1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

PICCARRETA DAVIS KEENAN FIDEL PC

2 East Congress Street, Suite 1000

Tucson, AZ 85701

(520) 622-6900

Michael L. Piccarreta

State Bar No. 003962

Email: mlp@pd-law.com

Attorney for Defendant Andrew Padilla

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

United States of America,

 Plaintiff,

vs.

6. Andrew Padilla,

 (Counts 1-51)

7. Joye Vaught,

 (Counts 1-51)

 Defendants.

NO. CR-18-00422-06-PHX-SPL

JOINT REPLY TO RESPONSE (DOC. 

371) TO EMERGENCY MOTION TO 

STAY SEIZURE OF ATTORNEYS’ 

FEES AND REQUEST FOR 

IMMEDIATE HEARING (DOC. 360)

Defendants Andrew Padilla and Joye Vaught hereby reply to the government’s 

response (Doc. 371) to their Emergency Motion to Stay Seizure of Attorneys’ Fees and 

Request for Immediate Hearing (Doc. 360). The defendants respectfully request this Court 

to extend the stay of seizures of attorneys’ fees, set a briefing schedule, and hold an 

evidentiary hearing to resolve the serious constitutional issues raised by the government’s 

actions.

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 1 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

I. INTRODUCTION

The instant Emergency Motions seek a stay of the government’s efforts to seize 

attorney retainers intended for defense of charges and claims against defendants,1 to 

allow a fair opportunity to address fundamental constitutional flaws of the 

government’s seizures. The government’s ex parte actions to seize attorney retainers 

are the latest round of its seizures of millions of dollars of defendants’ assets on the 

premise that every ad payment and every dollar of revenue earned by Backpage.com

(“Backpage”) for 14 years are criminal proceeds. And the government goes still further 

to assert that virtually every dollar of assets held by defendants or others on their behalf 

(such as lawyers holding retainers for legal defense) are tainted criminal proceeds even

where moneys had nothing to do with Backpage. The government’s theory and its 

seizures are wholly unprecedented, and, more importantly, they directly contravene the 

First, Fifth and Sixth Amendments. 

The government has persistently attempted to lead this Court down the path to a 

hearing pursuant to United States v. Monsanto, 491 U.S. 600 (1989), as the only 

available remedy for the defendants concerning the government’s pretrial restraint of 

their assets. Indeed, the government has taken every step possible to avoid ever having 

 1 Defendants Andrew Padilla and Joye Vaught file this reply in accordance with the 

Court’s order of November 8, 2018 (Doc. 361). Defendants James Larkin, Michael 

Lacey, John Brunst, and Scott Spear join in this reply, pursuant to the Court’s order of 

November 13, 2018 (Doc. 375), and these defendants have also separately filed a stay 

motion paralleling the motion of Padilla and Vaught, and to correct issues the Court 

noted in its order (Doc. 376).

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 2 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

to address the fact that this is a First Amendment case and, as a result, special rules 

govern the pretrial restraint of the defendants’ assets, which are the proceeds of their 

participation in First Amendment activities. The government urges this Court to start 

its analysis on step two, when this Court must begin its analysis on step one, which is 

the propriety of the government’s seizures under the First Amendment.

In Monsanto, the case upon which the government has so heavily relied, the 

Court began its analysis with a finding that the government had legally restrained the 

defendant’s assets prior to conviction. See Monsanto, 491 U.S. at 606-14. Indeed, there 

is nothing in the opinion to suggest that the defendant challenged the propriety of the 

government’s pretrial restraint of his assets other than to the extent that the restraint 

impacted his ability to fund his defense. See id. at 602-16. After making a preliminary 

finding on the legality of the restraint, the Court focused the opinion on whether any 

portion of those legally restrained assets could be used to fund the defense as a matter 

of Sixth Amendment precedent. See id. at 614-16. Monsanto makes it clear that you 

do not get to the Sixth Amendment analysis until there has first been a determination 

on the legality of the seizure. 

