Supreme Court backs government on frozen assets

WASHINGTON — The U.S. Supreme Court has decided that people whose assets have been frozen amid suspicion of illegal activity have no constitutional right to a hearing to plead for access to their money to mount a defense against criminal charges.

The justices voted 6-3 on Tuesday against a New York couple who have been indicted on charges they stole medical devices. The government froze their assets, including the $500,000 they set aside for their legal defense.

The Supreme Court has previously upheld the government’s ability to put a hold on property and money that can be tied to illegal activity, but had never ruled whether defendants are entitled to a hearing first. Lower federal courts were divided over whether a hearing is necessary.

The issue is especially salient because the Justice Department is seizing more property than ever. More than $4.2 billion was deposited in the Justice Department’s asset forfeiture fund in the government spending year that ended Sept. 30, 2012. That compares with about $1.6 billion in each of the two previous years.

Kerri and Brian Kaley, the couple at the center of the case, maintain they are innocent. They said they are at least entitled to a hearing to determine if they can use their money to fight the charges.

But Justice Elena Kagan wrote for the court that a grand jury already had found enough reason to indict the Kaleys and prosecutors froze money that could be tied to the allegations against the couple.

Allowing a judge to review the grand jury’s indictment would undermine the criminal justice system, Kagan said.

“The Kaleys here demand a do-over, except with a different referee,” Kagan said.

In dissent, Chief Justice John Roberts said that a defendant “might readily give all he owns to defend himself” so that a government order freezing his assets is serious business. He said the court should not have allowed a defendant to “be hobbled in this way without an opportunity to challenge the government’s decision to freeze those needed assets.” Justices Stephen Breyer and Sonia Sotomayor joined the dissent.