How Poking The Bear Gets Your Assets Kicked

by Ifrah PLLC

For many decades, the 4th Circuit Court of Appeals was viewed as a very conservative place, where prosecutors were usually quite comfortable with the status quo, a largely “law and order” kind of venue.  During the Obama presidency, the Court’s makeup changed dramatically, with a batch of younger, more liberal judges joining the “old guard” from Virginia, North Carolina, and South Carolina.  Consequently, this particular appellate court has become less predictable and often starkly divided.  That is, until the government messed with Will T. Chamberlain, the center of a long-running controversy surrounding pretrial restraint of a defendant’s assets.

The facts in Mr. Chamberlain’s case are deceptively simple:  After the defendant was indicted for stealing $200,000 from the government, the U.S. Attorney’s Office sought to prevent him from selling some real property worth about $200,000.  They had properly included a forfeiture provision in their indictment, and the allegation concluded by referring to an intent to pursue “substitute assets” if others could not be used to satisfy an eventual judgment.  Until this case, Fourth Circuit precedent has been clear that the government can seek a restraining order to prevent liquidation of substitute assets, which is the term of art for property which does not fall into the categories of criminal proceeds, facilitating property, or property associated with an ongoing criminal enterprise – in short, untainted property belonging to a criminal defendant.  Other Circuit Courts of Appeal have regularly read Title 21 U.S.C. § 853(p) as only applying to those “tainted” forms of property, and particularly so in the face of defendants seeking to engage in financial transactions that allow them to hire their counsel of choice.  The Fourth Circuit, however, relied upon legislative intent analysis from a 1989 Supreme Court opinion[1] that dealt with tainted assets, but included a general admonition that “federal restraint provisions must be construed liberally to prevent defendants from moving assets beyond the reach of the court in order to evade their forfeiture upon conviction.”  United States v. McKinney (In re Billman), 915 F.2d 916, 919 (4th Cir. 1990).

While the facts and issues were relatively simple, the procedural history in Mr. Chamberlain’s case was flat out ugly for the government.  So ugly that it led to a rare moment of complete unanimity within the Fourth Circuit.  At briefing, the government acknowledged that the subject property was untainted and that following recent Supreme Court precedent, the pretrial restraint of innocently-obtained property was unconstitutional when the property was needed by the defendant to obtain counsel.[2]  Here, however, the government had defense counsel on record saying this particular fund was not needed for legal fees.  After the initial briefing, the defense submitted a government brief from another pending Supreme Court matter[3] in which the government specifically asserted that under Luis, 21 U.S.C. § 853 does not permit pretrial restraint of substitute property.  The government then moved the Fourth Circuit panel to remand the case upon representation that they would no longer seek pretrial restraint of any of Mr. Chamberlain’s assets.  Instead, the now fully-poked bear voted unanimously to set the matter for immediate en banc review.  The government’s supplemental brief for the looming en banc disaster agreed with the defendant’s position and led to last week’s rare-as-an-eclipse en banc published opinion without any oral argument from the parties.  Referring to the reach of 21 U.S.C. § 853, the Fourth Circuit expressly overruled prior Circuit precedent and found that “[t]he plain language of the statute, therefore, provides no authority to restrain substitute assets prior to trial.  United States v. Chamberlain, 2017 WL 3568493, at *5 (4th Cir. 2017).

The opinion has two interesting side streets.  First, for a case that is ultimately predicated on Sixth Amendment issues regarding whether right to counsel means right to counsel of choice, there are precious few words devoted to that underpinning. Maybe the perceived maneuvering of the government, including its starkly inconsistent positions between a Supreme Court filing and Fourth Circuit position, made this a particularly easy rally-cry for the usually divided court.

The other interesting aspect is the case’s effect on the RICO forfeiture provisions, which had previously been cited as support for the Court’s pre-Chamberlain position on freezing substitute assets.  Most likely, the RICO provisions will be deemed a “related restraint provision” and subject to the exact same ruling.  Interestingly, the DOJ attorneys responsible for supervising and advising RICO prosecutions across the country, the Organized Crime and Gang Section,[4] had a long history of preaching caution to Assistant U.S. Attorneys who sought to seize or freeze assets which the defendant needed for obtaining counsel.  While the RICO statute and Fourth Circuit precedent permitted the action, a now-retired forfeiture expert for the Section consistently tried to talk AUSA’s into compromise or release of the funds in those circumstances.  His usual admonition to these prosecutors was a prescient one — “don’t poke the bear.”

[1] United States v. Monsanto, 491 U.S. 600 (1989).

[2] Luis v. United States, 136 S. Ct. 1083 (2016)

[3] Honeycutt v. United States, 137 S. Ct. 1626 (2017)

[4] Full disclosure—I was Chief of that Section from 2010-2017.

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.

© Ifrah PLLC | Attorney Advertising

Written by:

Ifrah PLLC

Ifrah PLLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.