Supreme Court Weighs Whether The Government Can Freeze A Defendant's Assets

Nov 10, 2015
Originally published on November 11, 2015 2:39 pm

The Supreme Court heard arguments Tuesday in a case testing whether the government can freeze a defendant's legitimately obtained assets, thus preventing the accused from hiring a lawyer.

Sila Luis, the owner of Miami home health care companies, was indicted on Medicare fraud charges in 2012. She has been detained at her home for two years while her case wended its way to the Supreme Court. She wants to use some of her assets to hire a lawyer for her trial.

The government concedes that some of her financial holdings are not connected to her alleged criminal conduct. But prosecutors contend that Luis has already spent so much of her ill-gotten gains that if she is convicted, she won't be able to pay back the Medicare Trust Fund what she owes unless her untainted assets are there to be tapped.

The Supreme Court has previously ruled that the government may, prior to trial, freeze money and property connected to criminal activity.

This case tests whether it can similarly freeze assets not connected to the alleged crime — for instance, assets like a home, cars, or jewelry acquired prior to the alleged crime.

"What the government proposes to do is financially cripple someone before they've been convicted, before they've had a trial and not allow them to use assets that are theirs to try to match the government in the courtroom," said defense lawyer Howard Srebnick. The asset freeze, he argues, amounts to a denial of the Sixth Amendment right to counsel.

He faced a seemingly skeptical Supreme Court Tuesday, mainly because the justices have ruled before that the government can, prior to trial, freeze assets and money connected to a crime. Srebnick maintained that there is a big difference between tainted money acquired in criminal activity, such as drug deals, and assets acquired prior to the alleged crime, or unconnected to the crime.

Justice Samuel Alito noted, however, that money is fungible, and Justice Elena Kagan observed that although there's a "powerful intuition behind your argument, it's a powerful intuition that was explicitly rejected" by this court in previous cases.

Attorney Srebnick could rightly have concluded that he had no chance of winning by the time he sat down.

The play, however, was not over. And when Deputy Solicitor General Michael Dreeben stepped to the lectern, he faced an increasingly agitated group of justices.

"The principle," Justice Stephen Breyer said, "is that the government, without proving that he's guilty of any crime beyond a reasonable doubt, can take all of his money." The effect of that, Breyer continued, is that a person cannot hire a lawyer, because he or she might later be convicted and fined. "I've never heard of such a principle."

"This is basically a zero-sum game," Dreeben replied. "Either there will be money available at the end of the case for the victims or the money will have been spent on lawyers."

Justice Anthony Kennedy seemed skeptical of the government's position. "It seems to me if the government prevails in this case, every state in the union, every locality could say that in the event of ... any crime involving bodily injury, that the government is entitled to [freeze assets] even if the consequence is that in most of those cases most people would not be able to afford a lawyer."

Chief Justice John Roberts seemed to agree. "This could apply to any law on the books," he said.

When Dreeben argued that one of the court's key cases from 1989 supported the government's position, Justice Kagan countered, "Suppose the court is just uncomfortable with the path we have started down " in that case, "what should we do with that intuition?"

Dreeben rejected the premise of the question, saying the court's prior decisions were correct, and the justices should not deviate from that path.

They didn't look very happy about that prospect. We'll know what they decide later in the term.

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The U.S. Supreme Court heard arguments today in a case testing whether the government can freeze all of a defendant's assets, preventing the accused from hiring a lawyer. The case was brought by the owner of a Miami home health care company indicted for Medicare fraud. NPR legal affairs correspondent Nina Totenberg picks up the story.

NINA TOTENBERG, BYLINE: Sila Luis has been locked down in home detention for two years while her case wended its way to the Supreme Court. She wants to use some of her assets to hire a lawyer for her trial. The government concedes that some of her holdings are not connected to her alleged criminal conduct. But it says if she's already spent so much of her ill-gotten gains that if she's convicted, she won't be able to pay back what she owes unless her untainted assets are there to be tapped.

The Supreme Court has previously ruled that the government may, prior to trial, freeze money and property connected to criminal activity. This case tests whether it can similarly freeze assets not connected to the alleged crime. On the steps of the Supreme Court today, defense lawyer Howard Srebnick, representing Sila Luis, said that if the government gets its way, defendants would routinely be assigned a public defender, thus depriving those who could pay of their constitutional right to the lawyer of their choice.

HOWARD SREBNICK: What the government proposes to do is financially cripple someone before they've been convicted, before they've had a trial and not allow them to use assets that are theirs to try to match the government in the courtroom.

TOTENBERG: Inside, Srebnick faced a seemingly skeptical court, mainly because the justices have ruled before that the government can, before a trial, freeze money connected to a crime. Lawyer Srebnick maintained that there's a big difference between tainted money - for example, from drug deals - and money that is untainted, not connected to any criminal activity - property, for instance, that was acquired prior to the alleged crime. Justice Alito noted, however, that money is fungible. And Justice Kagan observed that although, as she put it, there's a powerful intuition behind your argument, it's a powerful intuition that was explicitly rejected by this court in previous cases. Attorney Srebnick could rightly have concluded that he had no chance at winning by the time he sat down.

The play, however, was not over. And when deputy solicitor general Michael Greben stepped to the lectern, he faced an increasingly agitated group of justices. Justice Breyer - the principal that the government is arguing is that without proving that the defendant is guilty of any crime, it can take all his money so he can't hire a lawyer because he might later be convicted and fined. I've never heard of such a principle. Lawyer Dreeben - this is basically a zero-sum game. Either there will be money available at the end of the case for the victims, or the money will have been spent on lawyers. Justice Kennedy - it seems to me if the government prevails in this case, every state in the union could provide for a freeze of assets pending trial in any assault and battery, any spousal abuse case, any case with medical costs, for instance, even if the consequence of the asset freeze is that most people would not be able to afford a lawyer. Chief Justice Roberts - this could apply to any law on the books. Justice Kagan - suppose the court is just uncomfortable with the path we have started down in earlier cases. What should we do with that intuition?

The government's Mr. Dreeben rejected the premise of the question, saying the court's prior decisions were correct and the justices should not deviate from their path. They didn't look very happy about that prospect. We'll know what they decide later in the term. Nina Totenberg, NPR News, Washington. Transcript provided by NPR, Copyright NPR.