy in violation of 18 U.S.C. § 1962(d) (Count 1); collection of unlawful debt, in violation of 18 U.S.C. § 1962(c) (Counts 3, 7, 9, 11, 12); making extortionate extensions of credit, in violation of 18 U.S.C. § 892 (Counts 14 to 16); collection of extensions of credit by extortionate means, in violation of 18 U.S.C. § 894(a)(1) (Counts 22 and 24); and operating an illegal gambling business, in violation of 18 U.S.C. § 1955(a) (Count 25).

3 Gjeli was also acquitted on Count 18, the collection of an extension of credit by extortionate means.

4 The District Court had jurisdiction under 18 U.S.C. § 3231. We have jurisdiction pursuant to 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291.

5 HN1 Our review of the Defendants' Sixth Amendment challenge to the imposition of the sentencing enhancement is plenary, as it is a question of law. United States v. Barbosa, 271 F.3d 438, 452 (3d Cir. 2001).

6 Specifically, the Court applied the sentencing enhancement delineated in United States Sentencing Guidelines § 2E2.1(b)(1)(B), which states that: "if a dangerous weapon (including a firearm) was ... used, increase [the offense level] by 4 levels[.]" 7 Count 26 charges Mustafaraj and Gjeli with having:

knowingly possessed a firearm in furtherance of a crime of violence for which the defendants may be prosecuted in a court of the United States, that is, Count One of this indictment, which charged Racketeering Conspiracy, in that the conspiracy involved Making Extortionate Extensions of Credit, in violation of Title 18, United States Code, Section 892, and Collections of Extensions of Credit By Extortionate Means, in violation of Title 18, United States Code, Section 894(a)(1); and Count Thirteen of this indictment, which charged Making an Extortionate Extension of Credit, in violation of Title 18, United States Code, Sections 894(a)(1) and 2, to Customer #8, a person known to the grand jury; and the defendants brandished that firearm.

(App. at 178.)

8 In light of its holding in Apprendi, the Supreme Court in United States v. Booker recognized that sentencing enhancements that increase an applicable Guidelines range would likewise offend the Sixth Amendment if the Guidelines were treated as mandatory in sentencing decisions. 543 U.S. 220, 232-33, 125 S. Ct. 738, 160 L. Ed. 2d 621 (2005). The Court therefore held that the Guidelines are not mandatory and instead must be considered advisory. Id. at 245. We have explained that, since Booker, "the final Guidelines range does not bind the district court, but merely serves as one of a number of factors to be considered in fashioning the ultimate sentence." United States v. Grier, 475 F.3d 556, 564-65 (3d Cir. 2007) (en banc) (citing Booker, 543 U.S. at 259-60). And the facts found by the district court in imposing a sentencing enhancement do not "have the effect of increasing the maximum punishment to which the defendant is exposed." Id. (citing Apprendi, 530 U.S. at 489-94). Therefore, unless the sentence exceeded the statutory maximum chosen by Congress in the United States Code, the sentence is not unconstitutional. Id.; see United States v. Ciavarella, 716 F.3d 705, 735 (3d Cir. 2013) (recognizing that the "Sixth Amendment right to a jury trial is not implicated by fact finding during a sentencing proceeding unless those facts increase the statutory maximum punishment" (citing Apprendi, 530 U.S. at 490)).

9 Neither Count 13, of which Gjeli and Mustafaraj were acquitted, nor Count 18, of which Gjeli was acquitted (Mustafaraj was not charged in Count 18), had use of weapons as an element. The charge in Count 13, making an extortionate extension of credit, requires that the defendant made "any extortionate extension of credit, or conspire[d] to do so." 18 U.S.C. § 892(a); see United States v. Giampa, 758 F.2d 928, 933 (3d Cir. 1985) (noting that an extortionate extension of credit in turn requires "an 'understanding of the creditor and debtor at the time [the extension of credit] is made that delay in making repayment or failure to make repayment could result in the use of violence or other criminal means to cause harm'" (quoting 18 U.S.C. § 891(6)) (alteration in Giampa)). The charge in Count 18, collection of credit by extortionate means, has the following elements: (a) "knowingly participat[ing] in any way," (b) "in the use of any extortionate means[,]" (c) "to collect or attempt to collect any extension of credit, or to punish any person for the nonrepayment thereof[.]" 18 U.S.C. § 894(a). 10 The Guidelines define HN4 a dangerous weapon, in part, as "an instrument capable of inflicting death or serious bodily injury[.]" U.S.S.G. § 1B1.1, cmt. (n.1(D)). An axe is undoubtedly such an instrument, and the District Court determined that by a preponderance of the evidence. (See App. at 5244 ("Obviously, the [axe] is such a dangerous weapon, and [the] use of it to threaten the witness calls for the application of the four-point enhancement.").)

11 Gjeli did not waive that second argument and therefore our review is plenary as to the alleged error affecting him, but Mustafaraj's counsel (rightly) agreed with the District Court that it was not necessary to rule on the inclusion of Groups 10, 11, and 12 in the sentencing calculation. His challenges therefore need only be reviewed for plain error. See United States v. Flores-Mejia, 759 F.3d 253, 254-55 (3d Cir. 2014) (en banc) (reviewing unpreserved procedural challenges to a sentence for plain error). As the District Court's rulings on these issues survive plenary review, however, it is clear that they do not constitute plain error.

12 Mustafaraj also argues that the District Court erred in failing to strike a reference to guns in paragraph 178 of his Pre-Sentence Report. The government agrees that that was a clerical error but notes that it can be resolved at any time by motion to the District Court through Federal Rule of Criminal Procedure 36. Rule 36 states that "the court may at any time correct a clerical error in a judgment, order, or other part of the record, or correct an error in the record arising from oversight or omission." Fed. R. Crim. P. 36. Because we agree that any clerical error is properly the subject of a Rule 36 motion to the District Court, United States v. Bennett, 423 F.3d 271, 277 (3d Cir. 2005), we do not address it on appeal.

Mustafaraj's additional argument that his Bureau of Prisons' classification was potentially affected by the PSR is irrelevant to our review of the sentence imposed. Williams v. United States, 503 U.S. 193, 202-03, 112 S. Ct. 1112, 117 L. Ed. 2d 341 (1992) ("[R]emand is required only if the sentence was imposed as a result of an incorrect application of the Guidelines." (internal quotation marks omitted) (emphasis added)); see also United States v. Wilken, 498 F.3d 1160, 1170 n.9 (10th Cir. 2007) ("Precedent is clear ... that we determine whether a sentencing error is harmless with reference only to the sentence imposed." (citing Williams)).

13 Federal Rule of Criminal Procedure 32.2(b)(4)(B) governs "Notice [of Forfeiture] and Inclusion in the Judgment." It states that:

The court must include the forfeiture when orally announcing [*14] the sentence or must otherwise ensure that the defendant knows of the forfeiture at sentencing. The court must also include the forfeiture order, directly or by reference, in the judgment, but the court's failure to do so may be corrected at any time under Rule 36.

14 See n.12, supra, for the relevant text of Rule 36. 15 Because Gjeli and Mustafaraj did not object to the preliminary orders of forfeiture below, those claims would ordinarily be subject to plain error review. United States v. Olano, 507 U.S. 725, 735, 113 S. Ct. 1770, 123 L. Ed. 2d 508 (1993). Here, however, there was an intervening change in the law that provided a basis for appeal that did not exist at the time the District Court ruled on the preliminary orders of forfeiture. See Hamling v. United States, 418 U.S. 87, 102, 94 S. Ct. 2887, 41 L. Ed. 2d 590 (1974) (HN10 "[A] change in the law occurring after a relevant event in a case will be given effect while the case is on direct review."); see also McLaughlin v. Wohlgemuth, 535 F.2d 251, 254 (3d Cir. 1976) (vacating and remanding for district court to reconsider opinion in light of intervening law).

16 A review of the applicable forfeiture statutes demonstrates the substantial equivalency in both structure and text.

18 U.S.C. § 1963(a), which pertains to the racketeering conspiracy (Count 1), states that:

Whoever violates any provision of section 1962 of this chapter ... shall forfeit to the United States, irrespective of any provision of State law ...

...

(3) any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962.

18 U.S.C. § 981(a)(1), which pertains to extortionate extensions of credit (Counts 13-24) and illegal gambling (Count 25), states that:

The following property is subject to forfeiture to the United States:

(C) Any property, real or personal, which constitutes or is derived from proceeds traceable to [*16] a violation of [certain sections] of this title or any offense constituting "specified unlawful activity" (as defined in section 1956(c)(7) of this title), or a conspiracy to commit such offense.

21 U.S.C. § 853(a), which became relevant through the government's desire to seek substitute property pursuant to 21 U.S.C. § 853(p) for each count for which forfeiture was sought, United States v. Vampire Nation, 451 F.3d 189, 202 (3d Cir. 2006), states that:

Any person convicted of a violation of this subchapter ... shall forfeit to the United States, irrespective of any provision of State law--

(1) any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of such violation[.] Content Type: Cases

Terms: United States v. Ylli Gjeli, 2017 U.S. App. LEXIS 14894

Narrow By: -None-

Date and Time: Aug 30, 2017 09:43:11 a.m. EDT

About LexisNexis® Privacy Policy Terms & Conditions Sign Out

Copyright © 2017 LexisNexis. All rights reserved. Not a Legal Professional? Visit our consumer site Register | Login

CASES & CODES PRACTICE MANAGEMENT JOBS & CAREERS NEWSLETTERS BLOGS LAW TECHNOLOGY Search FindLaw

Forms Lawyer Marketing Corporate Counsel Law Students JusticeMail Reference

FindLaw Caselaw United States US Supreme Court KOKESH v. SECURITIES AND EXCHANGE COMMISSION KOKESH v. SECURITIES AND EXCHANGE COMMISSION

Print New Font size: A A Reset

United States Supreme Court

KOKESH v. SECURITIES AND EXCHANGE COMMISSION, (2017) No. 16-529 Argued: April 18, 2017 Decided: June 5, 2017 The Securities and Exchange Commission (SEC or Commission) possesses authority to investigate violations of federal securities laws and to commence enforcement actions in federal district court if its investigations uncover evidence of wrongdoing. Initially, the Commission's statutory authority in enforcement actions was limited to seeking an injunction barring future violations. Beginning in the 1970's, federal district courts, at the FindLaw Career Center request of the Commission, began ordering disgorgement in SEC enforcement proceedings. Although Congress has since authorized the Commission to seek monetary civil penalties, the Commission has continued to seek Attorney Corporate Counsel disgorgement. This Court has held that 28 U. S. C. §2462, which establishes a 5-year limitations period for "an Academic action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture," applies when the Judicial Clerk Commission seeks monetary civil penalties. See Gabelli v. SEC, 568 U. S. 442, 454. Summer Associate Intern In 2009, the Commission brought an enforcement action, alleging that petitioner Charles Kokesh violated Law Librarian

various securities laws by concealing the misappropriation of $34.9 million from four business-development Paralegal Search Jobs Post a Job | View More Jobs companies from 1995 to 2009. The Commission sought monetary civil penalties, disgorgement, and an injunction barring Kokesh from future violations. After a jury found that Kokesh's actions violated several View More securities laws, the District Court determined that §2462's 5-year limitations period applied to the monetary civil penalties. With respect to the $34.9 million disgorgement judgment, however, the court concluded that §2462 did not apply because disgorgement is not a "penalty" within the meaning of the statute. The Tenth Circuit affirmed, holding that disgorgement was neither a penalty nor a forfeiture.

Held: Because SEC disgorgement operates as a penalty under §2462, any claim for disgorgement in an SEC enforcement action must be commenced within five years of the date the claim accrued. Pp. 5-11.

(a) The definition of "penalty" as a "punishment, whether corporal or pecuniary, imposed and enforced by the State, for a crime or offen[s]e against its laws," Huntington v. Attrill, 146 U. S. 657, 667, gives rise to two principles. First, whether a sanction represents a penalty turns in part on "whether the wrong sought to be redressed is a wrong to the public, or a wrong to the individual." Id., at 668. Second, a pecuniary sanction operates as a penalty if it is sought "for the purpose of punishment, and to deter others from offending in like manner" rather than to compensate victims. Ibid. This Court has applied these principles in construing the term "penalty," holding, e.g., that a statute providing a compensatory remedy for a private wrong did not impose a "penalty," Brady v. Daly, 175 U. S. 148, 154. Pp. 5-7.

FindLaw’s Legal Grounds (b) The application of these principles here readily demonstrates that SEC disgorgement constitutes a penalty Latest humorous legal news within the meaning of §2462. First, SEC disgorgement is imposed by the courts as a consequence for violating delivered to your inbox. Newsletters.FindLaw.com/ public laws, i.e., a violation committed against the United States rather than an aggrieved individual. Second, Is It Legal? SEC disgorgement is imposed for punitive purposes. Sanctions imposed for the purpose of deterring infractions Latest criminal legal news of public laws are inherently punitive because "deterrence [is] not [a] legitimate nonpunitive governmental delivered to your inbox. Newsletters.FindLaw.com objectiv[e]." Bell v. Wolfish, 441 U. S. 520, 539, n. 20. Finally, SEC disgorgement is often not compensatory. Disgorged profits are paid to the district courts, which have discretion to determine how the money will be Fame and Folly Legal pop culture newsletter. distributed. They may distribute the funds to victims, but no statute commands them to do so. When an Newsletters.FindLaw.com individual is made to pay a noncompensatory sanction to the government as a consequence of a legal violation, the payment operates as a penalty. See Porter v. Warner Holding Co., 328 U. S. 395, 402. Pp. 7-9.

(c) The Government responds that SEC disgorgement is not punitive but a remedial sanction that operates to restore the status quo. It is not clear, however, that disgorgement simply returns the defendant to the place he would have occupied had he not broken the law. It sometimes exceeds the profits gained as a result of the violation. And, as demonstrated here, SEC disgorgement may be ordered without consideration of a defendant's expenses that reduced the amount of illegal profit. In such cases, disgorgement does not simply restore the status quo; it leaves the defendant worse off and is therefore punitive. Although disgorgement may serve

compensatory goals in some cases, "sanctions frequently serve more than one purpose." Austin v. United States, 509 U. S. 602, 610. Because they "go beyond compensation, are intended to punish, and label defendants wrongdoers" as a consequence of violating public laws, Gabelli, 568 U. S., at 451-452, disgorgement orders represent a penalty and fall within §2462's 5-year limitations period. Pp. 9-11.

834 F. 3d 1158, reversed.

SOTOMAYOR, J., delivered the opinion for a unanimous Court.

Opinion of the Court

581 U. S. ____ (2017)

NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.

No. 16-529 CHARLES R. KOKESH, PETITIONER v. SECURITIES AND EXCHANGE COMMISSION

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

[June 5, 2017]

JUSTICE SOTOMAYOR delivered the opinion of the Court.

A 5-year statute of limitations applies to any "action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise." 28 U. S. C. §2462. This case presents the question whether §2462 applies to claims for disgorgement imposed as a sanction for violating a federal securities law. The Court holds that it does. Disgorgement in the securities-enforcement context is a "penalty" within the meaning of §2462, and so disgorgement actions must be commenced within five years of the date the claim accrues.

I

A

After rampant abuses in the securities industry led to the 1929 stock market crash and the Great Depression, Congress enacted a series of laws to ensure that "the highest ethical standards prevail in every facet of the securities industry."1 SEC v. Capital Gains Research Bureau, Inc., 375 U. S. 180, 186-187 (1963) (internal quotation marks omitted). The second in the series--the Securities Exchange Act of 1934--established the Securities and Exchange Commission (SEC or Commission) to enforce federal securities laws. Congress granted the Commission power to prescribe " 'rules and regulations . . . as necessary or appropriate in the public interest or for the protection of investors.' " Blue Chip Stamps v. Manor Drug Stores, 421 U. S. 723, 728 (1975). In addition to rulemaking, Congress vested the Commission with "broad authority to conduct investigations into possible violations of the federal securities laws." SEC v. Jerry T. O'Brien, Inc., 467 U. S. 735, 741 (1984). If an investigation uncovers evidence of wrongdoing, the Commission may initiate enforcement actions in federal district court.

Initially, the only statutory remedy available to the SEC in an enforcement action was an injunction barring future violations of securities laws. See 1 T. Hazen, Law of Securities Regulation §1:37 (7th ed., rev. 2016). In the absence of statutory authorization for monetary remedies, the Commission urged courts to order disgorgement as an exercise of their "inherent equity power to grant relief ancillary to an injunction." SEC v. Texas Gulf Sulphur Co., 312 F. Supp. 77, 91 (SDNY 1970), aff'd in part and rev'd in part, 446 F. 2d 1301 (CA2 1971). Generally, disgorgement is a form of "[r]estitution measured by the defendant's wrongful gain." Restatement (Third) of Restitution and Unjust Enrichment §51, Comment a, p. 204 (2010) (Restatement (Third)). Disgorgement requires that the defendant give up "those gains . . . properly attributable to the defendant's interference with the claimant's legally protected rights." Ibid. Beginning in the 1970's, courts ordered disgorgement in SEC enforcement proceedings in order to "deprive . . . defendants of their profits in order to remove any monetary reward for violating" securities laws and to "protect the investing public by providing an effective deterrent to future violations." Texas Gulf, 312 F. Supp., at 92.

In 1990, as part of the Securities Enforcement Remedies and Penny Stock Reform Act, Congress authorized the Commission to seek monetary civil penalties. 104 Stat. 932, codified at 15 U. S. C. §77t(d). The Act left the Commission with a full panoply of enforcement tools: It may promulgate rules, investigate violations of those rules and the securities laws generally, and seek monetary penalties and injunctive relief for those violations. In the years since the Act, however, the Commission has continued its practice of seeking disgorgement in enforcement proceedings.

This Court has already held that the 5-year statute of limitations set forth in 28 U. S. C. §2462 applies when the Commission seeks statutory monetary penalties. See Gabelli v. SEC, 568 U. S. 442, 454 (2013). The question here is whether §2462, which applies to any "action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise," also applies when the SEC seeks disgorgement.

B

Charles Kokesh owned two investment-adviser firms that provided investment advice to business- development companies. In late 2009, the Commission commenced an enforcement action in Federal District Court alleging that between 1995 and 2009, Kokesh, through his firms, misappropriated $34.9 million from four of those development companies. The Commission further alleged that, in order to conceal the misappropriation, Kokesh caused the filing of false and misleading SEC reports and proxy statements. The Commission sought civil monetary penalties, disgorgement, and an injunction barring Kokesh from violating securities laws in the future.

After a 5-day trial, a jury found that Kokesh's actions violated the Investment Company Act of 1940, 15 U. S. C. §80a-36; the Investment Advisers Act of 1940, 15 U. S. C. §§80b-5, 80b-6; and the Securities Exchange Act of 1934, 15 U. S. C. §§78m, 78n. The District Court then turned to the task of imposing penalties sought by the Commission. As to the civil monetary penalties, the District Court determined that §2462's 5-year limitations period precluded any penalties for misappropriation occurring prior to October 27, 2004--that is, five years prior to the date the Commission filed the complaint. App. to Pet. for Cert. 26a. The court ordered Kokesh to pay a civil penalty of $2,354,593, which represented "the amount of funds that [Kokesh] himself received during the limitations period." Id., at 31a-32a. Regarding the Commission's request for a $34.9 million disgorgement judgment--$29.9 million of which resulted from violations outside the limitations period--the court agreed with the Commission that because disgorgement is not a "penalty" within the meaning of §2462, no limitations period applied. The court therefore entered a disgorgement judgment in the amount of $34.9 million and ordered Kokesh to pay an additional $18.1 million in prejudgment interest.

The Court of Appeals for the Tenth Circuit affirmed. 834 F. 3d 1158 (2016). It agreed with the District Court that disgorgement is not a penalty, and further found that disgorgement is not a forfeiture. Id., at 1164-1167. The court thus concluded that the statute of limitations in §2462 does not apply to SEC disgorgement claims.

This Court granted certiorari, 580 U. S. ___ (2017), to resolve disagreement among the Circuits over whether disgorgement claims in SEC proceedings are subject to the 5-year limitations period of §2462.2

II

Statutes of limitations "se[t] a fixed date when exposure to the specified Government enforcement efforts en[d]." Gabelli, 568 U. S., at 448. Such limits are " 'vital to the welfare of society' " and rest on the principle that " 'even wrongdoers are entitled to assume that their sins may be forgotten.' " Id., at 449. The statute of limitations at issue here--28 U. S. C. §2462--finds its roots in a law enacted nearly two centuries ago. 568 U. S., at 445. In its current form, §2462 establishes a 5-year limitations period for "an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture." This limitations period applies here if SEC disgorgement qualifies as either a fine, penalty, or forfeiture. We hold that SEC disgorgement constitutes a disgorgement qualifies as either a fine, penalty, or forfeiture. We hold that SEC disgorgement constitutes a penalty.3

A

A "penalty" is a "punishment, whether corporal or pecuniary, imposed and enforced by the State, for a crime or offen[s]e against its laws." Huntington v. Attrill, 146 U. S. 657, 667 (1892). This definition gives rise to two principles. First, whether a sanction represents a penalty turns in part on "whether the wrong sought to be redressed is a wrong to the public, or a wrong to the individual." Id., at 668. Although statutes creating private causes of action against wrongdoers may appear--or even be labeled--penal, in many cases "neither the liability imposed nor the remedy given is strictly penal." Id., at 667. This is because "[p]enal laws, strictly and properly, are those imposing punishment for an offense committed against the State." Ibid. Second, a pecuniary sanction operates as a penalty only if it is sought "for the purpose of punishment, and to deter others from offending in like manner"--as opposed to compensating a victim for his loss. Id., at 668.

The Court has applied these principles in construing the term "penalty." In Brady v. Daly, 175 U. S. 148 (1899), for example, a playwright sued a defendant in Federal Circuit Court under a statute providing that copyright infringers " 'shall be liable for damages . . . not less than one hundred dollars for the first [act of infringement], and fifty dollars for every subsequent performance, as to the court shall appear to be just.' " Id., at 153. The defendant argued that the Circuit Court lacked jurisdiction on the ground that a separate statute vested district courts with exclusive jurisdiction over actions "to recover a penalty." Id., at 152. To determine whether the statutory damages represented a penalty, this Court noted first that the statute provided "for a recovery of damages for an act which violates the rights of the plaintiff, and gives the right of action solely to him" rather than the public generally, and second, that "the whole recovery is given to the proprietor, and the statute does not provide for a recovery by any other person." Id., at 154, 156. By providing a compensatory remedy for a private wrong, the Court held, the statute did not impose a "penalty." Id., at 154.

Similarly, in construing the statutory ancestor of §2462, the Court utilized the same principles. In Meeker v. Lehigh Valley R. Co., 236 U. S. 412, 421-422 (1915), the Interstate Commerce Commission, a now-defunct federal agency charged with regulating railroads, ordered a railroad company to refund and pay damages to a shipping company for excessive shipping rates. The railroad company argued that the action was barred by Rev. Stat. §1047, Comp. Stat. 1913, §1712 (now 28 U. S. C. §2462), which imposed a 5-year limitations period upon any " 'suit or prosecution for a penalty or forfeiture, pecuniary or otherwise, accruing under the laws of the United States.' " 236 U. S., at 423. The Court rejected that argument, reasoning that "the words 'penalty or forfeiture' in [the statute] refer to something imposed in a punitive way for an infraction of a public law." Ibid. A penalty, the Court held, does "not include a liability imposed [solely] for the purpose of redressing a private injury." Ibid. Because the liability imposed was compensatory and paid entirely to a private plaintiff, it was not a "penalty" within the meaning of the statute of limitations. Ibid.; see also Gabelli, 568 U. S., at 451-452 (" [P]enalties" in the context of §2462 "go beyond compensation, are intended to punish, and label defendants wrongdoers").