Here, the government has not satisfied step one—demonstrating that their 

pretrial restraint of defendants’ assets was legal—because the seizure procedures used 

did not comply with constitutional standards governing for pretrial restraint of assets 

derived from participation in First Amendment activities See, e.g., Backpage.com, LLC 

v. Dart, 807 F.3d 229, 230-31 (7th Cir. 2015) (recognizing Backpage as “an avenue of 

expression and ideas and opinions” protected by the First Amendment, including its 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 3 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

“classified ads for ‘adult’ services”). 

II. BACKGROUND

Through their employment as salaried employees working in what they firmly 

believed to be lawful activities at a lawful business, defendants Padilla and Vaught earned 

the right to indemnification and advancement of funds for legal fees in legal actions arising 

out of the performance of their duties such as the present criminal prosecution. See United 

States v. Stein, 541 F.3d 130, 155 (2d Cir. 2008) (recognizing the Sixth Amendment right to 

counsel of choice for “an employee who reasonably expects to receive attorneys’ fees as a 

benefit or perquisite of employment, whether or not the expectation arises from a legal 

entitlement”). Under Delaware law, Backpage and its affiliates are obligated to advance 

defense costs and expenses to Padilla and Vaught, in accordance with the terms 

of certain LLC Agreements and/or under their agreements with Padilla and 

Vaught. Likewise, Backpage and its affiliates also are obligated to advance defense 

costs and expenses to Larkin, Lacey, Brunst, and Spear, in accordance with the terms 

of certain LLC Agreements and under the terms of various written 

agreements.2 Because the defendants earned the right to receive indemnification and 

 2 For example, when the United States seized Backpage.com, Mr. Padilla was employed 

by Amstel River Holdings, LLC. Mr. Padilla’s title was Chief Operating Officer (COO) 

on the business’ organizational chart. Under its Limited Liability Company Agreement, 

Amstel is obligated to indemnify Mr. Padilla as a “Company officer[].” Amended and 

Restated Limited Liability Company Agreement, Article XI, sec. 11.01(a). Moreover, 

various subsidiaries of Amstel are obligated to indemnify Mr. Padilla, as Amstel is an 

affiliate of the members of the subsidiaries and Mr. Padilla is an employee of Amstel. 

See, e.g., Dartmoor Holdings, LLC Third Amended and Restated Limited Liability 

Company Agreement, Article 8, sec. 8.2: “The Company shall indemnify, defend and 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 4 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

advancement of funds through their employment, and because they do not believe that any 

of the conduct was unlawful or any of the assets tainted, they are, in essence, bona fide 

purchasers for value of the funds for these services. See Luis v. United States, 578 U.S. __, 

__, 136 S.Ct. 1083, 1091 (2016). 

The government’s seizure of attorneys’ fees is just its latest maneuver in its attempts 

to interfere with the defendants’ Fifth and Sixth Amendment right to due process and right 

to counsel of choice. The government previously seized tens of millions of dollars that 

belong to defendants through ex parte civil seizure warrants obtained in the Central 

District of California (CDCA), including:

• On March 28, 2018, the government obtained at least 12 separate civil seizure 

warrants from Magistrate Judge Walsh and seized millions of dollars of assets 

from defendants.

• On April 4, 2018, the government obtained another civil seizure warrant from 

Magistrate Judge Walsh and again seized millions of dollars of assets.

• On April 9, 2018, the government obtained another civil seizure warrant from 

the Magistrate Judge Walsh and seized millions of dollars of assets. 

• On April 26, 2018, the government obtained another five civil seizure warrants 

from Magistrate Judge McDermott and seized millions of dollars of assets.

• On June 4, 2018, the government obtained three more civil seizure warrants 

from Magistrate Judge Rosenbluth and again seized millions of dollars of assets.

The government has continued to seize tens of millions of dollars of assets with 

 

old harmless each Member [i.e., Atlanticsche],...the affiliates of each Member [i.e., 

Mr. Padilla]...to the fullest extent permitted by law...”

