Opinion ID: 790487
Heading Depth: 2
Heading Rank: 2

Heading: Factual and Procedural Background for Robert M. Draskovich

Text: 5 On January 15, 2003, REA took control of Assail's principal place of business in St. George, Utah. The next day, Kimoto retained Appellant Robert M. Draskovich to defend him in the FTC's matter and in any potential criminal matters. The day after that, January 17, Draskovich received a $200,000 retainer. The funds were wired directly to him by Alliance Solutions, Inc. (Alliance). On January 21, 2003, Draskovich received an additional $10,000, which was transferred to him from Valdine Management Co. (Valdine). Kimoto assured Draskovich that the Alliance funds were not tainted, i.e., the funds had nothing to do with the government's allegations of telemarketing fraud. 6 On September 22, 2003, Kimoto, Assail, and the FTC entered into a stipulated judgment which brought the proceedings against Kimoto and Assail to a close. The court issued a judgment against Kimoto for $106 million. The judgment was suspended to the extent that it exceeded the sum generated from the liquidation of the assets in which Kimoto had an interest. All funds generated from the liquidation were ordered to be paid as consumer redress. The stipulated judgment contained a provision that allowed the defendants' attorneys to apply for fees from the receivership estate. On October 2, 2003, Draskovich applied to the district court to allow him to retain the funds he received from Alliance and Valdine. This was in spite of the fact that in April 2003, the FTC had already requested that Draskovich return the $210,000, arguing that the funds were transferred to him in violation of the court's asset freeze order. On October 22, 2003, the FTC and REA filed motions opposing the fee application and requesting that the district court require Draskovich to turn over the $210,000 to REA. On November 13, 2003, the court denied Draskovich's application and granted the FTC and REA's counter-motions requesting repayment of the entire retainer. Draskovich now appeals from the court's November 13 order. On appeal, he argues that: (1) the district court erred in finding that the fees he received were subject to the initial asset freeze; (2) the district court's order violated his client's Sixth Amendment right to counsel; and (3) the procedures the district court used in making its decision violated due process. 7