A federal judge in Colorado has ruled that federal prosecutors cannot seize fees paid by convicted racketeers or drug dealers to their defense attorneys even if the money came from illegal ventures.
Such an action "would undermine the very principles underlying the adversary system," U.S. District Court Judge John Kane ruled in Denver Friday.
It was the first ruling on part of the Comprehensive Crime Control Act of 1984, which permits the Justice Department to seize all of the assets of a defendant convicted of a drug offense or an organized crime charge -- except for those assets the convicted person can prove did not result from an illegal activity.
Justice Department attorneys have interpreted the law to mean that in drug and organized crime cases, the government may confiscate not only such assets as real estate and vehicles but also fees paid to defense attorneys.
In several cases, including this one, U.S. attorneys have told defense attorneys that their fees will be "forfeitable to the United States" if their clients are convicted.
The Colorado case involves Gerald L. Rogers, a Los Angeles businessman, who was charged with racketeering and mail fraud for offering allegedly abusive tax shelters.
Jeffrey Gordon, a defense attorney for Rogers, asked the court to rule whether the government would have a right to his fees.
"We lay the issue right out in the open," said Gordon. "This is important for lawyers all over the country."
In ruling for Gordon, the court said, "The government would possess the ultimate tactical advantage of being able to exclude competent defense counsel as it chooses. By appending a charge of forfeiture to an indictment under RICO a charge known as racketeering influence corrupt organization , the prosecutor could exclude those defense counsel which he felt to be skilled adversaries."
Deputy Assistant Attorney General James I.K. Knapp of the Justice Department's criminal division said he did not agree with the court's ruling.
"Attorneys should be in no better or worse position than anyone else who provides a defendant services and receives forfeitable assets as compensation," Knapp said.
Knapp said it is unlikely that the department would appeal the ruling "at this stage," since the defendant has not been convicted and the department therefore has not sought the fees.
"What they [Gordon] did is rather unusual, and the court granting the motion is also unusual," Knapp said.
Rogers' lawyer, Gordon, said he filed the motion to exclude attorneys' fees and costs from forfeiture partly because he was afraid that an attempt to take his fees would "interfere with the attorney-client relation" because information about the fees is part of his attorney-client privilege.