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 5 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

ex parte civil seizure warrants emanating from the CDCA.3 

In answer to the present Emergency Motion, the government argues that 

statutory forfeiture procedures permit pretrial asset seizures and preclude all challenges 

until after prosecution concludes. But, perhaps obviously, statutory procedures do not 

trump constitutional requirements. The government also asserts that the Emergency 

Motion was filed in the “wrong jurisdiction” and asks this Court “to deny the motions 

without prejudice and transfer them to the CDCA Court.” Opp. at 2 & n.1. 

The government’s claim that defendants filed the Emergency Motion in the 

“wrong court” and is engaged in “forum shopping” is shocking in its mendacity. Opp. 

at 5-6. As the government well knows, some defendants (but not Padilla or Vaught) 

did file a Motion in the CDCA Court challenging the initial asset seizures on First, 

Fourth, Fifth, and Sixth Amendment grounds, (Motion to Vacate, Dkt. 6, CDCA No. 

18-CV-6742), and the government immediately sought to have this Court assert 

jurisdiction and to have all matters involving the seizures decided by this Court. (See 

Dkt. 282, DAZ No. 18-CR-422). 4

 When this Court denied the government’s 

application and indicated it would await Judge Klausner’s ruling, the government 

immediately filed civil complaints covering the seizures and filed an ex parte

 3 The government has not even produced the underlying affidavits for the June or July 

seizures.

4 The government sought this procedure without informing this Court of the pending 

motion challenging the seizures in the CDCA and without disclosing that Judge 

Klausner had scheduled a hearing to consider the motion. [See Dkt. 282 DAZ No. 18-

422] 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 6 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

application for stay. (See Dkt. 79, CDCA No. 18-CV-6742 and “related cases” cited 

therein). The government’s stay application once again argued that matters involving 

the seizures should be addressed by this Court. (Id. at 4 (Defendants’ “concerns could 

be more properly” addressed in “the Arizona criminal matter”). Judge Klausner granted 

the government’s stay request (and the stay order currently is on appeal to the Ninth 

Circuit). (See In re Any and All Funds Held in Republic Bank of Arizona Accounts, 

Ninth Cir. Case No. 18-56455). The new seizure warrants targeting attorney trust 

accounts prompting these Emergency Motions rely on the same purported showing of 

probable cause, and, if challenged in CDCA, would be met with the same government 

evasions.

The one constant in this background is that the government has never once 

addressed defendants’ argument that a showing of probable cause is constitutionally 

inadequate to support a pre-conviction seizure of publishing assets and proceeds. In 

pleadings filed in CDCA and in this Court, the government has never even mentioned 

the law that controls in this specific circumstance. The government has not cited a 

single First Amendment case on the issue of seizures, and instead has relied exclusively 

on cases where a showing of probable cause is sufficient to support an asset seizure.5

 5 E.g., Kaley v. United States, 571 U.S. 320, 324 (2014) (holding that an indicted 

defendant does not have a right to contest a grand jury’s probable cause finding). 

However, neither Kaley, nor any other of the cases the government cites on the issue of 

seizures has anything to say about a case like this one, where probable cause is not

enough to support a seizure. See infra (discussing forfeiture cases).

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 7 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

The government’s recent actions must also be considered in context. At the 

outset of the case, the government assured counsel for two defendants that it would not 

be seizing attorneys’ fees. The government has not seized attorneys’ fees for the two 

defendants who are cooperating and pled guilty. The government then raised 

“concerns” about attorneys’ fees in May of 2018 and undersigned counsel responded 

in detail in June. (Doc. 360, Exhibits E and F). The case then progressed for months 

with no mention of seizing attorneys’ fees, multiple motions were filed, and this Court 

held a lengthy hearing on October 4, 2018. The Court subsequently issued rulings in 

mid-October, some of which were adverse to the government’s positions, including its 

attempts to disqualify able and experienced counsel.6 Shortly on the heels of these 

rulings, on October 31, 2018, the government obtained its seizure warrants for 

attorneys’ fees. The government’s timing should raise serious concerns with this Court. 

III. ARGUMENT

A. The Government’s Seizures Of The Defendants’ Assets Were Unlawful In 

Violation Of The First, Fourth, And Fifth Amendments To The United 

States Constitution.

