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Tuesday, June 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

Couple Loses Asset Freeze Challenge in High Court

(CN) - An indicted couple cannot challenge a grand jury's finding of probable cause to freeze assets that the pair needs to hire the attorneys of their choice, the U.S. Supreme Court ruled Tuesday.

Kerri Kaley, a former sales representative for a Johnson & Johnson subsidiary, was indicted in 2007 on charges of stealing prescription medical devices from hospitals and reselling them on the black market. Her husband, Brian Kaley, allegedly helped her ship the products to Florida.

The couple hired separate attorneys, who informed them that taking the case to trial would cost about $500,000 in legal fees.

The Kaleys mortgaged their home and put the $500,000 in a certificate of deposit that was later frozen in a criminal forfeiture, along with a "money judgment" of more than $2 million. Those funds were considered "proceeds" of the alleged crimes.

A judge in Florida barred the Kaleys from transferring or otherwise getting rid of the assets targeted for forfeiture, even if it prevented them from hiring their counsel of choice.

The court later granted the couple a hearing to determine if the frozen assets were traceable to the conduct charged in the indictment. Under the Supreme Court's 1989 ruling in United States v. Monsanto, a prosecutor can freeze assets needed for a defendant's chosen counsel "based on a finding of probable cause to believe that the property will ultimately be proved forfeitable."

But when the Kaleys failed to present evidence regarding traceability, the court declined to set aside the forfeiture order.

On their next appeal, the couple argued that the hearing should also have considered the validity of the underlying indictment.

The 11th Circuit disagreed, and the high court decided to take up the case last March.

On a 6-3 vote, the justices upheld the federal appeals court's ruling.

"The grand jury gets to say-without any review, oversight, or second-guessing-whether probable cause exists to think that a person committed a crime," Justice Elena Kagan wrote for the majority.

"If judicial review of the grand jury's probable cause determination is not warranted (as we have so often held) to put a defendant on trial or place her in custody, then neither is it needed to freeze her property. The grand jury that is good enough-reliable enough, protective enough-to inflict those other grave consequences through its probable cause findings must needs be adequate to impose this one too." (Parentheses in original.)

"So the longstanding, unvarying rule of criminal procedure we have just described applies here as well: The grand jury's determination is conclusive," Kagan concluded.

To rule otherwise "would have strange and destructive consequences," according to the majority opinion. The judge presiding over the probable cause hearing could come to a different conclusion than the grand jury, creating "legal dissonance" that could "undermine the criminal justice system's integrity," Kagan wrote.

She noted that neither the Kaleys nor their allies "have found a single case in which a judge found an absence of probable cause to believe that an indicted defendant committed the crime charged."

"So experience, as far as anyone has discerned it, cuts against the Kaleys: It confirms that ... they have no right to revisit the grand jury's findings."

Chief Justice John Roberts dissented, saying the majority's conclusion "is wrong on its own terms" and downplays the "possibility that a prosecutor could elect to hamstring his target by preventing him from paying his counsel of choice."

"Whatever serious crimes the grand jury alleges the Kaleys committed, they are presumptively innocent of those charges until final judgment," Roberts wrote. "Their right to vindicate that presumption by choosing the advocate they believe will best defend them is, as explained, at the very core of the Sixth Amendment."

Justices Stephen Breyer and Sonia Sotomayor joined the chief justice in dissent.

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