B

Application of the foregoing principles readily demonstrates that SEC disgorgement constitutes a penalty within the meaning of §2462.

First, SEC disgorgement is imposed by the courts as a consequence for violating what we described in Meeker as public laws. The violation for which the remedy is sought is committed against the United States rather than an aggrieved individual--this is why, for example, a securities-enforcement action may proceed even if victims do not support or are not parties to the prosecution. As the Government concedes, "[w]hen the SEC seeks disgorgement, it acts in the public interest, to remedy harm to the public at large, rather than standing in the shoes of particular injured parties." Brief for United States 22. Courts agree. See, e.g., SEC v. Rind, 991 F. 2d 1486, 1491 (CA9 1993) ("[D]isgorgement actions further the Commission's public policy mission of protecting investors and safeguarding the integrity of the markets"); SEC v. Teo, 746 F. 3d 90, 102 (CA3 2014) ("[T]he SEC pursues [disgorgement] 'independent of the claims of individual investors' " in order to " 'promot[e] economic and social policies' ").

Second, SEC disgorgement is imposed for punitive purposes. In Texas Gulf--one of the first cases requiring disgorgement in SEC proceedings--the court emphasized the need "to deprive the defendants of their profits in order to . . . protect the investing public by providing an effective deterrent to future violations." 312 F. Supp., at 92. In the years since, it has become clear that deterrence is not simply an incidental effect of disgorgement. Rather, courts have consistently held that "[t]he primary purpose of disgorgement orders is to deter violations of the securities laws by depriving violators of their ill-gotten gains." SEC v. Fischbach Corp., 133 F. 3d 170, 175 (CA2 1997); see also SEC v. First Jersey Securities, Inc., 101 F. 3d 1450, 1474 (CA2 1996) ("The primary purpose of disgorgement as a remedy for violation of the securities laws is to deprive violators of their ill-gotten gains, thereby effectuating the deterrence objectives of those laws"); Rind, 991 F. 2d, at 1491 (" 'The deterrent effect of [an SEC] enforcement action would be greatly undermined if securities law violators were not required to disgorge illicit profits' "). Sanctions imposed for the purpose of deterring infractions of public laws are inherently punitive because "deterrence [is] not [a] legitimate nonpunitive governmental objectiv[e]." Bell v. Wolfish, 441 U. S. 520, 539, n. 20 (1979); see also United States v. Bajakajian, 524 U. S. 321, 329 (1998) ("Deterrence . . . has traditionally been viewed as a goal of punishment").

Finally, in many cases, SEC disgorgement is not compensatory. As courts and the Government have employed the remedy, disgorged profits are paid to the district court, and it is "within the court's discretion to determine how and to whom the money will be distributed." Fischbach Corp., 133 F. 3d, at 175. Courts have required disgorgement "regardless of whether the disgorged funds will be paid to such investors as restitution." Id., at 176; see id., at 175 ("Although disgorged funds may often go to compensate securities fraud victims for their losses, such compensation is a distinctly secondary goal"). Some disgorged funds are paid to victims; other funds are dispersed to the United States Treasury. See, e.g., id., at 171 (affirming distribution of disgorged funds to Treasury where "no party before the court was entitled to the funds and . . . the persons who might have equitable claims were too dispersed for feasible identification and payment"); SEC v. Lund, 570 F. Supp. 1397, 1404-1405 (CD Cal. 1983) (ordering disgorgement and directing trustee to disperse funds to victims if "feasible" and to disperse any remaining money to the Treasury). Even though district courts may distribute the funds to the victims, they have not identified any statutory command that they do so. When an individual is made to pay a noncompensatory sanction to the Government as a consequence of a legal violation, the payment operates as a penalty. See Porter v. Warner Holding Co., 328 U. S. 395, 402 (1946) (distinguishing between restitution paid to an aggrieved party and penalties paid to the Government).

SEC disgorgement thus bears all the hallmarks of a penalty: It is imposed as a consequence of violating a public law and it is intended to deter, not to compensate. The 5-year statute of limitations in §2462 therefore applies when the SEC seeks disgorgement.

C

The Government's primary response to all of this is that SEC disgorgement is not punitive but "remedial" in The Government's primary response to all of this is that SEC disgorgement is not punitive but "remedial" in that it "lessen[s] the effects of a violation" by " 'restor[ing] the status quo.' " Brief for Respondent 17. As an initial matter, it is not clear that disgorgement, as courts have applied it in the SEC enforcement context, simply returns the defendant to the place he would have occupied had he not broken the law. SEC disgorgement sometimes exceeds the profits gained as a result of the violation. Thus, for example, "an insider trader may be ordered to disgorge not only the unlawful gains that accrue to the wrongdoer directly, but also the benefit that accrues to third parties whose gains can be attributed to the wrongdoer's conduct." SEC v. Contorinis, 743 F. 3d 296, 302 (CA2 2014). Individuals who illegally provide confidential trading information have been forced to disgorge profits gained by individuals who received and traded based on that information--even though they never received any profits. Ibid; see also SEC v. Warde, 151 F. 3d 42, 49 (CA2 1998) ("A tippee's gains are attributable to the tipper, regardless whether benefit accrues to the tipper"); SEC v. Clark, 915 F. 2d 439, 454 (CA9 1990) ("[I]t is well settled that a tipper can be required to disgorge his tippees' profits"). And, as demonstrated by this case, SEC disgorgement sometimes is ordered without consideration of a defendant's expenses that reduced the amount of illegal profit. App. to Pet. for Cert. 43a; see Restatement (Third) §51, Comment h, at 216 ("As a general rule, the defendant is entitled to a deduction for all marginal costs incurred in producing the revenues that are subject to disgorgement. Denial of an otherwise appropriate deduction, by making the defendant liable in excess of net gains, results in a punitive sanction that the law of restitution normally attempts to avoid"). In such cases, disgorgement does not simply restore the status quo; it leaves the defendant worse off. The justification for this practice given by the court below demonstrates that disgorgement in this context is a punitive, rather than a remedial, sanction: Disgorgement, that court explained, is intended not only to "prevent the wrongdoer's unjust enrichment" but also "to deter others' violations of the securities laws." App. to Pet. for Cert. 43a.

True, disgorgement serves compensatory goals in some cases; however, we have emphasized "the fact that sanctions frequently serve more than one purpose." Austin v. United States, 509 U. S. 602, 610 (1993). " 'A civil sanction that cannot fairly be said solely to serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes, is punishment, as we have come to understand the term.' " Id., at 621; cf. Bajakajian, 524 U. S., at 331, n. 6 ("[A] modern statutory forfeiture is a 'fine' for Eighth Amendment purposes if it constitutes punishment even in part"). Because disgorgement orders "go beyond compensation, are intended to punish, and label defendants wrongdoers" as a consequence of violating public laws, Gabelli, 568 U. S., at 451-452, they represent a penalty and thus fall within the 5-year statute of limitations of §2462.

III

Disgorgement, as it is applied in SEC enforcement proceedings, operates as a penalty under §2462. Accordingly, any claim for disgorgement in an SEC enforcement action must be commenced within five years of the date the claim accrued.

The judgment of the Court of Appeals for the Tenth Circuit is reversed.

It is so ordered.

FOOTNOTES

Footnote 1 Each of these statutes--the Securities Act of 1933, 15 U. S. C. §77a et seq.; the Securities Exchange Act of 1934, 15 U. S. C. §78a et seq.; the Public Utility Holding Company Act of 1935, 15 U. S. C. §79 et seq.; the Trust Indenture Act of 1939, 15 U. S. C. §77aaa et seq.; the Investment Company Act of 1940, 15 U. S. C. §80a-1 et seq.; and the Investment Advisers Act of 1940, 15 U. S. C. §80b-1 et seq.--serves the "fundamental purpose" of "substitut[ing] a philosophy of full disclosure for the philosophy of caveat emptor and thus . . . achiev[ing] a high standard of business ethics in the securities industry." SEC v. Capital Gains Research Bureau, Inc., 375 U. S. 180, 186 (1963).

Footnote 2 Compare SEC v. Graham, 823 F. 3d 1357, 1363 (CA11 2016) (holding that §2462 applies to SEC disgorgement claims), with Riordan v. SEC, 627 F. 3d 1230, 1234 (CADC 2010) (holding that §2462 does not apply to SEC disgorgement claims).

Footnote 3 Nothing in this opinion should be interpreted as an opinion on whether courts possess authority to order disgorgement in SEC enforcement proceedings or on whether courts have properly applied disgorgement principles in this context The sole question presented in this case is whether disgorgement, as applied in SEC enforcement actions, is subject to §2462's limitations period.

RESEARCH THE LAW Cases & Codes / Opinion Summaries / Sample Business Contracts / Research An Attorney or Law Firm MANAGE YOUR PRACTICE Law Technology / Law Practice Management / Law Firm Marketing Services / Corporate Counsel Center MANAGE YOUR CAREER Legal Career Job Search / Online CLE / Law Student Resources NEWS AND COMMENTARY Law Commentary / Featured Documents / Newsletters / Blogs / RSS Feeds GET LEGAL FORMS Legal Forms for Your Practice ABOUT US Company History / Media Relations / Contact Us / Privacy / Advertising / Jobs FIND US ON

Copyright © 2017 FindLaw, a Thomson Reuters business. All rights reserved. Lexis Advance® Research

Document:United States SEC v. Metter, 2017 U.S. App. LEXIS 16478

United States SEC v. Metter, 2017 U.S. App. LEXIS 16478

Copy Citation

United States Court of Appeals for the Second Circuit

August 29, 2017, Decided

No. 16-526-cv

Reporter

2017 U.S. App. LEXIS 16478 *

U.S. Securities and Exchange Commission, The Sullivan Lead Plaintiff Group, Plaintiffs Appellees, v.

Michael Metter, Defendant Appellant, Spongetech Delivery Systems, Inc., RM Enterprises International,

Inc., Steven Moskowitz, George Sperenza, Joel Pensley, Jack Halperin, Defendants,

BusinessTalkRadio.net, Inc., Blue Star Media Group, Inc., Relief Defendants.

Notice: Decision text below is the first available text from the court; it has not been editorially reviewed

by LexisNexis. Publisher's editorial review, including Headnotes, Case Summary, Shepard's analysis or

any amendments will be added in accordance with LexisNexis editorial guidelines.

Core Terms

disgorgement, consent judgment, district court, fine, civil penalty, allegations

Opinion

[*1] -526- cv SEC v. Metter

FOR APPELLANT: MARANDAE. FRITZ(Tammy P. Bieber and Brian K. Steinwascher, on the brief), Thompson Hine LLP , New York, NY.

FOR APPELLEE: MARTINV. TOTARO, Senior Counsel (John W. Avery , Deputy Solicitor, on the brief), for Robert B. Stebbins , General Counsel, Securities and Exchange Commission, Washington, DC.

Appeal from a judgment of the United States District Court for the Eastern District of New York (Irizarry, C.J., Levy, M.J.). District of New York (Irizarry, C.J., Levy, M.J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED. Defendant-Appellant Michael Metter challenges the district court's imposition of joint and several disgorgement liability in the amount of $52,236,995, plus prejudgment interest, and a civil penalty in the amount of $6,133,540. We assume the parties' familiarity with the procedural history of this matter, the underlying facts, and the issues on appeal.

We review the district court's disgorgement order for abuse of discretion. SEC v. Contorinis, 743 F.3d 296, 301 (2d Cir. 2014). We review the district court's imposition of a civil penalty for abuse of discretion. SEC v. Razmilovic, 738 F.3d 14, 38 (2d Cir. 2013) (citing SEC v. Kern, 425 F.3d 143, 153 (2d Cir. 2005)). We determine de novo whether the district court's disgorgement order or penalty amount to an excessive [*2] fine in contravention of the Eighth Amendment, accepting

-526- cv SEC v. Metter the district court's underlying factual findings unless clearly erroneous. United States v. Viloski, 814 F.3d 104, 109 (2d Cir. 2016).

I. Consent Judgment

As an initial matter, we note that Metter entered into a consent judgment with respect to liability in this matter. That consent judgment provides, in relevant part:

In connection with the Commission's motion for disgorgement, civil penalties and/or reimbursement, and at any hearing held on such a motion: (a) Defendant will be precluded from arguing that he did not violate the federal securities laws as alleged in the Complaint; (b) Defendant may not challenge the validity of the Consent or this Judgment; (c) solely for the purposes of such motion, the allegations of the Complaint shall be accepted as and deemed true by the Court; and (d) the Court may determine the issues raised in the motion on the basis of affidavits, declarations, excerpts of sworn deposition or investigative testimony, and documentary evidence, without regard to the standards for summary judgment contained in Rule 56(c) of the Federal Rules of Civil Procedure.

Judgment as to Defendant Michael E. Metter, Doc. 255, at 10. Included in the

Amended Complaint were the following allegations:

Defendant RM Enterprises [*3] International, Inc., is a Delaware corporation with its principal place of business in New York, New York. RM Enterprises is the majority shareholder of Spongetech and is controlled by Metter and Moskowitz. Metter and Moskowitz are the sole officers, serve as directors, and are currently the beneficial owners of two-thirds of RM Enterprises.

Amended Complaint at 7. Notwithstanding his agreement, Metter now claims on appeal that he did not control RM Enterprises and that Moskowitz was the person in control. In doing so, Metter violates the unambiguous terms of the consent judgment. We are unmoved by Metter's insistence that the relevant terms of the consent judgment should apply only to the well-pleaded facts in the Complaint. As the SEC correctly points out, under the terms of the consent judgment, it is

-526- cv SEC v. Metter immaterial whether the Complaint complied with Federal Rules of Civil Procedure 8 and 9 or would have survived a motion to dismiss. Metter surrendered his right to contest whether the factual allegations in the Complaint were well-pleaded when he agreed to the consent judgment. Without prejudice to any additional means the district court may deem appropriate to enforce its judgment, we elect simply [*4] not to consider those contentions made by Metter on appeal that are in violation of the judgment. This includes the Defendant's claim of double jeopardy.

II. Disgorgement

"The district court has broad discretion not only in determining whether or not to order disgorgement but also in calculating the amount to be disgorged. The amount of disgorgement ordered need only be a reasonable approximation of profits causally connected to the violation; any risk of uncertainty in calculating disgorgement should fall on the wrongdoer whose illegal conduct created that uncertainty." SEC v. First Jersey Securities, Inc., 101 F.3d 1450, 1474-75 (2d Cir. 1996) (internal quotation marks, citations, and alteration omitted). We are unconvinced by Metter's assertion that the characterization of the breadth of the district court's discretion in First Jersey, id., is unsuited to the circumstances of this case.

We find no abuse of discretion in the $52,236,995 amount of disgorgement liability imposed. The We find no abuse of discretion in the $52,236,995 amount of disgorgement liability imposed. The evidence before the district court showed, and Metter does not dispute, that $52,236,995 flowed into RM Enterprises as a result of the

-526- cv SEC v. Metter fraudulent scheme.1The Complaint alleges, and Metter cannot now deny, that he controlled RM Enterprises.2

III. Civil Penalty [*5]

Metter objects to the district court's imposition of a $6,133,540 civil penalty on the grounds that the district court included in its computation thereof a $5 million transfer from RM Enterprises to BusinessTalkRadio.net, Inc., an entity of which Metter was president. This $5 million was used to discharge delinquent debt that Metter had personally guaranteed and on which creditors had obtained judgments against Metter personally. Under these circumstances, the district court did not abuse its discretion when it included the $5 million transfer in its computation of Metter's personal enrichment. We likewise reject the Defendant's argument that his claim of financial hardship precluded the civil penalty imposed here.

IV. Eighth Amendment

In evaluating Metter's claim that the district court's disgorgement order violated

The SEC originally requested disgorgement in the amount of $52,356,995, which is consistent with the documentary record. On appeal, neither party has noted the discrepancy between this higher figure and the lower figure in the order and final judgment. The higher figure includes the lower one.

Metter argues that under the Supreme Court's recent decision in Honeycutt v ,United States, 137 S. Ct. 1626 (2017), disgorgement is appropriate [*6] only for the amount of money that he himself acquired from the scheme. Honeycutt is not controlling here for two principal reasons. First, as a matter of law, the decision applied to criminal forfeiture of the proceeds of controlled substance offenses under

U.S.C. § 853. Honeycutt, 137 S. Ct. at 1630. We decline Metter's invitation to extend the Honeycutt holding with respect to forfeiture under § 853 to the context of the equitable remedy of disgorgement. Second, as a matter of fact, the defendant in Honeycutt was an employee who had "no controlling interest in the store," id. at 1631 (internal quotation marks omitted), and thus had no control over the proceeds of the offense, while Metter did have control of RM Enterprises, a fact that he conceded in the consent judgment, and thus could control the distribution of proceeds. Even if the rule of Honeycutt applied in the context of disgorgement, therefore, that rule, which protects incidental figures from forfeiture of amounts far beyond what would be justified by their role in the offense, would not compel reversal in this case.

-526- cv SEC v. Metter the Excessive Fines Clause of the Eighth Amendment, the first step of our analysis is determining whether the disgorgement was a "fine" within the meaning [*7] of the Excessive Fines Clause. Viloski, 814 F.3d at 109. For the purposes of this appeal, we assume without deciding that, in light of the Supreme Court's recent decision in

Kokesh v. SEC, 137 S. Ct. 1635, 1642-44 (2017), the disgorgement liability imposed in this matter was essentially punitive in nature and thus was a fine within the meaning of the Excessive Fines Clause of the Eighth Amendment.

We proceed to consider whether the disgorgement ordered here was "grossly disproportional" within the meaning of United States v. Bajakajian, 524 U.S. 321, 334 (1998). In assessing whether a penalty is grossly disproportionate, we are required to examine the four "Bajakajian factors:"

(1) the essence of the crime of the defendant and its relation to other criminal activity, (2) whether the defendant fits into the class of persons for whom the statute was principally designed, (3) the maximum sentence and fine that could have been imposed, and (4) the nature of the harm caused by the defendant's conduct.

Viloski, 814 F.3d at 110 (quoting United States v. George, 779 F.3d 113, 122 (2d Cir. 2015)). In some cases, it may also be relevant whether the penalty effects a deprivation of an individual's livelihood. Id. at 111.

With respect to the first enumerated factor, we are, of course, cognizant that this penalty arises in the context of a civil enforcement action rather than a criminal prosecution, but the essence of the [*8] proscribed act is no less relevant. Here, Metter has admitted, for the purposes of the assessment of disgorgement liability, all of the facts alleged in the Complaint. The nature and character of Metter's actions as set -526- cv SEC v. Metter -526- cv SEC v. Metter

forth in the allegations of the Complaint amply justify the imposition of a harsh penalty. This factor weighs against a finding of gross disproportionality.

With respect to the second enumerated factor, the facts set forth in the Complaint establish that Metter, as a managing officer of a publicly traded company, is the precise type of person for whom the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act were designed. This factor also weighs against a finding of gross disproportionality.

We find the third enumerated factor inapposite in light of the absence of any statutory maximum in the context of a disgorgement award.

With respect to the fourth enumerated factor, we have not lost sight of the reality that each dollar of ill- gotten benefit Metter and his associates extracted by means of the illegal pump-and-dump scheme detailed in the Complaint flowed ultimately from the pockets of investors. As a publicly traded company, Spongetech had many such investors, but the harm caused [*9] by Metter's conduct is no less serious or severe for having been spread across multiple victims. This factor weighs against a finding of gross disproportionality.

With respect to whether the penalty effects a deprivation of Metter's livelihood, Metter, who bears the burden of showing the unconstitutionality of the district court's disgorgement order, id. at 109, has advanced no substantive argument as to the future prospects of his livelihood under that order. This factor is thus of no aid

-526- cv SEC v. Metter

to Metter.3 See id. at 114-15.

On balance, we are satisfied that the district court's imposition of disgorgement liability in the amount of $52,236,995 was not grossly disproportional, and thus effected no violation of Metter's Eighth Amendment rights. Indeed, since the disgorgement ordered almost precisely equaled the gains from the illicit conduct to the entity controlled by Metter, the resulting financial penalty was directly keyed to the scope of the wrongdoing.

We have considered all of Metter's remaining arguments and conclude that they are without merit. The judgment of the district court is AFFIRMED.

FOR THE COURT:

Catherine O'Hagan Wolfe, Clerk

Though Metter's failure to carry his burden is determinative [*10] of our analysis of this factor, we note in passing that "a forfeiture that deprives a defendant of his livelihood might nonetheless be constitutional, depending on his culpability or other circumstances." Viloski, 814 F.3d at 112. Accordingly, even assuming that the disgorgement order did effectively deprive Metter of his future ability to earn a living, it would be far from clear whether, under the circumstances of this case, the Eighth Amendment would suffer any insult.

