Asset Protection for the Criminal Defendant

One of the inevitable problems facing suspects in a criminal proceeding is the availability of funds to pay for a legal defense. Frequently, applicable laws authorize government seizure of defendants’ assets which effectively impoverishes them. Obtaining private counsel then becomes problematic. However, the Supreme Court recently decided in Luis v. United States that criminal defendants should be allowed to use untainted assets; that is, assets unrelated to their alleged crimes, to pay for their criminal defense.

The Supreme Court in a 5-3 decision reversed the 6th Circuit Court of Appeals and the District Court in finding that the Sixth Amendment prohibits the government from seeking untainted assets that are required to pay defense costs. The sanctity of a person’s right to counsel seems to have carried the day.

The dissent pointed out that sophisticated criminals know how to make criminal proceeds appear clean using cashier’s checks, money orders, prepaid debit cards and other methods as well as by opening bank accounts in other people’s names and through shell companies. Indeed, a rather valid point is that the bad guys can spend their ill-gotten gains while leaving their “clean” assets untouched in savings accounts.

The upshot of the case is that the government now has a much higher burden in asset seizure cases when the defendant challenges the forfeiture on the grounds that untainted assets are needed to pay for the suspect’s lawyer.

The interesting moral debate is why wealthy defendants should be allowed to hire private attorneys with assets that are otherwise subject to forfeiture when, in the vast majority of cases, defendants are indigent and must rely on public defenders. In other words, why does the Court feel these “more successful criminals” should be given a break and an advantage by being able to engage the best lawyers while indigent criminal defendants have no alternative but to use public defenders. In addition, money that is not seized is money that could have gone to victims under various restitution schemes. Scholars are questioning whether the criminals’ defense is more important than victims’ rights.

Asset protection planning attorneys should be aware of this Supreme Court ruling when providing services to a client who is a defendant in a criminal case.