United States v. Fisch

• Decision Date: 24 October 2013
• Docket Number: CRIMINAL NO. H-11-722
• Parties: UNITED STATES OF AMERICA v. ABRAHAM MOSES FISCH
• Court: U.S. District Court — Southern District of Texas

UNITED STATES OF AMERICA v. ABRAHAM MOSES FISCH

CRIMINAL NO. H-11-722

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

Date: October 24, 2013

MEMORANDUM AND OPINION

Defendant Abraham Moses Fisch seeks an evidentiary hearing on whether the government had probable cause to file a lis pendens on his real property in order to show that the lis pendens must be released to allow him access to money to pay for a lawyer of his choice. After thorough consideration of the arguments Fisch presented in his motion, submissions, and during a number of hearings on the issues; the government's response; Fisch's in camera submissions; and the relevant law, the court denies Fisch's request for a hearing and denies the motion. The reasons are explained below.

I. Background

In October 2011, the government obtained an indictment charging Fisch with conspiracy under 18 U.S.C. § 371, obstruction of justice under 18 U.S.C. § 1503, money-laundering conspiracy under 18 U.S.C. § 1956(h), money laundering under 18 U.S.C. §§ 1957, 2, and failure to timely file a tax return under 26 U.S.C. § 7203. That indictment included a notice of criminal forfeiture, which identified Fisch's home as forfeitable under 18 U.S.C. § 981 and 28 U.S.C. § 2461 as proceeds traceable to the conspiracy, obstruction of justice, money-laundering conspiracy, and money laundering counts. Later that same month, the government recorded a lis pendens in Harris County on that property.

Fisch, who is an experienced criminal-defense lawyer, retained a lawyer to represent him. That lawyer withdrew in May 2013 after the government obtained a superceding indictment that the lawyer believed created a conflict of interest. Fisch wants to choose another lawyer. He argues that the lis pendens significantly curtails his right to choose counsel and violates the Sixth Amendment. The government responds that the lis pendens does not affect Fisch's Fifth and Sixth Amendment rights for the reasons explained in United States v. Register, 182 F.3d 820 (11th Cir. 1999). The government also argues that Fisch has not shown that his financial status warrants granting the evidentiary hearing he seeks or lifting the lis pendens.

The Civil Asset Forfeiture Reform Act of 2000 governs federal civil forfeiture proceedings. Pub. L. No. 106-185, 114 Stat. 202 (2000) ("CAFRA"). Although 18 U.S.C. § 981 authorizes only civil forfeitures, 28 U.S.C. § 2461(c) makes property forfeitable under the civil-forfeiture statute subject to criminal forfeiture as well. United States v. Parrett, 530 F.3d 422, 425 n.2 (6th Cir. 2008) (citing 28 U.S.C. § 2461(c)); United States v. Capoccia, 503 F.3d 103, 115 (2d Cir. 2007) (Sotomayor, J.)). Under 18 U.S.C. § 981(a)(1)(C), "[a]ny property, real or personal, which constitutes or is derived from proceeds traceable to a violation" of various sections of Title 18 of the United States Code "or any offense constituting 'specified unlawful activity' [as defined in 18 U.S.C §1956(c)(7)] or a conspiracy to commit such offense" is subject to forfeiture. The government obtained an indictment containing a notice of criminal forfeiture for the counts relating to conspiracy, obstruction of justice, money-laundering conspiracy, and money laundering under 18 U.S.C. § 981 and 28 U.S.C. § 2461(c). The questions are whether, based on the record, the lis pendens on Fisch's property violates his Sixth Amendment right to choose counsel and requires that he be afforded a pretrial hearing contesting the lis pendens and, if so, what that hearing would involve. The threshold question is whether Fisch has satisfied the requirements that entitle him to an evidentiary hearing. "The Sixth Amendment to the Constitution guarantees that '[i]n allcriminal prosecutions, the accused shall enjoy the right . . . to have the Assistance of Counsel for his defense.'" Wheat v. United States, 486 U.S. 153, 158 (1988). "[W]hile the right to select and be represented by one's preferred attorney is comprehended by the Sixth Amendment, the essential aim of the Amendment is to guarantee an effective advocate for each criminal defendant rather than to ensure that a defendant will inexorably be represented by the lawyer whom he prefers." Id. at 159 (citing Morris v. Slappy, 461 U.S. 1 (1983); Jones v. Barnes, 463 U.S. 745 (1983)). The right to choose counsel is not as robust as the right to counsel; "the right to choose counsel is circumscribed in several important respects." Id.

