Opinion ID: 2972914
Heading Depth: 2
Heading Rank: 3

Heading: Restraint of Assets

Text: Jamieson next alleges that the district court violated his Sixth Amendment right to counsel of his choice by freezing his assets immediately following indictment, thereby preventing him from using his own assets to pay for his defense. On appeal, Jamieson contends that the government failed to establish probable cause that the restrained assets were traceable to the offenses in the indictment, because the district court did not hold an adversarial hearing or otherwise require the government to prove traceability before granting the motion to freeze assets. Although the Sixth Amendment grants a defendant the right to obtain counsel of his choice, this right “does not extend beyond the individual’s right to spend his own legitimate, nonforfeitable assets.” United States v. Farmer, 274 F.3d 800, 802 (4th Cir. 2001) (citing Caplin & Drysdale v. United States, 491 U.S. 617, 624-33 (1989)). The Supreme Court has held that a defendant’s assets may be restrained prior to trial as long as they are restrained based on a finding of probable cause to believe that the assets are subject to forfeiture. See United States v. Monsanto, 491 U.S. 600, 615 (1989). Under 21 U.S.C. § 853(e)(1), a court may enter a restraining order “upon the filing of an indictment or information charging a violation . . . for which criminal forfeiture may be ordered.” In this case, the indictment lists approximately $104 million as the amount involved in the money-laundering scheme and thus subject to forfeiture. The grand jury found probable cause for all of the allegations listed in the indictment, including count 158, which charged Jamieson with conspiracy to commit money laundering involving $104 million. The government has therefore made a basic showing of probable cause justifying restraint of Jamieson’s assets. On appeal, Jamieson’s principal complaint is that the district court did not go beyond the allegations in the indictment and hold an adversarial hearing to determine whether there was probable cause to conclude that the assets were subject to forfeiture. In Monsanto, 491 U.S. at 615, n. 10, the Supreme Court specifically refrained from ruling on whether due process requires such a probable cause hearing to support restraint of assets prior to trial or whether the indictment is sufficient. Although we have never had the occasion to resolve this question in the Sixth Circuit, various other courts around the country have addressed it, with less than uniform results.3 The district court in this case followed the lead of the Tenth Circuit in United States v. Jones, 160 F.3d 641 (10th Cir. 1998), in which the court noted that “an adversarial hearing that occurs shortly after freezing assets would serve to diminish the risk of an erroneous deprivation at a meaningful time” but held that such a hearing is necessary only when the defendant can (1) “demonstrate to the court’s satisfaction that she has no assets” and (2) “make a prima facie showing of a bona fide reason to believe the grand jury erred in determining that the restrained assets ‘constitute or are derived, directly or indirectly, from gross proceeds traceable to the commission of the offense.’” Id. at 646, 647. When the defendant makes the required showings, the burden then shifts to the prosecution 3 The Ninth Circuit, for example, has held that, prior to restraining assets in a criminal case, the district court must hold a hearing under Fed. R. Civ. P. 65 to determine whether probable cause exists to issue the restraining order. See United States v. Roth, 912 F.2d 1131, 1133 (9th Cir. 1990). On the other end of the spectrum, the Eleventh Circuit never requires such a hearing, but rather has held that the trial itself satisfies all due process concerns regarding pre-trial seizure of funds. See United States v. Register, 182 F.3d 820, 835 (11th Cir. 1999). Most circuits fall somewhere in between the Ninth and Eleventh Circuits and require that, in certain situations, the district court must hold a post-restraint adversarial hearing to determine probable cause to restrain the assets. See United States v. Monsanto, 924 F.2d 1186, 1203 (2nd Cir. 1991) (the Fifth and Sixth Amendments require a post-restraint, pretrial hearing regarding probable cause to restrain assets which are needed to retain counsel of choice); United States v. Kirschenbaum, 156 F.3d 784, 792 (7th Cir. 1998) (due process prohibits restraining funds without a hearing if the defendant can show a bona fide need to use the funds to obtain counsel); United States v. Jones, 160 F.3d 641 (10th Cir. 1998) (due process requires an adversarial hearing if the defendant can both show she has no other assets with which to pay for counsel and make a prima facie demonstration of error in the grand jury’s finding of probable cause); United States v. Farmer, 274 F.3d 800, 803 (4th Cir. 2001) (due process requires an adversarial hearing when defendant can show that he lacks other funds with which to secure counsel and that a portion of the restrained funds is legitimate). Nos. 02-3403; 03-4578 United States v. Jamieson Page 8 to establish, by probable cause at an adversarial hearing, that the restrained assets are traceable to the underlying offense. Id. at 647. Jamieson did not object to or appeal the district court’s decision to use the Jones framework and has never put forth any arguments that the Jones framework should not be applied to his case. In fact, Jamieson cites Jones in support of his argument on appeal, thus implicitly agreeing to its validity as precedent. We have no quarrel with the district court’s decision to apply Jones, recognizing as we do that “[a] fundamental requirement of due process is the ‘opportunity to be heard.’” Armstrong v. Manzo, 380 U.S. 545, 552 (1965), and that the opportunity to be heard is non-existent when a district court grants a restraining order based only on the indictment. Certainly, due process should be honored when a defendant’s Sixth Amendment right to counsel of choice is threatened by virtue of the restraint of his funds. But the claimed violation of due process in this case is belied by the fact that the district court actually provided the defendant with an adversarial hearing and an opportunity to be heard. The record indicates that in response to Jamieson’s motion to dissolve the restraining order or to hold an adversarial hearing, the district court determined that Jamieson had not properly met either Jones prong. See United States v. Jamieson, 189 F. Supp. 2d 754, 757-58 (N.D. Ohio 2002). The district court nevertheless held a hearing for the limited purpose of having Jamieson make both a further showing of his need for the assets and a prima facie showing that the assets were erroneously restrained. Although the district court did not explicitly make any findings that Jamieson had met both Jones prongs after presenting additional evidence at the hearing, the court instructed the government to present its evidence regarding probable cause to believe the assets were subject to forfeiture. At the hearing, the government duly presented a witness who established that Jamieson had very few assets at the beginning of the indictment period and that Jamieson’s profits from Liberte Capital were his only source of income during the indictment period. Based on this testimony, the trial court found probable cause “to believe that the restrained assets (i.e. the ‘vacation’ home primarily, although other assets were addressed, as was the restraining order itself) [were] in fact traceable to the underlying offenses, [were] thus ‘tainted,’ and [had] been properly the subject of a post-indictment restraining order.” Thus, the record shows that the district court heard live testimony regarding the restrained assets and that Jamieson had the chance to cross-examine the government’s witness. On appeal, the defendant has presented no specific challenge to the sufficiency of the hearing that was held. Moreover, with regard to the defendant’s claim that he was denied the right to counsel of choice, any error on the part of the district court with regard to the order restraining assets would have to be considered harmless error, which has been held to apply to choice of counsel. See Rodriguez v. Chandler, 382 F.3d 670, 674 (7th Cir. 2004) (“It is hard to see why violations of the qualified right to counsel of choice should lead to automatic reversal, when deprivation of the absolute right to a competent attorney leads to relief only if prejudice is demonstrable.”). Not only has Jamieson failed to allege prejudice, he has not even voiced dissatisfaction with his two trial attorneys. Indeed, he cannot show that he was deprived of counsel of his own choosing, because the record indicates that his primary court-appointed attorney was, in fact, his counsel of choice.