The government’s central argument boils down to this: that this case is no 

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 

 6 On October 24 and October 26, 2018, counsel made detailed requests for Brady/Giglio

material, citing this Court’s order noting that the government agreed to provide such 

information within ten days of discovering it. See Exhibits A and B hereto).

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 8 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

finding.” (Doc. 371, p. 13). This is false, and the government knows it. Where the 

assets involved were derived from publishing activities that are presumptively protected 

by the First Amendment, the government cannot effect a seizure in advance of an 

adversary proceeding that establishes the material at issue is unprotected.7

 Thus, the 

government’s claim that this is no different from any other case involving pretrial 

seizures is wrong for at least five reasons:

First, it has been established law for decades that the First Amendment bars the 

government from seizing or encumbering the assets or financial proceeds of publishing 

prior to conviction.8 In Fort Wayne Books, the Supreme Court invalidated a section of 

the Indiana RICO law that authorized the pretrial seizure of assets “subject to forfeiture” 

upon a showing of probable cause, which included all “property, real and personal, that 

‘was used in the course of, intended for use in the course of, derived from, or realized 

 7 The government’s refrain in various pleadings (except those relating to the seizures, 

where it has avoided the issue) is that advertisements for illegal transactions are 

unprotected by the First Amendment. This, however, is the very point the government 

must prove, and it cannot justify pre-trial seizures by assuming conclusions leaden with 

constitutional burdens. Otherwise, there would never be a bar to pre-trial seizure of 

publishing material alleged to violate the law. See, e.g., A Quantity of Books v. Kansas, 

378 U.S. 205, 211-12 (1964) (“It is no answer to say that obscene books are contraband, 

and that consequently the standards governing searches and seizures of allegedly 

obscene books should not differ from those applied with respect to narcotics, gambling 

paraphernalia and other contraband.”).

8 Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 63 (1989); Adult Video Ass’n. v. 

Reno, 41 F.3d 503 (9th Cir. 1994); Center for Democracy & Tech. v. Pappert, 337 

F. Supp. 2d 606, 649-650, 657 (E.D. Pa. 2004) (even for materials that may be 

“completely banned,” Fort Wayne Books requires that a court “make a final 

determination that the material is [unprotected by the First Amendment] after an 

adversary hearing”).

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 9 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

through’ . . . racketeering activity.” 489 U.S. at 51. The Court held the forfeiture order 

was unconstitutional even though the defendants in that case had 39 prior convictions 

for violating the state’s obscenity laws as predicate offenses and even assuming the 

materials subject to seizure were themselves obscene. Despite the fact the materials at 

issue could be forfeitable upon conviction, the Court held “the seizure at issue here is 

unconstitutional.” Id. at 65. See Adult Video Ass’n. v. Barr, 960 F.2d 781, 788 (9th 

Cir. 1992) (“the reasoning of Fort Wayne Books is equally applicable to the federal 

RICO statute” and its authorization of pretrial forfeitures of constitutionally-protected 

materials “is unconstitutional on its face”), aff’d, Reno, 41 F.3d at 504-05.

Second, the government cannot preemptively seize the profits or proceeds of 

publishing before conviction any more than it can seize other assets or the publications 

themselves. The Supreme Court has stressed that laws suppressing speech “may 

operate at different points in the speech process,” including by “imposing a burden by 

impounding proceeds on receipts or royalties.” Citizens United v. FEC, 558 U.S. 310, 

336-337 (2010). This follows from the well-established rule that depriving writers and 

publishers of compensation for their work violates the First Amendment. U.S. v. Nat’l 

Treasury Empl’s Union, 513 U.S. 454, 468-69 (1995); U.S. v. Playboy Ent. Grp., Inc., 

529 U.S. 803, 812 (2000). The Court applied these principles to hold the First 

Amendment prohibits government action to seize proceeds derived from publishing 

activities under a forfeiture regime in Simon & Schuster, Inc. v. Members of the New 

York State Crime Victims Bd., 502 U.S. 105, 115 (1991) (law authorizing forfeiture of 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 10 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11

proceeds is “presumptively inconsistent with the First Amendment”). 9 There, the Court 

found that the government cannot “freeze” profits from the sale of a book under a 

statutory scheme that generally authorizes forfeiture of proceeds of crime and 

prejudgment attachment procedures to ensure that wrongdoers “do not dissipate their 

assets.” Id. at 111.

