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ELIZABETH A. STRANGE

First Assistant United States Attorney

District of Arizona

KEVIN M. RAPP (Ariz. Bar No. 14249, kevin.rapp@usdoj.gov)

MARGARET PERLMETER (Ariz. Bar No. 024805, margaret.perlmeter@usdoj.gov)

PETER S. KOZINETS (Ariz. Bar No. 019856, peter.kozinets@usdoj.gov) 

ANDREW C. STONE (Ariz. Bar No. 026543, andrew.stone@usdoj.gov)

JOHN J. KUCERA (Cal. Bar No. 274184, john.kucera@usdoj.gov) 

Assistant U.S. Attorneys

40 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone (602) 514-7500

BRIAN BENCZKOWSKI

Assistant Attorney General

Criminal Division, U.S. Department of Justice

REGINALD E. JONES (Miss. Bar No. 102806, reginald.jones4@usdoj.gov) 

Senior Trial Attorney, U.S. Department of Justice

Child Exploitation and Obscenity Section 

950 Pennsylvania Ave N.W., Room 2116

Washington, D.C. 20530

Telephone (202) 616-2807 

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff, 

v. 

Michael Lacey, et al.,

Defendants.

No. CR-18-00422-PHX-SPL

GOVERNMENT’S RESPONSE IN 

OPPOSITION TO MOTIONS TO 

STAY SEIZURE OF ATTORNEYS’ FEES (Docs. 360, 365, 366)

Plaintiff United States of America (the “Government”), by and through its counsel 

of record, the United States Attorney’s Office for the District of Arizona and Special 

Assistant United States Attorney John J. Kucera, requests that this Court deny the motions

to stay seizure of attorneys’ fees (Docs. 360, 365, 366), because they are improperly filed 

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in the wrong jurisdiction and seek relief that is invalid as a matter of law.

1 In support, the 

Government states as follows:

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

On October 31, 2018, the Honorable Rozella A. Oliver, United States Magistrate 

Judge for the Central District of California (the “CDCA Court”), issued twelve seizure 

warrants for funds held in seventeen different bank accounts, which were held in the names 

of fifteen different law firms (collectively, the “Seizure Warrants”). 2 The Seizure Warrants

were issued upon the CDCA Court’s probable cause finding that, pursuant to 18 U.S.C. 

§ 981(a)(1)(A) and (C), the funds were property involved in or traceable to money 

laundering, or were proceeds of violations of 18 U.S.C. §§ 1952, 1956, and 1957 (interstate 

and foreign travel or transportation in aid of racketeering enterprises, and money laundering 

offenses, respectively). 

As it would in the normal course, the Government had intended to serve the seizure 

warrants on the banks to which they were issued. However, during execution of a similar 

warrant several weeks prior, that process resulted in one bank’s inadvertent freezing of a 

law firm’s entire Interest on Lawyer’s Trust Account (“IOLTA”) account, rather than a 

simple withdrawal of seized funds, causing an unintended interruption to the firm’s 

operations. To prevent similar interruptions, the Government contacted the fifteen law firms 

affected by the Seizure Warrants before executing the warrants at the respective banks. 

Beginning on November 6, 2018, attorneys from the Money Laundering and Asset Recovery 

Section of the Department of Justice’s Criminal Division began making courtesy calls to 

 1 At a minimum, the Government requests that the Court deny the motions without prejudice 

and transfer them to the CDCA Court. However, should this Court decide to reach the 

merits, the Government requests that the Court dismiss the motions because they do not 

state a legally valid basis to grant a stay. 

2 Despite the warrants being marked “*SEALED*”, twice, at the top of each warrant, the

warrants were not filed under seal. In addition, Doc. 365-1 contains the bank account 

information of the United States Postal Service, and the Government has requested that 

defense counsel seal that exhibit to prevent public disclosure of Government bank account 

information. 

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affected law firms to offer a wire-in-lieu-of-execution of the seizure warrants. (See Doc. 

