Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01679/USCOURTS-casd-3_10-cv-01679-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1355 Petition for Return of Property

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- 1 - 10cv1679

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

IN RE RETURN OF SEIZED PROPERTY,

DEAN G. CHANDLER AND GARY

BOBEL,

Movants,

CASE NO. 10CV1679 DMS (RBB)

ORDER DENYING MOTIONS

FOR RETURN OF SEIZED

PROPERTY

[Docs. 1 & 5.]

This matter comes before the Court on Dean G. Chandler and Gary Bobel’s motions for the

return of seized property pursuant to Rule 41(g) of the Federal Rules of Criminal Procedure. The

matter was fully briefed and came on for hearing on August 26, 2010. Michael Pancer and Gretchen

Von Helms appeared on behalf of movants. Valerie Chu and Bruce Smith appeared on behalf of the

government. For the reasons set forth below, the motions are denied. 

I.

BACKGROUND

On June 23, 2010, the United States seized funds in several bank accounts belonging to

Chandler and Bobel pursuant to a pre-indictment seizure warrant issued by a magistrate judge based

upon a showing of probable cause that the funds were associated with movants’ criminal activity. The

government contends that Chandler and Bobel engaged in illegal activity in connection with loan

Case 3:10-cv-01679-DMS-RBB Document 17 Filed 08/31/10 Page 1 of 4
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- 2 - 10cv1679

modification services. Chandler and Bobel now move the Court for a hearing, at which they would

show the funds are (a) not associated with criminal activity, and (b) needed by them to retain counsel

pending an ongoing criminal investigation. The government initiated administrative forfeiture

proceedings pursuant to 18 U.S.C. § 983, after the instant motions were filed. 

II.

DISCUSSION

Chandler and Bobel argue their sixth amendment right to counsel and fifth amendment right

to due process have been abridged by the government’s seizure of lawfully obtained funds, which has

deprived them of their ability to retain counsel during the criminal investigation. Accordingly, they

seek a hearing to prove the seized funds derive from legitimate sources, are not tainted by illicit

conduct, and are necessary to ensure their right to effective assistance of counsel. 

When a motion pursuant to Rule 41(g) is filed before criminal proceedings are instituted, the

motion is “treated as [a] civil equitable proceeding[] and, therefore, a district court must exercise

‘caution and restraint’ before assuming jurisdiction. Ramsden v. United States, 2 F.3d 322, 324 (9th

Cir. 1993) (quotations omitted). Four stringent factors are considered before a court’s equitable

jurisdiction is invoked: (1) whether the government displayed a callous disregard for the constitutional

rights of the movant; (2) whether the movant has an individual interest in and need for the property

he wants returned; (3) whether the movant would be irreparably injured by denying return of the

property; and (4) whether the movant has an adequate remedy at law to redress his grievance. Id. at

324-325. 

Perhaps realizing the daunting task of meeting the foregoing criteria, movants contend the

Court need not concern itself with the exercise of equitable jurisdiction because constitutional

implications under the fifth and sixth amendments distinguish their case. The sixth amendment right

to counsel, however, attaches only when an adversarial proceeding is commenced. Brewer v. Williams,

430 U.S. 387, 398 (1977). “[A] criminal defendant’s initial appearance before a judicial officer, where

he learns the charge against him and his liberty is subject to restriction, marks the start of adversary

judicial proceedings that trigger attachment of the Sixth Amendment.” Rothgery v. Gillespie County,

554 U.S. 191 (2008). Such is not the case here: Chandler and Bobel have not been arrested, indicted

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 United States v. Stein, 541 F.3d 130 (2d Cir. 2008), cited by movants, does not lead to a 1

different result. While the court acknowledged in Stein that pre-indictment government conduct could

affect a criminal defendant post-indictment, the court noted that sixth amendment rights do not attach

until indictment. Id. at 153. Further, in that case, the government pressured an employer to limit

attorney’s fees paid to employees under investigation and to terminate such payments upon indictment.

Thus, “the termination of fees upon indictment” deprived defendants of their sixth amendment right

to counsel. Id. at 153. n. 13.

- 3 - 10cv1679

or charged. Thus, their sixth amendment right to counsel has not attached. Similarly, movants’

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assertion that a fifth amendment right to an evidentiary hearing exists, is premised on cases in which

criminal charges have been filed. See United States v. Michelle’s Lounge, 39 F.3d 684, 701 (7th Cir.

Ill. 1994) (“[D]ue process requires the government to participate in a post-seizure adversary hearing

on probable cause when the district court has found that the government has seized through civil

forfeiture all of the assets a criminal defendant needs to obtain counsel.”) (emphasis added).

In the absence of criminal charges, the sixth amendment simply is not in play – and movants’

fifth amendment rights must be evaluated in that light. Here, funds were seized pursuant to a court

issued warrant; administrative forfeiture proceedings have been initiated, where movants may

challenge the seizure; and, in the event criminal charges are filed, the issues raised here may be

revisited there. 

Under these circumstances, this Court properly may exercise jurisdiction and hear the matter

only if the framework set out above under Rule 41(g) is met. It is not. The administrative forfeiture

proceedings initiated by the government provide Chandler and Bobel an adequate remedy at law. See

United States v. U.S. Currency, $ 83,310.78, 851 F.2d 1231, 1236 (9th Cir. 1988) (“[W]hen a civil

forfeiture proceeding is pending, there is no need to fashion an equitable remedy to secure justice for

the claimant.”). In addition, the government has not acted with “callous disregard” of the

constitutional rights of movants, as the government seized the property pursuant to a warrant issued

by a neutral fact finder. See Account Services Corp. v. United States, 2009 WL 2755649 (S.D. Cal.

2009) (“[T]he court finds the government did not act in callous disregard for ASC’s constitutional

rights. The seizures were effected based on seizure warrants for which the magistrate judges made

neutral and independent findings of probable cause.”) The Court therefore declines to exercise

equitable jurisdiction.

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While movants complain that the administrative process initiated by the government does not

afford adequate process because of its relatively slow pace (compared to a potentially fast moving

criminal investigation), the process accorded movants is adequate under the circumstances: a seizure

pursuant to a court issued warrant, with an opportunity to challenge the seizure in pending

administrative proceedings, all while movants remain uncharged. The fifth amendment requires no

more.

III.

CONCLUSION

For these reasons, the motions are denied without prejudice.

IT IS SO ORDERED.

DATED: August 31, 2010

HON. DANA M. SABRAW

United States District Judge

Case 3:10-cv-01679-DMS-RBB Document 17 Filed 08/31/10 Page 4 of 4