Content Type: Cases

Terms: United States SEC v. Metter, 2017 U.S. App. LEXIS 16478

Narrow By: -None-

Date and Time: Aug 30, 2017 09:39:00 a.m. EDT About LexisNexis® Privacy Policy Terms & Conditions Sign Out

Copyright © 2017 LexisNexis. All rights reserved. Kessler, Steven 10/24/2017 For Educational Use Only

United States v. Chamberlain, 868 F.3d 290 (2017)

Federal criminal forfeiture statute does not permit 868 F.3d 290 the pretrial restraint of untainted substitute United States Court of Appeals, property; overruling U.S. v. Bromwell, 222 Fourth Circuit. Fed.Appx. 307; U.S. v. Bollin, 264 F.3d 391; U.S. v. McKinney, 915 F.2d 916. Comprehensive Drug UNITED STATES of America, Plaintiff-Appellee, Abuse Prevention and Control Act of 1970 § 413, v. 21 U.S.C.A. § 853(e)(1)(A). William Todd CHAMBERLAIN, Defendant-Appellant. National Association of Criminal Defense Lawyers; Cato Institute, Amici Supporting Appellant. 1 Cases that cite this headnote

No. 16-4313

| Submitted: July 31, 2017 | Decided: August 18, 2017 Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. Malcolm J. Howard, Senior District Judge. (5:14-cr-00128-H-2) Synopsis Background: Defendant was charged with conspiracy to Attorneys and Law Firms defraud the government while serving abroad in the armed forces. The United States District Court for the Eastern ARGUED: Elliot Sol Abrams, CHESHIRE PARKER District of North Carolina, 5:14-cr-00128-H-2, Malcolm J. SCHNEIDER & BRYAN, PLLC, Raleigh, North Carolina, for Howard, Senior District Judge, 2016 WL 2899255, granted Appellant. Stephen Aubrey West, OFFICE OF THE UNITED the government's application for pretrial restraint of substitute STATES ATTORNEY, Raleigh, North Carolina, for assets to prevent the sale of a piece of real property owned by Appellee. ON BRIEF: Samuel B. Hartzell, WOMBLE defendant and his wife. Defendant appealed. CARLYLE SANDRIDGE & RICE, LLP, Raleigh, North Carolina, for Appellant. Kenneth A. Blanco, Acting Assistant Attorney General, Trevor N. McFadden, Deputy Assistant Attorney General, James I. Pearce, Criminal Division, [Holding:] On rehearing en banc, the Court of Appeals, UNITED STATES DEPARTMENT *291 OF JUSTICE, Wynn, Circuit Judge, held that federal criminal forfeiture Washington, D.C.; John Stuart Bruce, United States Attorney, statute does not permit the pretrial restraint of untainted G. Norman Acker, III, Assistant United States Attorney, substitute property; overruling U.S. v. Bromwell, 222 OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, Fed.Appx. 307, U.S. v. Bollin, 264 F.3d 391, U.S. v. North Carolina, for Appellee. Thomas K. Maher, NORTH McKinney, 915 F.2d 916. CAROLINA OFFICE OF INDIGENT DEFENSE SERVICES, Durham, North Carolina; Ilya Shapiro, CATO Vacated. INSTITUTE, Washington, D.C.; Abbe David Lowell, Scott W. Coyle, CHADBOURNE & PARKE LLP, Washington, D.C., for Amici Curiae. Before GREGORY, Chief Judge, and WILKINSON, West Headnotes (1) NIEMEYER, MOTZ, TRAXLER, KING, SHEDD, DUNCAN, AGEE, KEENAN, WYNN, DIAZ, FLOYD, THACKER, and HARRIS, Circuit Judges. [1] Forfeitures Government's right to seizure or restraint Opinion

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 Kessler, Steven 10/24/2017 For Educational Use Only

United States v. Chamberlain, 868 F.3d 290 (2017)

Vacated by published opinion. Judge Wynn wrote the opinion, in which Chief Judge Gregory and Judges Wilkinson, Following the circulation of a proposed opinion to the full Niemeyer, Motz, Traxler, King, Shedd, Duncan, Agee, Court, Defendant submitted, as a supplemental authority, a Keenan, Diaz, Floyd, Thacker, and Harris joined. brief submitted by the government to the Supreme Court in Honeycutt v. United States, ––– U.S. ––––, 137 S.Ct. 1626, WYNN, Circuit Judge: 198 L.Ed.2d 73 (2017). In that brief, the government asserted that, under Luis, Section 853(e)(1)(A) does not permit the pretrial restraint of substitute property. Br. of Resp't at 36, Honeycutt, No. 16-142 (Feb. 22, 2017). In light of Defendant's This case calls upon us to reconsider our anomalous rule submission, the government moved the panel to *292 remand permitting the pretrial restraint of a defendant's innocent and, inter alia, represented that it would not seek pretrial property pursuant to the federal criminal forfeiture statute, 21 restraint of any of Defendant's assets not traceable to his U.S.C. § 853. Arguing that the Supreme Court's recent alleged offense. At that point, the Court voted unanimously to decision in Luis v. United States, ––– U.S. ––––, 136 S.Ct. set the matter for immediate en banc review. 1083, 194 L.Ed.2d 256 (2016), undermined the jurisprudential foundation of our earlier decisions interpreting that statute, Defendant William Chamberlain asks us to abandon our After the case was calendared for en banc review, the existing rule and join our sister circuits in holding that Section government submitted a supplemental brief in which it asks us 853 does not authorize such restraint. For the reasons set out to overrule our existing precedent and hold that Section 853(e) below, we agree to do so. Accordingly, we overrule our does not authorize the pretrial restraint of substitute assets. In precedent construing Section 853 and other identically phrased short, the government now agrees with Defendant's proposed restraint provisions allowing the pretrial restraint of substitute construction of Section 853(e). Accordingly, by unanimous assets and vacate the district court's order relying on that vote of the Court, this matter is being resolved by published precedent. opinion without the need for further oral argument.

II. I. The challenged order at issue in this case arises out of Preliminarily, we address the procedural posture of this Defendant's alleged participation in a conspiracy to defraud appeal. This case initially was argued before a panel of this the government while serving abroad in the armed forces. Court on January 26, 2017. At that time, the parties renewed Between July 2009 and January 2010, Defendant was the their dispute regarding the degree to which Luis abrogates our senior Non-Commissioned Officer in a U.S. Army deployment earlier holdings construing Section 853 to permit the to Afghanistan that was paired with a Special Forces Group government to restrain a criminal defendant's untainted assets split-team. In connection with the deployment, the split-team before trial. As below, the government conceded that the had access to federal funds earmarked for specified military property at issue is not traceable to any alleged crime and is purposes, such as the purchase of equipment not otherwise thus subject to pretrial restraint, if at all, as substitute property available through military supply systems and the pursuant to 21 U.S.C. § 853(p). The government also agreed administration of humanitarian projects benefiting the Afghan that, following Luis, the Constitution prohibits the pretrial population. According to the government, while overseas, restraint of innocently-obtained property when it is needed by Defendant—along with four other team members—conspired a criminal defendant to obtain counsel. The government to steal approximately $200,000 of these funds. nonetheless asserted that the restraining order was proper under our existing rule that the government may restrain a criminal defendant's “substitute property” pending trial under Specifically, the government alleges that Defendant and his 21 U.S.C. § 853(e)(1)(A), see United States v. Bollin, 264 co-conspirators withdrew Afghani currency from the Finance F.3d 391, 421–22 (4th Cir. 2001)—a rule, the government Office at Bagram Airfield, converted it into American maintained, that Luis did not abrogate. currency, and sent a portion of the stolen funds to the United

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Kessler, Steven 10/24/2017 For Educational Use Only

United States v. Chamberlain, 868 F.3d 290 (2017)

States via money order. Aware that they would need to account for the withdrawn funds, the co-conspirators allegedly falsified receipts to conceal their theft. The government further Though acknowledging our unique rule permitting the pretrial alleges that, in connection with an investigation into the restraint of substitute assets, Defendant argued that our scheme, Defendant “admitted to taking money during the decisions setting out this rule were abrogated by the Supreme deployment that he knew was ‘left over’ from” the accounts Court's recent decision in Luis. The district court disagreed and acknowledged that a co-conspirator “told [Defendant] and, concluding that it was bound to abide by our pre-Luis during the deployment that [the co-conspirator] had ‘written precedent, ordered Defendant to refrain from selling or off’ some of the ... funds entrusted to the team.” J.A. 54. The otherwise disposing of the property during the pendency of the government asserts that Defendant “used approximately proceedings against him. United States v. Chamberlain, No. $1,800 of stolen federal funds to purchase two [postal money 5:14-CR-128-2-H, 2016 WL 2899255, at *2 (E.D.N.C. May orders and] then electronically deposited the [money orders] 17, 2016). This interlocutory appeal followed. Because the into his USAA bank account.” J.A. 36. challenged order is procedurally equivalent to a preliminary injunction, we have jurisdiction pursuant to 28 U.S.C. § 1292(a)(1). See Gang Luan v. United States, 722 F.3d 388, On June 25, 2014, the government charged Defendant and two 391 (D.C. Cir. 2013); United States v. Ripinsky, 20 F.3d 359, co-conspirators in a two-count indictment alleging that the 361 (9th Cir. 1994); In re Assets of Martin, 1 F.3d 1351, 1355 defendants: (1) conspired to knowingly and unlawfully (3d Cir. 1993). embezzle, steal, purloin, or convert more than $1,000 in federal property, in violation of 18 U.S.C. §§ 371, 641; and (2) knowingly and unlawfully embezzled, stole, purloined, or converted more than $1,000 in federal property, in violation A. of 18 U.S.C. § 641.1 The indictment included a notice, pursuant to 28 U.S.C. § 2461(c) and 18 U.S.C. §§ For most offenses, federal law provides for the forfeiture upon 981(a)(1)(C) and 1956(c)(7), that the government intended to conviction of property associated with a defendant's crimes.2 seek the forfeiture of $200,000 in funds derived from the Codified at 21 U.S.C. § 853, the federal criminal forfeiture proceeds of the alleged scheme. This notice further indicated statute provides for the forfeiture of two types of assets upon that, in the event that such proceeds *293 were unavailable, conviction. First, Section 853(a) authorizes the forfeiture of the government intended to pursue forfeiture of any eligible three categories of property directly linked to a criminal substitute property pursuant to 21 U.S.C. § 853(p). defendant's offense of conviction (“tainted” property). These categories include: In October 2014, both of Defendant's co-defendants 1 entered guilty pleas before a magistrate judge. The two (1) any property constituting, or derived from, any proceeds other alleged co-conspirators earlier pleaded guilty to the person obtained, directly or indirectly, as the result of such a criminal information. [offense]; In April 2016, with the charges still pending against (2) any of the [defendant]'s property used, or intended to be Defendant, the government sought a restraining order, pursuant used, in any manner or part, to commit, or to facilitate the to 21 U.S.C. § 853(e)(1)(A), to prevent the sale of a piece of commission of, such [offense]; and real property owned by Defendant and his wife with an estimated value of $200,000. In so doing, the government correctly noted that “the Fourth Circuit, unlike other circuits, (3) in the case of a person convicted of engaging in a permits the pre-trial restraint of substitute assets, subject to continuing criminal enterprise[,] ... any of his interest in, Sixth Amendment concerns.” J.A. 45. Because Defendant's claims against, and property or contractual rights affording a counsel advised the government that the property at issue was source of control over, the continuing criminal enterprise. “not needed to pay attorney's fees,” the government asserted that the proposed order would not implicate Defendant's rights under the Sixth Amendment and was thus permissible under 21 U.S.C. § 853(a). Second, when such directly forfeitable Fourth Circuit precedent. J.A. 45–46. property has substantially diminished in value or is otherwise beyond the court's reach, Section 853(p) *294 separately

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 Kessler, Steven 10/24/2017 For Educational Use Only

United States v. Chamberlain, 868 F.3d 290 (2017)

provides for the forfeiture of “substitute property” (often omitted). referred to as “untainted” property) up to the value of any property that would have been directly subject to forfeiture under Section 853(a). By its terms, Billman addressed the parallel forfeiture provision of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1963. More recently, The government's forfeiture notice in this matter alleged however, we have extended its holding to permit the pretrial 2 that property derived from the charged conspiracy was restraint of substitute assets under Section 853. In particular, subject to civil forfeiture pursuant to 18 U.S.C. § 981. in United States v. Bollin, 264 F.3d 391 (4th Cir. 2001), we However, by incorporating procedures applicable to relied on Billman to hold that, as a matter of statutory criminal forfeiture proceedings in civil forfeiture construction, Section 853(e)(1)(A) authorizes the pretrial actions, 28 U.S.C. § 2461(c) allows criminal forfeiture wherever civil forfeiture is authorized. United States v. restraint of untainted assets. 264 F.3d at 421–22. In so doing, Newman, 659 F.3d 1235, 1239 (9th Cir. 2011). we explained that the “restraint and substitute assets provisions Accordingly, the discussion that follows addresses the of § 853 are identical to those in the RICO statute,” and we criminal forfeiture procedures set out at 21 U.S.C. § thus saw “no reason to construe them differently.” Id. (citing 853. Billman, 915 F.2d at 921). Because the government may restrain a RICO defendant's substitute assets before obtaining In addition to providing for the post-conviction seizure of a conviction, we held that Section 853(e) likewise permits the forfeitable property, the statute further authorizes pretrial pretrial restraint of substitute assets “to preserve their restraint of certain of a criminal defendant's assets. availability for forfeiture pending the outcome of [a Specifically, upon motion by the government, Section defendant's] case.” Id. at 422. 853(e)(1)(A) authorizes district courts to enter orders or take other necessary steps “to preserve the availability of property described in [Section 853(a) ]” that “would, in the event of Though we are far from the only court to have considered the conviction, be subject to forfeiture.” Although Section 853(e) issue, we alone have concluded that Section 853(e) permits the explicitly refers only to property described in Section 853(a), government to restrain a criminal defendant's untainted we have long interpreted this provision to permit the pretrial substitute property before trial. In fact, after Billman, at least restraint of both tainted property subject to forfeiture under seven circuits have expressly rejected the reasoning underlying Section 853(a) and untainted property—like Section 853(p) our interpretation of Section 853(e) as permitting the pretrial substitute property—that bears no direct relationship to the restraint of substitute property. See United States v. Parrett, defendant's alleged offense. 530 F.3d 422, 431 (6th Cir. 2008); United States v. Jarvis, 499 F.3d 1196, 1204 (10th Cir. 2007); Ripinsky, 20 F.3d at 363; United States v. Floyd, 992 F.2d 498, 501–02 (5th Cir. 1993); *295 In re Assets of Martin, 1 F.3d at 1358–59; see also Specifically, in United States v. McKinney (In re Billman), 915 United States v. Gotti, 155 F.3d 144, 149–50 (2d Cir. 1998) F.2d 916 (4th Cir. 1990), cert. denied, 500 U.S. 952, 111 S.Ct. (interpreting analogous RICO provision); United States v. 2258, 114 L.Ed.2d 711 (1991), we explained that federal Riley, 78 F.3d 367, 371 (8th Cir. 1996) (same). This weight of forfeiture statutes must “be liberally construed to effectuate” authority notwithstanding, we have thus far declined to revisit their purpose of preserving “the availability for forfeiture of our minority view in the years since Billman was decided. See, property that can be forfeited after trial.” 915 F.2d at 921. In e.g., United States v. Bromwell, 222 Fed.Appx. 307, 311 & n.2 view of this broader remedial purpose, the Billman panel (4th Cir. 2007). reasoned that when “the defendant has placed [potentially forfeitable assets] beyond the jurisdiction of the court, [pretrial restraint provisions] must be read in conjunction with Despite this longstanding conflict between this Court and our [substitute assets provisions] to preserve the availability of sister circuits, the Supreme Court has yet to consider squarely substitute assets pending trial.” Id. Such a reading, the panel whether the government may restrain a defendant's innocent explained, heeded the Supreme Court's admonishment that assets under Section 853 or other identically phrased “[p]ermitting a defendant to use assets for private purposes that provisions. However, in addressing related constitutional ... will become the property of the United States if a conviction challenges in recent years, the Court has offered some insight occurs[ ] cannot be sanctioned.” Id. (internal quotation marks into the scope of the government's statutory authority. Most

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 Kessler, Steven 10/24/2017 For Educational Use Only

United States v. Chamberlain, 868 F.3d 290 (2017)

notably, in Luis, the Justices repeatedly referred to Section 853 from moving assets beyond the reach of the court in order to in discussing the Sixth Amendment guarantee that a criminal evade their forfeiture upon conviction. Id. defendant may use legitimate, untainted assets to retain his or her counsel of choice. 136 S.Ct. at 1090–92 (plurality op.). Because the Court's constitutional holding did not rest on a In Luis, however, the Supreme Court all but rejected such an close reading of the statute, the Court was not called upon to expansive reading of its earlier holdings. Specifically, the Luis consider—much less decide—whether Section 853(e) permits plurality explained that, unlike tainted assets—the defendant's pretrial restraint of untainted property that is not needed to ownership of which is necessarily “imperfect”—untainted retain counsel. Nonetheless, the Luis Court's discussion of assets *296 “belong to the defendant, pure and simple.” Luis, Section 853—and pretrial restraint more generally—presents 136 S.Ct. at 1090. With this in mind, the plurality emphasized an opportunity to revisit our existing interpretation of that that the contention that “property—whether tainted or provision. untainted—is subject to pretrial restraint, so long as the property might someday be subject to forfeiture ... asks too much of [the Court's] precedents.” Id. at 1091. In fact, With this most recent discussion in mind, we turn now to highlighting Section 853 in particular, the plurality explained consideration of the continued viability of our present that “whether property is ‘forfeitable’ or subject to pretrial interpretation of Section 853. restraint under Congress' scheme is a nuanced inquiry that very much depends on who has the superior interest in the property at issue.” Id. As such, the distinction between tainted and untainted assets is “an important one, not a technicality. It is B. the difference between what is yours and what is mine.” Id.

Our holdings in Billman and Bollin rested on our interpretation of the text of Section 853(e) and the parallel RICO restraint Recognizing this important distinction, our reliance on provision, as well as our view of Congress's broader remedial Monsanto in interpreting Section 853(e) and the parallel RICO goals in enabling criminal forfeiture. Following Luis, however, restraint provision to embrace both tainted and untainted assets these bases for permitting the pretrial restraint of substitute now appears misplaced. Shorn of this reliance on an overbroad assets under these statutory provisions appear far less certain. reading of Supreme Court precedent, however, our existing Indeed, as discussed below, the plain language of Section 853 interpretation of Section 853(e) does not withstand close indicates that Congress did not intend the statute to permit such scrutiny. restraint. Accordingly, we hereby overrule Billman and Bollin.

By its terms, Section 853(e) authorizes restraining orders “to Our existing interpretation of Section 853(e) draws largely on preserve the availability of property described in subsection our reading of the Supreme Court's earlier decisions addressing (a)” that would be subject to forfeiture upon conviction. 21 pretrial asset restraint in connection with criminal U.S.C. § 853(e)(1) (emphasis added). Although we are bound prosecutions. For example, in Billman, we cited the Supreme to construe this language liberally “to effectuate [the] remedial Court's then-recent decision in United States v. Monsanto, 491 purposes” of Section 853, 21 U.S.C. § 853(o), Section 853(e)'s U.S. 600, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989), for the explicit reference to Section 853(a)—with no similar reference proposition that “[t]he government may ‘seize property based to Section 853(p)—indicates that Congress intended to limit on a finding of probable cause to believe that the property will pretrial restraining orders to property directly forfeitable under ultimately be proven forfeitable.’ ” 915 F.2d at 919 (quoting Section 853(a). The plain language of the statute, therefore, Monsanto, 491 U.S. at 615, 109 S.Ct. 2657). Though provides no authority to restrain substitute assets prior to trial. acknowledging that Monsanto addressed the distinct issue of See Luis, 136 S.Ct. at 1091 (noting that Section 853(e) the government's authority to restrain tainted assets described “explicitly authorizes restraining orders or injunctions against under Section 853(a), we extended the Court's reasoning to ‘property described in subsection (a) of this section’ (i.e., include untainted substitute assets under Section 853(e). Id. at tainted assets)” (emphasis in original)); see also Ripinsky, 20 921. As previously noted, this interpretation was compelled, F.3d at 363 (rejecting the contrary construction as “clearly we posited, by the Court's admonition that federal restraint contradictory to the plain statutory language”). provisions must be construed liberally to prevent defendants

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 Kessler, Steven 10/24/2017 For Educational Use Only

United States v. Chamberlain, 868 F.3d 290 (2017)

The lack of express authorization to restrain untainted authorization, Section 853(e) does not by its terms permit substitute assets is particularly noteworthy in comparison to pretrial restraint of substitute assets. other restraint provisions. For example, the provision at issue in Luis specifically authorized courts—in a separate civil action—to issue restraining orders preventing the dissipation of potential substitute assets held by defendants charged with III. certain banking and health care offenses. See Luis, 136 S.Ct. at 1087; see also 18 U.S.C. § 1345(a)(2)(B)(i) (providing that, In reevaluating our existing precedent, we are mindful of the “[i]f a person is alienating or disposing of property, or intends deference owed to our colleagues and predecessors, whose to alienate or dispose of property, obtained as a result of [such carefully reasoned conclusions we are called upon to an offense],” the government “may commence a civil action ... scrutinize. In the nearly three decades since Billman was for a restraining order to ... prohibit any person from decided, however, federal courts have continued to explore the withdrawing, transferring, removing, dissipating, or disposing constitutional and statutory limitations of the government's of any such property or property of equivalent value” authority to restrain the property of those who stand accused of (emphasis added)). Absent similar language permitting such violating federal law. With the benefit of these continuing restraint under Section 853, other courts have uniformly held developments, as well as the most recent pronouncements of that the “legislative silence regarding substitute property in § the Supreme Court and the government's own evolving views, 853(e) precludes pre-conviction restraint of substitute it is now apparent that our existing precedent construing property.” Jarvis, 499 F.3d at 1204 & n.8 (collecting cases); Section 853 cannot be maintained and that reconsideration of see also Gotti, 155 F.3d at 148–49 (summarizing cases our minority rule is appropriate. addressing both Section 853(e) and the parallel RICO provision). By its plain text, Section 853(e) permits the government to obtain a pretrial restraining order over only those assets that Moreover, although we have interpreted Section 853(a) to are directly subject to forfeiture as property traceable to a permit courts to issue money judgments covering a convicted charged offense. Consequently, our precedents to the contrary defendant's substitute assets, United States v. McHan, 345 F.3d are overruled and the district court's order relying on those 262, 272 (4th Cir. 2003), it does not follow that Section 853(e) authorities is VACATED. is similarly permissive. Indeed, *297 Section 853(p) authorizes courts to order the forfeiture of substitute property only where property “described in [Section 853(a) ]” is rendered unavailable “as a result of any act or omission of the All Citations defendant.” 21 U.S.C § 853(p). Framed in the past tense, this provision means that a forfeiture order covering substitute 868 F.3d 290 property may issue only upon a showing, after conviction, that directly forfeitable assets have been rendered unavailable. See Jarvis, 499 F.3d at 1204 (explaining that Section 853(p) “imposes specific preconditions on the government's ability to claim title to the defendant's substitute property, preconditions which can only be satisfied once the defendant has been convicted”).

In sum, the Supreme Court has signaled that there is a firm distinction between the government's authority to restrain tainted and untainted assets in construing Section 853 and related restraint provisions. Consistent with this important distinction, when Congress intends to permit the government to restrain both tainted and untainted assets before trial, it has clearly provided for such authority. Lacking such express

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 Kessler, Steven 10/24/2017 For Educational Use Only

United States v. Chamberlain, 868 F.3d 290 (2017)

End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 7

Asset Forfeiture Overview1

By Steven L. Kessler

Federal Criminal Defense Seminar Albany, NY – November 7, 2017

(Copyright © 2017 by Steven L. Kessler)

1. Civil vs. Criminal Forfeiture

There are two types of forfeiture in the federal system – civil forfeiture and criminal forfeiture. Civil forfeiture proceedings are brought in rem against the property itself, which is named the defendant, be it the contents of a bank account, stock certificates, real property or 100 bottles of beer. This supports one of our legal fictions in the law that the property itself is guilty of criminal activity. The property is often seized under a judge-issued seizure warrant pursuant to the Admiralty Rules. The person who wants to recover the defendant property is known as a Claimant. He is making a claim to the property. The Claimant must file a claim and an answer in the forfeiture proceeding.

The case then proceeds for the most part like an ordinary civil matter.

1 For in-depth analysis and discussions of the topics included in this overview, see Mr. Kessler’s treatises, Civil and Criminal Forfeiture: Federal and State Practice (WestGroup 1993 & 2017 Supp) and New York Civil and Criminal Forfeitures (LexisNexis 2017).

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 2 – By Steven L. Kessler

A federal criminal forfeiture, in contrast, is filed in personam against the criminal defendant himself, usually asserted in one or more counts of the criminal indictment.

Two main statutes, 21 U.S.C. § 853 and 18 U.S.C. § 982, deal with criminal forfeiture.

These statutes address issues such as the types of property subject to forfeiture, the criminal activity to which forfeiture can apply, available defenses, and when and how property can be restrained, seized, forfeited and sold.