360, Ex. C at 1). The Government explained to each law firm that while normally these 

warrants would be served on the bank, the Government was attempting to minimize 

interruption by allowing the firms to wire the funds to the Government instead. 

Two days later, on November 8, 2018, counsel for Padilla and Vaught responded by 

challenging the warrants issued by the CDCA Court, but filed their “Emergency Motion of 

Defendants Andrew Padilla and Joye Vaught to Stay Seizure of Attorneys’ Fees and Request 

for Immediate Hearing” in the District of Arizona. (See Doc. 360.) On November 9, 2018, 

the law firm of Mitchell, Stein, Carey, Chapman PC (“Mitchell Stein”) filed a similar motion 

to stay the seizure of funds that were paid to them “in connection with the representation of 

witnesses.” (Doc. 365.) Shortly after, counsel for defendants Michael Lacey, James Larkin, 

John Brunst, and Scott Spear filed a motion to join defendants’ Andrew Padilla and Joye 

Vaught Emergency Motion to Stay Seizure of Attorneys’ Fees and Request for Immediate 

Hearing. (Doc. 366.) The defendants request that this Court stay all twelve of the warrants 

issued by the CDCA Court, despite the fact that not a single one of the twelve warrants was 

directed at any of the law firms or any of the defendants involved in that motion. Id.3

Because the arguments presented in all of the above-listed motions are largely the same, the 

Government is filing this collective response in opposition. On November 13, 2018, the 

court issued an order temporarily staying the execution of the seizure warrant on the IOLTA 

accounts for Mitchell Stein. (Doc. 369). Accordingly, the government is holding in 

abeyance the execution of the seizure warrants for only accounts held by Mitchell Stein, and 

attorneys for Vaught (Weiss) and Padilla (Piccarretta) pending the hearing on November 16, 

2018. 

 3 Because several non-defendants have moved or joined in the Motions to Stay Execution 

of the Seizure Warrants, for clarity, all represented parties seeking to stay execution of the 

Seizure Warrants shall be referred to as “Movants”. 

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II. THE MOTIONS ARE IMPROPERLY FILED AND THIS COURT SHOULD 

NOT EXERCISE EQUITABLE JURISDICTION

To the extent that Movants have any basis to contest the Seizure Warrants, such 

motions should have been filed in the Central District of California, where the warrants were 

issued. The Seizure Warrants were issued pursuant to 18 U.S.C. § 981(a)(1)(A) and (C), 

upon the CDCA Court’s probable cause finding that they are property involved in or 

traceable to money laundering, or were proceeds of violations of 18 U.S.C. §§ 1952, 1956, 

and 1957 (interstate and foreign travel or transportation in aid of racketeering enterprises, 

and money laundering offenses, respectively). The statute does not provide a basis for 

another court to obtain jurisdiction until after property has been seized. 18 U.S.C. § 

981(b)(3)(“Any motion for the return of property seized under this section shall be filed in 

the district court in which the seizure warrant was issued or in the district court for the 

district in which the property was seized.”).

4

 Such a motion for the return of property, 

however, would be filed pursuant to Rule 41(g) of the Federal Rules of Criminal Procedure. 

However, neither § 981 nor Rule 41 provides a jurisdictional basis for a court, other than 

the court that issued the warrants, to adjudicate a pre-execution motion, especially one that 

seeks to stay or vacate the warrants themselves. See Hewlett Packard Co. v. Equipment 

Resources, Inc., 1992 U.S. Dist. LEXIS 12653, *1 (Misc. No. 92-362, D.D.C. Aug. 25, 

1992) (denying without prejudice, and transferring, defendant’s motion to stay a seizure 

order issued by a judge in the Northern District of California, because that judge had asserted 

 4 Although the location of seizure has not yet been determined, most of the Seizure Warrants 

would have been served by a law enforcement agent based in Los Angeles who would have 

served them on California-based branches of the banks involved, as most of these warrants 

were issued to national banks such as JP Morgan Chase, Citibank, US Bank, etc. A small 

number of the banks at issue, for example, Alliance Bank of Arizona, have branches only in 

Arizona, and would have required service in the District of Arizona. Notably, the law firm 

that holds an account there, Mitchell Stein, does not represent any charged defendants in 

this case, but merely represents witnesses, the relevance of which is discussed infra. The 

only law firm that represents charged defendants, Piccarreta Davis Keenan Fidel, P.C. (Doc. 

