FORFEITURE

Civil Forfeiture

Overview

Civil forfeiture occurs when the government seizes property under suspicion of its involvement in illegal activity. Such a proceeding is conducted in rem, or against the property itself, rather than in personam, or against the owner of the property; by contrast, criminal forfeiture is an in personam proceeding. For this reason, civil forfeiture case names often appear strange, such as United States v. Eight Rhodesian Stone Statues,

Charles R. Kokesh v. Securities and Exchange Commission

Issues 

Does the five-year statute of limitations in 28 U.S.C. § 2462 apply when the Securities and Exchange Commission compels offenders to disgorge the proceeds of their illegal activity?

In this case, the Supreme Court will decide whether the five-year statute of limitations on forfeitures and penalties in 28 U.S.C. § 2462 applies when the Securities and Exchange Commission (“SEC”) directs a wrongdoer to surrender proceeds stemming from his illegal activity (“disgorgement claims”). Petitioner Charles R. Kokesh argues that § 2462 applies to SEC disgorgement claims because these claims fell within the ordinary meaning of “forfeiture” at the time Congress enacted the statute. In addition, Kokesh contends that § 2462 applies because disgorgement claims are in part to punish the wrongdoer and are therefore penalties. Respondent SEC counters that disgorgement claims are not forfeitures under § 2462 because the term “forfeiture” was only intended to include procedures to take tangible property when Congress enacted the statute. The SEC also argues that disgorgement claims are not penalties because they do not make wrongdoers worse off financially than they would have been if they did not violate the law. This case will resolve a circuit split regarding whether § 2462’s statute of limitations applies to SEC disgorgement claims. In doing so, this case will also determine whether the SEC can enforce U.S. securities laws through disgorgement orders without regard to when the alleged violation occurred.

Questions as Framed for the Court by the Parties 

Under 28 U.S.C. § 2462, any “action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued.”

The question presented is:

Does the five-year statute of limitations in 28 U.S.C. § 2462 apply to claims for “disgorgement”?

In 2009, the Securities and Exchange Commission (“SEC”) brought an enforcement action against Charles R. Kokesh, alleging that two investment advisory firms (“Advisers”) that he owned had mishandled the money of four clients (“Funds”). See Brief for Petitioner, Charles R.

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Luis v. United States

Issues 

May the US Government obtain a preliminary injunction under 18 U.S.C. § 1345 to prohibit a defendant from spending assets unrelated to the crime charged without violating a defendant’s right to hire an attorney of choice?

 

The Supreme Court’s decision in this case will determine whether the United States Government can constitutionally obtain a preliminary injunction under 18 U.S.C. § 1345 (“§ 1345”) to prohibit a defendant facing federal fraud charges from spending assets not derived directly from the charged crime. See Brief for Petitioner, Sila Luis at i. Luis argues that such a preliminary injunction violates a defendant’s right to counsel under the Sixth Amendment, and that the language of § 1345 does not allow the Government to restrain spending of untainted assets. See id. at 17–18, 34–35. Luis also asserts that even if a preliminary injunction of untainted assets is constitutional, the district court violated Fifth Amendment Due Process by failing to determine whether the Government was entitled, beyond a reasonable doubt, to the untainted assets. See id. at 44. On the other hand, the United States argues that the Supreme Court has previously held the Government’s restraint of all assets in a defendant’s possession to be constitutional, so long as the Government can show probable cause that the assets are forfeitable even if the defendant needs those assets to pay for counsel. See Brief for Respondent, United States at 25–26. The Court’s decision could significantly impact criminal defendants’ ability to hire private counsel in cases of federal fraud and will also shape U.S. asset forfeiture law. See Brief of Amicus Curiae American Bar Association, in Support of Petitioner at 7; see also Brief of Amici Curiae National Association of Criminal Defense Lawyers et al., in Support of Petitioner at 5–6.

Questions as Framed for the Court by the Parties 

Did a pretrial injunction prohibiting a defendant from spending untainted assets to retain counsel of choice in a criminal case violate the Fifth and Sixth Amendments?

