The Best Defense Your Money Can’t Buy

Prosecutors disarm defendants by freezing their assets.

Although the federal government accuses Kerri and Brian Kaley of trafficking in stolen medical devices, it has been unable to identify any victims of this alleged criminal scheme. That has not stopped the Justice Department from freezing the assets they need to defend themselves. The Supreme Court is now considering whether the Kaleys have a constitutional right to challenge the order blocking access to their money before it's too late to mount an effective defense.

For people facing criminal charges, freedom not only is not free; it is dauntingly expensive. The Kaleys' lawyers estimate that a trial will cost $500,000 in legal fees and other expenses. The Kaleys had planned to cover the cost with money drawn from a home equity line of credit-until the government took it.

Technically, the government has not taken the money yet; it has merely "restrained" it, along with the rest of the home's value, in anticipation of a post-conviction forfeiture. But the result is the same for the Kaleys: They can no longer afford to pay the lawyers they chose and trust, the people who have been representing them for eight years and are familiar with the details of their case.

Those details are puzzling. Kerri Kaley, who had a job with Ethicon selling medical devices to hospitals in the New York area, knew that hospital employees periodically would ask the company's sales representatives to take overstocked or outmoded devices off their hands. Seeing an opportunity to make some extra money, she and some of her colleagues began selling the devices, which no one else seemed to want, to a distributor in Miami.

Neither Ethicon nor any hospital has come forward to complain that its property was stolen. Yet the federal government brought criminal charges against Kaley, her colleagues, and her husband, who had helped ship the devices and deposited some of the revenue in his business account.

Prosecutors sought a forfeiture of more than $2 million, claiming it was proceeds from the Kaleys' crimes. A few days after admitting to a magistrate judge that only $140,000 could be traced to the medical device sales, they obtained a new indictment that included a money laundering charge. This allowed them to claim that any assets with which the proceeds had been mingled were subject to forfeiture because they had "facilitated" the concealment of ill-gotten gains.

The money laundering charge seemed implausible, given the clear and detailed financial records kept by the Miami medical device distributor and the Kaleys' accountant. The Kaleys are accused of laundering money they made no attempt to hide after stealing merchandise from owners who evidently were happy to be rid of it.

The only Ethicon sales representative who has been tried so far- who was able to hire the lawyers she wanted, since her assets were not frozen-was acquitted after less than three hours of deliberation. Two other sales representatives pleaded guilty and received sentences of five and six months, respectively, although the judges in both cases wondered aloud who the victims were.

The Kaleys are not ready to surrender. They want their day in court with the counsel of their choice. Toward that end, they argue that the Sixth Amendment, which guarantees the right to counsel, and the Fifth Amendment, which prohibits the taking of property without due process, require that they have an opportunity to challenge the legal basis of the proposed forfeiture before they go to trial.

An adversarial hearing is especially important in this situation because prosecutors have a financial stake in forfeitures, which help fund their budgets. Given the weakness of the case against the Kaleys, it's not clear who is guilty of theft here: the defendants or the government.

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  • Pompey||

    Ugh, disgusting civil forfeiture. Every time I read one of these it burns me up.

  • Pompey||

    Jacob, is there any information released about what entity is/was nominated for receivership?

  • Pompey||

    And actually, this isn't a case of civil forfeiture is it? My bad. If the funds are frozen, then they are probably the holding institution(s) still.

    This is a bit better than civil forfeiture, but only in a technical abstract sense. Disgusting.

  • RishJoMo||

    Dude really does seem to know whts going on man.

    www.AnonPlanet.tk

  • Enjoy Every Sandwich||

    In our system of justice, a person is innocent until proven broke.

  • Snark Plissken||

    Nice.

  • FuriousFatMan||

    even if you can afford a lawyer, you should google the fat bastard and make sure he's not the brother of the judge you are going before.....

    conflict of interest? naw, that only applies to the peons.

    -FFM

  • dinkster||

    Why did the other two plea out?