360), has its IOLTA account(s) at Chase Bank, the warrant for which would have been 

served in California. 

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jurisdiction and any relief defendant sought must be presented to the issuing court).5 

Allowing Movants to file motions such as this also creates forum-shopping problems where, 

in cases where they fear they may not get the result they want from the issuing district, they

file motions to stay the warrant with a different court.6

And, while this Court could find that it has discretionary, equitable jurisdiction over 

this matter, it is unnecessary to exercise it. Equitable jurisdiction “is to be exercised, if at 

all, with caution and restraint and in accordance with familiar limitations on the granting of 

equitable relief.” Meier v. Keller, 521 F.2d 548, 554 (9th Cir. 1975) (citing Hunsucker v. 

Phinney, 497 F.2d 29, 34 (5th Cir. 1974)); see also Smith v. Katzenbach, 351 F.2d 810, 815-

16 (D.C. Cir. 1965); Centracchio v. Garrity, 198 F.2d 382, 385-86 (1st Cir. 1952); Rodgers 

v. United States, 158 F. Supp. 670, 675-78 (S.D. Cal. 1958); 3 C. Wright, Federal Practice 

and Procedure, Criminal § 673 (1969)). 

In Meier, the Ninth Circuit held that a California district court erred in exercising 

equitable jurisdiction over Meier’s request for a temporary restraining order, a preliminary 

and permanent injunction prohibiting his attorney from appearing before any grand jury, 

suppression of all leads and evidence derived from his attorney’s cooperation, and a Rule 

41 request that seized documents be returned to him. See id. at 550, 554-56. Meier had 

been indicted in Nevada, but filed complaints in Nevada and California requesting relief. 

See id. at 554-55. The Nevada court in which he had been indicted immediately dismissed 

his request, but the district court in California granted it. Id. On appeal, the Ninth Circuit 

 5 The dearth of case law on pre-seizure motions to stay execution of warrants is likely due 

to the fact that notice is not legally required, nor is it usually given, prior to executing a 

seizure warrant. A “seizure for purposes of forfeiture is one of those ‘extraordinary 

situations’ that justify postponing notice and opportunity for a hearing.” Calero-Toledo v. 

Pearson Yacht Leasing Co., 416 U.S. 663, 676-77 (1974) (citing Fuentes v. Shevin, 407 U.S. 

67, 90 (1972)). 

6 For example, for other assets that were previously seized in this case pursuant to warrants 

issued by the Central District of California, Defendant James Larkin previously filed a 52- page “Motion to Vacate or Modify Seizure Warrants” in the Central District of California, 

where the seizure warrants were issued. (Case No. Case No. 18-MJ-00722, CDCA, filed 

July 31, 2018.) The CDCA Court did not immediately rule on that motion, nor was there a 

hearing.; It is worth considering whether Movants elected to file this round of “emergency 

motions” in the District of Arizona, where a hearing was already scheduled on other matters

and set for only eight days later. 

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looked first at whether there was an alternative remedy available to prevent irreparable 

harm. See id. at 555. Finding that post-seizure remedies existed, the Court held that the 

exercise of equitable jurisdiction was unnecessary. See id. The Court further found that 

defendant’s reasons for forum shopping were “all too evident: at best, he hoped for a forum 

more sympathetic to his position, at worst, he hoped to delay the Nevada prosecutions and 

to gain broader discovery than that normally available.” Id. 