Forfeitable property is usually property that is involved in some way with criminal activity. However, federal law also provides a backup method for forfeiting property that has become unavailable because it has been dissipated, devalued, hidden or removed from the country. In that event, the government may forfeit untainted assets belonging to the defendant that are equal in value to the missing property. Such property is referred to in the statute as “substitute property”. 21 U.S.C. § 853(p). If forfeitable property has been transferred to a third party ‘straw owner’ to evade forfeiture, the government can follow that property into the hands of a third party as well. 21 U.S.C. § 853(c).

2. Specific Property vs. Money Judgments

The government has argued that the legitimacy of money judgments – which are a judge-made creation – has been at least implicitly affirmed by the Committee that drafted

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 3 – By Steven L. Kessler

Rule 32.2 of the Federal Rules of Criminal Procedure in 2000. Although the Rule was to some extent a reworking of a subsection of an earlier version of Criminal Rule 32, it was the first time the words “money judgment” and forfeiture were found in the same sentence of an authority other than a court decision.2

It is an important Rule for the defendant in a criminal forfeiture case where the government seeks the forfeiture of specific property. While the Rule provides that the amount of a money judgment forfeiture will be determined by the court during the forfeiture phase of a trial, it also provides that “[i]f the government seeks forfeiture of specific property, the court must determine whether the government has established the requisite nexus between the property and the offense.” Fed. R. Crim. P. 32.2(b)(1)(A).

The key here for defense counsel is that where the government seeks to forfeit specific property, the defendant (or the government) is entitled to have the ‘nexus to the property’ issue decided by a jury. Fed. R. Crim. P. 32.2(b)(5)(A) (“In any case tried before a jury, if the indictment or information states that the government is seeking forfeiture, the court must determine before the jury begins deliberating whether either party requests that the jury be retained to determine the forfeitability of specific property

2 A wonderful decision on the illegality of money judgments is found in United States v. Surgent, ___ F.Supp.2d ___, 2009 U.S. Dist. LEXIS 72563, 2009 WL 2525137 (Aug. 17, 2009) (Gleeson, J.).

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 4 – By Steven L. Kessler if it returns a guilty verdict”). As the Rule states, the decision to have a jury make the nexus determination must be made before conviction.

Electing to have the jury make the determination provides to the defendant the added benefit of requiring the prosecutor to “submit a proposed Special Verdict Form listing each property subject to forfeiture and asking the jury to determine whether the government has established the requisite nexus between the property and the offense committed by the defendant.” Fed. R. Crim. P. 32.2(b)(5)(B). So, put the government to its proof and, for your client’s benefit, have the jury make this determination rather than rely on the judge to see things favorably for your client.

3. Provisional Remedies

The government’s right to pretrial restraint of assets in forfeiture cases is not absolute. In the Second Circuit, the government cannot restrain substitute assets before trial because they have no relation to the underlying criminal activity. United States v.

Gotti, 155 F.3d 144 (2d Cir. 1998),

Until recently, if you practiced in the Third, Fifth, Sixth, Eighth, Ninth or Tenth circuits, you were fine, because those courts also have properly interpreted the criminal forfeiture laws to bar pretrial restraint of substitute assets, a result clearly supported by the

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 5 – By Steven L. Kessler legislative history.3 The lone dissenter was the Fourth Circuit, adhering to its 1990 decision, In re Billman, 915 F.2d 916 (4th Cir. 1990), in which it held that pretrial restraint of substitute assets is consistent with the remedial purposes of the statute. See United

States v. McHan, 345 F.3d 262 (4th Cir. 2003).

Just last year, the Supreme Court put an end to this debate. Although the holding of the Court’s decision in Luis v. United States, 578 U. S. ___, 136 S. Ct. 1083, 194 L.

Ed. 2d 256 (March 30, 2016) addressed the release of untainted funds to pay a defendant’s counsel of choice, the Court’s discussion of the issue was far broader, making it clear that Section 853(a) permits only pretrial restraint of tainted property.

Indeed, this past August, the Court of Appeals for the Fourth Circuit acknowledged as much. In United States v. Chamberlain, 868 F.3d 290, 297 (4th Cir.

2017), the Court held that “Section 853(e) does not by its terms permit pretrial restraint of substitute assets” and expressly overruled Billman and the quarter-century of decisions from the Fourth Circuit adhering to Billman.

Where a criminal defendant’s assets are restrained pretrial because the government

3 See In re Assets of Martin, 1 F.3d 1351 (3d Cir. 1993) (also citing S. Rep. No., 970- 520); United States v. Holy Land Found. For Relief & Dev., 722 F.3d 677 (5th Cir. 2013); United States v. Parrett, 530 F.3d 422 (6th Cir. 2008); United States v. Field, 62 F.3d 246 (8th Cir. 1995); United States v. Ripinksy, 20 F.3d 359 (9th Cir. 1994) (citing S. Rep. No. 97-520, 97th Cong., 2d Sess. 10 n.18 (1982)); United States v. Jarvis, 499 F.3d 1196 (10th Cir. 2007).

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 6 – By Steven L. Kessler has shown probable cause that the property is related to the criminal activity, it is extremely difficult to get such property released to pay the defendant’s living expenses and legal bills. That’s in part because of a 25-year-old Supreme Court decision named

United States v. Monsanto, 491 U.S. 600 (1989). In Monsanto, the Supreme Court held that the Sixth Amendment right to counsel does not authorize the pretrial release of tainted funds to pay counsel fees. In what has come to be known as a Monsanto hearing, however, the defendant can move for the release of funds on the grounds that the property sought to be released is not tainted. Once the motion is made, the burden shifts to the government to make its probable cause showing anew in an adversary hearing. The government usually tends to avoid such hearings because it forces them to tip their hand regarding the criminal case against the defendant and the motion will get settled instead.

A recent notable exception to this pattern came in a criminal matter before Judge Miriam

Cedarbaum of the Southern District of New York, where the government agreed to take a

Monsanto motion to a hearing and won.4

Putting the government to its proof, however, is a double-edged sword, at least in a

District where the courts expect the defendant to complete under oath the prosecutor’s lengthy financial disclosure form as a precondition to holding a Monsanto hearing. This

4United States v. Greenwood, 865 F. Supp. 2d 444 (S.D.N.Y. May 30, 2012).

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 7 – By Steven L. Kessler may require some soul-searching by both the criminal defendant and counsel, as an inaccurate financial affidavit can obviously come back to hurt you. If you have reason to suspect that your client has undisclosed assets, it is best to avoid these hearings. In that situation, if all of the defendant’s assets are restrained, the better course is to have the defendant borrow from a family member or take out a home equity loan to pay legal fees.

Because of Luis and Gotti, the government cannot argue that it is entitled to restrain such untainted funds to secure a potential money judgment or substitute assets forfeiture, so you should be able to proceed without government interference.

Second Circuit practitioners faced with the issue of whether to request a Monsanto hearing must also be aware of that the Court’s relatively recent decision clarifying the conditions for granting such a hearing. In United States v. Bonventre, 720 F.3d 126 (2d

Cir. 2013), the Court of Appeals made clear that the defendant must show that he has insufficient unrestrained assets to pay counsel to warrant a hearing, a requirement that the district courts typically had required anyway. The Second Circuit also clarified than the government’s burden on a Monsanto motion in a criminal forfeiture is different that in a civil forfeiture case. In a criminal case, the government must demonstrate that there is probable cause to believe both that the criminal committed the criminal acts alleged in the indictment and that the restrained assets are subject to forfeiture as the proceeds of or

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 8 – By Steven L. Kessler involved in the criminal activity. In a civil case, the government need only show that there is probable cause to believe that the assets are subject to forfeiture under the applicable civil forfeiture statute.

In United States v. James Daniel Good Real Property, 510 U.S. 43, 52 (1993), the

Supreme Court observed that property owners whose property is seized for potential forfeiture are entitled to due process protection because the property has been seized by the government “not to preserve evidence of wrongdoing, but to assert ownership and control over the property itself.” The high Court held that prompt judicial review of such seizures is “of particular importance here, where the government has a direct pecuniary interest in the outcome of the proceeding.” Id. at 55-56. To support this proposition, the

Court also cited Justice Scalia’s opinion in Harmelin v. Michigan,5 where he wrote that

“it makes sense to scrutinize governmental action more closely when the State stands to benefit.”

When a criminal defendant is indicted, his or her tainted assets can be seized or restrained through all of the procedures available under both federal and state law, including:

• attachment of bank accounts and personal property

5 501 U.S. 957, 979 n.9 (1991).

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 9 – By Steven L. Kessler

• issuance of temporary restraining orders and preliminary injunctions against the defendant and others who are holding the defendant’s property or owe money to the defendant

• restraints on the transfer of real property such as lis pendens, and

• the appointment of a receiver to manage a business or commercial property owned by the criminal defendant.

When a defendant’s property is restrained in a criminal case, it is restrained for forfeiture only, not for restitution, payment of fines or anything else. The statutes authorizing seizures and restraints are only in the forfeiture laws. Examples include warrants of seizure, execution orders and orders of disposition and sale of seized property under the criminal forfeiture statute codified at 21 U.S.C. § 853, in subsections (f), (g) and (h). Seizures of property are also authorized under the civil forfeiture statute, 18

U.S.C. § 981(b) through (d), which can be used in criminal cases as well. The concept here is that forfeitable property was never truly property of the defendant, so the moment the defendant wrongfully obtained the property, it really belonged to the government.

This is the basis for what is known as the ‘relation back’ doctrine, a key forfeiture law provision. As phrased in 21 U.S.C. § 853(c), the relation back doctrine provides that

“[a]ll right, title, and interest in property [subject to forfeiture] vests in the United States upon the commission of the act giving rise to forfeiture under this section.” Thus, all of the defendant’s ill-gotten gains can be seized immediately upon indictment and held

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 10 – By Steven L. Kessler through sentencing. That not only puts the government first in line, but also excludes consideration of all other claims for what is often a period of years.

4. Kaley v. United States

A note about Kaley v. United States, 571 U.S. ___, 134 S. Ct. 1090 (2014). Kaley is a complex decision. What makes it so is that, according to the majority, Kaley is a grand jury case but, according to the dissent, it is a forfeiture case. So, for us as practitioners, at the very least, if the government attempts to use Kaley against you in a forfeiture case, your response is that the United States Supreme Court has stated definitively that Kaley has nothing to do with forfeiture. The majority held only that the

Kaleys could not use a Monsanto hearing to challenge the grand jury's probable cause finding that they committed the criminal acts alleged by the government. 134 S. Ct. at

1095 (the Kaleys are “not contesting that the assets restrained were . . . traceable to the conduct. [Their] quarrel is whether that conduct constitutes a crime”).

Sadly, truncating and sanitizing of the facts was the only way the majority could reach its desired result. Many of us are accustomed to this on the state level. But, in my experience, it is unusual before the Supreme Court. The majority also chose to tighten its blinders when it came to the widespread abuse of the forfeiture laws by the government.

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 11 – By Steven L. Kessler

This ivory tower perspective also adds to the understanding of the result in Kaley.

Certainly, it is no coincidence that, despite his political affiliation, Chief Justice Roberts, who authored the dissent, is the only Justice who had extensive experience representing private parties before joining the Court.

Although it is the dissent, Roberts’ eloquent rendition, especially relating to the right to counsel, is worthy of framing. He discusses the rich potential for prosecutorial overreaching, id. at 1105, and its relationship to fairness of the entire proceeding (“The possibility that a prosecutor could elect to hamstring his target by preventing him from paying counsel of choice raises substantial concerns about the fairness of the entire proceeding”). Roberts wrote:

Retaining one’s counsel of choice ensures the fundamental fairness of the actual trial, and thus may be far more valuable to a criminal defendant than pretrial release.

Id. at 1111.

Roberts continued, emphasizing how the Court’s decision eroded confidence in our adversary system of criminal justice “by permitting the Government to deprive a criminal defendant of his right to counsel of choice, without so much as a chance to be heard on why such a significant pretrial deprivation is unwarranted.” Id. at 1114. The

Chief Justice then concluded:

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 12 – By Steven L. Kessler

Federal prosecutors, when they rise in court, represent the people of the United States. But so do defense lawyers – one at a time. In my view, the Court’s opinion pays insufficient respect to the importance of an independent bar as a check on prosecutorial abuse and government overreaching. Granting the Government the power to take away a defendant's chosen advocate strikes at the heart of that significant role.”

Id. at 1114-1115.

5. Right to Counsel of Choice Becomes Paramount in Luis v. United States

Justice Roberts’ concerns about right to counsel expressed in his dissent in Kaley assumed center stage in Luis, although the opinion was written by Justice Breyer. As noted above, the Luis decision is significant for its reasoning in ensuring that untainted assets are not subject to pretrial restraint under section 853(c) or similar statutes.

But the holding of Luis actually arose under a different statute, 18 U.S.C. §

1345(a)(2), which authorizes pretrial restraint of assets sought to be forfeited in specific banking and health care fraud prosecutions. Notably, unlike section 853(c), section

1345(a)(2) specifically permits not only the pretrial restraint of tainted property, but also other “property of equivalent value” during the pendency of criminal proceedings to secure a potential forfeiture judgment.

Despite this express authorization by Congress for pretrial restraint of untainted assets, the Luis Court held that the Sixth Amendment right to counsel of choice overrides

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 13 – By Steven L. Kessler the statute. Reinforcing the importance of right to counsel of choice, the Court held that, where a defendant charged with a violation of 18 U.S.C. § 1345 lacks sufficient unrestrained funds to retain counsel of choice, but the government has available restrained untainted funds, the Sixth Amendment requires that those funds be released for that limited purpose.

6. Untainted Property Can be Forfeited Only Pursuant to the Substitute Asset Statute: Honeycutt v. United States

The other aspect of Luis – the government’s limited rights to the defendant’s untainted property prior to trial – took center stage in the Supreme Court’s 2017 decision in Honeycutt v. United States, 578 U.S. ___, 137 S. Ct. 1626 (June 5, 2017). As in Luis, the Court’s reasoning ranged more broadly, and has potentially even more significance, than the holding of the decision. Unlike Luis, however, which was a 4-3 decision with

Justice Thomas concurring in the result, Honeycutt was unanimous. And unlike Luis, which endorsed what was already the view of the vast majority of circuits in barring pretrial restraint of substitute assets, the Honeycutt ruling overruled virtually every Circuit court that had decided the issue.

In Honeycutt, the Supreme Court held that joint and several liability had no place in the world of criminal forfeiture. The biggest problem with permitting joint and several

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 14 – By Steven L. Kessler liability, beyond the express language of the statute, the Court noted, was that it would permit the government to forfeit untainted property. The Court parsed the many provisions of the forfeiture statute that treat tainted property differently than untainted property. The Court noted that the only way the government can forfeit untainted property is through the substitute assets provision of 21 U.S.C. § 853(p). Permitting joint and several liability would allow the government to do an ‘end run’ around the statute.

The jurisprudence underlying both Honeycutt and Luis is that criminal forfeiture remedies prescribed by Congress should be narrowly construed, and additional remedies not expressly authorized by statute should not be inferred by the courts. Further, both decisions are founded on the critical distinction between tainted and untainted property.

Luis focused on this distinction at the pretrial stage, while Honeycutt was primarily concerned with barring forfeiture of untainted property except through the substitute asset provision created by Congress for that purpose.

Interestingly, the Honeycutt Court also quoted Kaley:

. . . §853(e)(1) authorizes pretrial freezes ‘to preserve the availability of property described in subsection (a) . . . for forfeiture.’ Pretrial restraints on forfeitable property are permitted only when the Government proves, at a hearing, that (1) the defendant has committed an offense triggering forfeiture, and (2) ‘the property at issue has the requisite connection to that crime.’

Honeycutt, at *7 (quoting Kaley, 134 S. Ct. at 1095).

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 15 – By Steven L. Kessler

What is interesting about this quote is the Court’s reference to a “hearing” at which the government will be required to establish the connection between the property sought to be restrained and the offense. But under Monsanto, Bonventre and other decisions, a defendant is entitled to such a hearing only where he or she lacks sufficient assets to pay for counsel of choice. For the Honeycutt Court, however, there should be no requirement for making a preliminary showing of poverty. If property is not properly restrained because it has not been shown to have the requisite nexus to the criminal activity, it should be released whether the defendant needs it to pay counsel of choice or not.

Another interesting implication of the Honeycutt decision is its potential impact on the future of money judgment forfeitures. In a significant footnote, the Supreme Court rejected the government’s reliance on 21 USC § 853(o), which states that “the provisions of [§ 853] shall be liberally construed to effectuate its remedial purposes.” The Court’s response to the government’s argument was that “the Court cannot construe a statute in a way that negates its plain text, and here, Congress expressly limited forfeiture to tainted property that the defendant obtained. . .. [T]hat limitation is incompatible with joint and several liability.”

Section 853(o) is the same provision pointed to by every court that has authorized money judgment forfeitures. If the Court finally invalidates money judgment forfeitures

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected] Asset Forfeiture Overview Page – 16 – By Steven L. Kessler and requires prosecutors to trace proceeds to criminal activity, as the Honeycutt decision strongly indicates, the abuse of criminal forfeiture should be markedly reduced. This change is long overdue.

LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE THIRTY-FOURTH FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected]

STEVEN L. KESSLER maintains a national AV-rated white collar practice in New York. He litigates cases of first impression and has been involved with many state and federal forfeiture cases of national significance.

Mr. Kessler is a nationally recognized authority in the field of forfeiture law, representing clients in forfeiture and white collar criminal cases in state and federal district and appellate courts nationwide. He is a member of the Joint Rules Committee for the Southern and Eastern Districts of New York with regard to the forfeiture-related local rules. Mr. Kessler is the author of CIVIL AND CRIMINAL FORFEITURE: FEDERAL AND STATE PRACTICE (West Group 1993 & Supp. 2017), a three-volume treatise, analyzing the forfeiture and RICO statutes of all 50 states and the District of Columbia and the major federal forfeiture provisions. He received the Otto L. Walter Distinguished Writing Award from New York Law School in June 2000 for his highly acclaimed one-volume treatise, NEW YORK CRIMINAL AND CIVIL FORFEITURE (LexisNexis 2017). A contributor to the New York Law Journal and other publications on issues relating to forfeiture and criminal law, Mr. Kessler is the author and Revisions Editor of portions of the CIVIL PRACTICE MANUAL (LexisNexis) and ten chapters of the renowned 15-volume treatise, Weinstein, Korn & Miller’s NEW YORK CIVIL PRACTICE. He is widely quoted and cited in court opinions and media of legal and general circulation nationwide, including The New York Times, The Wall Street Journal, The Washington Post, Business Week, The Christian Science Monitor, The Houston Chronicle, The Kansas City Star and the ABA Journal, among others. Mr. Kessler was selected for inclusion in SUPER LAWYERS every year since 2012 and in NEW YORK’S TOP RATED LAWYERS, and his biography appears in WHO’S WHO IN AMERICAN LAW and similar publications. He is in his 24th year as an Adjunct Professor of Law at New York Law School, where he teaches New York Practice.

Mr. Kessler is a regular speaker and panelist at CLE programs and seminars. He has lectured before the National Conference of State Legislatures and the Southern Conference of the Council of State Governments, and has testified before the New York State Assembly Codes Committee and the New York City Council. He is a member of the Forfeiture Abuse Task Force of the National Association of Criminal Defense Lawyers, and served as Co-Chair of the Forfeiture Law subcommittee of the New York State Association of Criminal Defense Lawyers. He is also a past Treasurer of the NYSACDL and a member of its Board of Directors.

In addition, Mr. Kessler served from 1999-2001 as Chair of the General Practice Section of the New York State Bar Association. Between 1989 and 2001, he was the editor of One on One, the General Practice Section’s highly acclaimed newsletter. He served for eight years as a member of the NYSBA’s House of Delegates and was Chair of the Association’s Special Committee on AIDS and the Law from 1992 to 1996, a multi-professional committee responsible for the passage of groundbreaking legislation in Albany. He is a Fellow of the New York Bar Foundation.

Prior to entering private practice, Mr. Kessler was head of the Asset Forfeiture Unit of the Bronx District Attorney’s office, where he supervised and litigated all phases of forfeiture and related matters. In that capacity, he was a member of the Forfeiture Law Advisory Group of the New York State District Attorney’s Association.

A graduate of the Cornell Law School, Mr. Kessler is a member of the New York and Connecticut Bars and is admitted to practice before the United States Supreme Court. He has appeared before the United States Courts of Appeals for the First, Second, Third, Fifth and Seventh Circuits and the District Courts in Connecticut, Florida, Illinois, Massachusetts, New Jersey, New Mexico, New York, North Carolina, Texas, Vermont and West Virginia.

THE LAW OFFICES OF STEVEN L. KESSLER 100 PARK AVENUE 34th FLOOR NEW YORK, NEW YORK 10017-5516 TEL: 212-661-1500 FAX: 212-297-0777 WWW.KESSLERONFORFEITURE.COM E-mail: [email protected]

APPLYING THE BRAKES ON A RUNAWAY TRAIN:

THE SUPREME COURT LIMITS CRIMINAL FORFEITURE IN HONEYCUTT

Steven L. Kessler*

When Congress enacted the Civil Asset Forfeiture Reform Act of 2000 (CAFRA),

it targeted civil forfeiture as the area of greatest abuse and thus in most urgent need of

reform. It’s easy to see why. In civil forfeiture cases, the government utilizes one of our

legal fictions and brings an in rem action against the ‘guilty property.’ The property

owner is then required to affirmatively come forward and file a claim and answer to the

forfeiture complaint to preserve his or her property rights. No criminal conviction, or

even a criminal proceeding, is required. Indeed, even an acquittal in the criminal case

does not bar a civil forfeiture proceeding arising from the same alleged conduct. And, if

no claims are filed, the government keeps the property by default, a result that occurs in

the vast majority of administrative and judicial civil forfeiture proceedings.

The Myth That Criminal Forfeiture Is Less Subject to Abuse than Civil Forfeiture

With the enactment of CAFRA, Congress sought to steer federal prosecutors to

criminal forfeiture by making criminal forfeiture more inclusive and civil forfeiture less

attractive.1 Prior to CAFRA, there were a number of categories for which only civil

forfeiture was available. CAFRA expanded criminal forfeiture to permit the government

to forfeit any property that could be forfeited civilly.2

Other provisions sought to make civil forfeiture less attractive, such as a stepped- up burden of proof and the availability of market-rate attorneys’ fees for successful claimants in civil forfeiture cases rather than the far lower capped fees available under the Equal Access to Justice Act.

These statutory changes relied on the assumption that criminal forfeiture is less subject to abuse because forfeiture is part of sentencing. Although the government’s burden of proof in criminal forfeiture is the same preponderance standard as in civil forfeiture, Congress believed that the risk of abuse would be reduced because a criminal conviction was required before any property of the defendant could be forfeited in a criminal proceeding.