  • Snark Plissken||

    Probably intimidated by the system, threats of spending their lives in jail, etc.

  • dinkster||

    Given one acquittal they are probably kicking themselves. If the "masterminds" are acquitted, do they get a retrial?

  • JWatts||

    "Why did the other two plea out?"

    This might have had something to do with it: "The Kaleys' lawyers estimate that a trial will cost $500,000 in legal fees and other expenses."

    If it came down to spending $500K to defend my name or spending 5 months in jail, then I would have to consider the jail time. Do I throw away every asset I acquired over my lifetime and kick my family out of their home to save myself 5 months in jail? The answer is no.

    The only reason I would even contemplate fighting it, is over what the effects of the jail time would do to my future employment prospects.

  • dinkster||

    Out of the three sales reps, did the one acquitted pay that much? I don't really know.

  • wareagle||

    no victims have been found, yet a crime has been committed? Land of the free, indeed.

  • JWatts||

    Everything not compulsory is forbidden, Comrade.

  • DJK||

    To those who believe in crimes against the state (not just against individuals), this is not a problem.

  • np||

    In this video with Stephen Molyneux, Adam Kokesh (around 12:20) discusses how they took everything in the raid, "life savings, and silver, and guns and ammo"
    http://www.youtube.com/watch?v=df0SFAlwuMM
    They couldn't get his bitcoins though

  • bassjoe||

    Bitcoin wallet hiding in a hidden encrypted file is a great way to hide assets and pay for lawyers.

  • Ted S.||

    It'll never happen, but I'd like to see a civil settlement against the prosecutor, resulting in the prosecutor being dragged out of his house at gunpoint as it goes on the auction block to pay for the settlement. Preferably all of this would happen in front of his terrorized children.

  • ||

    it's not clear who is guilty of theft here

    Yes it is.

  • WTF||

    "Given the weakness of the case against the Kaleys, it's not clear who is guilty of theft here: the defendants or the government."

    Oh, I think it's pretty clear who the criminals are.

  • Rich||

    If we don't nip these victimless crimes in the bud, the perps could very well become emboldened to move on to victimful crimes and even careers in criminal justice.

  • Beezard||

    I've been reading these depressing Jacob Sullum articles about our justice system for over a decade and over the last year or so I've had the misfortune of learning how true they are. A close relative of mine is currently facing the rest of his life in jail and/or on a sex offenders list for essentially talking dirty (mutually and consensually) to a teenaged minor. (Yet even more depressing Jacob Sullum fare come true). Because a minor is involved, bail was set at $1,000,000. This means if a bail bond company even goes for it, it's at least $50,000 you don't get back. Needless to say, he can't swing it and he's been sitting in a county isolation cell over a year with one hour a day in the exercise yard.

    Of the public "defenders" assigned to him, the first joined the state prosecution (not on his case) a few weeks in. They had to start all over with a second one who was trying to get him to cop the first plea sent down by the prosecution as soon as he took the case.

    He was only able to afford a real defense lawyer due to a brother passing away. Money that could have gone to a million other uses during a real hard time.

    Luckily, no account freezes as in this story. (yet)

    But more fun stuff: if he's convicted, they take his social security. Yet another way they can screw the convicts whole family financially during a crappy time. So there's another story for ya, Jake!

  • Free Society||

    I wish you and your family the best. May the government thugs be locked in a cage until they die.

  • JWatts||

    Assuming what you say it true, he's already served more time awaiting trial than the "crime" deserves in any rational system.

  • Beezard||

    He's accused of receiving oral sex from her at some point along with the dirty talk. It's one he vehemently denies and his lawyer thinks the prosecution won't be able to hang in him. That's where the 60+ years is coming from. It's based on testimony she gave in an interview with cops. In that same interview she also said he shouldn't be punished for anything. Months later no one had told her he was even in jail. She was trying to call his house and talk to him.