"[A] defendant may not insist on representation by an attorney he cannot afford." Id. "[T]he Sixth Amendment guarantees a defendant the right to be represented by an otherwise qualified attorney whom the defendant can afford to hire[.]" Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 624 (1989). There is "no Sixth Amendment right to spend another person's money for services rendered by an attorney, even if those funds are the only way that defendant will be able to retain the attorney of choice." Id. at 626. "A robbery suspect, for example, has no Sixth Amendment right to use funds he has stolen from a bank to retain an attorney to defend him if he is apprehended." Id. "[W]hen a defendant claims that he has suffered some substantial impairment of his Sixth Amendment rights by virtue of the seizure or forfeiture of assets in his possession, such a complaint is no more than the reflection of the harsh reality that the quality of a criminal defendant's representation frequently may turn on his ability to retain the best counsel money can buy." Id. 630 (citations omitted). "[N]either the Fifth nor the Sixth Amendment to the Constitution requires Congress to permit a defendant to use assets adjudged to be forfeitable to pay that defendant's legal fees." United States v. Monsanto, 491 U.S. 600, 614 (1989) (citing Caplin & Drysdale, 491 U.S. at 617)).

In Monsanto, a companion case to Caplin & Drysdale, the Supreme Court held that adefendant's property may be restrained pretrial "based on a finding of probable cause to believe that the assets are forfeitable." Id. at 615. In that case, however, the Supreme Court was reviewing a pretrial restraint of assets following a hearing the Second Circuit required the district court to hold in that case. The Supreme Court expressly declined to consider "whether the Due Process Clause requires a hearing before a pretrial restraining order can be imposed" or whether the hearing that the Second Circuit required "was an adequate one." Id. at 615 n. 10. The Fifth Circuit has answered those questions.

"[W]hen the Government is seeking forfeiture and secures an indictment to that effect based on probable cause, a court may issue a restraining order without prior notice or a hearing." United States v. Holy Land Found. for Relief and Dev., 493 F.3d 469, 475 (5th Cir. 2007) (en banc). "In some cases, however, due process will require that the district court then promptly hold a hearing at which the property owner can contest the restraining order, without waiting until trial to do so." Id. Aligning itself with the majority of other circuits, the Fifth Circuit, sitting en banc, adopted the "time-honored test of Mathews v. Eldridge, 424 U.S. 319 (1976), to determine when a hearing is required." Id. (citing United States v. Jones, 160 F.3d 641, 645-48 (10th Cir. 1998); United States v. Monsanto, 924 F.2d 1186, 1193-98 (2d Cir. 1991), on remand from 491 U.S. 600 (1989); United States v. Moya-Gomez, 860 F.2d 706, 729-30 (7th Cir. 1988); United States v. Harvey, 814 F.2d 905, 928-29 (4th Cir. 1987), superceded as to other issues, In re Forfeiture Hearing As to Caplin & Drysdale, Chartered, 837 F.2d 537 (4th Cir. 1988) (en banc), aff'd, 491 U.S. 617 (1989)). Under that test, the court considers three factors when deciding whether the defendant is entitled to a hearing: "the private interest that will be affected by the restraint; the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the burdens that the hearing would entail." Id. "[C]ircuits employing this test have found that a propertyowner's interest is particularly great when he or she needs the restrained assets to pay for legal defense on associated criminal charges, or to cover ordinary and reasonable living expenses." Id. (emphasis added) (citing United States v. Melrose East Subdivision, 357 F.3d 493, 499-500 (5th Cir. 2004) (collecting cases)).

A. Whether Lis Pendens Is a Pretrial Restraint

Fisch's motion and argument raise but do not discuss the threshold question of whether recording a lis pendens is the type of pretrial restraint that triggers Mathews review. See id. Under Texas law, the holder of property encumbered by a lis pendens can still sell, occupy, or rent that property. Lis pendens "'refer[s] a purchaser pendente lite to the record of the case, to affect him with notice of the issues in the suit.'" State v. Silver Chevrolet Pickup, 140 S.W.3d 691, 694 (Tex. 2004) (quoting Elder v. Craddock, 223 S.W. 314, 315 (Tex. App.—Austin 1920, writ dism'd w.o.j.)). "A lis pendens notice protects the party with the claim against the real property . . . , innocent purchasers, and those who take a security interest in the property." Id. "Notably, the purpose behind the lis pendens provision does not suggest that the Legislature intended to confer rights upon the person whose property is the subject of [a] forfeiture proceeding." Id. The Texas Property Code makes clear that "[a] recorded lis pendens is notice to the world of its contents. The notice is effective from the time it is filed for record and indexed . . . , regardless of whether service has been made on the parties to the proceeding." TEX. PROP. CODE § 13.004. The Fifth Circuit has stated that "the lis pendens doctrine provides that one acquiring an interest in property the subject of a lawsuit takes...