U.S. v. Harvey, Nos. 86-5025

CourtU.S. Court of Appeals — Fourth Circuit
Writing for the CourtBefore PHILLIPS, ERVIN and CHAPMAN; JAMES DICKSON PHILLIPS
Citation814 F.2d 905
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Leon Durwood HARVEY, Defendant-Appellant, v. NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS (NACDL); National Legal Aid and Defender Association (NLADA); and American Bar Association (ABA), Amicus Curiae. UNITED STATES of America, Plaintiff-Appellant, v. CAPLIN & DRYSDALE, CHARTERED, Claimant-Appellee, and Christopher F. Reckmeyer, II; Robert Bruce Reckmeyer, Defendants. UNITED STATES of America, Plaintiff-Appellant, v. Ronald Burnell BASSETT a/k/a Ronnie Bump, a/k/a The Kid, a/k/a Zachary Jackson, a/k/a Ronald Jackson, a/k/a Beamon Jackson, a/k/a Ronald Jones, a/k/a R.F. Jones, a/k/a Beamon West, a/k/a Harry VanDyke, a/k/a The Bird; Clarence Meredith a/k/a Yo, a/k/a Magic, a/k/a Houdini, a/k/a Uncle Willie, Defendants- Appellees.
Decision Date06 March 1987
Docket Number86-5050 and 86-5069,Nos. 86-5025

Page 905

814 F.2d 905
55 USLW 2499
UNITED STATES of America, Plaintiff-Appellee,
v.
Leon Durwood HARVEY, Defendant-Appellant,
v.
NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS (NACDL);
National Legal Aid and Defender Association
(NLADA); and American Bar Association
(ABA), Amicus Curiae.
UNITED STATES of America, Plaintiff-Appellant,
v.
CAPLIN & DRYSDALE, CHARTERED, Claimant-Appellee,
and
Christopher F. Reckmeyer, II; Robert Bruce Reckmeyer, Defendants.
UNITED STATES of America, Plaintiff-Appellant,
v.
Ronald Burnell BASSETT a/k/a Ronnie Bump, a/k/a The Kid,
a/k/a Zachary Jackson, a/k/a Ronald Jackson, a/k/a Beamon
Jackson, a/k/a Ronald Jones, a/k/a R.F. Jones, a/k/a Beamon
West, a/k/a Harry VanDyke, a/k/a The Bird; Clarence
Meredith a/k/a Yo, a/k/a Magic, a/k/a Houdini, a/k/a Uncle
Willie, Defendants- Appellees.
Nos. 86-5025, 86-5050 and 86-5069.
United States Court of Appeals,
Fourth Circuit.
Argued Sept. 4, 1986.
Decided March 6, 1987.

Page 908

Samuel Rosenthal, Chief, Appellate Section, Criminal Div., U.S. Dept. of Justice (Stephen S. Trott, Asst. Atty. Gen., Criminal Div., Dept. of Justice, Washington, D.C., Henry E. Hudson, III, U.S. Atty., E.D. Va., Alexandria, Va., Breckinridge L. Willcox, U.S. Atty., Dist. of Md., Baltimore, Md., on brief), for the U.S.

Peter Van N. Lockwood (Graeme W. Bush, Steven D. Arkin, Julia L. Porter, Caplin & Drysdale, Chartered, Washington, D.C., on brief), for claimant-appellee Caplin & Drysdale, Chartered.

John L. Pollok (Charles L. Weintraub, Mark A. Summers, Hoffman Pollok & Gasthalter, New York City, on brief), for defendants-appellees Bassett and Meredith.

John Kenneth Zwerling (John Flowers Mark, Michael S. Lieberman, Zwerling, Mark, Ginsberg & Lieberman, Alexandria, Va., P.C., on brief), for defendant-appellant Leon D. Harvey.

(Eugene C. Thomas, President, American Bar Ass'n, Charles G. Cole, Steven H. Goldblatt, Terrance G. Reed, Washington, D.C., on brief), for amicus curiae The American Bar Ass'n.

(Peter Cohen, Washington, D.C., on brief), for amicus curiae Nat. Legal Aid and Defender Ass'n.

Before PHILLIPS, ERVIN and CHAPMAN, Circuit Judges.