Unfortunately, it turned out that greater reliance on criminal forfeiture has given rise to a different set of abuses. Some of these are as serious as, if not more serious than, civil forfeiture abuse. While civil forfeiture laws – which are an offshoot of maritime law and stretch back hundreds of years to British civil law – have traditionally been strictly construed, there is no such history behind criminal forfeiture laws, which are of far more recent origin.3

Abuse No. 1: Consent Forfeitures

One of the most common abuses in criminal forfeiture cases involves plea agreements where the criminal defendant enters into a consent forfeiture and agrees to forfeit property that does not belong to him or her. This problem arises because the criminal forfeiture statutes bar third party claims to property until after the defendant is sentenced and the property is included in a preliminary order of forfeiture.4

By the time the third party can be heard, in an “ancillary proceeding” where the fate of the property is determined, the property has already been “found” to be related to the defendant’s criminal activity, often again on nothing more than the defendant’s

2 consent. Making matters worse, most courts prevent the third party property owner from challenging the forfeitability of the property in the ancillary proceeding. So unless the third party fits into two narrow categories of the statute, the property will be forfeited based on nothing more than the defendant’s agreement, which is usually motivated by a desire to agree to forfeit as much property as possible to secure a lighter sentence or shorter incarceration. At least one decision involving this issue is pending on appeal.5

Abuse No. 2: Money Judgment Forfeitures

Another area of criminal forfeiture abuse is the so-called ‘money judgment forfeiture.’ This judge-made remedy permits the government to bypass the entire forfeiture process, including the right to a jury determination, and have the court essentially ‘pick a number’ based on the evidence of how much the defendant received from the criminal activity. Money judgments excuse the government from having to prove ‘nexus’ and show that a particular property is actually related to the criminal activity. The money judgment is entered, just like a civil judgment. The government then executes the money judgment against any property of the defendant, even untainted assets, regardless of its relationship to the criminal activity.

This result is particularly offensive because Congress already provided the government with two procedures for avoiding the ‘tracing’ requirement. First, where money and other fungible property is sought, the government need not trace it to the criminal activity. However, the statute of limitations is shortened from five years to one year.6 Second, if the government cannot locate the tainted property because of some act

3 of the defendant, such as liquidating it, transferring it or removing it from the jurisdiction, the government may forfeit “substitute assets,” which are any other property ‘of the defendant,’ regardless of taint, up to the amount of the missing tainted property.7

In 2004, a Pennsylvania district court dared to point out that money judgments are not authorized by Congress, and that “[c]ommon sense suggests that one cannot

‘forfeit’ something unless he first owns or possess it.”8 The court distinguished substitute assets, which presuppose that the defendant at some point had the tainted property, but subsequently dissipated it.

The government fought the court’s decision tooth and nail, ultimately securing a reversal from the Third Circuit. The remaining courts addressing the issue quickly closed ranks.9 One exception, however, came from the District Court for the Eastern

District of New York. In United States v. Surgent,10 Judge John Gleeson demonstrated that money judgments are not authorized by statute. He provided a detailed, historically-based and reasoned analysis missing from Croce and the decisions affirming the validity of money judgment forfeitures. Equally important, Judge Gleeson demonstrated that the money judgment route, valid or not, should not excuse the government from having to satisfy its statutorily-mandated burden of tracing the property sought to be forfeited to the criminal activity.

In a footnote in an unrelated case, the Second Circuit acknowledged Judge

Gleeson’s “thorough discussion” of the validity of money judgments but found it, “[i]n the end . . . unpersuasive.”11 And with that, the Surgent decision seemingly disappeared, relegated to the cabinet of legal curiosities.

4 Abuse No. 3: Joint and Several Liability

At the same time, a third area of criminal forfeiture abuse was rearing its head – the imposition of ‘joint and several liability’ for criminal forfeiture judgments on co- defendants alleged to be jointly involved in criminal activity. As with money judgment forfeitures, courts were convinced by prosecutors that it was appropriate and necessary to import this common law tort remedy into the statutory scheme of criminal forfeiture law to ensure that criminals did not circumvent the statute and pocket their ill-gotten gains.

Further, joint and several liability can be viewed as an extension of money judgment forfeitures, an outgrowth that could not exist without them. If there were no money judgment forfeitures, and prosecutors were always required to trace, it would be difficult for joint and several liability to come into play. If tainted property had to be traced from the criminal activity to a particular defendant, there would seem to be no basis for then drawing a line to a co-defendant without proof that the co-defendant actually received some of the tainted property.

With money judgments, the courts usually determine how much property the defendant obtained as proceeds of the crime or how much property was involved in a money laundering offense. Under those circumstances, it is a simple matter to declare that any number of defendants conspired together to obtain the proceeds or launder the property without specifying who actually received what property.

5 The Honeycutt Decision

The Roberts-led Supreme Court hinted at some dissatisfaction with the state of

criminal forfeiture law in recent decisions,12 but the rifle shot came in its June 5, 2017 decision in Honeycutt v. United States.13 Unconcerned with the fact that virtually every

Court of Appeals that has addressed the issue has ruled otherwise,14 the Supreme Court, in a unanimous decision, unequivocally rejected the application of joint and several liability in criminal forfeiture cases.15

The facts: The Honeycutt brothers were prosecuted under the federal drug laws

for selling suspiciously large quantities of a legal product that they knew or should have

known likely would have been used to manufacture methamphetamine. Although they

were brothers, they did not profit equally from the sales of their Tennessee hardware

store. Tony Honeycutt owned the store. Terry Honeycutt managed sales and inventory,

but he was an employee with no ownership interest in the business.

The government sought a money judgment against each brother in the total

amount of $269,751.98, which it asserted was the store’s profits from the sale of the

product containing the methamphetamine ingredient. Tony, the store owner, pled

guilty and agreed to forfeit $200,000. Terry went to trial and was convicted on 11 of 14

counts, including conspiracy and distribution. Terry was sentenced by the district court

to sixty months’ imprisonment.

Although the government conceded that Terry had no ownership interest in the

store and did not benefit personally from the sales that formed the basis for the

forfeiture amount, the government sought to hold Terry jointly and severally liable for

the entire amount of the store’s tainted profits. Therefore, the government sought a

6 money judgment of $69,751.98 against Terry, the total alleged profits of the conspiracy less the amount paid by Tony, his ‘co-tortfeasor.’ Interestingly, the district court denied the government’s forfeiture request, finding that Terry had not “personally received any profits” from the unlawful sales. The Court of Appeals for the Sixth Circuit reversed, however, and Terry took the case to the Supreme Court.

The legal question presented: The Court identified the question presented as whether the criminal forfeiture statute “embraces joint and several liability for forfeiture judgment.” The Court noted that applying this tort doctrine to criminal forfeiture

“would require that each defendant be held liable for a forfeiture judgment based not only on property that he used in or acquired because of the crime, but also on property obtained by his co-conspirator.”16

The Court noted initially that application of joint and several liability could result in the forfeiture of untainted property, which would contravene the limitations of the criminal forfeiture statute. Further, the Court found that the statute “defines forfeitable property solely in terms of personal possession or use,” as it specifically “limits forfeiture to property the defendant ‘obtained . . . as the result of’ the crime.” Under the law and ordinary usage, the Court said, “obtaining” property means personally acquiring or securing possession of it.17

Further, while section 853(a)(1) provides that forfeitable property may be

“obtained, direct or indirectly,” obtaining property indirectly still requires that the defendant actually receive it. An example of receiving forfeitable property indirectly would be if the funds were paid to the criminal defendant through an intermediary. But the property must nevertheless be “obtained” by the defendant, not by someone else.

7 Finding additional confirmation of the statutory intent to require personal receipt by the defendant, the Court pointed to provisions that limited forfeiture of property used to facilitate a crime to “the person’s property,” and limited forfeiture of property related to a continuing criminal enterprise to “his” – i.e., the defendant’s – “‘interest in’ the enterprise.”18

The Court looks more broadly at criminal forfeiture: The Court ranged even further from the construction of the specific statute in issue to demonstrate that joint and several liability is contrary to several other provisions of the criminal forfeiture statute. The statute, the Court found, consistently separates its treatment of tainted property from that of untainted property, a crucial distinction that is not preserved by the application of joint and several liability.

First, the relation-back provision of section 853(c) – which vests title to tainted property in the government upon the commission of the act giving rise to forfeiture – applies only to “tainted property obtained as the result of or used to facilitate the crime.”

Second, the pretrial freeze provision of the criminal forfeiture statute similarly applies only to property that the government proves, at a hearing, “has the requisite connection” to the charged criminal activity. Third, the statute’s provision for a rebuttable presumption that property is subject to forfeiture applies only to property “acquired by

[the defendant] during the period of the violation” and where there is “no likely source for such property” other than the crime.19

Permitting the application of joint and several liability upends this statutory scheme by failing to preserve the statute’s distinction between tainted and untainted assets. It permits the forfeiture of any property of a co-defendant, regardless of its

8 relationship to the criminal activity, so long as the co-defendant is found to be jointly and severally liable for the criminal activity and there is a forfeiture judgment arising from that criminal activity.

For the Supreme Court, however, the ‘clincher’ was the substitute assets provision, the sole criminal forfeiture statute that specifically authorizes the forfeiture of untainted property from a defendant. It should be recalled that the forfeiture of substitute assets is permitted, but only if sufficient tainted property of the defendant cannot be located as a result of “any act or omission of the defendant.”20

According to the Court, the substitute assets provision

demonstrates that Congress contemplated situations where the tainted property itself would fall outside the Government’s reach. To remedy that situation, Congress did not authorize the Government to confiscate substitute property from other defendants or co-conspirators; it authorized the Government to confiscate assets only from the defendant who initially acquired the property and who bears responsibility for its dissipation. Permitting the Government to force other co-conspirators to turn over untainted substitute property would allow the Government to circumvent Congress’ carefully constructed statutory scheme, which permits forfeiture of substitute property only when the requirements of §§ 853(p) and (a) are satisfied. There is no basis to read such an end run into the statute.21

The Court applies the rule of narrow construction of forfeiture statutes to criminal forfeiture: Against this statutory scheme, the government’s contention that the

“bedrock principle” of joint and several liability of co-conspirators must be read into the statute rang hollow. As noted above, the principle that forfeiture statutes must be strictly construed is largely a civil in rem forfeiture principle that has rarely been applied in a criminal forfeiture context. But that is precisely what the Supreme Court in

Honeycutt did.

9 The Court pointed out that forfeiture was historically civil in nature. Traditional forfeiture law kept a strict boundary between in rem civil proceedings and any related in personam criminal proceeding.22 With the enactment of the criminal forfeiture provision of section 853, “Congress altered this distinction . . . by effectively merging the in rem forfeiture proceeding with the in personam criminal proceeding and by expanding forfeiture to include not just the ‘thing’ but ‘property . . . derived from . . . any proceeds’ of the crime.”

The Court’s point was that Congress may have “altered” the distinction between civil in rem forfeiture and in personam criminal proceedings, but Congress did not eliminate that distinction. Criminal forfeiture is derived from civil forfeiture and subject to the same limitations:

[A]s is clear as is clear from its text and structure, § 853 maintains traditional in rem forfeiture’s focus on tainted property unless one of the preconditions of § 853 exists. For those who find it relevant, the legislative history confirms as much: Congress altered the traditional system in order to ‘improv[e] the procedures applicable in forfeiture cases.’ By adopting an in personam aspect to criminal forfeiture, and providing for substitute-asset forfeiture, Congress made it easier for the Government to hold the defendant who acquired the tainted property responsible. Congress did not, however, enact any ‘significant expansion of the scope of property subject to forfeiture.’23

Thus, the Supreme Court held that joint and several liability does not apply to criminal forfeiture. Only assets obtained directly or indirectly by a defendant are subject to forfeiture.

Implications of Honeycutt

The Supreme Court’s conclusion that, with the passage of the criminal forfeiture

10 laws, “Congress did not . . enact any ‘significant expansion of the scope of property

subject to forfeiture” should apply equally to money judgment forfeitures, which have no

basis in traditional civil forfeiture law. With Honeycutt, the Supreme Court has placed criminal forfeiture in the same context of forfeiture jurisprudence as civil forfeiture.

Criminal forfeitures should be disfavored, just like civil forfeiture. Criminal forfeiture statutes should be narrowly construed, just like civil forfeiture statutes.

Money judgment forfeitures are just as inconsistent with the statutory scheme as joint and several liability. And the invalidity of money judgment forfeitures is proven with the same provisions cited by the Supreme Court to prove the invalidity of joint and several liability, particularly the substitute asset provision, which essentially serves the same purpose that the government claims can only be satisfied by a money judgment.

Notably, these are some of the same provisions relied upon by Judge Gleeson in Surgent in finding that money judgments contravene Congress’ statutory scheme for criminal forfeiture.

In Surgent, Judge Gleeson rejected the numerous cases approving money judgment forfeitures because they all relied to some degree on “the novel proposition that a remedy or sanction not expressly forbidden by Congress is thereby authorized by it.”24 The reasoning rejected by Judge Gleeson, that any forfeiture remedy not specifically barred by Congress is permissible, is the same reasoning the courts have cited for applying joint and several liability that has now been rejected by the Supreme

Court in Honeycutt. The standard is not whether Congress has forbidden a remedy, but whether it has specifically authorized it. That is a test – now the law of the land – that applies to any forfeiture sanctions or remedies, civil or criminal.

11 The coup de grace of the Honeycutt decision is a footnote rejecting the government’s reliance on section 853(o), which states that “the provisions of [§ 853] shall be liberally construed to effectuate its remedial purposes.”25 The Court’s response to the government’s argument was that “the Court cannot construe a statute in a way that negates its plain text, and here, Congress expressly limited forfeiture to tainted property that the defendant obtained. . .. [T]hat limitation is incompatible with joint and several liability.”

Section 853(o) is the same provision pointed to by every court that has authorized money judgment forfeitures. As the Supreme Court correctly found, that provision is not a license for applying the criminal forfeiture laws in direct contravention of their plain meaning.

Criminal forfeiture statutes require the government to trace the property sought to be forfeited to a particular defendant. Both money judgments and joint and several liability contravene this requirement. If, after Honeycutt, prosecutors are finally required to satisfy the tracing requirement, the abuse of criminal forfeiture should be markedly reduced. If not, perhaps the Supreme Court will take on money judgments directly, leading them to the same demise as joint and several liability.

______

Steven L. Kessler, a long-time member of the NACDL Forfeiture Abuse Task Force, is an authority in the field of forfeiture with a national practice based in New York. He is a member of the Joint Rules Committee on Forfeiture for the Southern and Eastern Districts of New York and author of Civil and Criminal Forfeiture: Federal and State Practice (West Group 1993 & Supp 2017) and New York Criminal and Civil Forfeitures (LexisNexis 2016). Eric M. Wagner, an associate to Mr. Kessler, assisted in the preparation of this article.

12 1. See United States v. Capoccia, 503 F.3d 103, 116 (2d Cir. 2007) (Sotomayor, J.) (CAFRA’s expansion of criminal forfeiture was intended “to prevent abuse of the civil forfeiture process . . . by encouraging the government to seek forfeiture through criminal proceedings, where it would have to link targeted property to a specific criminal conviction”) (citing H.R. Rep. 016-192, at 8 (1999); 146 Cong. Rec. S1753-02; CAFRA § 16, 114 Stat. at 221 (“Encouraging Use of Criminal Forfeiture as an Alternative to Civil Forfeiture”).

2. See 28 U.S.C. § 2461(c)(“If a forfeiture of property is authorized in connection with a violation of an Act of congress, and any person is charged in an indictment or information with such violation but no specific statutory provision is made for criminal forfeiture upon conviction, the Government may include the forfeiture in the indictment or information in accordance with the Federal Rules of Criminal Procedure, and upon conviction, the court shall order the forfeiture of the property in accordance with the procedures [for criminal forfeiture] . . . in 21 U.S.C. § 853 . . ..”)

3. Compare United States v. One 1936 Model Ford V-8 De Luxe Coach, Motor No. 18- 3306511, 307 U.S. 219, 226 (1939) (“Forfeitures are not favored; they should be enforced only when within both letter and spirit of the law”) with United States v. Russello, 464 U.S. 16, 20 (1983) (in criminal forfeiture case under the Racketeer Influenced and Corrupt Organizations Act, rejecting petitioner’s argument that “criminal forfeitures are disfavored” and that criminal forfeiture statutes should be “strictly construed” against the government).

4. See 21 U.S.C. § 853(k).

5. See United States v. Nicoll, No. 15-2901 (3d Cir.), appealing, inter alia, United States v. Nicoll, 2015 WL 4251134 (D.N.J. July 9, 2015); United States v. Nicoll, 2015 WL 4251088 (D.N.J. July 9, 2015) (Chesler, J.).

6. 18 U.S.C. § 984.

7. 21 U.S.C. § 853(p).

8. United States v. Croce, 334 F. Supp. 2d 781, 785 (E.D. Pa.), amended on reconsideration, 345 F. Supp. 492 (E.D. Pa. 2004), reconsideration denied, 355 F. Supp. 2d 774 (E.D. Pa. 2005), reversed and remanded, 209 Fed. Appx. 208 (3d Cir. 2006).

9. See, e.g., United States v. Day, 524 F.3d 1361 (D.C. Cir. 2008); United States v. Casey, 444 F.3d 1071 (9th Cir. 2006); United States v. Hall, 434 F.3d 42 (1st Cir. 2006); United States v. Poulin, 690 F. Supp. 2d 415 (E.D. Va. 2010); United States v. Salvagno, 2006 WL 2546477 (N.D.N.Y. Sug. 28, 2006); see also United States v. Blackman, 746 F.3d 137 (4th Cir. 2014) (upholding validity of money judgments without reference to Croce); United States v. Hampton, 732 F.3d 687, 691-92 (6th Cir. 2013) (same); United States v. Padron, 527 F.3d 1156 (11th Cir. 2008) (same); United States v. Jarvis, 499

13 F.3d 1196 (10th Cir. 2007) (Same). Before reversing Croce, the Third Circuit rejected Croce’s determination regarding the invalidity of money judgment forfeitures in United States v. Vampire Nation, 451 F.3d 189 (3d Cir. 2006).

10. United States v. Surgent, 2009 U.S. Dist. LEXIS 72563 (E.D.N.Y. Aug. 17, 2009).

11. United States v. Awad, 598 F.3d 76, 79 n.5 (2d Cir. 2010). The Second Circuit in Awad stated that “we join our sister courts of appeal in holding that § 853 permits imposition of a money judgment on a defendant who possesses no assets at the time of sentencing.” 598 F.3d at 78 (citations omitted).

12. See, e.g., Luis v. United States, 578 U.S. ___, 136 S. Ct. 1083 (Mar. 30, 2016). Luis resolved a split in the Circuits in holding that criminal forfeiture law does not permit the pretrial restraint of substitute property, i.e., property not shown to be proceeds of or involved in criminal activity.

13. Honeycutt v. United States, 581 U.S. ___, 2017 WL 2407468 (June 5, 2017).

14. The Supreme Court noted that the Second, Third, Fourth and Eighth Circuits had held in favor of applying joint and several liability to criminal forfeitures, while the D.C. Circuit had ruled against application of the doctrine. See Honeycutt, 2017 WL 2407468, *4 n.1 (citing United States v. Cano-Flores, 796 F.3d 83, 91 (D.C. Cir. 2015); United States v. Van Nguyen, 602 F.3d 886, 904 (8th Cir. 2010); United States v. Pitt, 193 F.3d 751, 765 (3d Cir. 1999); United States v. Benevento, 836 F.2d 129, 130 (2d Cir. 1988) (per curiam)). The Sixth Circuit also ruled in favor of joint and several liability in Honeycutt itself, the decision reversed by the Supreme Court. See United States v. Honeycutt, 816 F.3d 362 (6th Cir. 2016).

15. Justice Gorsuch took no part in the decision.

16. Honeycutt v. United States, 2017 WL 2407468, *4.

17. Id., 2017 WL 2407468, *6. The Court even cited the dictionary definition of “obtain” from 1966, when section 853 was enacted, as well as a 1933 edition of the unabridged Oxford English Dictionary, the current edition of Black’s Law Dictionary and a recent decision of its own. Not surprisingly, the Court found that the definition of “obtain” has remained constant through the decades. Id. (citing Random House Dictionary of the English Language 995 (1966); 7 Oxford English Dictionary 37 (1933); Black’s Law Dictionary 1247 (10th ed. 2014); Sekhar v. United States, 570 U.S. ___, 133 S. Ct. 2720 (2013) (“Obtaining property requires ‘. . . the acquisition of property’”)).

18. Honeycutt v. United States, 2017 WL 2407468, *6 (citing 21 U.S.C. §§ 853(a)(2)- (3)).

19. Honeycutt v. United States, 2017 WL 2407468, *7 (citing 21 U.S.C. § 853(c) (relation back); § 853(e)(1) (pretrial restraint); § 853(d) (rebuttable presumption); Luis v. United

14 States, 136 S. Ct. at 1090 (relation back applies only to tainted property); Kaley v. United States, 571 U.S. ___, 134 S. Ct. 1090, 1095 & n.11 (2014) (“forfeiture applies only to specific assets”)).

20. 21 U.S.C. § 853(p).

21. Honeycutt v. United States, 2017 WL 2407468, *8.

22. Honeycutt v. United States, 2017 WL 2407468, *9 (quoting The Palmyra, 12 Wheat 1, 14-15 (1827) (“[t]he thing [was] primarily considered as the offender, or rather the offence [was] attached primarily to the thing. . . . [The forfeiture] “proceeding in rem st[ood] independent of, and wholly unaffected by any criminal proceeding in personam” against the defendant)).

23. Honeycutt v. United States, 2017 WL 2407468, *9 (quoting S. Rep. 98-225).

24. United States v. Surgent, 2009 U.S. Dist. LEXIS 72563, *47.

25. Honeycutt v. United States, 2017 WL 2407468, *9, n.2 (quoting 21 U.S.C. § 853(o)).

15

Investigating the Evidence: Getting the Records You Need

PRESENTED BY FAHEEMAH DOWNS

Introduction This session will discuss approaches and methods for re-evaluating the processed crime scene as well as how to navigate through the different entities of MPD to obtain the records you need for mounting an effective defense.

Why Is Looking At the Evidence Important We should not take the government’s evidence and their interpretation of the evidence at face value We should only look at the government’s evidence as the starting point for building our case We should fully explore what the government has and explore our own leads

Investigating The Police Department and Their Evidence

Police Department WEDSITE Wealth of Information Gun Walk In Program Alerts Crime Map Property Tweets Press Releases Crime and Activity Statistics Evidence Control Branch Crime

Albany Police Department Facebook Albany Police Department Tweeter Page

Evidence Control Branch

Located at:

17 DC Village Lane, SW Washington, DC 20032 Navigating Evidence Control Branch

Know the process and procedure to view the evidence

Make sure language reads view and photograph

Fax to MPD Evidence Control Branch.

Evidence Viewings must be scheduled 72 hours in advanced. What to Bring

Camera Note pad Photo Log Gloves are provided

Impoundment Lot

Located at:

5001 Shepherd Parkway, SW Washington, DC 20020

Navigating Impoundment Lot

When was car delivered

Photograph Car

Swab Car

DNA Labs Research articles about the labs Are they following proper protocol Have they passed the national accreditation National accreditation board suspends all DNA testing at D.C. crime lab By Keith L. Alexander April 27, 2015 One of the national organizations that govern DNA laboratories has ordered the District’s new crime lab to immediately suspend all DNA casework after concluding that the lab’s procedures are “insufficient and inadequate.”

Cell Phone Records/ Cell Site Analysis Importance of Cell Phone Records and Cell Site Records Everybody has a cell phone (clients/witnesses)

Contains Evidence (Exculpatory and Inculpatory)

Provides Leads

Must understand what the Govt is alleging. How and why the Govt can or cannot corroborate its allegations through phone records?