    The dirty talk is undeniable. They took it from emails. Part of the reason he was in so long is the Feds were deciding whether to get involved because it took place online. It took buying a real lawyer who knew the DA to get the federal charges dropped.

    The corruption of a minor charges are enough to land him on a sex offenders list and potentially packs a years. He's 65. It could be a life sentence.

  • Beezard||

    To clarify, the DA isn't in charge of the federal charges but he wouldn't move forward with the state trial until he knew the feds intentions.

    I think the lawyer knew the federal liaison not the DA. Anyhoo, the lesson is, a lot of times it's who you know and what you pay for to expedite these matters. The public defenders wouldn't do it.

  • Beezard||

    As far as what he deserved, I think a few months and severe beating from the girls parents and a divorce with his wife would have sufficed.

    I'd have more sympathy for the parents if they hadn't followed the police's directions and purposely socialized with him to give the cops more evidence. They even took a trip to England together after knowing about the emails. That's not only insane it reeks of entrapment to me, but the lawyer disagrees.

    The real victim is his wife, and she's been beyond cool about it. Her stance is 'I want to kill him, but he's also my best friend and the state response has completely draconian'.

  • marie||

    Kudos to the wife. My husband (also in his 60s), doing four years in federal for downloading child porn, lost his social security but will get it back once he is released. That should be true in this case, as well?

    Many guys doing YEARS in prison for talking dirty with federal agents, with nary a minor in sight. The justice system is all system, no justice.

    I hope he and his wife have support from family and friends.

  • Beezard||

    Ill have to ask. I can only hope so. I'm not sure what kind of job he's going to be able to get once he's out. Luckily they have a rental home he can move into, so long as no one builds a school or something near it..

  • marie||

    The wife might be interested in someone who thinks like she does: me.

  • Beezard||

    As for support his immediate family and friends are fully behind him and more so her. Shes got people coming out of tge wiodwork to mow tge lawn and that sort of thing. Especially once they heard the details of how demented the investigation was. They know he's stupid but not dangerous.

    But as I'm sure you know, that whole sex offender thing is a fairly huge obstacle to get around for any one else youre trying to convince. If it were drugs I could bang on pots and pans in the middle of the street about how he's a political prisoner or something. The sex offender jacket makes you have to plea a million caveats and explain everything to a tee before you can get most people to sympathize with what a travesty of justice is going.

  • Beezard||

    * Woodwork to mow the lawn, ect.

  • marie||

    Yes. And if he takes a plea to get a lesser sentence, he may have to plead to something he didn't do. They have a life full of difficulties ahead--so much better that they will do it together. Remind them that there are individuals and organizations out there trying to change the crazy laws. WAR (Women Against Registry) is one; RSOL (Reform Sex Offender Laws) is another.

  • Beezard||

    I'm not certain the marriage will survive once hes out, But she's made it clear she won't cut and run while he's in there. She's kept her word for over a year. She gets a call from him every day, visits often, and does 100% of the outside legal legwork. She's been amazing. My brother and I live many states away and aren't really in any financial situation to do much but write and call. So it's been essential. Ill pass it along. Thanks.

  • Mainer2||

    OT, but this 85 richest own half the wealth story is really getting traction:

    Oxfam is calling on the business chiefs gathering at Davos to promise to support progressive taxation and not dodge their own taxes, refrain from using their wealth to seek political favours and demand that companies they own or control pay a living wage. In a report last week the forum warned that income disparity leading to social unrest could have a significant impact on the world economy over the next 12 months.

    Funny, but I can't seem to find any site that has a list of the 85 people. But oh the comments on the various sites. Nearly all are piling on to hate on the nasty rich people.

    I sure would like to know how many are russian oligarchs, saudi princes, and third world despots.

  • ||

    Doesn't Forbes put out a World's 100 richest?

  • Alabast||

    Doesn't freezing someones assets because they are supposedly "ill-gotten gains" before the trial violate the whole principle of innocent until proven guilty?

  • Free Society||

    The Rational Basis standard of review basically puts the burden of proof on defendants and in the case of regulations, on property owners, to prove that the law, action or regulation is unjust.

