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United States v. Scully

United States Court of Appeals, Fifth Circuit

February 14, 2018

UNITED STATES OF AMERICA, Plaintiff - Appellee
v.
ROBERT WARREN SCULLY, also known as Robert Scully, also known as Robert W. Scully Defendant-Appellant

         Appeal from the United States District Court for the Western District of Texas

          Before KING, JONES, and ELROD, Circuit Judges.

          EDITH H. JONES, Circuit Judge

         Appellant Robert Warren Scully was convicted of conspiracy to defraud the United States, conspiracy to commit wire fraud, and aiding and abetting a wire fraud scheme. 18 U.S.C. §§ 371, 1343, 1349. The district court later granted the Government's motion to restrain Scully's assets to preserve them for restitution and forfeiture. Scully was then sentenced and ordered to pay $1, 206, 539.94 in restitution. See 18 U.S.C. § 3613(c). The district court denied Scully's motion to partially vacate its earlier restraining order on his assets. Because the Sixth Amendment does not entitle Scully to use funds subject to the Government's post-conviction forfeiture lien to pay for appellate counsel of his choice, this court AFFIRMS.

         BACKGROUND

         Robert Warren Scully was convicted of conspiracy to defraud the United States, conspiracy to commit wire fraud, and aiding and abetting a wire fraud scheme on November 25, 2015. The Government filed a motion to restrain Scully's assets on July 7, 2016; the motion was granted that same day. The motion specifically mentioned over $220, 000 from the sale of a home in Florida. The Government moved to restrain these proceeds (and Scully's other assets) to preserve them for Scully's expected restitution obligations. The district court sentenced Scully to 180 months of imprisonment and ordered him to pay $1, 206, 539.94 in restitution, a $5, 000 fine, and a $500 special assessment. The district court entered judgment on November 29, 2016.

         Scully filed his notice of appeal for his conviction and sentence in early December 2016. He then filed a motion to partially vacate the July 7, 2016 restraining order so he could use $65, 000 of his house proceeds to cover attorney and transcript fees for his appeal. The district court denied Scully's motion. Scully filed a timely notice of appeal.

         DISCUSSION

         On appeal, Scully contends that the district court reversibly erred by denying his motion to partially vacate the restraining order as to the funds from the sale of his home in Florida. He argues that the proceeds are "untainted" because they are not fruits or instruments of crime, and the district court's continued restraint on his untainted assets denies his Sixth Amendment right to counsel of his choice on appeal.

         This court has jurisdiction over the instant appeal pursuant to 28 U.S.C. § 1292(a)(1). This court reviews the district court's denial for abuse of discretion. Castillo v. Cameron Cty., Tex., 238 F.3d 339, 347 (5th Cir. 2001). The district court's legal conclusions are reviewed de novo. Id.

         Appellant argues that United States v. Floyd, 992 F.2d 498 (5th Cir. 1993), and Luis v. United States, 136 S.Ct. 1083 (2016), mandate reversal of the district court's order. A review of Supreme Court precedent and the Floyd opinion shows that Appellant has no right to use the funds at issue to pay for appellate counsel.

         The Supreme Court's opinion in Caplin & Drysdale, Chartered v. United States lays out important principles for this court's analysis. The defendant there was charged with violations of the RICO statutes and their forfeiture provision. Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 619-21, 109 S.Ct. 2646, 2649-50 (1989). The Court held that a defendant is not entitled to use tainted funds forfeited after conviction to pay for attorneys' fees from trial. See id. The Court held that "[a] defendant has 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 that defendant will be able to retain the attorney of his choice." Id. at 626, 109 S.Ct. at 2652. Notably, under 21 U.S.C. § 853(c), which codified the "relation-back" doctrine, the Government had a property interest in the assets at issue from "the time of the criminal act giving rise to forfeiture." Id. at 627, 109 S.Ct. at 2653. The Court held that the Government's interest in recovering all forfeitable assets overrode any Sixth Amendment right criminal defendants may have to use forfeitable assets for attorneys' fees. Id. at 631, 109 S.Ct. at 2655. Therefore, the Court "reject[ed] petitioner's claim of a Sixth Amendment right of criminal defendants to use assets that are the Government's-assets adjudged forfeitable . . . to pay attorneys' fees, merely because those assets are in their possession." Id. at 632, 109 S.Ct. at 2656.[1]

         The Court in Luis addressed whether the Sixth Amendment bars the Government from restraining a defendant's untainted assets before trial. Similar to Scully, the defendant in Luis was indicted for violations of 18 U.S.C. §§ 371 & 1349. 136 S.Ct. at 1087. The Government sought a pretrial restraining order pursuant to 18 U.S.C. § 1345(a)(2) to prevent dissipation of any of Luis's assets that might later become subject to forfeiture. Id. at 1087-88. The Court noted that the "nature of the assets at issue" differed from those in Monsanto and Caplin & Drysdale. Id. at 1089-90. Notably, Luis's assets were untainted (not traceable to the crimes charged) and unquestionably belonged to her preceding a judgment of conviction, whereas the assets in Monsanto and Caplin & Drysdale, were tainted in a way that rendered defendants' ownership interest imperfect under the "relation-back" forfeiture statute. Id. at 1090. The Court observed that its prior decisions established "that whether property is forfeitable or subject to pretrial restraint under Congress' scheme is a nuanced inquiry that very much depends on who has the superior interest in the property at issue." Id. at 1091.

         Luis owned the assets, while the Government's interest in them was entirely contingent on a conviction at some later time. Id. at 1092-93. Therefore, the Court held that Luis's interest in her untainted property and her Sixth Amendment right to assistance of counsel before trial outweighed "the Government's contingent interest in securing its punishment of choice . . . as well as the victims' interest in securing restitution . . . ." Id. at 1093. The Court acknowledged that the Government's interest, while important, "would seem to lie somewhat further from the heart of a fair, effective criminal justice system" than the defendant's Sixth Amendment right. Id. Accordingly, the Court held that Luis had "a Sixth Amendment right to use her own 'innocent' property to pay a reasonable fee for the assistance of counsel" pretrial. Id. at 1096.

         This court's precedent is in line with Luis. In United States v. Floyd, this court held only that a district court erred in issuing a "pretrial restraining order freezing certain . . . assets that were untainted by the ...


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