Monday, July 6, 2015

Asset Forfeiture and the Sixth Amendment Right to Counsel of Choice: Should Crime Pay?

On June 8, 2015, the United States Supreme Court agreed to hear the issue of whether a criminal defendant’s rights to due process and counsel of choice under the Fifth and Sixth Amendments are violated if the court orders a pretrial freeze of the defendant’s assets; assets which may be necessary for the defendant to hire private.

In Luis v. United States, the defendant, Sila Luis, was charged with Medicare fraud in the Southern District of Florida.  Luis was indicted in 2012 on fraud charges involving around $45 million in illegal Medicare payments.  The FBI said Luis, president of a healthcare provider, paid kickbacks and bribes to Medicare patient recruiters and submitted false claims for work done on behalf of its beneficiaries.  Once indicted, federal prosecutors froze Luis’s assets the same day, but Luis argued that the frozen assets were in no way connected to the alleged crimes and that prosecutors violated her Sixth Amendment rights since she needed the money to hire an attorney to mount a defense.  In a motion responding to the prosecutor’s temporary restraining order, Luis argued, “the Fifth and Sixth Amendments, individually and in combination, require that the court exempt from restraint and forfeiture those assets needed for (and ultimately expended on) [] legal defense to the charges pending before [the court].”  Further, she argued that by freezing her untainted assets before trial, the government not only “cripple[d] [her] ability to retain [private] counsel,”  but it also deprived her of money she would have invested “for the best and most industrious investigators, experts, paralegals, and law clerks, to at least attempt to match the litigation support available to the United States Attorney’s Office.

However, the lower court ruled against Luis after federal prosecutors argued that freezing the assets was necessary because she had already spent the tainted money on travel and luxury goods, and freezing the remaining funds were necessary to recover the full value of alleged fraud if convicted.  The court, in conclusion, stated that there is “no Sixth Amendment right to use untainted, substitute assets to hire counsel.”  The court also quoted an analogy from the Fourth Circuit’s decision in In re Forfeiture Hearing As to Caplin & Drysdale, Chartered, which illustrated a bank robbery involving $100,000, after which, the defendant is arrested in possession of the $100,000.  The defendant, without proof, argues his innocence and claims the money to be a gift from a friend.  The Fourth Circuit provided that no reasonable person would “contend that the $100,000 must be made available to pay for the defendant’s lawyer, and not be kept available for return to the bank in the event the defendant is found guilty.”  In reliance on the analogy, the Fourth Circuit held that prosecutors may take steps to freeze a defendant’s assets.

The Luis case differs from the case that was before the Fourth Circuit.  In Luis, the defendant’s frozen assets were not traceable to the fraud scheme.  The lower court again relied on the Fourth Circuit’s analogy, adding that the bank robber spent the $100,000 shorty after stealing it, but it just so happens he has an extra $100,000 obtained legitimately sitting in a bank account.  The court provided that Congress authorized restraint of those substitute assets in 18 U.S.C. § 1345 and therefore, the bank has the right to have those substitute, untainted assets kept available for return.
The Eleventh Circuit also rejected Luis’s arguments without any further explanation.  The Supreme Court granted certiorari to decide whether Luis’s Sixth Amendment right to hire counsel of choice should outweigh prosecutorial efforts to recover the full value of alleged fraud against the government.

The Fifth Amendment provides that “No person shall be … deprived of … property, without due process of law.”  Further, the Sixth Amendment provides that criminal defendants “enjoy the right … to have the assistance of Counsel for his defense.”  The Supreme Court has subsequently found in Powell v. Alabama that “a defendant should be afforded a fair opportunity to secure counsel of his own choice.”  This right to counsel of choice has been upheld even recently in the 2006 United States v. Gonzalez-Lopez decision, when the Supreme Court found that a defendant’s right to counsel is violated “whenever the defendant’s choice is wrongfully denied,” and such an error “pervades the entire trial.”