  • Free Society||

    Total bullshit, really. It's the government handing itself deference for all things.

  • JWatts||

    "Doesn't freezing someones assets because they are supposedly "ill-gotten gains" before the trial violate the whole principle of innocent until proven guilty?"

    I think it's reasonable to prevent someone from using money in question on legal fees and thus depriving the victim of it. In this case, there is not victim and the state is freezing all their assets, not just the money in question, so it's complete bullshit.

    To the argument that the money is "theirs" before they are proven guilty, I think some common sense has to prevail. I don't think a reasonable person believes that a bank robber should be able to use the money they stole in their defense.

  • Will Nonya||

    So being able to pay reparations to a "victim" (in this case the state)is more important than having access to the resources needed to prove ones innocence?

    The idea that the state can claim 2 million in assets are tainted because they came into contact with the disputed $140k is reasonable?

    The concept that "It is better and more satisfactory to acquit a thousand guilty persons than to put a single innocent one to death" or in prison holds no weight with you? Is this because guilty until proven innocent is an acceptable norm for you?

  • Free Society||

    Given the weakness of the case against the Kaleys, it's not clear who is guilty of theft here: the defendants or the government.

    Oh no, it's very clear.

  • Loki||

    Kerri Kaley, who had a job with Ethicon selling medical devices to hospitals in the New York area, knew that hospital employees periodically would ask the company's sales representatives to take overstocked or outmoded devices off their hands. Seeing an opportunity to make some extra money, she and some of her colleagues began selling the devices, which no one else seemed to want, to a distributor in Miami.

    So... it's now illegal for you to resell something that someone gave you? In a nutshell it seems like that's all they were doing. So I guess at this point anyone who ever sells something on craigslist that a friend gave them should watch out.

    the judges in both cases wondered aloud who the victims were.

    Then why didn't the judges throw the cases out? Did they not want to offend their golf buddies in the DA's office?

  • Will Nonya||

    I imagine this case was raised by a competitor "doing good" by informing a political connection of the injustice being committed.

    Oh the horrors of free enterprise.

  • TerminusEst||

    But doesn't this beg the question of WHY a defense is so costly?

    Why is it that a court-appointed defender virtually guarantees a guilty verdict and a paid lawyer is either unaffordable or will bankrupt you?

    What is wrong with this situation, and what can we do to fix it?

  • bassjoe||

    I worked for a Criminal Justice Act panel attorney a few years ago. Essentially public defenders paid by the court when the PD office is conflicted out.

    The federal public defenders at least from that city, I would not want to fuck with. The prosecutors respected them and they took cases to trial regularly.

    The attorney I was working for was hardcore. He would have multiple trials a year. He'd convince terrified clients to reject plea deals and take the risk of trial...and he'd win for them. He regularly tussled with prosecutors and judges in court.

    And he was hated by the prosecutors. Bar complaints were filed against him by prosecutors alleging unethical conduct; an extreme threat as if he ever got dinged by the Bar, he'd be kicked off the CJA panel. He didn't care; he defended himself at the Bar (and won) and continued his ways defending clients.

    We need more defense attorneys like him.

  • Will Nonya||

    Well, according to Doc Brown sometime in the next year we will manage to abolish all lawyers. That should help.

  • MoreFreedom||

    "Given the weakness of the case against the Kaleys, it's not clear who is guilty of theft here: the defendants or the government."

    I suppose Sullum is being sarcastic here. To me it's very clear the government is engaging in theft, and prosecuting someone for something that isn't a crime (and if it is, it shouldn't be).

    If the government were doing its job of protecting our lives, property and our pursuit of happiness, then it would be prosecuting the prosecutor.

  • MoreFreedom||

    I'd like to prosecute the prosecutors here. And eliminate all funding in the Justice Dept. for prosecuting these non-crimes. They obviously have too many employees and too much money, considering they didn't have any real criminals to go after.

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