Third, whenever the law authorizes the seizure of materials (or proceeds 

therefrom) that are even arguably protected by the First Amendment,10 the Supreme 

Court has long held that more rigorous procedural protections must be used. In 

circumstances such as these, the government must use “procedural safeguards designed 

to obviate the dangers of a censorship system.” Southeastern Promotions, Ltd. v. 

Conrad, 420 U.S. 546, 559-560 (1975). Such safeguards include placing “the burden 

of instituting judicial proceedings, and of proving that the material is unprotected . . . 

on the censor, limiting any restraint to “a specified brief period” to preserve the status 

quo, and ensuring “a prompt final judicial determination.” Id. at 560. For seizures of 

publishing assets, the burden of initiating judicial review and of proving that the 

 9 American Library Ass’n. v. Thornburgh, 713 F. Supp. 469, 484 n.19 (D.D.C. 1989) 

(“pre-trial seizure of non-expressive material [including ‘printing presses, bank 

accounts, etc.’] ex parte from a business engaged in expressive material also is 

unconstitutional”), rev’d on standing grounds sub nom. American Library Ass’n. v. 

Barr, 956 F.2d 1178, 1194-96 (D.C. Cir. 1992)

10 Backpage.com, LLC v. Cooper, 939 F. Supp. 805, 816, 833-34 (D. Tenn. 2013) (ads 

on Backpage.com are protected speech under the First Amendment); Backpage.com, 

LLC v. Hoffman, 2013 WL 4502097, at *9-11 (D.N.J. 2013) (rejecting argument that 

escort ads on Backpage.com are unprotected speech).

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 11 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

12

material is unprotected expression is on the government, and requires final judicial 

determination on the merits. Blount v. Rizzi, 400 U.S. 410, 420-22 (1971). 

Fourth, a showing of probable cause is never sufficient to justify such a seizure. 

Fort Wayne Books, 489 U.S. at 66 (“mere probable cause to believe a legal violation 

has transpired is not adequate to remove books or films from circulation”); Adult Video 

Ass’n., 960 F.2d at 788 (it is not enough for the government to show probable cause to 

support a forfeiture order); Pappert, 337 F. Supp. 2d at 658 (E.D. Pa. 2004) (“Although 

evidence of probable cause is sufficient to make an arrest, Fort Wayne holds that a 

finding of probable cause is not sufficient to completely remove a publication from 

circulation.”). See Backpage.com LLC v. Dart, 807 F.3d 229, 230-31 (7th Cir. 2015) 

(enjoining Sheriff’s actions to “suffocate” website financially based on allegations of 

illegality). As the Supreme Court stressed in Blount v. Rizzi, only a judicial 

determination in an adversary proceeding ensures the necessary sensitivity to freedom 

of expression, and a mere showing of probable cause cannot be sufficient to justify a 

seizure. 400 U.S. at 418-20. See U.S. v. Treatman, 408 F.Supp. 944, 954-56 (C.D. Cal. 

1976) (applying Blount to invalidate postal law authorizing injunctions barring the 

mailing of sexually-oriented advertising because the provision “contains none of the 

required procedural safeguards”); U.S. v. Thirty-Seven Photographs, 402 U.S. 363, 

373-74 (1971).

Fifth, where a website publishes millions of advertisements, the government 

cannot justify a wholesale seizure of assets based on allegations that the website’s 

former owners had some general level of awareness that third-parties posted ads for 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 12 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

13

prostitution. Under the applicable and widely-recognized legal standard, the 

government has the burden to prove that defendants had both the requisite knowledge 

and the requisite intent with respect to the particular advertisements for which the 

government claims authority to forfeit proceeds. The Supreme Court has long held that 

under the First Amendment the government cannot impose liability for distributing 

expressive materials without proof of scienter. Smith v. California, 361 U.S. at 153-54. 