However, last term, the Supreme Court in Kaley v. United States reaffirmed the government’s ability to freeze property and/or money if there is a chance it could be tied to illegal activity.  The Court first approved of the government’s ability to freeze a defendant’s assets in the 1989 United States v. Monsanto decision, where the Court approved the constitutionality of such an order as long as it is “based on a finding of probable cause to believe that the property will ultimately be proved forfeitable.”  The Kaley Court held that standard to apply even when the defendant seeks to use the disputed assets to pay for counsel.  Since Monsanto, lower courts have provided hearings to defendants seeking to remove an asset restraint to pay for counsel.  In these hearings, defendants have been allowed to litigate the issue of whether the assets in question are connected to the crime; however, the Kaley Court “[did] not opine on” whether pretrial restraint of untainted assets could pose constitutional problems.  Lower courts since then have differed.  For example, the Fourth Circuit has held that defendants are still guaranteed the right to counsel of choice and are allowed to use untainted assets to hire counsel, but the Court of Appeals in Luis found that Monsanto, Kaley, and Caplin & Drysdale “foreclose[d]” constitutional challenges to pretrial restraint of untainted assets needed to hire counsel of choice.

The Luis decision will be worth following because the government has increasingly used asset forfeiture as a “potent weapon” to ensure “crime doesn’t pay,” as put by Warren Richey of The Christian Science Monitor.  Many fraud cases are a result of government claims on property or stolen proceeds that are directly traceable to criminal activity; however, prosecutors have sought to freeze and preserve assets and/or proceeds that may or may not be linked to criminal activity as a form of insurance that the government will be able to collect if the defendant is convicted.  The problem with this strategy is that pretrial freezing of the defendant’s money may leave the defendant short of funds—funds necessary to hire a lawyer.

It is difficult to predict how the Supreme Court will decide in this case.  The case raises issues of the defendant’s presumption of innocence, right to counsel of choice, fairness, and property rights, all of which are rooted in the Constitution.  Chief Justice Roberts touched on the issue last year in a dissenting opinion, in which he said, “[f]ew things could do more to undermine the criminal justice system’s integrity than to allow the government to initiate a prosecution and then, at its option, disarm its presumptively innocent opponent by depriving him of his counsel of choice … [such a move would be] fundamentally at odds with our constitutional tradition and basic notions of fair play.”  

Although the Luis decision will most likely affects federal practitioners, state-level practitioners should follow this case.  Some states have various statutes providing for the forfeiture of property and/or money that was either used in criminal activity, or traceable to criminal activity.  For example, Wisconsin’s statute does not explicitly provide for or prohibit pretrial seizures of assets and there have been no cases to address the issue.  Practitioners in similarly situated states should be wary of this decision because any limitations the Supreme Court places under the Fifth and Sixth Amendments would apply to the states.