JAMES DICKSON PHILLIPS, Circuit Judge:

These three cases, consolidated for purposes of appeal, present important issues respecting the forfeiture provisions of the Comprehensive Forfeiture Act of 1984, ch. 3, Pub.L. No. 98-473, Secs. 301 et seq., 98 Stat.1976 (1984) (the Act) (codified at 18 U.S.C. Sec. 1963 (RICO) and 21 U.S.C. Secs. 848, 853 (CCE)).

In two of the cases, Nos. 86-5069 and 86-5050, the government appeals district court orders exempting legitimately contracted attorney fees from forfeiture; in the third case, No. 86-5025, the defendant appeals his conviction on the basis that pre-trial restraining orders which forced indigency upon him violated his sixth amendment right to counsel and his fifth amendment right to procedural due process.

Together, the appeals require us to consider (1) whether Congress intended by the Act to authorize pre-conviction restraints on transfer and ultimate forfeiture of property legitimately contracted by defendants to be paid as attorney fees, on the basis alone that the attorney had reasonable cause to believe that the property was subject to forfeiture upon defendant's conviction; (2) if so, whether such an application of the Act would violate either or both the constitutional right to counsel secured to defendants by the sixth amendment, and the associated right to a fundamentally fair trial secured by the fifth amendment; and (3) whether, in any event, post-indictment ex parte restraints on transfers of property, as permitted by the Act solely on the basis of allegations in the indictment, without any opportunity for immediate post-restraint

Page 909

hearing, violate fifth amendment rights to procedural due process.

We hold that the Act was intended by Congress to permit such pre-conviction restraints on transfer and ultimate forfeiture of property legitimately contracted to be paid as attorney fees, but that such an application violates the qualified right to counsel of choice secured by the sixth amendment. We further hold that post-indictment ex parte restraints on property transfers, as permitted by the Act, violate fifth amendment procedural due process rights where no opportunity for an early post-restraint hearing is afforded but that here the error of entering such an order was harmless and, in any event, no basis for reversing the conviction.

On this basis, we affirm the orders exempting legitimate attorney fees from forfeiture in Nos. 86-5069 and 86-5050 and the criminal conviction in No. 86-5025.

I

The Act significantly revised existing forfeiture provisions in the RICO and CCE statutes by expanding the reach of forfeiture in relation to offense, the types of property subject to forfeiture, and the time frame within which ownership of property subjects it to forfeiture; by liberalizing the provisions for restraining orders or injunctions against transfers of potentially forfeitable property; and by providing a procedure by which third parties can assert, after a defendant's conviction, their interest in property subject to forfeiture. We summarize and briefly analyze those provisions most salient to these appeals. 1

New 18 U.S.C. Sec. 1963(a)(3) adds 2 to the basic reach of the forfeiture provisions "(3) any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962." This expanded the reach of the forfeiture provisions from property "associated with" the criminal enterprise to include as well "property derived from the profits" of the criminal enterprise.

New subsection (b) makes clear that all types of property within the defined reach of the Act is subject to forfeiture:

(b) Property subject to criminal forfeiture under this section includes--

(1) real property, including things growing on, affixed to, and found in land; and

(2) tangible and intangible personal property, including rights, privileges, interests, claims, and securities.

Even more critical than these expansions of forfeiture's reach and of the types of property subject to forfeiture, and most critical to the issues before us, is a new provision that the government's interest in property subject to forfeiture arises at the time the charged offense is committed rather than, as formerly, at the time of the defendant's conviction. Subsection (c) now provides that:

(C) All right, title, and interest in property described in subsection (a) vests in the United States upon the commission of the act giving rise to forfeiture under this section. Any such property that is subsequently transferred to a person other than the defendant may be the subject of a special verdict of forfeiture and thereafter shall be ordered forfeited to the United States, unless the transferee establishes in a hearing pursuant to subsection (m) that he is a bona fide purchaser for value of such property who at the time of purchase was reasonably without cause to believe that the

Page 910

property was subject to forfeiture under this section.

This "relation-back" provision was designed to close a loophole in the existing statutes that had permitted defendants to escape in personam forfeiture by transferring assets to third parties before conviction. S.Rep. No. 225, 98th Cong., 1st Sess. 200-01, reprinted in 1984 U.S.Code Cong. & Ad.News, 3182, 3383-84 [hereinafter cited as Senate Report].

