September 8, 2016
from the United States District Court for the Southern
District of Indiana, Indianapolis Division. No.
l:12-cr-00072-TWP-DML-l - Tanya Walton Pratt, Judge.
Wood, Chief Judge, and Kanne and Hamilton, Circuit Judges.
Hamilton, Circuit Judge.
appeal in a criminal case presents an unusual combination of
offenses: health care fraud and unlawful possession of
firearms and ammunition. Defendant Bruce Jones was both a
family counselor and a firearms enthusiast who collected
dozens of guns and thousands of rounds of ammunition. Jones
had a prior felony conviction, so it was a federal crime for
him to possess firearms and ammunition. The FBI discovered
these weapons while investigating Jones for allegedly
fraudulent health care billing. A federal grand jury charged
Jones with three counts of possessing firearms and ammunition
in violation of 18 U.S.C. § 922(g)(1) and one count of
health care fraud in violation of 18 U.S.C. § 1347. The
district court bifurcated the case for separate trials on the
firearms charges and the health care fraud charge. The juries
convicted Jones on all counts. The district court sentenced
Jones to 90 months in prison on his fraud conviction and 100
months on each felon-in-possession conviction, with all terms
to be served concurrently.
appeals and raises four distinct issues. First, he contends
that the ex parte pretrial restraint of certain life
insurance policies violated his Fifth and Sixth Amendment
rights. Second, he argues that the district court erroneously
denied his request for new counsel during his fraud trial.
Third, he contends that he was denied the opportunity to
testify at his fraud trial. Fourth, he challenges the
court's sentencing guideline computation. We affirm in
Pretrial Restraint of Assets
first challenges the pretrial restraint of six life insurance
policies titled in his name. The government listed these
policies in a forfeiture allegation in the controlling,
second superseding indictment. On April 15, 2014, following
Jones's conviction on the felon-in-possession charges but
before his fraud trial, the government filed an ex
parte application under 28 U.S.C. § 2461(c) and 21
U.S.C. § 853(e)(1)(A) to restrain those policies in
anticipation of post-conviction forfeiture. The district
court entered a restraining order that same day. Jones
contends that the pretrial restraint violated his Sixth
Amendment right to hire counsel of choice and his Fifth
Amendment right to due process of law.
we review de novo questions of constitutional law.
See Anderson v. Milwaukee County, 433 F.3d 975, 978
(7th Cir. 2006). But there is a wrinkle here: Jones did not
object at the time that his life insurance policies were
restrained. Nor did he raise an objection at any point during
the district court proceedings even though the restraining
order invited him to "petition for a pre-trial hearing
if he can demonstrate that he has no other assets available
with which to retain counsel" or if he could show that
the restrained policies were "not subject to
forfeiture." Where a defendant fails to lodge a timely
objection before the district court, we review only for plain
error, assuming the defendant has not actually waived the
point. See United States v. Bickart, 825 F.3d 832,
837 (7th Cir. 2016) ("To demonstrate plain error,
defendants must show: (1) an error or defect, (2) that is
clear or obvious, (3) affecting the defendants'
substantial rights. Even then, we have discretion to correct
the error if it seriously impugns the fairness, integrity, or
public reputation of the judicial proceedings, but we need
not do so.") (citations omitted).
excuse his failure to raise this issue in the district court,
Jones argues that the legal landscape shifted while his
appeal was pending, creating an analytical path that was not
available to him in 2014. Specifically, Jones points to
Luis v. United States, 578 U.S. -, 136 S.Ct. 1083
(2016). In Luis, the Supreme Court held that the
"pretrial restraint of legitimate, untainted
assets needed to retain counsel of choice violates the
Sixth Amendment." Id. at 1088 (plurality
opinion) (emphasis added); see also id. at 1096
(Thomas, J., concurring in the judg- merit) (agreeing with
plurality that a "pretrial freeze of untainted assets
violates a criminal defendant's Sixth Amendment right to
counsel of choice"). In so holding, the plurality
distinguished two earlier cases in which the Court had found
no Sixth Amendment defect in forfeiture proceedings.