By Mahira Khan
CLP Staffer

Monday, June 22, 2015

Planting the Seeds of a Security Threat: Seed Theft and Economic Espionage

     Attorney for the Southern District of Iowa, indicted seven Chinese citizens for the theft of trade secrets regarding corn seeds. Of those seven, only two— siblings, Mo Hailong and Mo Yun— are currently being prosecuted; even though all worked for Beijing Dabeinong Technology Group, a Chinese company specializing in agricultural science and technology. Both brother and sister were intimately involved in the upper echelon of DBN Group; Mo Hailong served as the director of international business, while his sister Mo Yun is the wife of Dr. Shao Genhuo, the CEO of DBN Group. The other five, who have purportedly fled the U.S., all worked for Kings Nower Seed, a subsidiary of DBN Group. The case was recently re-entered the media’s attention when it became known that the FBI, under the Foreign Intelligence Surveillance Act (FISA), has been using anti-terrorism surveillance tactics to investigate the siblings. 
     The corn seeds that the group intended to appropriate from Monsanto and DuPont, both huge players in the agribusiness field, were specially inbred seeds used to breed hybrids that farmers could buy. Inbred seeds are highly valuable because companies spend millions of dollars each year to produce new hybrids that are resistant to drought and insects, or able to grow with more success and virility. Use of such seeds would have allowed China to attempt to catch the U.S. production rates of corn. 
     DuPont became suspicious when Mo Hailong was spotted in 2011 digging in one of their cornfields; when approached by a security guard, Mo Hailong claimed that he was an employee at University of Iowa, jumped in his car, and drove away. A year later, three of the indicted individuals attempted to smuggle seeds out of the U.S. hidden in Orville Redenbacher popcorn boxes and napkins. Mo Yun became implicated in the plot through text messages from 2007 and 2008 discussing the theft of corn seeds for her husband’s company. Defense counsel’s main contention has involved the testing of the seeds; testing requires genetic analysis and the actual planting of the seeds, a rather lengthy process. The defense claims that the government took a long time to begin the process leaving no time for the defense to conduct similar tests. However, the most controversial issue is the government’s use of surveillance tactics normally reserved for “terrorist threats” to build their case against the Mo siblings.
     The members of the group were monitored with the same technology and surveillance tactics used to monitor threats to national security, including the placement of tracking devices on cars and the tapping of cellphones. With the approval of the Foreign Intelligence Surveillance Court (FISC)—a “secret” court comprised of eleven federal judges—the FBI moved forward and investigated the seven members over the course of two years before filing the indictment. The government’s two-year investigation yielded roughly 500,000 documents, as well as audio tapes and surveillance footage. After FISA passed in 1978, the FISC was tasked with creating guidelines for the manner in which agents working for a “foreign power” may be monitored. 
     The use of such measures raises a number of concerns. For example, whether such surveillance is an invasion of these individuals’ privacy, or should the FBI be using these sorts of resources for the theft of trade secrets? Although it is true that agricultural byproducts like these seeds would fall under the umbrella of trade secret, the seeds are valuable and important to the furthering of the U.S.’s competitiveness in the biotechnical global field. Because individuals were purportedly attempting to steal something from the United States, some would argue that this is a direct attack on national security. However, several factors separate this case from other surveillance and intellectual property cases. The economic value of the trade secret in question should not have any bearing on what charge to impose. Alternatively, FISA was designed to protect against spying on the U.S. by foreign governments; the government pointed to DBN’s alleged close ties with the Chinese government as sufficient reasoning for the extensive surveillance measures. Although the Chinese government only owns 1.08 % of DBN Group, there does seem to be evidence indicating that the company has ties to the Communist Party of China, something that could make it more difficult for defense counsel to suppress the surveillance evidence as unnecessary intrusion into their client’s lives. 
     An additional important factor in the debate over the appropriateness of such surveillance measures is the fact that the government could have presumably chosen to charge the Mo Hailong and Mo Yun with economic espionage rather than the theft of trade secrets. Under the Economic Espionage Act of 1996economic espionage is the “acquisition of trade secrets” for the benefit of “any foreign government, […] instrumentality, […] or agent.” Although the theft of trade secrets, or industrial espionage, criminalizes similar activity, it is different from economic espionage because the theft merely needs to benefit someone other than the owner. Since the siblings were charged with the latter, the question is raised as to whether there really is any connection between the theft and the Chinese government. It could be argued that the U.S. government chose to indict the pair on the broader charge rather than fail to establish a viable connection to the Chinese government. Regardless, as this case moves forward, it will be important to see how the court responds; the decision could mark an important precedent in a rather unsowed field. Allowing this form of surveillance for non-militant foreign government agents could arguably lead to the allowance in the future for similar surveillance in a number of situations.

By Jacqueline Morley
CLP Articles Editor 

Friday, May 1, 2015

You Snooze, You Lose: The Sleepwalking Defense

Everyday when the sun goes down, hundreds of millions people in the United States go to sleep. For most of those people, the act of sleeping occurs normally and they awaken the next morning to continue living productive lives. However, nearly seventy-five percent of adult Americans experience some form of a sleep disorder at least a few nights per week. Sleepwalking is one such disorder. The prevalence of sleepwalking in the general adult population is between one and fifteen percent.

Friday, April 24, 2015

Retroactive Application of Miller v. Alabama to Eliminate Life Sentences Imposed on Juveniles

In 2012, the Supreme Court granted certiorari to hear Miller v. Alabama, which involved two 14-year-old boys who were convicted of murder during an attempted robbery. The state court allowed the juveniles to be tried as adults. As a result, at 14-years-old, they were sentenced to life imprisonment with no chance of parole due to mandatory sentencing guidelines, which did not allow the judge to consider any factors related to the juvenile’s life. In evaluating the state’s decision, the Supreme Court ruled that life without parole for juveniles violated the Eighth Amendment, which prohibits cruel and unusual punishment, when mitigating factors are not considered in the sentencing. The judge writing for the majority stated:

Tuesday, April 21, 2015

Skype and the Right to Confrontation

On February 23, 2015, the petition for certiorari was denied in the case of New Mexico v. Schwartz.  What the Court failed to realize by denying this petition, is that defendants all over the nation will not get the full protection the United States Constitution requires.  As technological advances increase, our use of technology in the courtroom increases as well.  From computer monitors to email to video testimony, technology has a significant impact on the way cases are handled in the courtroom.  The ease of technology, as well as its accessibility, makes it an ever-growing issue when applied the Constitution – issues the Framers never could have imagined.[1]  In New Mexico v. Schwartz, the defendant argues that by allowing four witnesses to testify via Skype, his 6th Amendment confrontation clause rights were violated.

