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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 DEFENDANT 

LACEY’S MOTION FOR RELEASE 

OF FUNDS UNRELATED TO 

BACKPAGE AND REQUEST FOR 

EXPEDITED RELIEF (Doc. 385)

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 issue an order 

denying Michael Lacey’s (“Defendant”) motion for release of funds (Doc. 385 (the 

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“Motion”), thereby mooting Defendant’s “Notice of Government’s Non-Opposition” (Doc. 

403)). 

In support, the Government states as follows:

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

On April 26, 2018, a United States Magistrate Judge sitting in the Central District of 

California (the “CDCA Court”) issued seizure warrants for funds held in the Republic Bank 

of Arizona accounts ‘2485, ‘1897, and ‘3126 (the “Seizure Warrants”) after finding probable 

cause that 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). 

On November 16, 2018, almost six months after the CDCA Court issued the Seizure 

Warrants, and the same day this Court heard argument on certain defendants’ Emergency 

Motion to Stay Seizure of Attorney Fees and Request for an Immediate Hearing (Dkt. 360) 

and related filings (Docs. 365, 376, and 377), Defendant filed this Motion. In its ruling on 

the Emergency Stay Motion, this Court determined that it would not exercise jurisdiction 

over seizure warrants issued in the Central District of California (“CDCA”), finding that 

the defendants had an adequate remedy for their allegations before that rendering court. 

(Transcript, pp. 55 – 56 (Nov. 16, 2018), excerpts attached at Exhibit A). As of this Court’s 

November 16 ruling, this is now the “law of the case,” and its application should result in 

this Motion being denied. Indeed, the Government did not immediately file a response to 

this Motion due to its having been filed earlier on the same day as this Court’s ruling on 

the “Emergency Stay Motion,” and because this Court’s ruling resolved the very same 

issues raised by this Motion.

Additionally, even if this Court’s prior decisions were not applicable to this Motion, 

the relief Defendant seeks constitutes a motion for return of property, arising under Rule 

41(g) of the Federal Rules of Criminal Procedure. However, such a motion is inappropriate 

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and must be denied where, as here, the property is subject to a civil forfeiture proceeding 

or is the subject to criminal forfeiture. 

Finally, to the extent that Defendant’s Motion seeks the release of funds necessary 

to his criminal defense, Defendant has failed to set forth the necessary basis for a hearing 

because he has not made the prerequisite showing that he lacks sufficient un-seized assets 

to retain counsel of his choice.

II. DEFENDANT’S MOTION IS PRECLUDED BY THE LAW OF THE CASE 

The ‘law of the case doctrine’ relieves a court from having to reconsider an issue 

already decided by the same court or by a superior court in the identical action. United 

States v. Real Prop. Located at Incline Vill., 958 F. Supp. 482, 487 (D. Nev. 1997) (citing 

Thomas v. Bible, 983 F.2d 152, 154 (9th Cir.), cert. denied, 508 U.S. 951 (1993)); see

Musacchio v. United States, 136 S. Ct. 709, 716 (2016) (“The law-of-the-case doctrine 

generally provides that ‘when a court decides upon a rule of law, that decision should 

continue to govern the same issues in subsequent stages in the same case.’”) (quoting Pepper 

v. United States, 562 U.S. 476, 506 (2011)) (“Musacchio”). The doctrine is a discretionary 

principle designed to ensure judicial consistency and to prevent the reconsideration, during 

the course of a single continuous lawsuit, of those decisions which are intended to put a 

particular matter to rest. Id. Under the law of the case doctrine, a previous decision on a 

factual or legal issue must be followed in all subsequent proceedings in the trial court or on 

a later appeal in the appellate court....” Id. 

Even ‘summary’ treatment of a legal of factual issue becomes the law of the case.” 

Id. at 488 (citing Leslie Salt, 55 F.3d at 1392). The Ninth Circuit even “adhered to the law 

of the case even where a prior ruling was “cryptic and somewhat ambiguous.” Id. (quoting

Hanna Boys Ctr. v. Miller, 853 F.2d 682, 687 (9th Cir. 1988)). “Whether a previous 

proceeding’s ruling becomes the law of the case ‘turns on whether a court previously 

decided upon a rule of law ... not on whether, or how well, it explained the decision.’” Id.