Similarly, since the CDCA Court already found probable cause that the funds at issue 

are subject to seizure, Movants in this case are hoping that this Court will prove more 

sympathetic and repudiate the CDCA Court’s finding. Furthermore, the Government 

contacted every law firm subject to these Seizure Warrants and informed them of the proper 

legal remedy they have if they feel the warrants were issued in error – to file a claim in this 

Court’s ancillary proceedings, or, if the Sixth Amendment applies to their client(s), to 

request a Monsanto-type hearing, as discussed further below. But what Movants actually 

want from this Court is clear – an end-run around lawful forfeiture proceedings and a means 

to avoid the threshold showing requirements of Monsanto. Consequently, this Court should 

respect the probable cause finding of the CDCA Court, reject Movants’ attempts to forum 

shop, and refuse to exercise jurisdiction over this matter.

III. STAY OF SEIZURE WARRANTS IS NOT THE APPROPRIATE REMEDY

In addition to filing in the wrong jurisdiction, Movants’ request for a stay of the 

Seizure Warrants is not an appropriate remedy. As discussed above, Movants have a 

statutory remedy in the ancillary proceedings that will occur in this case, as well as being 

entitled to a Monsanto hearing if the Sixth Amendment is applicable.

7

A. Proper Remedy for Seizures is the Ancillary Proceeding and Forcing 

Parties to Wait Does Not Violate Due Process

 7 Not only are defendants entitled to a Monsanto hearing, but the Government repeatedly 

offered to release a portion of funds for attorneys’ fees, for indigent defendants upon an 

informal showing of need. (See, e.g., Doc. 360, Ex. C at 5). None of the defendants have 

attempted to make such a showing. Counsel for Larkin expressed interest in doing so, but 

to date, has not provided anything to support a claim of indigence. 

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Title 21 U.S.C. § 853(k) ensures an orderly forfeiture process and protects the district 

court’s exclusive jurisdiction over assets subject to criminal forfeiture.

8 Section 853(n) sets 

forth the procedures for determining third party rights in criminal forfeiture cases, and 

expressly bars third parties from contesting the forfeiture in any other forum. The Movants’ 

“emergency motions” are simply another attempt by third parties and defendants in the 

Backpage proceedings to contest forfeiture in another forum,

9 a tactic that is barred by 

Section 853.

The Supreme Court has consistently held that deferring ownership issues to the 

ancillary proceeding was a policy choice that Congress was entitled to make, even if it 

prolongs the forfeiture process. See Libretti v. United States, 516 U.S. 29, 44 (1995); see 

also United States v. Coffman, 574 F. App’x 541, 564 (6th Cir. 2014) (same). Forcing third 

parties to wait until the ancillary proceeding to contest the forfeiture does not violate due 

process. See United States v. Lazarenko, 476 F.3d 642, 648 (9th Cir. 2007) (forcing a third 

party to wait until the ancillary proceeding to contest a forfeiture, rather than granting an 

immediate hearing on a motion to vacate a seizure pursuant to section 853(f), does not 

violate the third party’s right to due process); see also United States v. Watts, 786 F.3d 152, 

175 (2d Cir. 2015) (holding that, beyond § 853(n)(6)(A), (B), the statute authorizes no 

challenges to the forfeitability of a defendant’s property by interested third parties); United 

 8 “Except as provided in subsection (n), no party claiming an interest in property subject to 

forfeiture under this section may... commence an action at law or equity against the United 

States concerning the validity of his alleged interest in the property subsequent to the filing 

of an indictment or information alleging that the property is subject to forfeiture under this 

section.” 21 U.S.C. § 853(k)(2).