See Elonis v. United States, 135 S. Ct. 2001, 2009 (2015) (“[W]rongdoing must be 

conscious to be criminal.”). Here, neither the affidavits in support of the seizure 

warrants nor the superseding indictment allege that defendants had the requisite 

knowledge and the requisite intent with respect to any specific advertisement, much 

less as to all of the millions of advertisements posted to Backpage.com.

Contrary to the government’s position, Movants have no avenue for relief via a 

“Monsanto Motion” under Rule 41(g) in the Arizona criminal case.11 Monsanto speaks 

to a much different (and narrower) issue—whether asset seizures may be excessive and 

deprive a criminal defendant of effective counsel. The defendant must make a threshold 

showing that seized assets are needed to pay for his counsel of choice, after which the 

court must conduct a post-seizure, adversary “Monsanto Hearing.” Here, by contrast, 

the first issue is the government’s right to hold any of their assets as a matter of First 

 11 Rule 41(g) (formerly Rule 41(e)) provides that “[a] person aggrieved by an unlawful 

search and seizure of property or by the deprivation of property may move for the 

property’s return.” Fed. R. Crim. P. 41(g). Any claim for the return of property based 

on United States v. Monsanto, 491 U.S. 600 (1989), involves Fifth and Sixth 

Amendment rights. 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 13 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

14

Amendment law, and it is the government’s burden to prove that the assets are subject 

to forfeiture. Fort Wayne Books, 489 U.S. at 63; Simon & Schuster, Inc., 502 U.S. at 

115. Unlike the process provided in a Monsanto hearing, for seizures of publishing 

assets, the burden of initiating judicial review and of proving that the material is 

unprotected expression is on the government, and a final judicial determination on the 

merits is required. Blount v. Rizzi, 400 U.S. 410, 420-22 (1971). Accordingly, United 

States v. Unimex, 991 F.2d 546 (9th Cir. 1993) is inapposite.

B. The Erroneous Deprivation Of Counsel Of Choice Based On The 

Government’s Untested Theories Constitutes Automatic Reversible Error.

Erroneous denial of the right to counsel of choice is structural error and requires 

automatic reversal even in the absence of any showing of prejudice. The “Sixth Amendment 

right to counsel of choice...commands, not that a trial be fair, but that a particular guarantee 

of fairness be provided -- to wit, that the accused be defended by the counsel he believes to 

be best.” United States v. Gonzalez-Lopez, 548 U.S. 140, 146 (2006). “The right to select 

counsel of one’s choice...has been regarded as the root meaning of the constitutional 

guarantee.” Id. at 147-48. “Where the right to be assisted by counsel of one’s choice is 

wrongly denied, therefore, it is unnecessary to conduct an ineffectiveness or prejudice 

inquiry to establish a Sixth Amendment violation.” Id. at 148. “Deprivation of the right is 

‘complete’ when the defendant is erroneously prevented from being represented by the 

lawyer he wants, regardless of the quality of the representation he received.” Id.

The seizure of attorneys’ fees is just the government’s latest maneuver in its onslaught

on defendants’ right to counsel of choice. Indeed, after its failed effort to disqualify the most 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 14 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

15

able, experienced and qualified attorneys in the country, the government is now trying to 

reach the same result by different means, resulting in huge tactical advantages to the 

government and causing immeasurable damage to the defendants and their rights.

As noted above, obviously related to these concerns is the fact that the seizure warrant 

is invalid because Backpage’s publishing proceeds cannot be seized until the government 

proves, at an adversarial pretrial hearing, that the proceeds are from activity that is not

protected by the First Amendment. See, e.g., Fort Wayne Books, 489 U.S. at 63 (“while the 

general rule under the Fourth Amendment is that any and all contraband, instrumentalities, 

and evidence of crimes may be seized on probable cause..., it is otherwise when materials 

presumptively protected by the First Amendment are involved”). 