Petitioner Sila Luis provided health care to homebound patients through her two businesses, LTC Professional Consultants, Inc.

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Luis v. United States

Issues 

May the US Government obtain a preliminary injunction under 18 U.S.C. § 1345 to prohibit a defendant from spending assets unrelated to the crime charged without violating a defendant’s right to hire an attorney of choice?

 

The Supreme Court’s decision in this case will determine whether the United States Government can constitutionally obtain a preliminary injunction under 18 U.S.C. § 1345 (“§ 1345”) to prohibit a defendant facing federal fraud charges from spending assets not derived directly from the charged crime. See Brief for Petitioner, Sila Luis at i. Luis argues that such a preliminary injunction violates a defendant’s right to counsel under the Sixth Amendment, and that the language of § 1345 does not allow the Government to restrain spending of untainted assets. See id. at 17–18, 34–35. Luis also asserts that even if a preliminary injunction of untainted assets is constitutional, the district court violated Fifth Amendment Due Process by failing to determine whether the Government was entitled, beyond a reasonable doubt, to the untainted assets. See id. at 44. On the other hand, the United States argues that the Supreme Court has previously held the Government’s restraint of all assets in a defendant’s possession to be constitutional, so long as the Government can show probable cause that the assets are forfeitable even if the defendant needs those assets to pay for counsel. See Brief for Respondent, United States at 25–26. The Court’s decision could significantly impact criminal defendants’ ability to hire private counsel in cases of federal fraud and will also shape U.S. asset forfeiture law. See Brief of Amicus Curiae American Bar Association, in Support of Petitioner at 7; see also Brief of Amici Curiae National Association of Criminal Defense Lawyers et al., in Support of Petitioner at 5–6.

Questions as Framed for the Court by the Parties 

Did a pretrial injunction prohibiting a defendant from spending untainted assets to retain counsel of choice in a criminal case violate the Fifth and Sixth Amendments?

Petitioner Sila Luis provided health care to homebound patients through her two businesses, LTC Professional Consultants, Inc.

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Luis v. United States (14-419)

Issues 

May the US Government obtain a preliminary injunction under 18 U.S.C. § 1345 to prohibit a defendant from spending assets unrelated to the crime charged without violating a defendant’s right to hire an attorney of choice?

The Supreme Court’s decision in this case will determine whether the United States Government can constitutionally obtain a preliminary injunction under 18 U.S.C. § 1345 (“§ 1345”) to prohibit a defendant facing federal fraud charges from spending assets not derived directly from the charged crime. See Brief for Petitioner, Sila Luis at i. Luis argues that such a preliminary injunction violates a defendant’s right to counsel under the Sixth Amendment, and that the language of § 1345 does not allow the Government to restrain spending of untainted assets. See id. at 17–18, 34–35. Luis also asserts that even if a preliminary injunction of untainted assets is constitutional, the district court violated Fifth Amendment Due Process by failing to determine whether the Government was entitled, beyond a reasonable doubt, to the untainted assets. See id. at 44. On the other hand, the United States argues that the Supreme Court has previously held the Government’s restraint of all assets in a defendant’s possession to be constitutional, so long as the Government can show probable cause that the assets are forfeitable even if the defendant needs those assets to pay for counsel. See Brief for Respondent, United States at 25–26. The Court’s decision could significantly impact criminal defendants’ ability to hire private counsel in cases of federal fraud and will also shape U.S. asset forfeiture law. See Brief of Amicus Curiae American Bar Association, in Support of Petitioner at 7; see also Brief of Amici Curiae National Association of Criminal Defense Lawyers et al., in Support of Petitioner at 5–6.

Questions as Framed for the Court by the Parties 

Did a pretrial injunction prohibiting a defendant from spending untainted assets to retain counsel of choice in a criminal case violate the Fifth and Sixth Amendments?

Petitioner Sila Luis provided health care to homebound patients through her two businesses, LTC Professional Consultants, Inc.

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