9 When Defendant Larkin’s “Motion to Vacate or Modify Seizure Warrants” was not 

immediately ruled on by the Central District of California, he and several other defendants 

filed an 84-page civil complaint in the Delaware Chancery Court, attempting to collaterally 

attack assets that were subject to federal forfeiture, in direct contradiction of 21 U.S.C. § 

853(n). Camarillo Holdings, LLC vs. Amstel River Holdings, LLC, Del. Ct. of Chancery, 

Case No. 2018-0606-SG, Aug. 16, 2018, Doc. 1. On the same day they filed their Verified 

Complaint, defendants filed a Motion for Expedited Proceedings, requesting “that trial be 

scheduled as soon as the Court’s calendar permits in the 45-60 day time-frame [sic].” Id. at 

Doc.15. One day after being notified of the seizure warrants issued in CDCA, Movants filed

motions to stay the ancillary proceedings in defendant Carl Ferrer’s criminal case (Case No. 

2:18-cr-00464-SPL, Dist. Of Ariz.), because the “Delaware court’s ruling will have a direct 

and material impact on Claimants’ petitions and this Court’s adjudication of Claimants’ 

interest(s) in the relevant assets.” Id. at Doc. 44. See also, id. at Docs. 45-48.

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States v. Holy Land Found. for Relief & Dev., 493 F.3d 469, 477 (5th Cir. 2007) (en banc) 

(Section 853(k) ensures an orderly process that relieves the Government of the burden of 

having to defend the forfeiture against third party claims during an ongoing prosecution 

while protecting the third party’s right to a day in court in the ancillary proceeding; this 

procedure does not violate the third party’s right to due process); De Almeida v. United 

States, 459 F.3d 377, 381 (2nd Cir. 2006) (until the ancillary proceeding, the ownership of 

the property is irrelevant; any property involved in the offense of conviction may be 

forfeited; thus, the Government does not have to establish the defendant’s ownership of the 

property to seize it pending trial or to obtain a preliminary order of forfeiture, and section 

853(k) makes it clear that the third party must wait until the ancillary proceeding to assert 

his rights); Sunrise Acad. v. United States, 791 F. Supp. 2d 200, 205-07 (D.D.C. 2011) 

(conducting a thorough due process analysis and concluding that absent a showing of 

irreparable injury, requiring a third party to wait until the ancillary proceeding does not 

violate due process); United States v. McCorkle, 143 F. Supp. 2d 1311, 1318-19 (M.D. Fla. 

2001) (“Congress has established the procedure for adjudicating third party interests in 

forfeited property. 21 U.S.C. § 853(n). A petitioner must follow the specified procedure, 

and may not commence a separate action against the United States concerning the validity 

of his alleged interest in the forfeited property. 21 U.S.C. § 853(k).”).

Even the traditional post-seizure remedy of Rule 41 is inappropriate in the case of a 

third party seeking the release of property seized or restrained for criminal forfeiture. While 

Rule 41 allows claimants to file a motion to return property if they believe the initial seizure 

was improper, United States v. Eight Thousand Eight Hundred & Fifty Dollars ($8,850) in 

United States Currency, 461 U.S. 555, 569 (1983), Section 853(k) bars third parties from 

commencing any action against the United States after an indictment has been filed and the 

asset becomes subject to criminal forfeiture. See, e.g., United States v. Lugo, 2012 WL 

32452, *2 (E.D.N.Y. Jan. 5, 2012) (§ 853(k) bars a third party from seeking the return of 

property subject to criminal forfeiture by filing a Rule 41(g) motion pre-trial; that there was 

no forfeiture notice in the indictment when the motion was filed did not matter because the 

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Government filed a superseding information that did contain such notice); Sunrise Acad. v. 

United States, 791 F. Supp. 2d 200, 203-04 (D.D.C. 2011) (§ 853(k) bars a third party from 

seeking pre-trial release of property seized from its own bank account by filing a lawsuit 

against the U.S.; it is not trumped by Rule 41(g)); Walker v. United States, 2011 WL 62139, 

*1 (W.D. Wash. Jan. 7, 2011) (defendant’s mother could not use Rule 41(g) to seek pre-trial 

return of vehicle seized from the defendant and listed in his indictment as subject to 

forfeiture); Account Servs. Corp. v. United States, 2009 WL 2755649, *2-4 (S.D. Cal. Aug. 