In fact, Luis v. United States, 578 U.S. __, __, 136 S.Ct. 1083, 1093 (2016), narrowly 

defines the type of “contraband” that can be seized pretrial, i.e. “a robber’s loot, a drug 

seller’s cocaine, a burglar’s tools, or other property associated with the planning, 

implementing or concealing of a crime.” Id. at __, 136 S. Ct. at 1090. In addition, Luis makes 

it clear that the fact that funds may at some point be determined to be forfeitable to the 

government does not outweigh a criminal defendant’s present constitutional right to use 

assets to which he is entitled to fund his counsel of choice. Id. at __, 136 S. Ct. at 1093.

Indeed, the government has not cited a single case where the third party 

challenging the forfeiture of assets has itself been charged in a criminal case and the 

assets at issue are funds in attorney trust accounts that the claimants need for the defense 

of an ongoing criminal case. In circumstances where the assets at issue are attorney 

retainer accounts needed for the claimant’s defense in a pending criminal case, it would 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 15 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

16

be grossly unfair to postpone the hearing for years, until after the conclusion of the 

criminal trial.

There are additional concerns about whether the government is pursuing legitimate 

financial interests in seeking to forfeit these funds in light of the fact that the government will 

likely have to expend the same amount of funds (or much, much more) if the defendants are 

deprived of funds for their current counsel and panel counsel are appointed to represent them. 

In fact, Luisspecifically noted that, under these circumstances, “[t]hese defendants, rendered 

indigent, would fall back upon publicly paid counsel, including overworked and underpaid 

public defenders....The upshot is a substantial risk that accepting the Government’s views 

would -- by increasing the government-paid-defender workload -- render less effective the 

basic right the Sixth Amendment seeks to protect.” 578 U.S. at __, 136 S.Ct. at 1095. The 

government’s position here seems to be at odds with the fact that “it is in the government’s 

interest that every defendant receives the best possible representation he or she can obtain.” 

United States v. Stein, 541 F.3d 130, 157 (2d Cir. 2008). Under these circumstances, it 

appears that the government has no real financial interest and is, instead, expressing its 

preference on who will represent these defendants.

There has also been a pattern of government overreaching in this case that now 

includes ignoring applicable case law, overaggressive seizures, attempts to remove 

defendants’ counsel of choice from the case, and attempts to deny defendants assets 

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 16 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

17

necessary to fund counsel of choice.12 All of these actions obviously will gain the 

government tactical advantage. If the defendants are properly represented, there will be no

conviction based upon the government’s theories and the facts as they currently stand. Under 

these circumstances, “the government’s interference in the [] [d]efendants’ ability to mount 

a defense ‘creates an appearance of impropriety that diminishes faith in the fairness of the 

criminal justice system in general.’” United States v. Stein, 435 F.Supp.2d 330, 372 

(S.D.N.Y. 2006) (quoting Young v. United States ex rel Vuitton et Fils S.A., 481 U.S. 787, 

811 (1987)). The government’s efforts in these areas appear to be raising huge issues with 

serious constitutional implications.

Contrary to the government’s urgings, this Court is not powerless to act in the face of 

tactics that this Court has presumably never seen before. The government’s conduct not only 

violates the defendants’ First and Fourth Amendment rights, as set forth above, but also their 

Fifth and Sixth Amendment rights to due process and counsel of choice.13 As in Stein, the 

government has intentionally interfered with funds earmarked for employees’ criminal 

defense fees. That violation of the right to counsel of choice constituted structural error that 

 12 There are other issues that raise additional serious concerns, such as over-aggressive 

behavior in execution of search warrants (including removing one defendant’s 77-year-old 

mother-in-law naked from the shower at gunpoint), service of early morning arrest warrants 

after receiving offers to voluntary surrender, needlessly restrictive release conditions despite 

pretrial services’ recommendations, interference with access to funds for ordinary living 

expenses, possible collusion with civil plaintiffs’ counsel to impact defendants, issuing a 

speaking indictment as opposed to a traditional indictment, and the document dump of the 

initial disclosure, all of which evinces governmental overreaching and improper interference 

with the defendants’ constitutional rights.

13 The seizure and forfeiture of millions of dollars based on underlying state 

misdemeanor offenses also violates the Eighth Amendment.

