The government has a full panoply of tools that may (if used inappropriately) sever the relationship between attorney and defendant. The United States Court of Appeals for the Tenth Circuit recently discussed the use of those tools when a defendant claimed that the government inappropriately caused his attorney to withdraw from his case.
The trouble began shortly after the defendant told the court that he had no income and no money. Incongruously, a retained attorney appeared on behalf of the defendant. Seeking to understand the inconsistency, the government moved to withhold production of discovery until more could be learned about how the attorney was getting paid. The government argued that the defendant continued to engage in criminal conduct and alleged that there may be a conflict of interest between the attorney and the defendant as a result. But the attorney refused to provide the government with information about his fees.
The District Court held an initial hearing on the government's motion. During a colloquy with the defendant, the District Court identified four potential conflicts: (1) the defendant's girlfriend, who delivered the fees to the attorney, might be charged as a co-conspirator; (2) if the fees were being paid by someone higher in the defendant’s criminal organization, then the attorney's loyalty might be compromised; (3) the attorney might be guilty of criminal conduct for accepting the fee; and (4) the government might forfeit the attorney's fees, and the defendant might not want an attorney to represent him if the attorney was not getting paid (essentially arguing that there might be a perception that the attorney would not perform well if the attorney feared that the fees would be forfeited to the government.).
At the hearing, the Court also asked the government to submit more information to help the Court decide the issue. The Court allowed the government to file that information under seal and ex parte. In the meantime, the government caused the Grand Jury to issue several subpoenas to the attorney relating to the fees.
The subpoenas caused the attorney great difficulty. The attorney explained to the Court that he feared government action to restrain money in the attorney's trust account because "it will automatically ring bells to the . . . State Bar." The attorney offered to put the fees into the Court’s registry just to avoid any problems with his bank or the State Bar. And the attorney emphasized that he was putting the money into the registry voluntarily (and not pursuant to the subpoenas) so as to avoid any problems with the trust account and the bar.
The District Court's listing of the potential conflicts for the attorney is troubling in light of the Model Rules of Professional Conduct. Putting aside a situation where the attorney knew or should have known that the fees were the proceeds of crime, which would be an obvious no-no, there was no further indication of potential conflicts. A lawyer may receive payment from a third-party so long as (1) the client is informed and agrees and (2) the lawyer recognizes his duty is to the client and not to the source of the funds. See Model Rules 1.7, 1.8(f). Moreover, a lawyer's duty to his client is not lessened if the lawyer's fees are seized by the government (the Supreme Court has previously expressed indifference as to whether this risk essentially turns the representation into a contingent fee arrangement). See Model Rule 1.3; Caplin & Drysdale v. United States, 491 U.S. 617, 632 n.10, 109 S. Ct. 2646, 105 L. Ed. 2d 528 (1989).
As it turns out, in this case, the government appears to be correct that the money was the proceeds of crime. Although the girlfriend was told that "the money came from the sale of a car and from collecting cash from family and friends," the girlfriend believed that the money was "very suspicious." The Court did not reveal whether the attorney had any basis to think the money was suspicious (the girlfriend was evidently much closer to the criminal conduct than the attorney and in a much better position to determine whether the circumstances were suspicious, but there is no indication that she shared her perspective with the attorney). Nevertheless, this case marks a dangerous line between the government's enforcement of its forfeiture priorities and a defendant's Sixth Amendment rights. It is reasonable to expect more cases with similar fact patterns as the government increases its forfeiture efforts.
The case discussed and quoted from above is United States v. McKeighan, 685 F.3d 956 (10th Cir. 2012).