Kaley v. United States: Prisoners Have No Constitutional Right to Challenge Asset Freezes
Prosecutors frequently seek to freeze the assets of criminal defendants, particularly in cases involving white-collar crimes. Thanks to the U.S. Supreme Court, getting your money back just became more difficult.
In Kaley v. United States, the Court held that a criminal defendant indicted by a grand jury does not have the constitutional right to challenge an asset freeze under 21 U.S.C. § 853(e)(1), even if those assets are needed for the defendant to pay her attorneys to defend her in trial.
The Facts of the Case
Kerri Kaley was a medical device salesperson under federal investigation for stealing devices from hospitals. She admitted she took certain pieces of medical equipment and sold them with her husband’s help. Kerri claimed she only took outdated models the hospitals were glad to be rid of, reasoning she wasn’t stealing if the hospital no longer wanted it.
The Kaleys retained counsel to represent them. To pay for their legal fees, the Kaleys took out a line of credit on their home and used it to purchase of certificate of deposit (CD). They later deposited an additional $63,000 in the CD. When the Kaleys were indicted by the grand jury, it included a forfeiture count. The government froze the Kaleys’ assets, including their home and the CD. As a result, the Kaleys could no longer afford their attorney of choice as protected by the Sixth Amendment.
A lower court judge questioned why the government froze the entire CD when only $140,000 could be linked to the illegal sale of the medical devices. In response, the government added a new grand jury indictment charge of conspiracy to commit money laundering, which allowed them to freeze the entire amount held in the CD.
The U.S. Court of Appeals for the Eleventh Circuit held that due process requires a hearing when freezing assets prevents a defendant from hiring his/her counsel of choice, even though the forfeiture was proper after the indictment. However, the appellate court added that the Kaleys could not challenge the evidence supporting the indictment against them in the post-indictment hearing. The scope of the hearing should be limited to whether the frozen assets were traceable to the charged crime. The Kaleys appeal to the Supreme Court argued they have the right to challenge the evidence supporting the grand jury’s decision and finding of probably cause that they committed the crime.
The Supreme Court’s Decision
The divided Supreme Court ruled that freezing assets of an indicted defendant prior to trial is constitutional as long as the order was based on probable cause to believe the property would ultimately be proven forfeitable, even when the assets are needed to pay the defendant’s lawyer.
Justice Kagan wrote, “[T]he grand jury gets to say—without any review, oversight, or second-guessing—whether probable cause exists to think that a person committed a crime.”
Chief Justice John Roberts Jr., joined by justices Stephen Breyer and Sonia Sotomayor, dissented, noting the possibility of government overreaching without providing the presumed innocent defendant’s right to be heard.
Supreme Court Tackles Bridgegate Scandal and Four Other Casesby DONALD SCARINCI on January 21, 2020
Last week, the U.S. Supreme Court heard oral arguments in Kelly v. United States, the criminal case...
Supreme Court Kicks Off Second Half of 2019-2020 Termby DONALD SCARINCI on January 16, 2020
The Supreme Court is back in session, with the justices returning from their winter break on Januar...
Separation of Powers Under Morrison v. Olsonby DONALD SCARINCI on January 14, 2020
In Morrison v. Olson, 487 U.S. 654 (1988), the U.S. Supreme Court upheld the independent counsel pr...
- Establishment ClauseFree Exercise Clause
- Freedom of Speech
- Freedoms of Press
- Freedom of Assembly, and Petitition
- The Right to Bear Arms
- Unreasonable Searches and Seizures
- Due Process
- Eminent Domain
- Rights of Criminal Defendants
Preamble to the Bill of Rights
Congress of the United States begun and held at the City of New-York, on Wednesday the fourth of March, one thousand seven hundred and eighty nine.
THE Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution.