Sila Luis was indicted on charges related to $45 million in Medicare fraud. Unsurprisingly, her personal assets amounted to much less than $45 million. The federal government sought to freeze the use of her assets not traceable to the fraud. She wanted to use them to hire an attorney.
The question in Luis v. United States is whether not allowing a criminal defendant to use assets not traceable to a criminal offense to hire counsel of choice violates the Sixth Amendment’s right to counsel.
This case is relevant to state and local government for a few reasons. First, while the asset forfeiture in this case likely went to reimburse the federal government for the Medicaid fraud, generally, law enforcement involved receive asset forfeitures. Second, some state asset forfeiture laws, like the federal statute in this case, allow untainted assets to be substituted. Third, in some instances state and local governments, like the federal government in this case, are the victim of a fraud and seek to recoup as much of their losses as possible.
This case comes on the heels of last year’s Kaley v. United States, where the Supreme Court held 6-3 that defendants may not use frozen assets which are the fruits of criminal activities to pay for an attorney. Luis argues that it is “inconceivable” that she may not use “her own legitimately-earned assets to retain counsel.” The federal government responded that per her reasoning criminal defendants “could effectively deprive her victims of any opportunity for compensation simply by dissipating her ill-gotten gains.”
The district court, affirmed by the Eleventh Circiut, agreed with the United States using this example:
[S]uppose . . . a bank robber [steals $100,000 and has] spent the $100,000 that he stole. It just so happens, however, that he has another $100,000 that he obtained legitimately. Should his decision to spend the $100,000 he stole mean that he is free to hire counsel with the other $100,000 when Congress has authorized restraint of those substitute assets? The reasonable answer is no. The bank has the right to have those substitute, untainted assets kept available for return as well.