The United States government claimed that Sila Luis defrauded Medicare for millions of dollars through kickbacks and overbilling. Before the trial, prosecutors sought to freeze the defendant’s assets under 18 U.S.C. Sec. 1345, which allows freezing assets “obtained as a result of” or “traceable” to the crime, or other “property of equivalent value.” The case focused on the “property of equivalent value” section of the statute.
The parties agreed that the assets sought to be frozen were not the result of the crime, and were “untainted.” Prosecutors claimed the assets could be frozen to ensure that money would be available for restitution in the event the defendant was convicted. The defendant, however, claimed she needed the assets to hire counsel.
The Court stated that “[T]he property here is untainted; i.e., it belongs to the defendant, pure and simple,”. This “differs from a robber’s loot, a drug seller’s cocaine, a burglar’s tools, or other property associated with the planning, implementation, or concealing of a crime.”
“How are defendants whose innocent assets are frozen in cases like these supposed to pay for a lawyer – particularly if they lack ‘tainted assets’ because they are innocent, a class of defendants whom the right to counsel certainly seeks to protect?” the Court said, in rejecting the government’s arguments.
The Court also noted that if it allowed freezing untainted assets, more defendants would have to rely on “publicly paid counsel, including overworked and underpaid public defenders.”