27, 2009) (once seized property is included in a criminal indictment, a third party who 

alleges that the property belongs to it cannot file a Rule 41(g) motion for its return; despite 

the inevitable delay, the third party’s right to contest the forfeiture in the post-trial ancillary 

proceeding is an adequate remedy at law; but the court must be sure that the seizure did not 

involve a “callous disregard” for the third party’s Fourth Amendment rights and that the 

third party is not suffering irreparable harm). “The law appears settled that an ancillary 

proceeding constitutes the only avenue for a third party claiming an interest in seized 

property.” Lazarenko, 469 F.3d at 821.

The CDCA Court found probable cause that the funds at issue in the Seizure Warrants 

were subject to forfeiture. Many of the bank accounts have already been included in a 

Preliminary Order of Forfeiture in defendant Carl Ferrer’s criminal case. See Case No. 2:18-

cr-00465-SPL, Dist. of Ariz., at Doc. 43-1. Because the assets at issue are subject to 

forfeiture, the appropriate remedy to challenge the seizure is through the ancillary 

proceeding.

B. Proper Remedy for Sixth Amendment Claims over Seized Funds is a 

Monsanto Hearing

A post-restraint, pretrial hearing is available as an exception to the ancillary 

proceeding remedy, but only if (1) the Sixth Amendment is implicated, and (2) the defendant 

makes a prima facie showing that there is no probable cause for the forfeiture of the 

restrained property. United States v. Monsanto, 491 U.S. 600, 109 S. Ct. 2657, 105 L. Ed. 

2d 512 (1989). Neither the Fifth nor the Sixth Amendment requires Congress to permit a 

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defendant to use tainted assets adjudged to be forfeitable to pay legal fees. See Caplin & 

Drysdale v. United States, 491 U.S. 617, 633 (1989) (post-trial); United States v. Monsanto, 

491 U.S. 600, 616 (1989) (pretrial). Congress’ rationale for this was clear: “[p]ermitting a 

defendant to use assets for his private purposes that ... will become the property of the United 

States if a conviction occurs cannot be sanctioned.” Monsanto, 491 U.S. at 613, 109 S.Ct. 

2657. 

1. The Sixth Amendment is not implicated where an individual has 

not been charged.

The Sixth Amendment provides that “[i]n all criminal prosecutions, the accused shall 

enjoy the right ... to have the assistance of counsel for his defense.” U.S. CONSTITUTION,

6TH AMEND. In McNeil v. Wisconsin, 501 U.S. 171 (1991), the Supreme Court explained 

when this right arises:

The Sixth Amendment right [to counsel] ... is offense specific. It cannot be 

invoked once for all future prosecutions, for it does not attach until a 

prosecution is commenced, that is, at or after the initiation of adversary 

judicial criminal proceedings—whether by way of formal charge, 

preliminary hearing, indictment, information, or arraignment.

Id., at 175 (citations and internal quotation marks omitted). The only other “right to counsel” 

found outside of the Sixth Amendment, is the Fifth Amendment guarantee that “[n]o person 

... shall be compelled in any criminal case to be a witness against himself.” Id., at 176. In 

Miranda v. Arizona, 384 U.S. 436 (1966), the Supreme Court “established a number of 

prophylactic rights designed to counteract the “inherently compelling pressures” of 

custodial interrogation, including the right to have counsel present.” Id. Thus, a right to 

counsel can attach at the time of arrest or during custodial interrogation, where the Fifth 

Amendment is implicated and a subject requests that counsel be present. Id. Whether 

Monsanto applies to a Fifth Amendment right to counsel in a situation where the defendant 

has been arrested or requests counsel during a custodial interrogation, appears to be an issue 

of first impression. However, where an individual has not been charged, is not under arrest, 

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and is not requesting counsel as part of a custodial interrogation, the right to counsel has not 

attached, and no Sixth Amendment rights are implicated. 

