FEAR-List Bulletin posted by Brenda Grantland, 1-28-98

According to the Providence (Rhode Island) Journal, five criminal defense attorneys who represented convicted money launderer Stephen Saccoccia, have experienced firsthand the sting of forfeiture, as federal authorities seized close to $2 million in attorneys fees Saccoccia paid them to represent him in his federal money laundering prosecution. (Note: The U.S. Supreme Court approved the constitutionality of seizing attorney's fees -- even those that are already earned -- for representing a criminal defendant that the federal government chooses to target for forfeiture, in Caplin & Drysdale and Monsanto. Both of these cases can be found in the FEAR website's on-line law library.)

According to the article, Providence U.S. Attorney Sheldon Whitehouse argued that the attorneys' fees paid to Kenneth O'Donnell, of Providence, R.I.; Robert Luskin, of Washington, D.C.; Jack Hill, of San Francisco; Stephen Finta of Fort Lauderdale, Fla.; and Lawrence Semenza, of Nevada, "were paid in such a fashion that the lawyers should have known that the monies were laundered drug profits."

The attorneys fees seized this past week were just chump change in the forfeiture revenue stream generated by this case. In addition to being sentenced to 660 years in prison, Saccoccia was fined "$15.8 million and ordered to forfeit $136.3 million" according to the article.

"This should not be viewed as a broad-brush assault on defense counsels' legitimate fees.'" U.S. Attorney Sheldon Whitehouse was quoted as saying.

When the Saccoccias were arrested in 1991, the court froze up to $140 million of their assets, including bank accounts, gold or other precious metals. Facing very serious federal charges, Saccoccia nevertheless managed to hire counsel, and when the dust settled, the government wanted to know where he got the money to pay counsel. The government asked the court to allow it to depose Saccoccia's lawyers, and the court agreed.

During depositions the government asked the five defense lawyers how they were paid, and they told of payments in cash and gold bars. The government then argued in a motion to the court that the manner in which they were paid put them on notice that the money was ill-gotten gains that were frozen by the court's pretrial restraining order, which ordered Saccoccia to turn over his assets, up to $140 million.

In the second article: "U.S. Attorney collects $4.4 million in fiscal year," the Providence Journal reported that the same U.S. Attorney's office that seized the five defense attorneys' fees "collected about $4.4 million in fines and criminal assets and through civil litigation during the fiscal year that ended Sept.30, according to U.S. Attorney Sheldon Whitehouse." "That total doesn't include the value of 82 gold bars seized from the property of the mother of money-launderer Stephen Saccoccia," the article adds. "Altogether, the money collected makes up about $1 million more than the cost of operating the U.S. Attorney's office, Whitehouse said. 'That's a net gain for the taxpayers, something we have accomplished year in and year out,' he said."

Depending on your point of view, it's either good news that your law enforcement community is self-funding, and even turns a profit -- or a very scary concept.

One wonders about the priorities and honesty of law enforcement officials who get to keep what they seize. Up to 80% of the property that is forfeited federally is distributed to the agencies that handled the investigation leading to the forfeiture, even if they are state and local agencies. This is called "Equitable Sharing" -- although it sounds more like bounty hunting. For a real eye-opener, read the U.S. Dept. of Justice's publication "A Guide to Equitable Sharing of Federally Forfeited Property for State and Local Law Enforcement Agencies." My copy is dated March 1994, but there may be a more current version. Call DOJ and order a copy -- if you dare.