Second Circuit Shifts Burden of Showing Assets to Defendants; Clarifies Monsanto Decision


Both civil and criminal agencies charged with enforcing U.S. laws have turned increasingly to broad based use of "asset freeze orders." Legal counsel and their clients should understand the issue, particularly as there is a split in the Circuits and the Supreme Court has not yet addressed the issue.

"But I thought that was my money until I am found guilty."

The quote above often emanates from parties who find that one or another government agencies, or sometimes the civil and criminal prosecutors, have frozen their assets even before a trial—leaving the individual without means of hiring a defense team.

On June 19, 2013, the U.S. Court of Appeals for the Second Circuit issued an opinion "clarifying" its 1991 decision in U.S. v. Monsanto, where it held that a (criminal) defendant who wishes to use frozen funds for their defense is entitled to a pretrial hearing to determine whether there is probable cause to believe the defendant committed the crimes that formed the basis for the forfeiture and whether the funds are forfeitable.

In U.S. v. Bonventre, the Second Circuit ruled that a defendant must first make a "threshold showing" that a Monsanto hearing is warranted. To do so, the defendant must show "beyond the bare recitation of the claim, that he or she has insufficient alternative assets to fund counsel of choice." Basically, the Second Circuit shifted to defendants the burden of showing all their assets and the source thereof other than the frozen assets.

The Second Circuit's opinion creates a split with the Third, Fourth, Sixth and Tenth Circuits. The U.S. Supreme Court has not yet addressed the issue.

Topics:  Attorney's Fees, Burden-Shifting, Forfeiture, Frozen Assets, Monsanto, SCOTUS

Published In: Civil Procedure Updates, Civil Remedies Updates, Conflict of Laws Updates, Criminal Law Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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