Here, the only Movants who have a Sixth Amendment right to counsel, and have 

counsel who are subject to the Seizure Warrants, are Padilla and Vaught. (Case No. 2:18-

cr-00422-SPL, Dist. of Ariz., Doc. 360.) Defendants Larkin, Lacey, Spear and Brunst have 

a Sixth Amendment right to counsel, but none of the Seizure Warrants were issued to a law 

firm that represents them and none of their attorneys’ fees are included in the twelve 

warrants. It is unclear what standing they are claiming to have to contest warrants issued to 

accounts completely unrelated to their retained attorneys, and which are neither in their 

possession nor control. 

The only law firm bank account included in the Seizure Warrants that ostensibly 

represents one of the charged Defendants belongs to Mitchell Stein, who, according to 

PACER, represents defendants Larkin, Spear, Brunst, Hyer, Padilla, Vought, and several 

uncharged “movants.” However, Mitchell Stein’s Motion states that they were only filing 

on behalf of eight clients who consist of “various current and former Backpage employee 

witnesses in this case,” rather than any charged defendants (Case No. 2:18-cr-00422-SPL, 

Dist. of Ariz., Doc. 365). Consequently, Mitchell Stein’s uncharged clients have no Sixth 

Amendment basis to contest the Seizure Warrants. 

2. Not a single Movant has made the threshold showing that they do 

not possess sufficient assets to obtain counsel. 

To seek relief from seizure, a defendant must first make a showing that they do not 

possess sufficient assets to obtain counsel. Only where all of a defendant’s assets have been 

seized or restrained are the defendant’s Fifth and Sixth Amendment rights violated. See 

United States v. Unimex, Inc., 991 F.2d 546, 551 (9th Cir. 1993) (“Unimex’s right to counsel 

under the Sixth Amendment and to Due Process under the Fifth Amendment were violated 

by taking away all of its assets, denying it an opportunity to show cause prior to its criminal 

trial that an amount it could have used for attorneys’ fees was non-forfeitable.”). “To even 

be entitled to the hearing, defendants must first show a genuine need to use the assets to 

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retain counsel of choice.” See Kaley v. United States, 571 U.S. 320, 353-54 (2014) 353-54 

(Roberts, C.J., dissenting) (citing United States v. Bonventre, 720 F.3d 126, 133 (2d Cir. 

2013) (holding that to qualify for a post-restraint Monsanto hearing, the defendant must 

disclose his net worth, provide a comprehensive list of his assets, and explain how he has 

been paying his significant living expenses; it is not enough to contrast his income stream 

and bank account balances with his living expenses and legal fees)). In applying Unimex, 

courts put the initial burden upon the defendant to show that he lacks sufficient funds. See 

United States v. McCray, 113 F. App’x. 770, 772 (9th Cir. 2004) (upholding district court’s 

refusal to grant Monsanto hearing regarding funds held in parallel civil case; holding 

defendant has no Sixth Amendment right to a hearing unless he offers evidence as to the 

source of the restrained property and “his inability to compensate counsel from other funds 

available to him”) (citing Unimex, 991 F.2d at 551); see also United States v. Wetselaar, 

2013 WL 8206582, *19-20, *23 (D. Nev. Dec. 31, 2013) (applying Unimex and denying 

request for probable cause hearing; Government not required to “re-establish” probable 

cause that property is traceable to the offense until defendant shows that he lacks other 

funds); United States v. Swenson, 2013 WL 3322632 (D. Idaho July 1, 2013) (if property is 

seized, the court applies Unimex, which permits a hearing only if the defendant satisfies the 

burden of proving need and that funds are not tainted); United States v. Approximately 

$144,001 in U.S. Currency, 2011 WL 5345266 (N.D. Cal. Nov. 7, 2011) (applying Unimex, 

finding defendant not entitled to a probable cause hearing in his civil forfeiture case without 

first showing that he lacked other funds with which to retain counsel in the related criminal 

matter).

