Criminal Justice

The Best Defense Your Money Can't Buy

How 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.

Today the Supreme Court is considering whether the Kaleys have a constitutional right to challenge the order blocking access to their money before it's too late for them to mount an effective defense. A ruling in their favor would help limit the government's ability to deprive people of their liberty by depriving them of their property.

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 Kerri 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, which 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. In short, 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.

Given the nature of these offenses, it's not surprising that the only Ethicon sales representative who has been tried so far (who was able to hire the lawyers she wanted because 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 throw in the towel. 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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  1. 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.

    Now, really; does crime need a victim in order for it to be a crime? What nonsense!

    1. The victim is the US Treasury. Someone’s got to pay the NPS to barricade parks.

    2. The Pharma co could always press charges for theft. but it prob didn’t mind counting a loss.

      The article is not clear as to whether they paid taxes on gains, but seems they did not else they wouldn’t have charged with money laundering – which is tax evasion.

      So there were victims – legally speaking.

      1. That simply isn’t true. Money laundering and failure to pay taxes are completely different offenses, governed by different statutes. That someone was charged with money laundering is NOT an indication that they evaded any taxes. Actually, that someone was charged with money laundering isn’t even an indication that they laundered money… an accusation is not evidence.

      2. Please look it up. Money laundering is pretty much the opposite of avoiding taxes. Link http://legal-dictionary.thefre…..aundering.

  2. 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.

    1. The correct answer is “Obamacare”.

  3. An adversarial hearing is especially important in this situation because prosecutors have a financial stake in forfeitures…

    That’s the problem. Agents of the state – all agents of the state – must have an actual personal financial stake in the bad actions they bring against fellow citizens. Until there are some real consequences, law enforcement will never stop padding their resumes and filling their coffers at the expense of the little people.

    1. Skin in the game

    2. Couldn’t agree more. Frankly, the punishment for prosecutorial abuse should be the removal of qualified immunity. Let’s see a couple of prosecutors get sued into the poorhouse and you’ll see vastly more scrupulous behavior on the part of prosecutors.

      1. The punishment for prosecutorial abuse should be conviction of Conspiracy charges having to do with the sentence the prosecutor was asking for. So, in a Capitol case an abusive prosecutor should face charges of Conspiracy to Commit Murder. On lesser charges is would be Conspiracy to Wrongfully Imprison, or some such.

  4. Federal Lawcare exchanges, an individual mandate to pay a retainer, and a tax on lawyer devices ought to fix all of this.

    1. I think we just need to go right to single payer legal services.

      1. Commie.

        1. Actually, why shouldn’t the proglodytes be in favor of single-payer legal services? A right to counsel is actually in the Constitution, and lack of effective counsel could easily destroy your life, and this affects the poor and minorities disproportionately. All the Obamacare arguments apply.

          Of course expecting logical consistency from the left is way too much to ask.

          1. If we could find a solution for insane legal costs, there might not be a need for Obamacare. Reducing malpractice insurance and the amount of money hospitals and doctors spend on legal fees combined with a payment system where individuals have incentive to shop around for the best value healthcare would be a very good start to real reform.

            1. Sure, would you like to donate your time to this cause. A year or two (might) do it.

            2. This. My wife’s father had to close down his medical practice and retire at 62 because his insurance premiums jumped to over six figures a year. I guess that is what he gets for being sued exactly zero times, but being in a field where other doctors get sued every day.

            3. Rubbish. Malpractice insurance is not a great economic burden for lawyers, and despite all the whining and gnashing of teeth, not for most physicians, either. And the costs of medical malpractice insurance, or for legal representation in personal injury actions, have virtually nothing to do with the rates for criminal defense attorneys.

          2. Don’t think it isn’t on their agenda, but they won’t be arguing for it until they have a way to get the Lawyers on their side of the argument.

      2. My idea is gaining traction! 🙂

      3. Public defenders already fit the bill; this action is just doing its part.

    2. With many politicians moving from the legal profession to political office, I see no problem with this suggestion whatsoever.

      Seriously though, I can’t believe the fuckers haven’t already tried it.

      1. Universal legal representation would mean cops and prosecutors couldn’t bully poor people anymore. Like they’d ever allow that.