(quoting Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988)). However, 

certain exceptions to this doctrine apply. For example, the “law of the case doctrine” is not 

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applicable where (1) the court is presented with substantially additional or different 

evidence, (2) where a contrary decision of the applicable law is made with respect to a 

particular issue, and (3) the prior decision was clearly erroneous resulting in a manifest 

injustice. Id. (citing In re Benny, 81 F.3d 91, 94 (9th Cir. 1996); United States v. Garcia, 

77 F.3d 274, 276 (9th Cir. 1996); Helger v. Borg, 50 F.3d 1472, 1475 (9th Cir. 1995).

On November 16, 2018, this Court reviewed and addressed almost the exact same 

issues and concerns raised by defendant James Larkin’s “Supplemental Brief” in support of

defendants’ Emergency Motion to Stay Seizure of Attorney Fees and Request for an 

Immediate Hearing (Dkt. 377 (“Supplemental Brief”)), which was filed one day prior to the 

hearing set for the Emergency Motion. In defendant Larkin’s Supplemental Brief, he argued 

that the seizure of funds was improper because, among other things, the seizure restrained 

funds unrelated to the criminal allegations contained in the Indictment and First Superseding 

Indictment and because the seizure has left defendant with insufficient funds to afford his 

counsel of choice. (See Supplemental Brief, p. 2). During oral argument, the Court asked 

government counsel whether the government would request that the Court consider the 

Response to the Emergency Motion (Dkt. 371) as also responding to the Supplemental Brief. 

The Court: And Mr. Kucera [government counsel at the hearing], I am treating the 

government’s response [to Document 377] as Document Number 371, since 371 was filed 

in the [Emergency Motion]. Is that what you would like?

Mr. Kucera: Notwithstanding the fact that these other documents were filed after the 

response –

The Court: Correct.

Mr. Kucera: -- yes, Your Honor.

The Court: I mean, would your response be pretty much the same? It’s the same 

issue.

Mr. Kucera: Certainly along those same lines, yes, Your Honor.

(Transcript, pp. 51 – 52).

The instant Motion contains substantially the same issues as those included in the 

Supplemental Brief that this Court found to be “the same issue” adjudicated by the Court in 

the Emergency Motion. This Court found that “[t]he defendants have not set forth any 

persuasive reasons as to why [this] Court should interfere with the Central District of 

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California’s issuance of the search warrants, and [this] Court finds that the defendants have 

sufficient legal remedy for any challenges to the seizure warrants issued by the Central 

District of California in that district.” (Id. at 59).1 For these reasons, this Court denied 

defendants’ Emergency Motion (Dkt. 376). (Id.) As such, on November 16, 2018, during 

oral argument this Court already decided the issues presented by this Motion.

Because the Motion raises issues that were already decided, and because the Motion

does not present “substantially additional or different evidence” that should cause this Court 

to reconsider its previous ruling, the rule of the case set forth on November 16 applies, and 

the Motion should be denied.

III. DEFENDANT’S IMPROPER MOTION FOR RETURN OF PROPERTY

A. A Motion For Return Of Property Is Unavailable Once The Government Has 

Initiated Forfeiture Proceedings 

Even if this Court had not ruled on the issues presented by Defendant’s Motion, 

Defendant seeks the return of property seized pursuant to a seizure warrant. Motions for the 

return of property are an equitable remedy governed by Rule 41(g) of the Federal Rules of 

Criminal Procedure. However, where, as here, the government has commenced civil or 

criminal forfeiture proceedings, those proceedings provide an adequate remedy at law for a 

defendant to seek relief, and a motion for return of property is unavailable. See United 

States v. Premises of 2nd Amendment Guns, LLC, 917 F. Supp. 2d 1120, 1122 (D. Or. 2012) 

(citing United States v. Bluitt, 815 F. Supp. 1314, 1316-17 (N.D. Cal. 1992) (“A rule 41(g) 

motion is unavailable . . . when property is retained pursuant to administrative or civil 

forfeiture . . . This is because Rule 41(g) provides an equitable remedy and is not available 

when a claimant has [an] adequate legal remedy”)).

