U.S. Supreme Court Restricts Challenges To Pretrial Seizure Of Defense Funds

The U.S. Supreme Court recently weakened a criminal defendant's ability to challenge the Government's pretrial seizure of assets that a defendant has allocated for mounting a defense. In Kaley v. United States,1 the Court eliminated a defendant's right to challenge a grand jury's finding of probable cause, which underlies pretrial seizure orders2 to restrain such funds. The Court left intact a defendant's right to challenge whether seized funds are traceable to alleged misconduct.

In this case, a grand jury indicted Kerri and Brian Kaley, a married couple, on charges related to an alleged conspiracy to steal and resell outmoded, surplus prescription medical devices. But the Kaleys learned of the grand jury investigation before the indictment. They hired counsel and began mounting a defense. (The Kaleys continue to maintain that their actions could not amount to a crime and tried to convince the Government not to pursue the case.) To pay their attorney's fees, the Kaleys applied for a $500,000 equity line of credit on their home and used the funds to purchase a certificate of deposit (C.O.D.).

Based on the grand jury's finding of probable cause underlying the indictment, the Government sought a restraining order to freeze the Kaleys' assets. The...