The Scenario

The Scenario

Client is accused of a stabbing murder at an auto repair shop.

Date: 07/19/2012 Time: Approx. 19:00 (7:00 PM) Crime Scene: 39 Q St. SW Alibi Location: 201 N St. SW

Based on the client’s cell site data, could he have been at the scene of the crime?

Investigating Police Department Cameras and Surveillance Footage CCTV Cameras DCPS Cameras Buildings and Street Cameras WMATA Cameras License plate reader, red light cameras

*** time sensitive, be specific and be prepared ***

Medical Records Brown Subpoena Ex-Parte

May provide unredacted names of Witnesses

Narrative of incident, Consistent? Inconsistent

Toxicology Report/Drugs/Alcohol/Demeanor

General Orders You must review Police Departments General Orders (online)

FOIA the police departments training procedures and materials Discuss how you can use general orders to bolster your cross-examination of crime scene “expert” and other government witnesses Find things that violate general orders and as well as the guidelines of DOJ How to properly recover a gun Chain of custody for evidence

Police Misconduct Revolutionized in court practice at general felony level (guns and drugs)

Request information from Office of Police Complaints (OPC)

Request information from IAD

ALL of this led to more investigation into police officers….

Police Officers Facebook Pages

Crime Map Is an application available on MPD website ◦ http://crimemap.dc.gov/ It provides detailed information about crimes reported in DC and provides a map of incident locations It does not provide data on non-violent incidents in DC. It does not provide data earlier than 2011 Sexual Assault Data Disclaimer

What Does Crime Map Tell You ◦ Criminal Complaint Number ◦ District ◦ Method ◦ Offense ◦ PSA ◦ Report Date ◦ Shift ◦ Ward ◦ Map Coordinates An Interactive Map Crime Data

REPORT_DAT OFFENSE METHOD BLOCK DISTRICT CCN 8/4/2013 7:52 THEFT F/AUTO OTHERS W STREET SE AND 16TH STREET SE 7 13109607 8/4/2013 15:46 ASSAULT W/DANGEROUS WEAPON OTHERS 2300 - 2499 BLOCK OF HARTFORD STREET SE 7 13109785 8/4/2013 2:28 ROBBERY OTHERS 1300 - 1367 BLOCK OF SAVANNAH STREET SE 7 13109560 8/3/2013 18:05 MOTOR VEHICLE THEFT OTHERS CONGRESS STREET SE AND 10TH PLACE SE 7 13109262 8/4/2013 7:43 BURGLARY OTHERS 3100 - 3119 BLOCK OF MARTIN LUTHER KING JR AVENUE 7 13109620 8/3/2013 9:24 SEX ABUSE OTHERS 1341 - 1399 BLOCK OF HOWARD ROAD SE 7 13109111 8/4/2013 1:40 THEFT/OTHER OTHERS 714 - 799 BLOCK OF CONGRESS STREET SE 7 13109527 8/4/2013 20:29 BURGLARY OTHERS 2700 - 2799 BLOCK OF WADE ROAD SE 7 13109875 8/3/2013 9:22 THEFT/OTHER OTHERS 2700 - 2899 BLOCK OF LANGSTON PLACE SE 7 13109139 8/3/2013 9:50 THEFT F/AUTO OTHERS 3400 - 3499 BLOCK OF 23RD STREET SE 7 13109114 8/4/2013 6:27 THEFT F/AUTO OTHERS 2200 - 2235 BLOCK OF RIDGE PLACE SE 7 13109603 8/3/2013 1:12 ASSAULT W/DANGEROUS WEAPON GUN 3500 - 3599 BLOCK OF STANTON ROAD SE 7 13108963 8/4/2013 3:27 BURGLARY OTHERS 3300 - 3399 BLOCK OF 11TH PLACE SE 7 13109551 8/3/2013 19:09 THEFT/OTHER OTHERS 2001 - 2248 BLOCK OF ALABAMA AVENUE SE 7 13109342 8/4/2013 18:00 THEFT/OTHER OTHERS 3400 - 3499 BLOCK OF 24TH STREET SE 7 13109822 8/3/2013 0:37 MOTOR VEHICLE THEFT OTHERS 3200 - 3225 BLOCK OF 13TH STREET SE 7 13108933 8/4/2013 21:30 THEFT F/AUTO OTHERS 4680 - 4699 BLOCK OF MARTIN LUTHER KING JR AVENUE 7 13109881 8/4/2013 23:21 BURGLARY OTHERS 2300 - 2399 BLOCK OF RAYNOLDS PLACE SE 7 13109957 8/4/2013 21:01 BURGLARY OTHERS 4000 - 4399 BLOCK OF 3RD STREET SE 7 13109889 8/3/2013 22:07 ROBBERY OTHERS 2000 - 2099 BLOCK OF SOUTHERN AVENUE SE 7 13109419 8/4/2013 0:24 ROBBERY GUN 4307 - 4599 BLOCK OF 3RD STREET SE 7 13109486 8/4/2013 15:54 ASSAULT W/DANGEROUS WEAPON KNIFE 108 - 149 BLOCK OF IRVINGTON STREET SW 7 13109773 8/4/2013 15:23 ASSAULT W/DANGEROUS WEAPON OTHERS SAVANNAH STREET SE AND 23RD STREET SE 7 13109765 8/3/2013 4:07 ROBBERY GUN 3100 - 3299 BLOCK OF STANTON ROAD SE 7 13109043 Office of Research and Analysis Services

Provides: arrest data, call for service data, and other data.

Items Needed for Crime Scene Investigation Crime Scene Investigation Methods Observe

Record

Collect

Preserve Investigating the Crime Scene Collect evidence Photograph Diagrams and sketches Measurements Canvassing Other Areas GPS Monitoring Ballistics 911 calls and radio runs

And so much more…

Jason Downs Impeachment Ok…Not That ↑Kind Of Impeachment Fall 2017 Impeachment - Overview

• Most common form is impeachment via prior inconsistent statement • Impeachment via omission • Other forms of impeachment ▫ Inconsistency with another witness ▫ Bias ▫ Prior conviction Impeachment - Overview

• Write out the impeachments you anticipate/hope for • In reality, you must be prepared to impeach without having written out the questions for impeachment Impeachment via prior inconsistent statement

• Three Cs 1) Confirm 2) Confront 3) Complete Impeachment via prior inconsistent statement

▫ Confirm – Clearly establish the current version of the testimony to be impeached Impeachment via prior inconsistent statement

▫ Confirm – Use language signaling an impeachment is coming – E.g., you’re now claiming…today you say…your most recent story is…according to you today… Impeachment via prior inconsistent statement

▫ Confirm – Use precise wording of the statement to be impeached – “Mr. President, today, you claim the electoral college is actually genius in that it brings all states, including smaller ones, into play” Impeachment via prior inconsistent statement

▫ Confront – Confront the witness with the prior inconsistent statement – The method by which you confront the witness depends on why you’re impeaching – Earlier version was true? – Neither version is true? – I’m in control. Period. Impeachment via prior inconsistent statement

▫ Confront – Earlier version was true? – Foundation as to time, place, and who was involved in the prior statement – Indicia of truth of the prior statement (e.g., proximity in time to the incident; under oath; signed; prior statement was true when spoken AND still true today) Impeachment via prior inconsistent statement

• E.g.: confronting the witness – prior version was true: • [confirm] • You discussed the electoral college on November 6, 2012 • The day of the 2012 election • You weren’t running for President in that election • You were not a politician on Nov. 6 2012 • You weren’t trying to influence people to vote for you in the 2012 election Impeachment via prior inconsistent statement

• Common example = grand jury testimony • Send a message before confronting the witness: pick up the transcript Impeachment via prior inconsistent statement

• E.g. confronting the witness – prior version was true: • [confirm] • You testified in this case before grand jury • Date • Location • Description • Oath • Truth • Proximity to incident? Impeachment via prior inconsistent statement

• Unsworn [defense] statement • Confronting the witness – prior statement was true • Similar build up • Date • Location • Proximity to incident? • Description • Truth • Truth you told [insert date] is still true today Impeachment via prior inconsistent statement

▫ Confront – Neither version is true? – Nearly the same foundation – However, do not build up the indicia of truth – Tone of voice, body language, movement is more accusatory Impeachment via prior inconsistent statement

• E.g. confronting the witness – neither version is true • [confirm] • You discussed the electoral college on November 6, 2012 • The day of the 2012 election Completing an Impeachment

• If impeachment via prior inconsistent statement, YOU read the statement word for word (slowly) • E.g. “Mr. President, on Nov. 6 2012, you said, the electoral college is a disaster for democracy” Completing an Impeachment

• Immediately show the witness the document/audio/video? • Depends on your goal. Earlier version is true? Neither version is true? • “you testified, word for word,…” Full Impeachment Example (prior version is true)

• “Mr. President, today, you claim the electoral college is actually genius in that it brings all states, including smaller ones, into play” • You discussed the electoral college on November 6, 2012 • The day of the 2012 election • You weren’t running for President in that election • You were not a politician on Nov. 6 2012 • You weren’t trying to influence people to vote for you in that election • Of course, you had no reason to lie on Nov. 6 2012 • On Nov. 6 2012, you said, the electoral college is a disaster for democracy Full Impeachment Example (neither version is true)

• “Mr. President, today, you claim the electoral college is actually genius in that it brings all states, including smaller ones, into play” • You discussed the electoral college on November 6, 2012 • On Nov. 6 2012, you said, the electoral college is a disaster for democracy Impeachment Example – “Today you claim you claim you don’t know anything about David Duke” Impeachment Example – “When you weren’t a politician, you said David Duke was a racist and a bigot” Completing an Impeachment

• If impeachment via another witness, ask the witness the question you plan to ask the impeachment witness (don’t forget to call the impeachment witness!) Completing an Impeachment

• If impeachment via omission, there are different ways: • You never said [omitted fact] • Read [document] and look up when you find the spot where you said [omitted fact] • I’m going to give you this read pen, circle where you said, [omitted fact] Impeachment By Omission

• Practically, you’ll likely be using a grand jury transcript or a defense statement • You must establish: ▫ A question was asked that would have elicited a response including the omitted matter Impeachment By Omission

• Practice tips to establish before completing the impeachment: 1) The witness understood the need to be complete on important details 2) The document, report, hearing, or interview must have been an (hopefully, “the”) appropriate place to speak of or note the important matter that was omitted 3) At the time of the interview (hearing, report, etc.), the witness knew or should have known of the important matter that was omitted Impeachment By Proof of Bias

• Bias cross-examination is guaranteed by the 6th Amendment as a basic component of the right to confront adverse witnesses. • Extrinsic Evidence Is Admissible • Important cases ▫ Davis v. Alaska, 415 U.S. 308, 316 (1974), Delaware v. Van Arsdall, 475 U.S. 673 (1986), Olden v. Kentucky, 488 U.S. 227 (1988), Alford v. United States, 282 U.S. 687 (1931), Smith v. Illinois, 390 U.S. 129 (1968) Impeachment By Proof of Conviction

• Fed. R. Evid. 609 • Collateral details inadmissible Conclusion

• Practice Tips: ▫ Deciding whether to impeach the witness ▫ Breaking the inconsistency into several changed facts ▫ Primacy / recency ▫ Avoiding ruining your hard work by offering the witness a chance to explain Cyber Ethics – Terms, Definitions and Suggestions

Data Mining

What is it?

Data mining is a newer threat that takes advantage of the vast quantity of data that is recorded electronically. Data mining sifts through information to identify patterns or trends.

How can it harm?

Hackers and identity thieves use data mining to find ways to exploit individual targets. They can use data mining to find personal and confidential information on web sites with weak security measures.

What can I do?

Think Before You Post: Remember that what you post online could be accessible to anyone worldwide. Limit the amount of information you put online, and be sure to keep personal and client-related information out of social networking sites. See the section on social media and networking for more details.

Social Engineering

What is it?

Social engineering is a method used to trick users into giving out information about themselves or the network or to take some action that can grant an attacker unauthorized access. Social engineering can be carried out in person, over the phone, over the Internet, and through e-mail. Of all the attack types, social engineering is one of the simplest, most common, and most successful.

How can it harm?

Hackers can use social engineering to trick you into giving out sensitive or personal information that could be used in additional attacks against you or the Client.

What can I do?

To prevent social engineering attacks, be cautious of anyone requesting information, especially by phone or e-mail. Always verify the identity of the person or organization making the request and the reason for the request.

1 Phishing and Spear Phishing

What is it?

Phishing is a scheme that mixes social engineering with digital communication to lure victims into providing information. For example, an attacker sends an e-mail asking the recipient to click on a link within the e-mail. This link brings the victim to a phony web site designed to look like a legitimate site. The victim is then asked to provide personal information.

Spear phishing is a more advanced form of phishing as it utilizes some knowledge about its recipients in order to appear legitimate.

Spear phishing messages are targeted to small groups or individuals. For example, those targeted by spear phishing attacks may all be employees of the same company or members of the same bank.

What is it?

Phishing e-mails may have one or more of the following characteristics: • Phishing e-mails use generic greetings, while spear phishing e-mails use personal information for a more targeted greeting. • Fake sender’s address • The “From” e-mail address can be easily faked (spoofed). It might appear completely correct, or have a similar variation. Example: [email protected] • The message may come from a legitimate e-mail account because that account has been compromised. Example: [email protected] • Sense of urgency • Fake or deceptive web links • E-mails that make extensive use of graphics and have layouts similar to a web site • Misspellings and non-standard grammar

How can it harm?

Attackers often gain sensitive or personal information – such as passwords and credit card details – from their victims through misleading e-mails and fake web pages. Typically this information is used to commit identity theft.

What can I do?

Always be suspicious of e-mails requesting personal or sensitive information. Unless you are sure and trust the sender, never click on a link in an e-mail. Instead, open your web browser and type in the organization’s web address yourself.

If you suspect a phishing or spear phishing scam, contact the organization in question to confirm that they sent the e-mail.

2 Information Spillage

What is it?

Information spillage occurs when information is processed or received on an information system operated at a level lower than the classification assigned to the information. For example, spillage would occur if confidential information were processed on personal e-mail accounts or sensitive information were processed on a public Internet web site.

How can it harm?

Information spillage compromises the confidentiality of information by exposing it to: (a) users not authorized to access it; and/or (b) information systems not authorized to process it.

What can I do?

You are obligated to safeguard client or case-related information. You must be aware of the processes and procedures for assigning security classifications, marking, storing, and transmitting client information. Proper reporting, coordination, and cleanup are critical to limiting the spillage of Client and/or confidential information.

Social Media and Social Networking

What are they?

Social media consist of a variety of digital technologies that foster interaction among individuals who use the tools. Social media enables individuals to:

• Post their own content and/or comment on what others have posted • Download distributed media files, such as video and audio • Interact in simulated learning, gaming, and trading environments • Engage in online conversations and network with others • Examples of social media include Internet forums, videos, wikis, blogs, microblogs, virtual worlds, podcasts, Twitter forums, and social networking sites.

Social networking is a means of connecting to people through people you know. It includes communication mechanisms such as forums, chat rooms, e-mail, and instant messaging. Social networking also includes social networking sites (SNS) such as MySpace, Facebook, LinkedIn, Yammer, delicious, Flickr, and Twitter.

How can they cause harm?

Social media and social networking sites often contain vast amounts of personal information, which makes them targets for cyber crime. Hackers, scammers, and criminals use the seemingly harmless information on these sites to conduct social engineering attacks, spear phishing attacks, counterintelligence, and identity theft, to name a few. These sites are also a prime venue for distributing malicious code.

3 For example, imagine a law firm employee is preparing to go on a business trip. She will be visiting several cities, and she mentions these details on her blog. Elsewhere on her tweets and Facebook wall, she has mentioned that part of her job involves greeting and hosting witnesses. Although not intended to do any harm, her messages provide details that may potentially compromise the schedules and security of witnesses, employees, office facilities, or even herself.

What can I do?

Only post what you are comfortable with strangers seeing. Beware of malicious code from third-party applications. Check to see what personal information may be provided to third parties. Be careful about posting photos that may contain sensitive information such as clues to locations or personal information in the background. Ensure your social networking profile is set to “private” and only allow access to people you know.

Password-protect your web page, blog or sites where possible.

Never – • post client-related, personal or sensitive information • post your e-mail address on any personal profiles • post photos of buildings or grounds where you work • post anything that might embarrass you later, particularly photos • download software applications, “gifts,” games, or other executable files • expect that your information will be private on social networking sites; hackers may still be able to access this information.

4

Cyber Ethics

Ethics in the Age of Digital Information, Internet Access, and Global Social Networking

Tony Gallagher Federal Defender for the District of Montana Notes about this presentation The Ethics Rules discussed during this talk are from:  The ABA Code and Model Rules of Professional Responsibility  NYSBA Rules of Professional Conduct and Comment as of January 1, 2017  Opinions of the NYSBA and NYCLA Committees on Professional Ethics Notes about this presentation  Film shorts, audio clips and cartoons are used for educational purposes under the ‘fair use’ exception to the copyright laws of the United States, and are not displayed for any other reason. Notes about this presentation  The views and opinions expressed are the presenter’s, extrapolated or summarized from rules, cases and articles.  The statements made during this program do not constitute legal advice. Digital risks for you and your client

 Physical security from theft or loss  Word and data processing  Digital transfers  Electronic filing  Electronic imaging and recording  File preservation and storage  Email and Text communication

Data Security

 While large corporate firms may be viewed as prime targets for hacking activity, small law firms and individual lawyers are often targeted since they do not have the same level of financial and technical resources.  Attorneys have the ethical duties of confidentiality and competence, and these oblige reasonable steps to protect client data. Data Security

 Attorneys need to prevent themselves from being a target.  The first line of defense is effective password protection. This image cannot currently be displayed. Data Security

 Attorneys must take care to physically secure devices and to exercise care in transporting digital gadgets from loss or theft Data Security

ABA Ethics Opinion 477 May 2017

The eleven page opinion covers a range of issues for attorneys to consider in order to protect confidential client information from “nefarious actors throughout the internet.”

What are drivers which activate reasonable efforts to ethically protect data?

 (1) The sensitivity of the information;  (2) The likelihood of disclosure if additional safeguards are not employed;  (3) The cost of employing additional safeguards; What are drivers which activate reasonable efforts to ethically protect data?  (4) The difficulty of implementing the safeguards; and  (5) The extent to which the safeguards adversely affect the lawyer's ability to represent clients (e.g., by making a device or important piece of software excessively difficult to use). Metadata  Metadata is data about data. It describes how, when, and by whom a document was created.  All file types, not just word- processing, spreadsheets , graphics, photos and presentations, maintain some file system metadata fields.

Is the day approaching when the mere act of sending a sensitive client email without encryption could be an ethics violation? Frankly, given the capabilities of cyber thieves, sleuths, intruders and gamers, it is already here.

Metadata

 An attorney has an ethical duty to exercise reasonable care when transmitting electronic documents to ensure that he or she does not disclose his or her client’s secrets and confidences Metadata

 Just as a sending lawyer has an ethical obligation to reasonably protect the confidences of a client, the receiving lawyer also has an ethical obligation to refrain from mining an electronic document Metadata

 The unauthorized mining of metadata by an attorney to uncover confidential information would be a violation of the Rules of Professional Conduct. Metadata

 New York State Bar Ass’n Comm. on Prof. Ethics, Op. No. 749 (Dec. 2001) and Op. No. 782 (Dec. 2004)  Reasonable care required to prevent disclosure of metadata. Cloud Computing

 Cloud computing can raise ethical concerns for attorneys because confidential client information is stored by third party service providers.  The American Bar Association described cloud computing as software accessed via the internet that allows data to be stored remotely by a vendor rather than on the computer of an attorney or law firm. I have to say . . .

I’m not a big fan of cloud computing! Cloud Computing

 In New York, a lawyer may use an online data storage system provided that the lawyer takes reasonable care to ensure that confidentiality will be maintained in a manner consistent with the lawyer's obligations under Rule 1.6. In addition, the lawyer Cloud Computing

 The Lawyer should stay abreast of technological advances to ensure that the storage system remains sufficiently advanced to protect the client's information, and should monitor the changing law of privilege to ensure that storing the information online will not cause loss or waiver of any privilege. How social networking affects you and your client

30 What’s in a “Tweet?”

 Includes metadata  Who/when  App used  Number of followers and tweets  Geotag The Rat Scenario

Hey Joe, they’ll never catch me

Why is that?

Clarissa Client Joe the Rat

Because I lied to the investigators! 33 US v. Cervantes-Cardenas 220 Fed.Appx 718 (9th Cir. 2007) "That defendant was carrying an image of the patron saint of drug smuggling was not 'other acts' evidence under Fed.R.Evid. 404(b) because it was 'inextricably intertwined' with the drug smuggling charge."

Beyond client revelations, lawyers must exercise reasonable care with their personal social media Social Media Hubris

 Illinois public defender faced bar discipline for blog posts  “This stupid kid is taking the rap for his drug-dealing dirtbag of an older brother because “he’s no snitch”  “Huh? You want to go back and tell the judge that you lied to him, you lied to the presentence investigator, you lied to me?” Social Media Hubris

 ABC News -- A Florida public defender out of a job after a judge declared a mistrial upon learning of a Facebook postings the lawyer made mocking her own client:  Commented about underwear worn in client photo and  questioned client’s innocence Social Media Hubris

 Florida attorney publicly reprimanded after blog post about a judge: • “Evil, unfair witch” • “Seemingly mentally ill” Rule 8.2 Judicial and Legal Officials (a) A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge… “Your Honor, I’d like to request a short recess so I can update my Twitter page.” Of course, we all wish there was an app that would prevent embarrassing information from becoming public

How can we ethically obtain and use digital and social media information  Request from Government in discovery  Limited to usual discovery rules  Defense’s own [ethical] investigation  Limited to public postings and cooperative “friends” DISCOVERY REQUEST MOTIONS Good Overview of Social Media Discovery

Katherine W. Dandy & Ginette M. Portera, “Guiding Principles on the Discoverability and Admissibility of Social Media”, 88 N.Y. St. B.J. at 26 (January 2016) Use publicly-available information

Within Terms of Service  Google, Yahoo, Bing, and the like  LexisNexis® Public Records  WestLaw products such as People Map and Company Search  Local/State Public Records Use publicly-available information

Social Search Sites  www.pipl.com  www.wink.com  www.yoname.com  www.zabasearch.com  www.archive.org/web/wegb.php Information may be obtained using your own valid social-networking website account  Create an account on a social- networking website, with accurate information, and conduct any research she wishes to on that network  User profile must include the investigator’s employer and job title if the investigator is going to make friend requests in their official capacity. Obtain information provided by a third- party member social-network  If client or another member of a social- networking website provides the information obtained from a social- networking website, the investigator can use that information.  If the investigator never engages in or encourages deception, use of the information will not violate any ethical rules. Observe the activities of a member of a social-networking website while she browses the network.  As long as the member gives permission, the investigator can observe and direct her browsing.  This method is probably the best way to obtain information that is not publicly available since no deceit is involved. Use the account of a third-party, without that member present but with permission, but only to browse

 Passive browsing ONLY – i.e. restricted use: search for and look at any profiles available  Do not contact anyone using this technique  This technique should only be used if the previously discussed ones are not available  This method may be appropriate if Client is in custody and thus unable to use the internet. Ethical Thin Ice

 AVOID Using the account of a member of a social-networking website to actively communicate with others without that member present  AVOID making misrepresentations on a social-networking website, when the misrepresentations are targeted at an individual in order to get information that would otherwise be unavailable The Digital Imposter NEVER  Contact (email, message, or “friend” request) the victim or potential witnesses or others represented by counsel without full disclosure of your professional affiliation  Create a fictitious account  Deceptive acts, on the internet, in a chat room, or other social media is always unethical  As Digital Imposter you may be committing a state and/or federal crime Use of Content in Court

 U.S. v. Suarez, 2010 WL 4226524 (D. New Jersey 2010)  Adverse inference jury instruction for Government failure to turn over Blackberry communications between CI and agent  Griffin v. State, 995 A.2d 791 (2010)  Officer “authenticated” information from social networking site of defendant’s girlfriend; used to corroborate state witness testimony Some Final Thoughts  Ethical issues arise everyday . . . in countless situations  No attorney [or her investigator] should approach a difficult ethical situation or try to tackle an ethical dilemma without careful thought and consideration of the consequences CONSUMER WARNING: No ethics opinion can guarantee a safe harbor in difficult cases. In close cases lawyers should proceed carefully, with full knowledge of the applicable ethical rules, and ideally with the advice of counsel Seek Help

Sometimes seeking the advice of a colleague, the state ethics commission representative or trusted outside counsel can be enlightening and alleviate fears . . .

