When Leon D. Harvey was charged in Alexandria with drug smuggling, prosecutors obtained a court order freezing his assets. A wealthy drug kingpin by the government's accounting, Harvey suddenly was rendered indigent, unable to afford a defense lawyer.

He was given a court-appointed attorney -- in this case, the lawyer he intended to hire anyway. But counsel John Zwerling complained that the defense was hamstrung because his client was prohibited from paying him.

Harvey, convicted Jan. 15, was sentenced Friday to 40 years in prison, and ordered to forfeit all his assets and pay a $100,000 fine. He is a recent example of a new U.S. Justice Department effort to stop defendants from paying lawyers with profits from drug dealing and racketeering.

It is a practice that has raised the ire of criminal defense lawyers across the country.

"I think it's absolutely outrageous," said Washington attorney Bernard S. Bailor, whose legal fees were blocked by federal prosecutors in a recent drug case. "You're tying up a man's ability to defend himself before any adjudication of his guilt, which is tantamount to giving a man no counsel."

Armed with 1984 crime legislation that increased the government's powers to seize ill-gotten gains, U.S. prosecutors have moved to freeze defendants' assets at the time of indictment, prohibiting transfers even to attorneys. In other cases attorneys have been put on notice that if their client is convicted, their fees may be confiscated. In a few cases, lawyers have been subpoenaed to reveal the size and sources of their fees.

"Congress has made the determination that people who make a living from extortion, drug dealing and racketeering should not get any economic benefit from that," said William Landers, special counsel to Stephen S. Trott, chief of Justice's criminal division. "They cannot buy a luxury yacht, they cannot take a trip to Europe and they cannot pay attorneys' fees."

Lawyers may be worried about the impact of this on their income, but they are challenging it on the higher ground of their clients' constitutional rights.

"It turns the presumption of innocence on its ears; it interferes with the adversary process and with the right of a defendant to hire counsel of his choice," said Miami attorney Neal Sonnett, vice president of the National Association of Criminal Defense Lawyers, who received a subpoena last year to reveal the source of his client's fees. The subpoena was withdrawn.

"Nobody ever dreamed we would have these problems with attorneys' fees," said Rep. William J. Hughes (D-N.J.), chairman of the House subcommittee on crime and an author of the 1984 legislation. "Frankly, I am concerned over some of the stories which keep coming back to us from attorneys," said Hughes, whose subcommittee held hearings on the controversy in Miami in November.

Hughes said he plans to have his subcommittee examine individual cases as well as how the Justice Department is attempting to carry out forfeiture of legal fees.

So far, attempts to seek the forfeiture of legal fees are not widespread and apply only to cases in which a defendant has been charged with racketeering or running a continuing criminal enterprise in drugs. In many cases the lawyers have fought back and the courts have issued conflicting opinions, leaving the constitutionality of the practice an open question. No known case has reached an appellate court.

Faced with an uproar from the criminal defense bar, the Justice Department last summer issued guidelines on forfeiture of legal fees that call for approval from the head of its criminal division before prosecutors can go after attorneys' fees.

Also, prosecutors are supposed to have "reasonable grounds" to believe the attorney knew a client's assets were subject to forfeiture at the time he or she took the money. One way attorneys would be forewarned, the guidelines state, is if a judge has ordered a defendant's assets frozen before trial.

Landers, who said no attorney so far has lost fees already received, noted other ways:

"If somebody is arrested on drug charges and pays his lawyer in cash, in small denominations of tens, twenties and hundreds . . . I think it's fairly clear the attorney knows the money is coming from drug activities." In such cases, said Landers, "they are taking the fee at their own jeopardy." Finally, the rules say forfeiture actions against legal fees should be "uniformly and fairly applied." But some lawyers say this is not happening.

"They're selectively deciding which lawyers to go after," said Gerald B. Lee, an Alexandria attorney. "They're only going after seasoned, experienced, effective lawyers."

A recent survey of nearly 1,700 members of the criminal defense lawyers' association by University of Southern California law professor William J. Genego found that 21 percent had been questioned about their fees by prosecutors, most of them since 1983. Some lawyers in the survey said they now require clients to sign contracts stating their fees do not come from tainted sources.

"Justice Department guidelines are entirely inadequate because they are internal, unenforceable and can still be used on a selective basis," Genego said.

Landers disputes attorneys' charges that forfeiture robs a defendant of effective counsel. If the defendant can show income from legitimate sources or if a third party wants to pay for the defense, that is fine, Landers said. And if that is not possible, the defendant will be given court-appointed counsel. To imply that such counsel is inferior, he said, is offensive.

But the American Bar Association, which has protested the forfeiture policy, charges that it allows the government "to manipulate the roster of defense counsel," giving it an "enormous tactical advantage over the accused."

Lawyers such as Zwerling contend that complicated charges like racketeering and criminal enterprises usually result from years of investigation by the government and require a comprehensive, and expensive, defense. "An attorney has got to be able to go to war" with the government on such cases, said Zwerling. "You have to mobilize your firm, mobilize your resources, go through discovery, interview witnesses in jail, in time to come up with a defense, if one exists.

"I cannot say where we would have wound up" if he had been allowed to take Harvey's money, said Zwerling, whose salary and expenses were paid -- and limited -- by the court. "But it would have been by a different road. At least we would have had the opportunity to explore different avenues of defense."

Sonnett said he has no problem with issuance of restraining orders on a defendant's assets at the time of indictment, but he contends that attorneys' fees should be exempt from this. But should lawyers be in a special category when it comes to creditors? Many in Congress, including Hughes, believe not.

"My offhand opinion is 'no,' " Hughes said, "but it may be something we have to look at."