For many decades, the 4th Circuit Court of Appeals was viewed as a very conservative place, where prosecutors were usually quite comfortable with the status quo, a largely “law and order” kind of venue. During the Obama presidency, the Court’s makeup changed dramatically, with a batch of younger, more liberal judges joining the “old guard” from Virginia, North Carolina, and South Carolina. Consequently, this particular appellate court has become less predictable and often starkly divided. That is, until the government messed with Will T. Chamberlain, the center of a long-running controversy surrounding pretrial restraint of a defendant’s assets.
The facts in Mr. Chamberlain’s case are deceptively simple: After the defendant was indicted for stealing $200,000 from the government, the U.S. Attorney’s Office sought to prevent him from selling some real property worth about $200,000. They had properly included a forfeiture provision in their indictment, and the allegation concluded by referring to an intent to pursue “substitute assets” if others could not be used to satisfy an eventual judgment. Until this case, Fourth Circuit precedent has been clear that the government can seek a restraining order to prevent liquidation of substitute assets, which is the term of art for property which does not fall into the categories of criminal proceeds, facilitating property, or property associated with an ongoing criminal enterprise – in short, untainted property belonging to a criminal defendant. Other Circuit Courts of Appeal have regularly read Title 21 U.S.C. § 853(p) as only applying to those “tainted” forms of property, and particularly so in the face of defendants seeking to engage in financial transactions that allow them to hire their counsel of choice. The Fourth Circuit, however, relied upon legislative intent analysis from a 1989 Supreme Court opinion[1] that dealt with tainted assets, but included a general admonition that “federal restraint provisions must be construed liberally to prevent defendants from moving assets beyond the reach of the court in order to evade their forfeiture upon conviction.” United States v. McKinney (In re Billman), 915 F.2d 916, 919 (4th Cir. 1990).
While the facts and issues were relatively simple, the procedural history in Mr. Chamberlain’s case was flat out ugly for the government. So ugly that it led to a rare moment of complete unanimity within the Fourth Circuit. At briefing, the government acknowledged that the...