Questions?

Thanks for your attention META DATA

FILE SYSTEM metadata tracks when an electronic file was created or last modified and by whom, the folder location in which it is — or has been — stored and perhaps also when the file was last opened and/or printed. Various file system metadata “fields” can be readily viewed in Microsoft Office (MS Office) programs such as Word, Excel and PowerPoint by selecting Properties from the File drop-down menu. All file types, not just word-processing, spreadsheets and presentations, maintain some file system metadata fields.

Of particular concern to every lawyer is the potential for inadvertently divulging another client’s name. Even if a confidential name or word or phrase is no longer reflected in the “Name” of the file, it can still linger in the “Title” field.

E-MAIL metadata is a sub-category of file-system metadata. Some of the many specialized e-mail metadata fields are the omnipresent To, From, Date/Time Sent, Subject and Cc. Those fields are readily apparent to sender and recipient upon opening an e-mail — and often even before it (by eyeballing one’s Inbox or Sent Items).

Other, less transparent e-mail file system metadata can provide additional insight, including the sender’s domain, the route a message has traveled and where delays may have occurred between sending and receipt. Basic e-mail metadata can be viewed by, for example, opening a Microsoft message and then selecting Options from the View dropdown menu. More detailed e-mail metadata often is not viewable in the application used to create the e-mail. Yet, depending on which of the many e-mail systems is being used, various tools — including some at the e-mail database/server level — can be used to view and manipulate this less accessible metadata.

DOCUMENT (IMBEDDED/ EMBEDDED) metadata consists of prior content of an electronic file. Examples are: inserted comments, text in trailers and text in small and/or white font. This category is the scariest in that, often, the disseminator has no idea that the embedded content was ever, let alone still is, in the file. The reason: The problematic prior content may not be visible when the creator or last reviser/“reviewer” opened, or last edited, the document.

Once revealed, embedded data can yield major surprises. In each of Word and Excel, one to three clicks can reveal reviewer name(s), the sequence in which changes were made and, at times, the actual contents of those changes. In MS Word, some of the ominous scenarios include copying and pasting a portion (just some of the cells) of an Excel file yet inadvertently embedding the entire Excel spreadsheet and mishandling Tracked Changes.

File system and document metadata are found in many file types, including those in the MS Office family. Even when the context is neither electronic discovery nor even litigation, lawyers should be cognizant of metadata’s daily reach. The frequent re-use of prior electronic work-product places all attorneys in the midst of the estimated 90 percent of computer users whose first drafting step is “File . . . Save as” or right-click-copy on a file icon followed immediately by right-click-paste.

Not all metadata contains harmful or privileged information. Yet, when metadata does, inadvertent disclosure can: waive attorney-client privilege and/or work-product; generally jeopardize a client; and hurt the attorney-client relationship.

1 Nationwide, judicial decisions and ethics opinions as to metadata have been evolving scattershot. As to a recipient’s ethical duty, there is a stark split. The restrictive view holds that Metadata Mining is Forbidden as it may Invade the Sender’s Client’s Confidences. This view treats confidential information in metadata like other types of “inadvertently” disclosed information by deeming it unethical to examine (“mine”) a file’s metadata without consent of the sending attorney. A more liberal view in summary allows an attorney to ethically view metadata in a file received from opposing counsel if it was not ‘scrubbed’ by the opponent. If the sender had wanted to preclude the recipient from mining the metadata, he/she should have used reasonable care by employing scrubbing software. The American Bar Association and the Maryland and New York City bar associations hold to this view.

As to a sender’s ethical duties, however, there is unanimity. The sender has a “duty . . . to use reasonable care when transmitting documents by e-mail to prevent the disclosure of metadata containing client confidences or secrets. As to the overall issue of inadvertent disclosure — whether or not involving metadata — there is much less consistency as to the recipient’s obligations. Some states employ a tortured parsing of who knew what someone else intended — and when. Others naively presume that a remedy can be satisfactory though it is impossible to erase already-read information from a recipient’s memory.

Neither MS Office’s menu options nor its free “Remove Hidden Data” (RHD) tool (now called Document Inspector) remove all risky metadata. Thus, the soundest approach is to use metadata-cleaning software to scrub any e-mail attachment before it is sent out into the world from your law firm or legal department. Payne Consulting Group’s (PCG’s) Metadata Assistant is a basic metadata analysis/removal application that is effective, as is the more powerful Work-share Professional or Workshare Protect. Both PCG and Workshare can be configured to prompt a user each time he/she clicks to send an e-mail outside of your firm or department.

Many a lawyer thinks he/she (and therefore the client) is wholly protected by an automated conversion of an MS Office file to .pdf format. Yet, even there, at least some file system metadata migrates to the new file. A recipient of a file converted without prior metadata scrubbing can simply input “Ctrl+D.” Then, he/she can poke around in the .pdf’s properties to identify the Title and Author borne by the file when in its original format.

To avoid that migration scenario, scrub the original file before or during its conversion to .pdf. And maybe after as well. Adobe Acrobat’s “Examine Document” feature removes metadata. Similarly, conversion to .pdf does not magically fix — but, rather, perpetuates — an improperly handled electronic redaction. Given that a federal eFiling exposes a .pdf to anyone in the world with a PACER number, the stakes are even higher.

Follow the “Three E’s” — Establish, Educate and Enforce — by: 1. creating overall information management policies; 2. appropriately training employees; and 3. deploying requisite software.

2

New Client Social Media Checklist

• Does client have mobile device (i.e. cell phone, iphone, blackberry, Android, etc.) • Does client use mobile device to send text messages • Does client use mobile device to access the internet • Does client use mobile device to access any social networking sites • Is client on Facebook or MySpace (same questions should be asked for both) • Does client accept anyone as friend by default or are do they review requests • Does client allow the public to see their profile and postings (what are client's privacy settings) • Is client friend with anybody involved in this case • Has client already posted or discussed anything related to the case on their page (i.e. messages, links, photos, etc.)

Warn client not to discuss case on Facebook and explain why (friends may be govt snitch/Govt can use it against client) Warn client not to discuss case with any potential witness (may be violation of bond; potential obstruction of justice; potential threats ) Warn client not to discuss witnesses nor make reference to witness (may be obstruction of justice; potential threats)

• Does client use Twitter • Who does client follow anyone • Who follows client • Has client tweeted about the case • Has client received any tweets about the case • Does client allow the public to follow their tweets (what are client's privacy settings)

Advise client re: public nature of tweets and how cannot control where/to whom they are forwarded Warn client not to discuss case on Twitter and explain why (friends may be snitches and the Government can use it against client) Warn client not to discuss case with any potential witness (may be violation of bond; potential obstruction of justice; potential threats) Warn client not to discuss witnesses nor make reference to witness (may be obstruction of justice; potential threats)

• Is client using any other social networking sites • Does client have a blog • Does client go to any blogs regularly and have they left comments - if so, under what user name • Does client go to any chat rooms - what is their handle (user name) • For all of the above, have any of their discussions been related to the case

Get details and give warnings

Cyber Ethics: Ethics in the Age of Digital Information, Internet Access, and Global Social Networking

We are presented with examples of ethical dilemmas every day. Through this presentation, ethical issues are raised for discussion through film clips, cartoons and interactive discussion. The Ethics Rules discussed during this talk are from the ABA Code and Model Rules of Professional Responsibility. The views and opinions expressed are mine, extrapolated or summarized from rules, cases and articles and statements made during this program do not constitute legal advice. Refer to local codes or ethics committees for applicable rules and interpretations in your jurisdiction.

Overarching Ethical Duty: Data Security

While large corporate firms may be viewed as prime targets for hacking activity, small law firms and individual lawyers are often targeted since they do not have the same level of financial and technical resources. Attorneys have the ethical duties of confidentiality and competence, and these oblige reasonable steps to protect client data. Attorneys need to prevent themselves from being a target. The first line of defense is effective data security – including something as simple as password protection all the way through sophisticated system security programing. Moreover every attorney must ensure the physical security of electronic equipment and digital devices.

Cyber Ethics issues, vocabulary – see handout

Metadata [see also Meta Data hand-out]

Metadata is data about data. It describes how, when, and by whom a document was created. Distributing documents containing metadata may violate Rule 1.6 if it violates a client’s confidentiality and certainly implicates attorney competence.

FILE SYSTEM metadata tracks when an electronic file was created or last modified and by whom, the folder location in which it is — or has been — stored and perhaps also when the file was last opened and/or printed. Various file system metadata “fields” can be readily viewed in Microsoft Office (MS Office) programs such as Word, Excel and PowerPoint by selecting Properties from the File drop-down menu. In a similar fashion to Office document, Adobe’s PDF creation tools automatically populate some metadata, of which some is less obvious to the user than others. These apparent, user defined metadata types that can be defined by Adobe’s tools first can be found by accessing the document properties with Adobe Acrobat Professional under File/Document Properties under the Description tab. Typically Adobe’s tools will also pre-populate as much of this information as it can from the original document metadata.

1 All file types, not just word-processing, spreadsheets, photos (e.g., JPEG or GIF), and presentations, maintain some file system metadata fields. Of particular concern to every lawyer is the potential for inadvertently divulging another client’s name. Even if a confidential name or word or phrase is no longer reflected in the “Name” of the file, it can still linger in the “Title” field.

E-MAIL metadata is a sub-category of file-system metadata. Some of the many specialized e-mail metadata fields are the omnipresent To, From, Date/Time Sent, Subject and Cc. Those fields are readily apparent to sender and recipient upon opening an e-mail — and often even before it (by eyeballing one’s Inbox or Sent Items). Other, less transparent e-mail file system metadata can provide additional insight, including the sender’s domain, the route a message has traveled and where delays may have occurred between sending and receipt. In order for E-mail to function properly, each message relies on a series of routing information included as part of the message. This routing information is known as headers. These headers include information about the sender, recipient, server information (including IP addresses), and some relevant e-mail software, including the possible client application. Basic e-mail metadata can be viewed by, for example, opening a Microsoft message and then selecting Options from the View drop-down menu. More detailed e-mail metadata often is not viewable in the application used to create the e-mail. Yet, depending on which of the many e-mail systems is being used, various tools — including some at the e-mail database/server level — can be used to view and manipulate this less accessible metadata.

EMBEDDED metadata consists of prior content in an electronic file. Examples are: inserted comments, text in trailers and text in small and/or white font. This category is the scariest in that, often, the disseminator has no idea that the embedded content was ever, let alone still is, in the file. The reason: problematic prior content may be invisible when the creator or last reviser/reviewer opened, or edited, the document. Once revealed, embedded data can yield major surprises. For instance, in Word and Excel, one to three clicks can reveal reviewer name(s), the sequence in which changes were made and, at times, the actual contents of those changes.

File system and document metadata are found in many file types, including those in the MS Office family. Even when the context is neither electronic discovery nor litigation, lawyers should be cognizant of metadata’s daily reach. The frequent re-use of prior electronic work-product places all attorneys in the midst of the estimated 90 percent of computer users whose first drafting step is “File . . . Save as” or right-click-copy on a file icon followed immediately by right-click-paste. Billed as one of the most comprehensive, widely used search engines of the modern Internet, it is no surprise that Google is a tool for finding software for metadata analysis.

Lawyers must have a sufficient understanding of the technology – either directly or through associating with persons possessing such knowledge – to determine how to satisfy the lawyer’s duty of reasonable care. Reasonable care will vary depending on the circumstances, including the subject matter, the sensitivity of the information, the likelihood that the information is sought by others, and the potential harm from disclosure. But not all metadata contains harmful or privileged information. Yet, when metadata does, inadvertent disclosure can: waive attorney-client privilege and/or work- product; generally jeopardize a client; and damage the attorney-client relationship.

2 Comment

A lawyer must act competently to safeguard information acquired during the representation of a client against inadvertent or unauthorized disclosure by the lawyer or other persons who are participating in the representation of the client or who are subject to the lawyer’s supervision. An attorney has an ethical duty to exercise reasonable care when transmitting electronic documents to ensure that he or she does not disclose his or her client’s secrets and confidences.

Just as a sending lawyer has an ethical obligation to reasonably protect the confidences of a client, the receiving lawyer also has an ethical obligation to refrain from mining an electronic document. The unauthorized mining of metadata by an attorney to uncover confidential information would be a violation of the Rules of Professional Conduct. Employ program features and next generation software to remove all metadata when the documents are in final form. The soundest approach is to use metadata-cleaning software to scrub any e-mail attachment before it is sent out into the world.

New York State Bar Ass’n (NYSBA), Op. No. 749 (Dec. 2001) and Op. No. 782 (Dec. 2004) (addressing the exercise of reasonable care to prevent the disclosure of client confidential information through metadata). New York County Lawyers Association (NYCLA) Op. 738 (2008) (lawyer may not ethically search metadata made available through an adversary’s inadvertent disclosure of client confidential information through metadata).

Email and Remote Access Communication

Like papers and electronically transmitted documents, a lawyer who receives an email relating to the representation of the lawyer’s client and knows or reasonably should know that it was inadvertently sent shall promptly notify the sender. NYSB Rule 4.4(b). Comment [2] to the Rule, amended in 2015, says: “A document, electronically stored information, or other writing is ‘inadvertently sent’ within the meaning of paragraph (b) when it is accidentally transmitted, such as when an email or letter is misaddressed or a document or other writing is accidentally included with information that was intentionally transmitted.” “For purposes of this Rule, ‘document, electronically stored information, or other writing’ includes not only paper documents, but also email and other forms of electronically stored information – including embedded data (commonly referred to as ‘metadata’) – that is subject to being read or put into readable form.” Attorneys must not read or continue to read once recognizing that it was inadvertently sent and must return the item to the sender or permanently delete electronically stored information. NYSB Rule 4.4(b), Comment [3].

On May 4, 2017, the ABA released Formal Ethics Opinion 477, Securing Communication of Protected Client Information. This Opinion updates formal Ethics Opinion 99-413, issued in 1999, which concluded that lawyers could use unencrypted email to communicate with clients. Those of us who were practicing in 1999 will remember the difficulty the then-still-new phenomenon of ubiquitous email communication created for lawyers' obligations of confidentiality. The ABA has revisited the question because of new concerns about cybersecurity and client confidentiality.

3 Opinion 477 does not mandate any specific cybersecurtty measures, but instead requires “reasonable efforts” to ensure client confidentiality when using any form of electronic communication, including text messaging, cloud-based document sharing, or other services, in addition to email. The “reasonable efforts” requirement is consistent with Model Rule 1.6(c) concerning inadvertent disclosure of client Information. The Opinion adopts the factors set forth in Comment 18 to Model Rule 1.6(c) as guidelines for “reasonable efforts”:

(1) The sensitivity of the information; (2) The likelihood of disclosure if additional safeguards are not employed; (3) The cost of employing additional safeguards; (4) The difficulty of implementing the safeguards; and (5) The extent to which the safeguards adversely affect the lawyer's ability to represent clients (e.g., by making a device or important piece of software excessively difficult to use).

Hacks and data breach events raise ethical concerns for attorneys if they have not taken reasonable care to protect their clients’ confidential information. Rule 1.6 of the New York Rules of Professional Conduct defines the attorney’s obligation to protect a client’s confidential information. Comment 17 to Rule 1.6 states, “[w]hen transmitting a communication that includes information relating to the representations of a client, the lawyer must take reasonable precautions to prevent the information from coming into the hands of unintended recipients.”

With remote access and email communications, at a bare minimum, some degree of password protection and encryption should be in effect. Attorneys have a duty to protect their clients’ confidential information and to follow appropriate practices and procedures as they relate to constantly evolving technology security measures. The failure to do so has the potential to not only damage the client and client relationships, but also to expose a lawyer, law firm, and their insurers to potential liability and damages, as well as disciplinary action.

Cloud Computing

Cloud computing can raise ethical concerns for attorneys because confidential client information is stored by third party service providers. The American Bar Association described cloud computing as software accessed via the internet that allows data to be stored remotely by a vendor rather than on the computer of an attorney or law firm. State bar associations that have written ethics opinions on its member’s responsibilities while using cloud computing services hold attorneys to a duty of reasonable care” though the requirements of reasonable care vary with each state.

Service providers are beginning to replace the computer programs we used to run on our personal computers with programs hosted on corporate computers and delivered over the Internet. Cloud computing brings obvious benefits to users – no longer must we install our own software fixes or copy files to a flash drive when we hit the road – but cloud computing will also aid law enforcement. As we move more of our conduct onto intermediated websites, we will leave behind much more

4 detailed and accurate evidence of our conduct, accessible from the unbiased intermediary itself. Just as the transition from phone to e-mail has made it easier to track certain kinds of crimes, so too will the move from offline to online word processing and calendaring. In short, cloud storage is internet-based computing in which large groups of networked remote servers allow centralized data storage.

The Supreme Court has held that an individual relinquishes any Fourth Amendment interest in information that he or she voluntarily discloses to a third party. Known as the “Third Party Doctrine,” this controversial rule is increasingly problematic in an age where a large proportion of personal communications and transactions are carried out over the Internet. Internet users expose virtually all of the information they generate online – e-mails, web-surfing histories, search terms, and more – to online service providers.

Remote servers in the ‘cloud’ provide hardware and software for even such basic tasks as word processing. More and more data is being stored on third-party servers. Most scholars have assumed that Internet information will be unprotected by the Fourth Amendment and certainly from private investigators when it comes to generally available internet postings and communications. Ethics Rules demand reasonable care in guarding against dissemination of sensitive data, embarrassing comments, or inculpatory information. Most if not all of the ethics authorities who speak to the issue of cloud storage also speak to an attorney’s obligation to ensure that the cloud utilized has adequate and updated security measures.

A little good news. In Matter of Warrant to Search a Certain E–Mail Account Controlled & Maintained by Microsoft Corp., 829 F.3d 197 (2d Cir. 2016), the Second Circuit held that a company is not required to comply with a U.S. government search warrant for customer e-mails stored on servers in other nations (in that particular case, Dublin, Ireland).

Social Media and networking

American Bar Association (“ABA”) Formal Opinion 466 (2014) states:

As indicated by [ABA Rule of Professional Conduct] Rule 1.1, Comment 8, it is important for a lawyer to be current with technology. While many people simply click their agreement to the terms and conditions for use of an [electronic social media] network, a lawyer who uses an [electronic social media] network in his practice should review the terms and conditions, including privacy features – which change frequently – prior to using such a network

Beyond inadvertent revelations, clients and lawyers must exercise reasonable care with their purposeful use of electronic media or risk running afoul of several Ethical Rules

Three examples:

5 Illinois defense attorney faced bar discipline for blog posts: “This stupid kid is taking the rap for his drug-dealing dirtbag of an older brother because “he’s no snitch” “Huh? You want to go back and tell the judge that you lied to him, you lied to the presentence investigator, you lied to me?”

ABC News -- A Florida public defender out of a job after a judge declared a mistrial upon learning of a Facebook postings the lawyer made mocking her own client: Commented about underwear worn in client photo and questioned client’s innocence

Florida attorney publicly reprimanded after blog post about a judge: “Evil, unfair witch” “Seemingly mentally ill”

Ethical rules implicated by these acts: Rule 1.6 Confidentiality of Information; Rule 8.2 Judicial and Legal Officials (a) A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge…; and Rule 3.6 Trial Publicity (a) A lawyer shall not make an extrajudicial statement that a reasonable person would expect to be disseminated by means of public communication if the lawyer knows or reasonably should know that it will have a substantial likelihood of materially prejudicing an adjudicative proceeding. Be aware of recent Bar Association opinions providing guidance for attorneys who utilize social media themselves, as part of their practice. For instance, review NYCLA Opinion 748 (2015) and N.Y. City Bar Opinion 2015-7 (2015). Depending upon the content of the social media page, attorneys may have to include the disclaimer found in Rule of Professional Conduct 7.1. There may also be implication of Rule 7.4.

Know how social media and networking can be used against your client

The last several years have seen social media grow from college campuses to a nearly ubiquitous medium for communicating and sharing information. Facebook, Instagram, and Twitter alone have well over 2 billion active users. Attorneys should be aware of their client’s social media presence and account for client information stored on non-traditional platforms. Is your client sending work-related messages via social media? How are those messages being preserved? Is your client alleging facts in court and at the same time sharing statements and pictures that tell a different story?

In criminal cases, one additional question is: Can your client defensibly delete or remove social media posts during the course of the criminal litigation, or change privacy settings, without running afoul of obstruction of justice or tampering with evidence laws? Although the opinions are cautious and caveats abound, they generally hold that a party, whether in litigation or before litigation has begun, may change privacy settings on a social media account to make public information private. However, a party may not destroy relevant, or potentially relevant, evidence or violate any statutory, regulatory or other obligation regarding preservation of information. One is not “concealing” evidence or “obstructing” access thereto in violation of Rule 3.4(a) by changing settings. To assume otherwise ignores social media practicalities and defies common sense.

6 NYCLA Ethics Opinion 745 (July 2, 2013), says attorneys may advise clients concerning (1) what they should or should not post to social media; (2) privacy settings; (3) what existing postings they may or may not remove; and (4) the implications of social media posts on a case. So your ethical duty of Competence includes warning your client not to discuss her case on Facebook or other social media. Explain why – friends may be government cooperators or willing to use client statements against your client. Moreover, law enforcement now uses social network sites as a primary source for everything from investigative leads to trial impeachment. Clients must be warned not to discuss the case with any potential witness using social network communication (may be violation of bond; potential obstruction of justice; potential threats). Clients must be admonished not to discuss witnesses nor make reference to witness (may be obstruction of justice; potential threats).

Understand the public nature of tweets and how the user cannot control where/to whom they are forwarded. See United States v. Cervantes-Cardenas, 220 Fed.Appx 718 (9th Cir. 2007). “That defendant was carrying an image of the patron saint of drug smuggling was not 'other acts' evidence under Fed.R.Evid. 404(b) because it was 'inextricably intertwined' with the drug smuggling charge.”