Id. at 1090-91 (plurality opinion). Compare
Caplin & Drysdale, Chtd. v. United States, 491
U.S. 617 (1989) (post-conviction forfeiture that deprived
defendant of funds he would have used to pay attorney did not
violate Sixth Amendment because, pursuant to statute, title
to funds vested in United States upon defendant's
commission of crime), with United States v.
Monsanto, 491 U.S. 600 (1989) (pretrial restraint that
deprived defendant of tainted assets traceable to crime
likewise did not violate Sixth Amendment).
Luis, unlike Caplin & Drysdale and
Monsanto, the restraining order prevented the
defendant from using her own untainted funds to hire counsel.
Luis, 136 S.Ct. at 1090 (plurality opinion). The
government's interest in Luis's untainted funds was
similar to that of an unsecured creditor, who "someday
might collect from a debtor's general assets" but
"cannot be said to have any present claim to, or
interest in, the debtor's property." Id. at
1092. Citing Luis, Jones argues that the government
now bears the burden to demonstrate at the outset that the
assets it wants to restrain are tainted.
may read Luis too expansively. Luis says
nothing about timing or burden shifting. On the contrary, the
government in that case conceded that the district court had
restrained untainted funds. Id. at 1088. But even
assuming without deciding that Jones's interpretation of
Luis is correct, that case would have offered Jones
at best an additional line of at- tack on the district
court's restraining order. Under long-settled circuit
law, the pretrial restraint of a defendant's assets
"without affording the defendant an immediate,
postrestraint, adversary hearing at which the government is
required to prove the likelihood that the restrained assets
are subject to forfeiture violates the due process clause to
the extent that it actually impinges on the defendant's
qualified sixth amendment right to counsel of choice."
United States v. Moya-Gomez, 860 F.2d 706, 731 (7th
Cir. 1988). If the district court finds that the
defendant has insufficient alternative assets with which to
pay counsel, but the government fails to justify its
retention of all the frozen assets, "then the court must
order the release of funds in an amount necessary to pay
reasonable attorneys' fees for counsel of sufficient
skill and experience to handle the particular case."
Id. at 730.
that Jones's life insurance policies were not
tainted by his fraud, and assuming further that he genuinely
needed those assets to retain counsel, we cannot understand
why he failed to invoke his right to an immediate hearing
under Moya-Gomez. Conversely, if the life insurance
policies were tainted, or if Jones had sufficient
alternative assets available to him, then Luis would
not have strengthened his litigating position. Either way, we
find no plain error.
addition to a due process argument under Moya-Gomez,
Jones could have presented a statutory argument based on the
language of 21 U.S.C. § 853(e). The overwhelming
majority of courts to consider the question have held that
§ 853(e) "conveys Congress's intent to
authorize the restraint of tainted assets prior to
trial, but not the restraint of substitute
assets." United States v. Parrett, 530 F.3d
422, 431 (6th Cir. 2008); see also, e.g., United States
v. Jarvis, 499 F.3d 1196, 1204 (10th Cir. 2007)
("[A]ll but one federal court of appeals to address the
issue has determined the legislative silence regarding
substitute property in § 853(e) precludes pre-conviction
restraint of substitute property.").
points out that the government's ex parte motion
asserted there was probable cause to believe that his life
insurance premiums and contributions "constitute or
derived from proceeds obtained from the health care fraud,
or represent a substitute asset, and are therefore
subject to forfeiture." Jones also notes that the
government cited In re Billman, 915 F.2d 916, 921
(4th Cir. 1990), which held that a similar forfeiture
statute, 18 U.S.C. § 1963, authorizes pretrial restraint
of substitute assets. But we have never held as much. No
controlling precedent barred Jones from asking the district
court to construe § 853(e) as applying only to tainted
assets, an argument that at least one district court in this
circuit has accepted. See United States v. Toran,
No. 13-30072, 2015 WL 1968698, at *7 (CD. 111. May 1, 2015).
