Sila Luis was indicted for healthcare fraud. At the time, she had about $2 million which she hoped to use to fund her legal defense. 18 U.S.C. §1345(a)(2) allows the government to freeze assets belonging to a citizen accused of health care fraud or bank fraud. The statute allows for the seizure of 1) proceeds 2) property traceable to the crime and 3) other property of equivalent value.These funds fell within the third category and were “untainted by the crime.” In other words, these funds were not direct proceeds of the alleged fraud nor where they traceable directly to the fraud.
As noted by the Court, “[t]he Government and Luis agree that this court order will prevent Luis from using her own untainted funds, i.e., funds not connected with the crime, to hire counsel to defend her in her criminal case.” Despite this concession, the government secured a court order to keep Luis from “dissipating” her assets. Luis argued that freezing untainted assets violated her Sixth Amendment right to hire counsel of her choice to represent her in court.
In a 5-3 decision in Luis v. United States handed down today, the United States Supreme Court agreed. The Court held that seizing or freezing untainted assets that would be used to hire the accused’s attorney of choice violated the Sixth Amendment. In doing so, the Court ruled a person’s right to counsel of their choice is greater than the government’s interest in securing restitution or fines. The Court highlighted the distinction between proceeds and traceable assets on one hand and untainted assets on the other. The Court refers to the right to have a fair opportunity to hire a defense attorney of one’s choice as “a great engine by which an innocent man can make the truth of his innocence visible.” While not an absolute right, the Court recognized this right as a fundamental right and allowing the government to seize untainted assets thereby denying them the right to hire an attorney of their own choosing would erode that fundamental right.
The question of whether assets are proceeds, traceable, or untainted may be a complex one. If your assets have been frozen, seized, or are subject to forfeiture, turn to a firm that has the experience and asset-tracing resources to represent you.