        1. Don’t you believe it. In a system of Universal Legal Representation the representatives and the prosecutors would all eat in the same cafeteria. Your representation would be “The Prosecutor has you dead to rights. Plead guilty.”

          1. Everyone gets a public pretender. I stand corrected.

  5. The money laundering charge seemed implausible given the clear and detailed financial records kept by the Miami medical device distributor and the Kaleys’ accountant.

    Since corporate taxes don’t go directly into the coffers of the DA, what do you expect a federal lawyer to do, starve?

  6. my Aunty Isla got an awesome year old Mercedes-Benz SLS AMG only from working part-time online… why not try this out ……. http://www.BAM21.CoM

    1. Isla *Bonita*?!

      1. *squints*

        Don’t do that ever again. Please.

        1. Como puede ser verdad!

      2. I was once stuck on hold with an Indian call center, and a MIDI version of that song was the hold music.

        Awful, awful, awful.

  7. I thought the whole point of pre-trial asset forfeiture was to force the defendant into taking a public pretender who views their job as getting plea bargains for the prosecutor.

    1. Two errors sarc;

      First – PD = “penitentiary direct”,

      Second – they are not there to get pleas bargains for the prosecution…they are there to learn the ropes enough to go into lucrative private practice later!

      1. Just more federally subsidized education then. WHY DO YOU HATE EDUCAtIOn?!?!111oneoneone

      2. Or to pay their rent until they can get some drug clients.

  8. I predict the following ruling: Something something NEW PROFESSIONALISM something something FYTW.

    No way the supremes give up this money maker. In fact this will probably accelerate asset forfeiture.

    1. It’s not just a money maker, it’s a conviction maker. When you can’t afford an attorney you’re almost guaranteed to lose because most public pretenders see their job as securing convictions for the prosecution.

    2. I gotta agree. More than likely “freezing” the assets is not allowed by current law. They’ll have to seize all of the assets in a forfeiture proceeding rather than simply freezing them, whether they charge the couple with a crime or not. Then the couple will have to use the assets they no longer have to sue to get back their assets – in a proceeding guaranteed to last until sometime long after their criminal trial is over.

    3. Right on Mr Lizard.

      Everybody say it with me now, “Because FUCK YOU, that’s why!”

  9. Please put a name and face on these prosecutors for the forth coming Tar and Feathering.

  10. “As Jacob Sullum explains, a ruling in their favor would help limit the government’s ability to deprive people of their liberty by depriving them of their property.”

    This WILL be read as a tax!

  11. They should shut down the Justice Department.

  12. We need to overhaul the laws governing prosecutor misconduct.

    1. Bring back the stocks.

  13. Silly citizens, trix are for feds.

  14. Wait… so I can sue stores for selling other people stuff? Hell, I didn’t know making money was that easy!

  15. We make jokes about lawyers, but seen at work, they’re often scary. The nice ones are too nice, with the fight stripped out of them. The aggressive ones are too aggressive, displaying no restraint. As defensive counsel, they’ll do anything they can to get someone off, as the O.J. Simpson criminal trial demonstrated. As prosecutors, they’ll try to strip away a defendant’s ability to defend themselves, as here.

    There are at least two causes. One is obvious. For a problem to be this pervasive, what lawyers are taught in law school must be defective. Weak but good lawyers don’t have their confidence increased by being taught any professional standards worthy of the name. Greedy and ruthless lawyers aren’t restrained by anything they are taught either. In short, law stinks because law schools stink.

    The second is even more telling. The profession protects its own. Rarely are lawyers held personally accountable for their misbehavior. If lawyers lose a civil suit, their clients might have to pay the opposing side’s fees. If prosecutors get out of hand, as here, taxpayers end up paying for their misdeeds. And if a lawyer gets a guilty man off with a clever trick, the future victims can’t sue that lawyer.

  16. Something far more insidious and always overlooked that chops off the ability of people to defend themselves in court against an aggressive prosecutor: Bail.

    Take G. Zimmermann for example. The prosecution attempted to set bail above any amount of money he had access to in order to pressure him into a quick guilty plea, and when that didn’t work, they hammered his wife on a perjury charge that they had to edit the court transcript to make look even slightly legit.

    When any criminal defendant is forced to put up their entire asset pool in bail or face the probability of being jailed with violent offenders for *years* until they can face their accusers, their right to defend themselves in court is moot.

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