NEW 4TH CIRCUIT RULING EXPLORES FORFEITURES
(Posted September 25, 2017) Last year, the Supreme Court of the United States ruled that federal criminal forfeiture laws don’t authorize the government to seize untainted assets from a defendant before trial. Luis v. US, 136 S.Ct. 1083 (2016). That’s because the defendant’s right to the assistance of counsel outweighs the government’s interest in seizing that pot of money. Today, in US v. Marshall, the Fourth Circuit takes up the question whether the same rule applies after a conviction, when the defendant wants to use untainted assets to appeal.
Since this appeal implicates that vital three-word phrase, appellate attorneys’ fees, I will assume that I have your attention. Here’s the setup: The government can seize any assets that it can trace to criminal activity. If it can’t find those assets, it can move the trial court to allow it to seize “substitute assets,” including those that aren’t related to any crimes.
The government accused Marshall of what appear to be some high-level drug-distribution and money-laundering crimes, to the tune of $108 million. That money wasn’t lying around under his mattress when Marshall was arrested, so the government filed papers indicating that it would seek seizure of $59,000 out of a bank account.
As noted above, that substitution had to wait, based on last year’s ruling out of First Street. After conviction, the government followed through with the seizure, but Marshall indicated that he wanted to use that money to hire an appellate lawyer. After obtaining a stay below, Marshall filed a motion in the Fourth Circuit seeking release of the funds for that purpose.
A panel of the court today unanimously denies the motion, finding that Luis expressly has no application after conviction. Unlike a defendant’s constitutional right to be tried by a jury of his peers, there is no constitutional right to appeal. (Maybe we ought to work on getting that oversight fixed. More work for appellate lawyers.) In the absence of a constitutional right, the government’s interest in the property outweighs Marshall’s.
Technically, that’s because Marshall’s interest in it is zero. By law, tainted funds become property of the government as soon as the crime is committed. Untainted funds become government property once the trial court enters a substitution order, and once that happened here, Marshall didn’t own the money anymore. The panel quotes a SCOTUS opinion’s memorable language on this point: “It would be illogical to hold that a defendant is entitled to use assets that he no longer owns to hire counsel.”
Note that this isn’t the criminal appeal of the underlying conviction, so Marshall can still try to obtain his freedom. He will, however, be represented by a court-appointed lawyer in that appeal, instead of the privately retained lawyer he wanted.