For long, it has been conventional for prosecutors to attach property and freeze accounts of defendants simply upon an indictment and long before their conviction. This system, while purporting to protect the interests of alleged victims of crime, seems to do away at once with the rights of the defendants, holding them guilty before being proved as such, and taking away their abilities to defend themselves.
In fact, as alleged by Kerri and Brian Kaley, in Kaley v. United States, by holding their money hostage, the government creates a situation where the defendants are deprived of their rights to properly defend themselves by the best possible lawyer within their means. This happens because the government handicaps their means by freezing their assets even before they are found guilty.
The case had the Supreme Court Justices almost evenly split over assets of a defendant being frozen until the outcome of a trial.
Deputy U.S. Solicitor General Michael Dreeben argued that a grand jury indictment could result in jailing of a defendant before trial and therefore was sufficient ground for freezing assets.
However, Chief Justice John G. Roberts Jr. did not buy the argument and observed, “It’s not that property is more valuable than liberty or anything like that … It’s that property can be used to hire a lawyer who can keep him out of jail for the next 30 years. So the parallels don’t strike me as useful.”
The Kaleys are accused of participating in a scheme for selling stolen medical devices, only there are no victims. Because they never stole from anyone, but removed medical equipment that hospitals wanted to be rid of, as they had brought in newer equipment. They have been charged with money laundering, though they never hid any money, because all transactions were meticulously recorded and all equipment sold to a medical distributor who kept proper records.
So, upon getting them indicted in a crime without victims, the federal prosecutors froze their assets and made sure they can’t properly defend themselves. Of the other three persons indicted in the matter, only one went to trial and was free within three hours. Two others pleaded guilty and went in for five to six months, though there are no victims of the fantasy of a crime.
The ABA has also filed an amicus brief supporting the rights to a hearing where frozen assets are needed to pay counsel.