by Matt Clarke
The Tenth Circuit Court of Appeals ruled that the proper test for whether a district court should hold a pretrial hearing on a motion challenging the seizure of assets is whether the defendant has sufficient unseized assets to pay the reasonable costs of retaining his choice of counsel, not whether the defendant has any unseized assets.
A federal grand jury returned a 21-count indictment against Wyoming physician Shakeel Kahn and others, charging money laundering and distribution of controlled substances. The indictment included a criminal forfeiture count under 21 U.S.C. § 853, listing most of Kahn’s assets as fruits of the charged crimes. Two weeks later, Kahn filed a motion for a hearing to challenge the seizure of $1,140,699.95 in cash and bank accounts. The motion asserted Kahn required the money to retain counsel of his choice. He listed his only unseized assets as a house valued at $175,000 encumbered by an $80,000 lien and a business with an after-taxes monthly income of under $3,000. According to the motion, Kahn required $200,000 to retain counsel and would need an estimated total of $450,000 for his defense costs.
The court denied the motion because Kahn had some unseized assets, citing United States v. Jones, 160 F.3d 641 (10th Cir. 1998), as requiring a pretrial hearing on seized assets only when the defendant has no unseized assets, and there was good reason to believe the grand jury erred in linking the assets to the charged crime. The court refused to consider whether Kahn’s unseized assets were sufficient for him to retain counsel of his choice. With the assistance of Laramie attorney Megan L. Hayes, Kahn filed an interlocutory appeal.
The Tenth Circuit noted that its Jones opinion contained language that could be interpreted as requiring that there be no unseized assets before a pretrial asset-forfeiture hearing is required. However, at the end of the opinion, the Jones Court concluded “that due process requires a district court to conduct a post-restraint, pre-trial hearing before continuing to freeze assets if a defendant needs the assets for reasonable legal and living expenses and makes a prima facie showing that the grand jury erred in determining the assets are traceable to the underlying offense.” Accordingly, the Tenth Circuit determined that the intent of Jones was to permit a hearing if the defendant had “no unrestrained assets sufficient to reasonably be able to retain counsel of choice,” and did not require the defendant to have no unrestrained assets at all before the hearing could be held.
Because the wrong standard had been applied in denying the motion, the Court reversed the denial of the motion and remanded the case to the district court for it to reconsider the motion using the two-part Jones test as clarified in the Court’s opinion. See: United States v. Kahn, 890 F.3d 937 (10th Cir. 2018).
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Related legal case
United States v. Kahn
|Cite||890 F.3d 937 (10th Cir. 2018)|
|Level||Court of Appeals|
|Appeals Court Edition||F.3d|