In this case, Martha McEachin moved from Los Angeles to Albuquerque in March 2008. She had only been living with the defendant for a month and a half when she went missing.  In May 2008, a decomposed body was found wrapped in an air mattress with sheets in an alley about 500 feet from the Defendant’s apartment.  A two-year investigation ensued and the defendant was charged with McEachin’s murder.

At the trial, four of the State’s witnesses testified using Skype.  The defendant argues that this use of video testimony violated his 6th Amendment rights.  The Confrontation Clause states that in a criminal prosecution the defendant has the right to be confronted with the witnesses against him.  The defendant argues that video testimony via Skype does not satisfy this right.  The lower court explains that the right the Confrontation Clause gives is a guaranteed face-to-face meeting with the witnesses who are appearing before the jury.  There may be exceptions to this right; however, they must be narrowly tailored to include situations that are necessary to further an important public policy.  Without a particularized showing of necessity, the right of confrontation stands.  The court goes on to explain that mere inconvenience for a witness is not sufficient grounds to violate this face-to-face right.  The court believes that the state did not show necessity for the use of video testimony, and therefore reversed the defendant’s conviction.

The outcome of this case, however, was not ideal.  If this case had made it to the Supreme Court, the question of how to determine when video testimony via Skype is appropriate would have been determined.  Practitioners and judges are now left with an open-ended question of when this type of testimony does or does not violate the Confrontation Clause.  While an argument can be made for either side, concrete criteria to protect defendants should be implemented.  With the fast rate of growing technological advances, this is not the last time the Supreme Court will be presented with this particular issue.  Right now the best a judge can do is balance the interest of the State with the rights of the defendant.  It seems this is a losing battle either way.

Kelsey Edenzon
Staffer, Criminal Law Practitioner

[1] Jamie Walker and Laura Carlsen, “Can I Testify via Skype?” Using Videoconferencing Technology to Enhance Remote Witness Testimony, NWSidebar (June 11, 2014).

Friday, April 17, 2015

Judicial override is a concept that has been in place since the late 1970s. Its a permissive doctrine that gives state trial judges the option to override a jurys sentencing determination and institute a sentence the judge believes is more suitable. In Alabama, judicial override has been used frequently to override jury verdicts of life without parole for the death penalty. The Supreme Court will soon decide whether to grant certiorari on the question of whether Alabamas use of the judicial override option violates a defendants Sixth Amendment right to a jury as well as the Eighth Amendments prohibitions on arbitrary and capricious death sentences and cruel and unusual punishment.

Tuesday, April 14, 2015

SCOTUS Watch: Glossip v. Gross

Glossip v. Gross, Docket No. 14-7955,
on Appeal from the Tenth Circuit

“From this day forward, I shall no longer tinker with the machinery of death.  For more than twenty years I have endeavored—indeed.  I have struggled—along with a majority of this Court, to develop procedural and substantive rules that would lend more than the mere appearance of fairness to the death penalty endeavor.  Rather than continue to coddle the Court’s delusion that the desired level of fairness has been achieved and the need for regulation is eviscerated, I feel morally and intellectually obligated simply to concede that the death penalty experiment has failed.”
-          Justice Harry Blackmun

In the current term of the United States Supreme Court, the Justices are set to decide a case which almost literally questions the “machinery of death” and the “death penalty experiment.”   

Friday, April 10, 2015

The Death Penalty: Academia v. Public Opinion

In the past decade or so, the subject of capital punishment has spurred many academics to heated opinions arguing for and against the death penalty.  Some opponents of capital punishment have highlighted the world trend of abolishing the death penalty, noting that China, Iran, Pakistan, Saudi Arabia, and the United States carry out most of the known executions around the world, and that “the number of countries that still allow the death penalty has been dwindling.