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Thursday, May 30, 2024 | Back issues
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Couple’s Asset Freeze Will Go Before Justices

WASHINGTON (CN) - The U.S. Supreme Court on Monday agreed to consider asset freezes that prevent criminal defendants from retaining the counsel of their choice.

While working as a sales representative for Ethicon Endo-Surgery in January 2005, Kerri Kaley learned that she was the target of a grand jury investigation in the Southern District of Florida.

Investigators suspected Kaley was stealing prescription medical devices from hospitals and then selling them on the black market, and her husband, Brian Kaley, was also under investigation.

Both retained separate counsel, who informed the Kaleys that their legal fees to take the case through trial would be approximately $500,000.

The Kaleys mortgaged their home to fund this defense and put the $500,000 credit certificate of deposit.

In a 2007 indictment for conspiracy and other charges, prosecutors also sought criminal forfeiture of all property traceable to their alleged offenses, naming the CD as one such asset.

A federal judge in Florida quickly restrained the Kaleys from transferring or otherwise disposing of the property targeted for forfeiture, and upheld that order against the couples claims that it prevented them from retaining counsel.

The prosecutor later filed a secret, sealed affidavit supporting probable cause for the CD forfeiture, and the court refused the Kaleys' request for a pretrial, post-restraint evidentiary hearing.

After the 11th Circuit reversed in 2009, the trial court concluded that the Kaleys did in fact deserve a hearing, but it limited such proceedings as to the whether the assets in question were traceable to the conduct charged in the indictment.

When the Kaleys failed to present evidence regarding traceability at the hearing, the court declined to set aside the protective order.

On the couple's next appeal, they said the hearing should also have considered the validity of the underlying indictment. In April 2012, the 11th Circuit shot them down.

The Kaleys qualified for a pretrial, post-restraint hearing since the government's strong interest in restraining the property was "outweighed by the significant prejudice the Kaleys would suffer without a hearing: the potentially wrongful deprivation of the resources needed to retain their counsel of choice."

There is no basis, however, for this hearing to involve a challenge against the evidentiary support for the underlying charges, the court found.

"As we see it, the defendants are not entitled to try the entire case twice, once before trial and the again before a judge and jury," the ruling states.

Judge James Edmondson said he concurred only in the result and did so "with deep doubts," noting that his sister circuits are split over the issue.

"I have voiced my doubts, but I cannot firmly conclude that the legal position my experienced, able colleagues have taken is definitely erroneous," Edmondson wrote. "Therefore, I do not dissent, although I am uneasy that the limits that we set today for the hearing essential to continue a pretrial restraint on property might well be too limiting under the Constitution."

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