After making a showing of financial necessity,

10 a defendant may make a prima facie

showing that there is no probable cause for the forfeiture of the restrained property in order 

 10 “Perhaps recognizing that Monsanto hearings might be used only to gain a sneak peak of 

the Government’s case and witnesses, thereby wasting prosecutorial resources, a majority 

of courts have held that such hearings are necessary only where the criminal defendant 

makes at least an initial showing that he has no other assets with which to retain private 

counsel.” United States v. Kramer, No. 1:06CR200-ENV-CLP, 2006 WL 3545026, at *4 

(E.D.N.Y. Dec. 8, 2006) (citing United States v. Jamieson, 427 F.3d 394, 406 n. 3 (6th 

Cir.2005) (cataloguing other circuit’s approaches)).

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to be entitled to a Monsanto hearing. At the probable cause hearing, a defendant cannot 

challenge the grand jury’s finding of probable cause with respect to the underlying crime, 

but he retains the right to challenge the probable cause regarding the nexus between the 

property and the offense. Cf. Kaley v. United States, 571 U.S. 320, 341 (2014). However, 

to be entitled to this remedy, the defendant must first have his assets seized or restrained, 

and prove that he otherwise has insufficient funds to mount a defense.

Movants argue that the Government should have to litigate the merits of the forfeiture 

case now, and prove the Government’s theory of forfeitability prior to seizure. But that is 

not the law and Movants have made no threshold showing of financial need that would 

entitle them to such a hearing at this point. 

IV. CONCLUSION

Despite Movants’ contention that this case is somehow different from any other 

federal case that involves the seizure of proceeds and funds involved in money laundering, 

as the CDCA Court determined in its probable cause finding - it is not. All but two of the 

Movants lack any Sixth Amendment claim to the finds, and the two who have been charged,

did not make the requisite threshold showing of financial need to be entitled to a hearing. 

Consequently, the proper legal recourse for challenging the Government’s theory of 

forfeiture (which will undoubtedly be litigated as part of the Government’s criminal case in 

chief), is for Movants’ to file a claim in the ancillary proceeding. The Emergency Motions

to Stay Seizure of Attorneys’ Fees (Docs. 360, 365, 366) should be DENIED because: this 

Court should respect the jurisdiction of the CDCA Court and its rulings; most of the Movants 

lack standing to request the relief they seek; none of the Movants have made the requisite 

threshold showing of financial need; and the requested remedy is inappropriate – any 

remaining third party claims must be adjudicated during the ancillary proceeding. 

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Respectfully submitted this 13th of November, 2018.

ELIZABETH A. STRANGE

First Assistant United States Attorney

District of Arizona

BRIAN BENCZKOWSKI

Assistant Attorney General

U.S. Department of Justice

Criminal Division, U.S. Department of Justice

KEVIN RAPP

MARGARET PERLMETER

ANDREW STONE

PETER KOZINETS

Assistant United States Attorneys

REGINALD E. JONES

Senior Trial Attorney

s/John J. Kucera

JOHN J. KUCERA

Special Assistant United States Attorney

Attorneys for Plaintiff

UNITED STATES OF AMERICA

CERTIFICATE OF SERVICE

I hereby certify that on this 13th day of November 2018, I electronically transmitted 

the attached document to the Clerk’s Office using the CM/ECF System for filing and 

transmittal of a Notice of Electronic Filing to the following CM/ECF registrant:

Anne Chapman, Erin McCampbell, Gregory Zamora, James Grant, Lee Stein, Paul 

Cambria, Robert Corn-Revere, Ronald London, Janey Henze Cook, John Littrell, Kenneth Miller, Thomas Bienart, Jr., Bruce Feder, Michael Kimerer, Rhonda Neff, KC Maxwell, 

David Wakukawa, Michael Piccarreta, Stephen Weiss, Gopi Panchapakesan, Ariel Neuman, Gary Lincenberg, Anthony Bisconti, Whitney Bernstein, Seetha Ramachandran.

 s/ U.S. Attorney’s Office

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