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 17 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

18

could only be remedied by dismissal of the indictment. 541 F.3d at 157 (citing GonzalezLopez).14 It is well settled that federal district courts have the “inherent authority to remedy 

constitutional violations within their jurisdiction.” Ruiz v. Scott, 1996 WL 9320104, *8 (S.D. 

Tex. 1996); see also United States v. Barrera-Moreno, 951 F.2d 1089, 1091 (9th Cir. 1991). 

In addition, “[a]ll federal courts are invested with inherent powers enabling them to 

manage their cases and courtroom effectively.” United States v. Kent, 649 F.3d 906, 

912 (9th Cir. 2011).

In the present case, the government’s belated effort to seize attorneys’ fees some 

seven and one-half months after the original indictment severely adversely impacts this 

Court’s ability to manage its own cases. Permitting the seizure of attorneys’ fees at this 

point will seriously impact the present case including, among other things, a new 

scheduling order and trial date, withdrawal of counsel and appointment of indigent 

services counsel and other indigent services requests, ongoing motions practice, 

discovery issues, and other matters related to the case.15 The defendants have been 

 14 The Second Circuit affirmed the district court’s ruling dismissing the indictment on Sixth 

Amendment grounds and did not address the district court’s separate finding that the 

government’s interference with assets to fund attorneys’ fees for counsel of choice also 

violated the defendant’s substantive due process rights. United States v. Stein, 495 F.Supp.2d 

390, 412 (S.D. N.Y. 2006); see also United States v. Stein, 435 F.Supp.2d 330, 365 (S.D. 

N.Y. 2006).

15 For just one example, the Court will need to re-visit its denial of the motion for 

itemization of Brady/Giglio material. (Doc. 339). In opposing the motion, the 

government noted the number of defense counsel and their familiarity with the case 

(Doc. 294, p. 11), and this Court’s order mentioned the defendants’ “seemingly 

unlimited access to legal resources.” (Doc. 339, p. 5). If the attorneys’ fees are seized, 

obviously all of that will change.

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 18 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

19

severely prejudiced by the government’s dilatory tactics in waiting all of these months 

to now take this action. It is well-settled that such prejudicial delays should not be 

countenanced by the courts.16 In the present case, the government has not even 

attempted to defend its lack of diligence in this matter.

CONCLUSION

For the foregoing reasons, defendants respectfully request this Court to extend 

the stay of seizures of attorneys’ fees, set a briefing schedule, and hold an evidentiary 

hearing to resolve the serious constitutional issues raised by the government’s actions.

RESPECTFULLY SUBMITTED this 15th day of November, 2018.

PICCARRETA DAVIS KEENAN FIDEL PC

By: /s/ Michael L. Piccarreta

Michael L. Piccarreta

Attorney for Andrew Padilla

KARP & WEISS, P.C.

By: /s/ Stephen M. Weiss

Stephen M. Weiss

Attorney for Joye Vaught

 16 See In re Native Energy Farms, LLC, 2018 WL 5805985, *3 (9th Cir. 2018). (The 

defense of laches requires proof of lack of diligence by the party against whom the 

defense is asserted and prejudice to the party asserting the defense)

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 19 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

20

On November 15, 2018, a PDF version

of this document was filed with the

Clerk of Court using the CM/ECF

System for filing and for Transmittal

of a Notice of Electronic Filing to the

following CM/ECF registrants:

Reginald Jones, reginald.jones4@usdoj.gov

Peter Kozinets, peter.kozinets@usdoj.gov

John Kucera, john.kucera@usdoj.gov

Margaret Perlmeter, margaret.perlmeter@usdoj.gov

Kevin Rapp, kevin.rapp@usdoj.gov

Patrick Reid, Patrick.Reid@usdoj.gov>

Andrew Stone, andrew.stone@usdoj.gov

Amanda Wick, Amanda.Wick@usdoj.gov

Paul Cambria, pcambria@lglaw.com

Tom Bienert, tbienert@bmkattorneys.com

Bruce Feder, bf@federlawpa.com

Michael Kimerer, mdk@kimerer.com

Stephen Weiss, sweiss@karpweiss.com

Case 2:18-cr-00422-DJH Document 382 Filed 11/15/18 Page 20 of 20