2

 

 

 

1 The Government maintains its position that this Court would be the appropriate venue 

for a Monsanto-type motion and/or hearing, but Defendant has not sought such relief.

 

2 Although a Rule 41(g) motion is not permissible under these circumstances, were this 

Court to permit defendant’s Motion, the Motion would be treated as a civil complaint and 

the government would be entitled to 60 days to respond pursuant to Rule 12(a) under the 

Federal Rules of Civil Procedure. Ladele v. United States, No. CR 06-00125 MMM, 2010 

WL 476957, at *6 (C.D. Cal. Feb. 2, 2010) (treating movant’s Rule 41(g) motion as a civil 

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Long lists of headnotes confirm the well settled law that motions for return of 

property are unavailable once the defendant can contest any forfeiture in an existing civil or 

criminal proceeding: “The proper office of a Rule 41(g) motion is, before any forfeiture 

proceeding have been initiated or before any criminal charges have been filed, to seek the 

return of property seized without probable cause, or property held an unreasonable length 

of time without the institution of proceedings that would justify the seizure and retention of 

property.” United States v. Sims, 376 F.3d 705, 708 (7th Cir. 2004). A motion for return of 

property is properly denied once a civil forfeiture action has been filed. United States v. 

U.S. Currency $83,310.78, 851 F.2d 1231, 1235 (9th Cir. 1988) (“$83,310.78”); see also, 

Cartwright v. United States, No. 00-4400-CIV-JORDAN, slip op. at 5 (S.D. Fla. Feb. 26, 

2001) (refusing to exercise equitable jurisdiction over motion for return of property seized 

for civil forfeiture because defendant’s subsequent indictment, including forfeiture, gives 

defendant adequate remedy at law; there is nothing wrong with starting case with civil 

seizure and proceeding with criminal forfeiture).

For this reason, Defendant’s request for return of property is properly denied.

B. The Proper Remedy For Sixth Amendment Claims Is A Monsanto Hearing

Although Defendant seeks the return of property pursuant to a Sixth Amendment 

claim, the only proper path to this remedy (before trial) is a motion pursuant to Monsanto,

3

and the Government reasserts the arguments made in its November 15, 2018, Response In 

Opposition to Defendant’s Motion to Stay Seizure of Attorneys’ Fees (Dkt. 371).

 

complaint; where “the government claim[ed] the property sought was already the subject of 

an administrative foreclosure proceeding, the court must convert the government’s 

opposition into a motion for summary judgment....”); see United States v. Williams, 267 F. 

Supp. 2d 1130, 1138 (M.D. Ala. 2003) (motion for return of seized property denied, despite 

finding of lack of probable cause and granting of motion to suppress, because the property 

was restrained in a criminal case under 21 U.S.C. § 853(e)(1) and an civil forfeiture 

complaint had been filed under 18 U.S.C. § 983(a)(3)(B)(ii)(II)).

 

3

 The Government has 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. 

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A post-restraint, pretrial hearing is available 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). 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). This is so because 

neither the Fifth nor the Sixth Amendment requires Congress to permit a 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.

“To even be entitled to the hearing, defendants must first show a genuine need to 

use the assets to 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)); 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 

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civil forfeiture case without first showing that he lacked other funds with which to retain 

counsel in the related criminal matter).

After a showing of financial necessity,

4

a defendant may make a prima facie showing 

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

Defendant seeks to have the Government litigate the merits of the forfeiture case 

now, and prove the Government’s theory of forfeit ability prior to seizure. But that is not 

the law and Defendant has made no threshold showing of financial need that would entitle 

him to a hearing at this point. 

For this reason, Defendant’s request for return of property is properly denied.

///

///

///

 

4

“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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IV. CONCLUSION

For the forgoing reasons, the Government respectfully requests that Defendant’s 

Motion be denied, thereby mooting his “Notice of Government Non-Opposition.” 

Respectfully submitted this 11

th of December, 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/Kevin Rapp

JOHN J. KUCERA

Special Assistant United States Attorney

Attorneys for Plaintiff

UNITED STATES OF AMERICA

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CERTIFICATE OF SERVICE

I hereby certify that on this 11th day of December 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/Angela Schuetta 

U.S. Attorney’s Office

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