Your client’s social media or internet storage can almost always be obtained by police investigators with a warrant or subpoena (e.g., 18 U.S.C. §2703; Grand Jury). Let me explain: for traditional investigations involving little or no modern technology, the old assumptions about the differences between probable cause and reasonable suspicion continue to hold. For example, the beat cop on the sidewalk will often have reasonable suspicion about unfolding, suspicious activity long before he or she has probable cause. See Terry v. Ohio, 392 U.S. 1, 30 (1968) (creating the reasonable suspicion standard for sidewalk stop-and-frisk encounters). But when crime investigation moves from the sidewalk to the Internet, something very different unfolds. When investigating an Internet crime scene, the police almost always have probable cause whenever they have any suspicion at all that the suspect has used a cell phone, computer, or interactive device due to the design of modern communications networks and, in particular, because of the crucial role played by online intermediaries like telephone and Internet service providers. The Internet is a treasure trove information on your client unimpeded by traditional notions of probable cause.

Unlike records kept in the tangible world, online and automatically produced records tend to be precise, detailed, and accurate. The surveillance camera at the corner convenience store provides the view from one fixed vantage point, probably hampered by poor lighting or position. Human observers looking at the crime replayed on the surveillance recording will probably spot different clues and interpret different things from the same images. In contrast, an entry from a web server’s access log provides precise, unambiguous information, at least to one trained to interpret it. The log file can provide sender and receiver IP addresses, dates of access, the operating system used (e.g., Windows, Apple), and web browser utilized (e.g., Internet Explorer, Firefox). This data might be cryptic, but to an expert it is not subject to the kind of ambiguities and matters of interpretation as the convenience store’s surveillance camera footage.

In addition to this narrative, please see the New client social Media Checklist hand-out.

7 Attorneys must know how to ethically obtain and use digital and social media information.

Information posted on public sites, or sites that the public may access, are fairly accessed when the attorney or her investigator is gathering information on jurors, witnesses or law enforcement investigators. However, take care if you are an attorney gathering information, or directing another to do so on your behalf. Beyond Rules already discussed, the following rules may be implicated in such searches: Rule 4.1 Truthfulness in Statements to Others [in the course of representing a client a lawyer shall not knowingly make a false statement of material fact or law to a third person]; Rule 8.4 Misconduct [It is professional misconduct for a lawyer to . . . (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation]; Rule 5.3 Responsibilities Regarding Nonlawyer Assistants [Lawyer is responsible for conduct of nonlawyer that would be a violation of Rules if engaged in by lawyer if orders or ratifies the conduct.].

An investigator may always access publicly-available information. Publicly available information is information on the internet that can be accessed without needing to log in. Information found through a search engine as well as information on a social networking website that can be accessed without logging in is publicly-available information. For example, an investigator may use a search engine, like Google, to search for the name of a person of interest. Often, the search result will return a link to the person’s social network webpage. Viewing information returned from this type of search does not violate any ethical or legal rules.

Furthermore, many profiles on Facebook and other similar services are publicly accessible. An attorney’s investigator could use a search engine or the search of the social network site, without logging in or having an account, to find and access publicly available profiles. NYSBA Opinion 843 (2010) held an attorney can view the page of another party, so long as the she does not “friend” the person, or have a third party do so, i.e., only passive viewing.

Information may be obtained using your own valid social-networking website account

You or your investigator may create an account on a social-networking website, with accurate information, and conduct any research she wishes to on that network. An investigator may ask to join groups and access the profiles of people that are enabled by joining the group. The investigator may even ask an individual to be her “friend” (for example, on Facebook) as long as the person is not a witness disclosed by the opposing party or represented by counsel. The profile should include the investigator’s current employer and job title if the investigator is going to make friend requests in their official capacity. If the person is the victim or a witness disclosed by the opposing party, the investigator may still ask to be an individual’s “friend” as long as she is careful in the “friend” request to clearly identify herself and the agency she works for and to state who she represents.

Obtain information provided by a third-party member social-network

If the client or another member of a social-networking website provides an investigator with information obtained from a social networking website, the investigator can use that information.

8 This information could include printouts or digital copies of profile pages, communications between members, photos, or any other information accessible to the member on the social networking website. An investigator should not encourage the client or other member to engage in deception on her behalf in order to acquire information. However, as long as the investigator did not engage in or encourage deception, she should be able to use the information without violating ethical duties.

Observe the activities of a member of a social-network while she browses the network.

An investigator or the attorney may ask her client, a friendly witness, or someone else to come to her office to browse a social networking website. As long as the social network member gives permission, the investigator can observe and direct her browsing. The investigator may also ask the member to save or print information as she comes across it. Because the investigator is merely requesting that the member browse in a certain way, she is not impersonating anyone or engaged in deceit. This method is probably the best way to obtain information that is not publicly available since no deceit is involved.

Use the account of a 3rd-party, without member present but with permission, only to browse

An attorney or her investigator may use the account of her client, a friendly witness, or someone else to passively browse a social-networking website when given permission by the account holder. Passively browsing means the investigator may search for and look at any profiles available to the member’s account she is borrowing.

However, she should not message, email, friend request, or in any other way directly communicate with anyone one else using the borrowed account. By signing in to the social networking website, the investigator is to some degree representing herself to be a different person. Therefore, this technique should only be used if the previously discussed ones are not available. In particular, this technique may be appropriate if the client is in custody and thus unable to use the internet. Avoid using the account of a member of a social-networking website to actively communicate with others without that member present or making misrepresentations on a social media when the misrepresentations are targeted at an individual in order to get information that would otherwise be unavailable. NEVER contact (by email, message, or “friend” request) the victim or other persons represented by counsel without full disclosure of your professional affiliation. Likewise, never create a fictitious account. Deceptive acts, on the internet, in a chat room, on a Twitter account, or while using Tumblr or other social media is always unethical

An attorney should not create a fictitious account using a fake name and other false information in order to gain access to other users’ information. Such behavior involves deception and is therefore unethical. Furthermore, it may be a criminal violation of the website’s terms of use.

See hand-out, 10 Tips to Keep Social Networking in Line With Legal Ethics.

9 References and Suggested Reading

American Bar Association, Cloud Ethics Opinions Around the U.S. available at: https://www.americanbar.org/groups/departments_offices/legal_technology_resources/resources/ charts_fyis/cloud-ethics-chart.html).

ABA Formal Op. 11-459 (Aug. 4, 2011) (“Duty to Protect Confidentiality of E-mail Communications with One’s Client”).

ABA Formal Op. 11-460 (Aug. 4, 2011) (“Duty When Lawyer Receives Copies of a Third Party’s E-mail Communications with Counsel”).

ABA Formal Op. 466 (April 24, 2014) (“Lawyer Reviewing Jurors’ Internet Presence”).

Joanna Stern, “The Future of Public Wi-Fi: What to Do Before Using Free, Fast Hot Spots,” The Wall Street Journal (Jan. 19, 2016).

Matthew Tokson, “Automation and the Fourth Amendment,” January 2011, Iowa Law Review 581.

Adriana Linares, “Information Management Skills Every Attorney Should Know,” The Florida Bar Journal (Jan. 2016).

Paul Ohm, “Probably Probable Cause: the Diminishing Importance of Justification Standards, ” May, 2010 (Symposium), Minnesota Law Review 1514.

Amy Walker Wagner, “Maintaining Competence in Your Legal Practice in the Face of Technological Advancement,” The Bencher (Nov./Dec. 2015).

David G. Ries, “Encryption: Basic Security You Should Be Using Now,” Trends (July/Aug. 2015).

Samson Habte, “Lawyers May Need to Encrypt E-Mail in Especially Risky or Sensitive Scenarios,” 15 Digital Discovery & e-Evidence (DDEE) 226 (May 28, 2015).

Arianne Fuchsberger, “Social Media Searches: Go Beyond the Google,” Lexology (Dec. 26, 2015) (providing tips on locating a complete picture of a person’s online presence).

Sarah Salter, “Storage and Privacy in the Cloud: Enduring Access to Ephemeral Messages,” Hastings Communications and Entertainment Law Journal 365 (2010).

“The Sedona Conference – Commentary on Ethics & Metadata,” 14 Sedona Conf. J. 169 (2012).

Scott Malouf, “Social Media Law: A Good Second Impression: Legal Ethics and Making Public Social Media Private,” NY Daily Record, February 2, 2015

10 Dino E. Medina, Defensible Cybersecurity Tailoring an Organization’s Security Posture to Applicable Legal Standards, 88 N.Y.St. B.J. at 38 (May 2016).

Social Media Ethics Guidelines of the Commercial and Federal Litigation Section of the New York State Bar Association, Mark A. Berman, Section Chair, updated May 11, 2017.

Steven G. Mehta and Adam Ashby, Basic Measures Law Firms Can Take to Improve Cybersecurity, Los Angeles Lawyer October 2014 at page 40.

James Podgers, Lawyers Struggle to Reconcile New Technology with Traditional Ethics Rules, ABA Journal, April 2016.

Paper and presentation by –

Anthony R. “Tony” Gallagher Federal Defender, District of Montana [email protected] 406.727.5328

11

10 Tips to Keep Social Networking in Line With Legal Ethics

1. REMEMBER THAT THE SAME ETHICAL RULES APPLY.

Blogs, social networks, Twitter, and the like are modern forms of media, but the century old ethical rules apply. In fact, these new media generally do not require new rules. Generally speaking, the principles underlying current Professional Conduct Rules are applicable to the media evolution.

2. DO NOT BETRAY CLIENT CONFIDENCES.

Exhibit A for how lawyers can get themselves into trouble online is the former Illinois assistant public defender whose law license was suspended for 60 days because of her blog postings that authorities said exposed client confidences. She believed and maintained that she was blogging about her clients anonymously. Bar authorities, however, concluded that she provided sufficient detail in some posts to allow specific clients to be identified. My advice: Do not blog about your own clients or cases, except as to details that have unequivocally become public, such as when a case of yours is reported in an appellate opinion. There is plenty else for you to blog about.

3. AVOID INADVERTENTLY FORMING ATTORNEY-CLIENT RELATIONSHIPS.

Many lawyers don’t answer consumer questions in Q&A forums on sites such as Avvo and LinkedIn for fear of forming an attorney-client relationship. A lawyer can participate in these forums but also disavow any “reasonable expectation” by expressly using cautionary language and disclaimers in an answer. Keep your answers generic, avoid addressing highly specific facts, and expressly state that your answer should not be considered legal advice.

4. DO NOT SOLICIT.

Ethical rules prohibit lawyers from soliciting potential clients for pecuniary gain. Fear of solicitation keeps lawyers off of Twitter, Facebook and other social networks. Such fear is unfounded. No question, a lawyer could solicit through any of these media — but the lawyer would have to be trying very hard to do so. For it to be a solicitation, it has to be targeted at a specific individual and intended to be perceived as an offer to provide legal services. Merely engaging with the public in an online forum of any kind is not solicitation.

5. STEER CLEAR OF UNAUTHORIZED PRACTICE.

In my opinion, the current rules against unauthorized and multijurisdictional practice are archaic and senseless in today’s highly connected world. But they remain the rules. If you are admitted only in one state, you cannot give legal advice in another state.

To my knowledge, there has never been an ethics complaint against a lawyer for answering questions online in a Q&A forum or for participating in a discussion on Twitter or elsewhere online. Even so, lawyers are advised to refrain from giving fact-specific advice online — and to include disclaimers in any answers they provide to consumer questions. There is a big difference between educating about law and advising about law.

1 6. UNDERSTAND THE RULES ON RECOMMENDATIONS.

ABA Model Rule 7.2 says, “A lawyer shall not give anything of value to a person for recommending the lawyer’s services.” Does this mean you cannot provide an endorsement of a colleague on sites such as LinkedIn or Avvo? Absolutely not, provided nothing of value is exchanged. But can you promise to provide an endorsement if the other attorney promises to endorse you in return? That quid pro quo could be seen as an exchange of value. A very different example – One law firm distributed free T-shirts emblazoned with its name. It then offered a chance to win a prize to anyone who posted a photo on Facebook wearing the firm’s shirt. “The firm arguably gave people something ‘of value’ (the shirt and the opportunity to win a prize) for ‘recommending the lawyer’s services’ and thus might be viewed as running afoul of the existing version of Rule 7.2,” the commission wrote.

7. REMEMBER THE RULE ON TRIAL PUBLICITY.

Limit what you say about your cases. The conduct rules tell you not say anything that “will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.”

8. MAKE NO FALSE OR MISLEADING STATEMENTS.

If the profession were to have only one ethical rule, it would be this: Do not misrepresent yourself, your services or your capabilities. This is embodied in ABA Model Rule 7.1, which prohibits false or misleading communications. Social media offer a powerful form of marketing and self promotion, especially for young and less-experienced lawyers. In the enthusiasm to build a practice or reputation, lawyers should be cautious not to overstate their capabilities and experience.

9. BECOME COMPETENT IN TECHNOLOGY AND SOCIAL MEDIA.

It only makes sense: The best way to stay out of trouble with any medium is to understand how it works. If you are uneducated about technology and social media, you are more susceptible to tripping up. In addition to maintaining competence in law and practice, th rules of professional conduct contain a veiled directive: lawyers must have more than a working knowledge of the benefits and risks associated with the data systems, software and computer technology, and information sharing platforms they utilize. So, know all you can about Social Media that you or employees may use.

10. USE COMMON SENSE.

Exercise common sense in your use of social media and you are unlikely to get into trouble. Think carefully about that blog post before you hit publish. Consider all 140 of those characters before you send out a tweet. Always be mindful of that now-old saw, “If you wouldn’t want to read it on the front page of The New York Times, don’t post it online.”

See also: NYSBA Social Media and Digital Communications Policy, approved by the NYSBA Executive Committee, May 17, 2012, available at http://www.nysba.org/socialmediapolicy and Social Media Ethics Guidelines of the Commercial and Federal Litigation Section of the New York State Bar Association, updated May 11, 2017, at www.nysba.org/social mediaguidelines17.

2

1

EXPOSING MISTAKES WITHOUT MAKING THEM YOURSELF: CROSS-EXAMINATION IN MIS-ID CASES

Paul Rudof Public Defender Co-Counsel Committee for Public Counsel Services Northampton, MA [email protected]

I. “The Great Engine That Couldn’t”1 – The Challenge of Revealing an Honest, but Mistaken Witness Through Cross-Ex

a. Cross-Ex Better Designed to Reveal the Lying Witness than the Honest, but Mistaken W

b. Jurors Fundamentally Misunderstand the Factors that Detract from Eye-ID Reliability

i. Example: Stress – if you highlight stress, will your jurors think that enhances, detracts, or doesn’t affect reliability? You must know this before deciding to cross on it

ii. Case Law Recognizing Limits of Cross-Ex in Mis-ID Cases: 1. State v. Lawson, 291 P.3d 673, 695 (Or. 2012) 2. State v. Guilbert, 306 Conn. 218, 243 (2012) 3. State v. Clopten, 223 P.3d 1103, 110 (Utah 2009) 4. State v. Henderson, 27 A.3d 872, 888-889 (2011) 5. Commonwealth v. Crayton, 21 N.E.3d 157, 169 (Mass. 2014) 6. Perry v. New Hampshire, 132 S. Ct. 716, 737 (2012) (Sotomayor, J., dissenting)

c. Studies on Jurors’ Understanding of Memory / Factors Affecting ID reliability

i. Cutler, et al., Juror Sensitivity to Eyewitness Identification Evidence, 14 Law & Hum. Behav. 185 (1990) ii. Kassin & Barndollar, The Psychology of Eyewitness Testimony: A Comparison of Experts and Prospective Jurors, 22 J. APPLIED PSYCHOL. 1241 (1992) iii. Hart & Associates (2004 Public Defender Services of D.C. juror survey) iv. Benton, et al., Eyewitness Memory is Still Not Common Sense: Comparing Jurors, Judges and Law Enforcement to Eyewitness Experts, 20 Applied Cognitive Psychol. 115 (2006) v. McAuliff & Kovera, Estimating the Effects of Misleading Information on Witness Accuracy: Can Experts Tell Jurors Something They Don’t Already Know? , Appl. Cognitive Psychol. 21: 849-870 (2007)

1 Jules Epstein, “The Great Engine That Couldn’t: Science, Mistaken Identifications, and the Limits of Cross- Examination,” 36 Stetson L. Rev. 727 (2007) 2

vi. Wise & Safer, A Comparison of What U.S. Judges and Students Know and Believe About Eyewitness Testimony, J. Applied Social Psychol. 40: 1400-1422 (2010) vii. Franklin, N., Greenstein, M. (In Press). Nothing but the truth? An assessment of narrative goals in the criminal justice system. In H.A. Taylor & J. M. Zacks, Representations in mind and world. Hove, England: Psychology Press.

II. Theory, Theory, Theory

a. Misidentification isn’t a Theory, just a Category of Theories

b. Theory is fact-specific narrative of how this individual human being came to be incorrectly identified as the perpetrator of a real crime

c. Mis-ID theories should answer two questions: i. Why should we think this ID witness/victim was capable of making a mistake? ii. Why did this ID W/V identify your specific client?

d. Is this a “Good Look” or a “Bad Look” theory of defense? i. hinges largely on description originally given by V/W ii. V/W described features/clothing/etc that don’t match your client → Good Look iii. V/W gives vague description → Bad Look

e. Who is the Enemy (the cause of the mistake)? i. Usually not the V/W ii. Police – if they engaged in suggestion, failed to follow protocols, etc. iii. Other civilians – Suggestive comments, showed social media photos, etc. iv. Media – publicized photo of client that led to ID

f. What Will Jury Hear/Understand/Believe About Factors that Affect ID Reliability? i. Read the Studies about Lay Person Understanding/Belief ii. What is the Knowledge base/beliefs of your jurors coming into the trial? Voir Dire On This! iii. Expert Testimony? Use Them! iv. Science-Based Jury Instructions? Request Them! v. If no expert and outmoded instructions, be wary of cross on factors that jurors misunderstand

III. ESTIMATOR VARIABLES THAT MIGHT BE “COMMON SENSE”

a. Intoxication: Jurors Do Get This One!

b. Duration of Event i. Majority of Jurors understand that longer exposure → higher reliability ii. BUT, still significant minority doesn’t get that iii. AND, jurors don’t understand that witnesses overestimate duration iv. SO, How to Cross on Duration? 3

1. Don’t Ask “how long”, unless they’ve given prior statement and it’s good for you 2. Instead, show how quick it happened a. Short questions b. Only the basic facts; no thoughts, feelings c. Quick Pace d. The Lead-In – b/f the encounter, slow pace, many details, thoughts, feelings

c. Distance i. Jurors understand that farther distance means less reliable ii. BUT, jurors don’t understand that witnesses underestimate distance iii. AND, jurors might not understand iv. AND, jurors don’t understand that extremely close distance detracts from reliability v. How to Cross? 1. Don’t ask to “estimate” distance, unless prior statement that is helpful 2. Instead, show with specific locations, measurements, obstructions (if this is helpful)

d. Lighting i. Jurors understand basic concept that poorer lighting impairs viewing ability ii. BUT, don’t understand specifics, like: 1. Hard to discern color, fine detail in lower light 2. Low light slows rate of extraction of visual information (so if crime of short duration, W will pick up less information in low light) 3. Non-uniform lighting casts shadows, distorts perceptions of shape, impairing face memory 4. Lighting from source than than from above impairs encoding abilities

IV. NON-COMMON SENSE ESTIMATOR VARIABLES – BEWARE THE MISUNDERSTANDINGS!!

a. Stress i. Emphasize violence, trauma, fear, suddenness ii. BUT, beware if no expert or jury instruction and your jurors don’t get this (i.e., they think W more likely to remember details of stressful event)

b. Weapon Focus i. Elicit the details of the weapon ii. Don’t get Greedy (“So, you were focusing on the gun, not the face”) iii. BUT, beware if no expert or jury instruction and your jurors don’t get this (i.e., they think W more likely to remember details of stressful event)

c. Cross-Race: Can’t Cross on this; requires instruction or expert testimony

d. Distinctive Face/Feature – i. Cross to show Description was Generic, nothing unique; 4

ii. or if unique feature described, highlight that if client doesn’t have that feature

e. Disguise/Head Covering

f. Familiarity

i. Cross on Stranger ii. If mild familiarity, AND expert or jury instruction, emphasize limited nature of prior contacts iii. Consider Unconscious Transference / Memory Source Error Theory

V. SYSTEM VARIABLES: NOT CLEAR JURORS UNDERSTAND / KNOW ANY OF THIS

a. Time b/t Crime and ID (or, Rate of Memory Decay / “Forgetting Curve”)

i. Iconic Ebbinghaus study: exponential loss of memory; sharpest decline within first 20 minutes

ii. Deffenbacher et al. (2008): 15% of info lost in minutes; over 50% lost within 4 hrs

iii. Egan (1977): At 2 days, rate of false IDs exceeds rate of correct IDs

iv. Cross-Ex: All things W did, people interacted with in b/t viewing perp and ID procedure

b. Witness Certainty: i. Deeply Misunderstood AND jurors rely on this above all else! ii. Hard to Cross on, UNLESS . . . 1. Evidence that Level of Confidence Has Increased Over Time; OR 2. Police Failed to Obtain Confidence Statement Right After ID (but only cross on that if jurors hear expert testimony about the difference in probative value b/t confidence statement right after ID vs. later)

c. Exposure to Outside Info – from cops, civilians, media

d. Failure to Make Prior ID and Impact on Subsequent ID (Mugshot Effect)

e. Instructions / Advisements

i. Failure to Give Cautionary Advisements (perp may not be there; you don’t have to make a selection; we’ll continue investigation regardless)

ii. Impact of Suggestive Instructions

iii. Greathouse & Kovera (2009) 5

f. Blind v. Non-Blind Administration of ID Procedure

i. Cues are not necessarily intentional or noticed

ii. Humans very good at giving and receiving social cues

iii. Greathouse & Kovera (2009)

g. Sequential v. Simultaneous

i. still controversial within scientific community ii. BUT, could cross on advantages of sequential AND Witness engaged in relative judgment (which one looks closest)

h. Post-ID Feedback i. Impacts Confidence AND W’s perception of viewing conditions ii. BUT, doesn’t necessarily undermine ID that pre-dated feedback; iii. AND, jurors might use it as evidence bolstering ID (e.g., cops belief that W got it right)

VI. CROSS THE COPS ON BEST PRACTICE / PROTOCOLS

a. Failure to Follow, if they didn’t i. Including Failure to Record Confidence Statement at Time of ID, if W appears confident or testifies about confidence b. OR, To Show Contrast Between a Better Procedure (e.g., an array, or proper advisements) with What Was Done (e.g, a show-up, or no instructions)

VII. TAKE AWAY THE IN-COURT ID

a. Move to Exclude b. Take it Away in Opening c. Cross-Ex on W’s knowledge of everyone else in courtroom i. Have W do In-Court ID of prosecutor ii. BUT, beware the clueless, ignorant, unsophisticated W who might not know who’s who in courtroom

VIII. LANGUAGE AND TONE

a. Always TWO people – perpetrator and (client’s name – not “defendant’ or “client”) b. “Mistake” c. Show Sympathy for Victim / Witness; they are mistaken, not lying, and really experienced a real crime