Last week the Supreme Court further clarified the procedures and limits regarding the government’s ability to freeze assets in connection with criminal prosecutions. Following the 2014 decision in Kaley v. United States, where the Court ruled (in the government’s favor) that a defendant could not challenge the legality of a pre-trial asset seizure by contesting the grand jury’s determination of probable cause, last week the Court added to the body of law on asset forfeiture by siding with defendants and limiting the government’s ability to freeze “untainted” assets. The Court’s March 30, 2016 decision in Luis v. U.S. holds that the government’s pre-trial freeze of “untainted” assets (meaning money not connected to the alleged crimes) violates the Sixth Amendment right to counsel by choice.
In a 5-3 ruling, the Court overturned the Eleven Circuit’s judgment, and, as Justice Breyer wrote in the plurality opinion, concluded that “the defendant in this case has a right to use her own ‘innocent’ property to pay a reasonable fee for the assistance of counsel.” The Court noted the fundamental nature of the right to representation under the Sixth Amendment, and that such a right outweighed the government’s interests in financially punishing defendants. Justice Breyer noted that the government’s interest was not undermined because defendants might still have tainted property subject to freeze.
Luis represents a curtailment of the government’s power to freeze a defendant’s untainted assets that would otherwise be used to pay for counsel of defendant’s choosing. However, individuals that may become involved in criminal proceedings should note that this ruling only applies to untainted funds, those which are not connected in any way to the alleged crimes. The mere fact that funds were used to pay an attorney’s fees would not prevent tainted funds from being subject to freeze or subsequent forfeiture (as set forth in Section 9-120.102 of the U.S. Attorney’s Manual).