The rights of third parties who claim an interest in property sought to be forfeited are now provided in new subsections (j) and (m). Subsection (j) prohibits third parties from intervening in the trial or appeal of a criminal case involving forfeiture and from commencing an action challenging the government's alleged interest in property that has been alleged to be subject to forfeiture in an indictment on information. Subsection (m) then relegates third parties to asserting their interests in post-conviction proceedings:

(m) ... (2) Any person, other than the defendant, asserting a legal interest in property which has been ordered forfeited to the United States pursuant to this section may ... petition the court for a hearing to adjudicate the validity of his alleged interest in the property. The hearing shall be held before the court alone, without a jury.

Subsection (m)(6) specifies the showing a third party is required to make to have her property relieved of the forfeiture. The court will exempt the property from forfeiture only if the third party is able to show that:

(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or

(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section.

The 1984 amendments also broaden, in ways critical to the issues before us, the Government's power to obtain preconviction orders restraining the defendant's use of property alleged to be subject to forfeiture. Subsection (e)(1) authorizes the Government to seek and the courts to enter injunctions and restraining orders either before or after the defendant is indicted. Such orders may issue before indictment only after notice and hearing unless the government demonstrates ex parte that there is a substantial probability that the property will be proven at trial to be subject to forfeiture and that giving notice would jeopardize the availability of the...

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49 practice notes
  • Mowbray v. Kozlowski, Civ. A. No. 89-0014-H.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Western District of Virginia)
    • October 25, 1989
    ...the language is ambiguous, or would, as literally read, contravene a clearly expressed legislative intention." United States v. Harvey, 814 F.2d 905, 913 (4th Cir.1987) (citations omitted). Happily, all parties agree that the plain meaning of § 303(e) of the MCCA, as amended, is dispositive......
  • Siers-Hill v. United States, CRIMINAL NO. 2:18cr62
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • June 15, 2020
    ...should be applied by the interpreting court without further review." Id. at 7.In support thereof, Petitioner cites United States v. Haney, 814 F.2d 905, 917 (4th Cir. 1987), which states, "Even where the results appear anomalous or unintended in a particular case, courts are not free to dis......
  • U.S. v. Kaley, No. 07-13010.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • August 18, 2009
    ...(10th Cir.1998); Monsanto, 924 F.2d at 1195-98; United States v. Moya-Gomez, 860 F.2d 706, 728-29 (7th Cir.1988); United States v. Harvey, 814 F.2d 905, 929 (4th Cir.1987), superseded as to other issues, In re Forfeiture Hearing as to Caplin & Drysdale, Chartered, 837 F.2d 637 (4th Cir.1988......
  • U.S. v. Monsanto, No. 436
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • January 29, 1988
    ...Congress only intended the CFA to reach fraudulent third party transfers, such as "sham" attorney's fees. See United States v. Harvey, 814 F.2d 905, 913-17 (4th Cir.1987) (surveying the cases but rejecting their position), reh'g in banc granted sub nom. United States v. Caplin & Drysdale, C......
  • Request a trial to view additional results
49 cases
  • Mowbray v. Kozlowski, Civ. A. No. 89-0014-H.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Western District of Virginia)
    • October 25, 1989
    ...the language is ambiguous, or would, as literally read, contravene a clearly expressed legislative intention." United States v. Harvey, 814 F.2d 905, 913 (4th Cir.1987) (citations omitted). Happily, all parties agree that the plain meaning of § 303(e) of the MCCA, as amended, is dispositive......
  • Siers-Hill v. United States, CRIMINAL NO. 2:18cr62
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • June 15, 2020
    ...should be applied by the interpreting court without further review." Id. at 7.In support thereof, Petitioner cites United States v. Haney, 814 F.2d 905, 917 (4th Cir. 1987), which states, "Even where the results appear anomalous or unintended in a particular case, courts are not free to dis......
  • U.S. v. Kaley, No. 07-13010.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • August 18, 2009
    ...(10th Cir.1998); Monsanto, 924 F.2d at 1195-98; United States v. Moya-Gomez, 860 F.2d 706, 728-29 (7th Cir.1988); United States v. Harvey, 814 F.2d 905, 929 (4th Cir.1987), superseded as to other issues, In re Forfeiture Hearing as to Caplin & Drysdale, Chartered, 837 F.2d 637 (4th Cir.1988......
  • U.S. v. Monsanto, No. 436
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • January 29, 1988
    ...Congress only intended the CFA to reach fraudulent third party transfers, such as "sham" attorney's fees. See United States v. Harvey, 814 F.2d 905, 913-17 (4th Cir.1987) (surveying the cases but rejecting their position), reh'g in banc granted sub nom. United States v. Caplin & Drysdale, C......
  • Request a trial to view additional results

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