Jones could have advanced a constitutional argument, a
statutory argument, or both in response to the re- straining
order. Any one of these approaches could have delivered the
same relief he believes he might have obtained under
Luis. Jones forfeited his challenge to the
restraining order by failing to object in the district court,
so we review that order only for plain error.
no plain error. Nothing in the record tends to show that the
life insurance policies were not tainted by Jones's
fraud. Further, it is unclear whether Jones even needed the
life insurance policies to retain counsel. A presentence
investigation report prepared in December 2013 estimated
Jones's net worth (exclusive of the insurance policies)
at over half a million dollars. Granted, most of that net
worth was attributable to real estate, and the government
apparently filed notices of lis pendens against some
of Jones's properties. But a lis pendens notice
does not deprive real estate of all marketable value; it
simply places successors in interest on notice of a potential
competing claim. Further, it appears that at least two of the
lis pendens notices were lifted in August 2014, well
in advance of Jones's fraud trial.
event, because Jones never objected to the restraint on his
life insurance policies, the district court had no reason to
probe these matters in an evidentiary hearing. The district
court committed no plain error by entering the pretrial
restraining order, which invited Jones to challenge it
promptly if he thought there were grounds to do so. Having
failed to do so, Jones is not entitled to relief based on his
Request for Substitute Counsel
next argues that the district court improperly denied his
request for new counsel during his fraud trial, which was the
second of the two. He had an opportunity to explain his
reasons for requesting substitute counsel, so we review the
district court's denial for abuse of discretion.
United States v. Harris, 394 F.3d 543, 551 (7th Cir.
2005). We consider such factors as the timeliness of the
defendant's motion, the adequacy of the district
court's inquiry into the motion, and whether the conflict
resulted in a total lack of communication preventing an
adequate defense. Id. at 552. No single factor is
dispositive. If we find an abuse of discretion, we may
nevertheless uphold the district court's decision
"unless the defendant establishes that he was deprived
of his Sixth Amendment right to effective assistance of
counsel." United States v. Bjorkman, 270 F.3d
482, 500 (7th Cir. 2001).
record shows that Jones had a rocky relationship with his
appointed attorney, Mark Inman, who is an experienced
criminal defense lawyer in federal cases. Despite that rocky
relationship, we conclude that the district judge did not
abuse her discretion in denying Jones's request for
substitute counsel. We do not reach the separate question
whether Jones's Sixth Amendment right was compromised.
to the three factors identified in Harris, we
consider first the timeliness of Jones's request. Jones
asked for a new lawyer three weeks before his fraud trial was
scheduled to begin. Three weeks is not much time to prepare
for such a trial. We assume that if the district court had
appointed a new lawyer an immediate request for a continuance
would have been expected. Even so, we have previously
recognized that requests for new counsel submitted several
weeks before a critical proceeding may be timely under the
circumstances. Compare United States v. Zillges, 978
F.2d 369, 372 (7th Cir. 1992) (request made one month before
trial did not "represent a tactic to secure a
continuance on the eve of trial"), and United States
v. Ryals, 512 F.3d 416, 419 (7th Cir. 2008) (request
three weeks before sentencing hearing was timely,
particularly where breakdown in communication between
attorney and client did not occur until after trial), with
United States v. Hall, 35 F.3d 310, 313-14 (7th Cir.
1994) (request after defendant pled guilty and just ten days
before sentencing hearing appeared to be an "effort to
derail the sentencing that was fast approaching"), and
United States v. Burgos, 539 F.3d 641, 646 (7th Cir.
2008) (request on morning of trial came too late).
second factor -adequacy of the inquiry-weighs in the
government's favor. After receiving Jones's letter,
the district judge referred the matter to a magistrate judge
for a hearing. During that hearing, the magistrate judge gave
Jones an opportunity to explain his concerns. The magistrate
judge also heard from attorney Inman and from the government.
In denying Jones's request, the magistrate judge
explained that Jones's dispute with his lawyer primarily
concerned trial strategy and that such disputes are
insufficient grounds for replacement of appointed counsel.
Jones renewed his request a week later. The district judge
held an ex parte session in which Jones explained
his complaints about Inman. At the end of the session, the
judge denied Jones's renewed request. After the fraud
trial but before sentencing, Jones asked once more for a new
lawyer. The district judge delegated the request to a
different magistrate judge who heard from both Jones ...