United States v. Sullivan ( 2021 )


Menu:
  •                       UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF COLUMBIA
    UNITED STATES OF AMERICA,
    v.                               Crim. Action No. 21-78
    (EGS)
    JOHN SULLIVAN,
    Defendant.
    MEMORANDUM OPINION
    Defendant John Sullivan (“Mr. Sullivan”) is charged in a
    multi-count Superseding Indictment arising from his alleged
    participation in the events at the U.S. Capitol on January 6,
    2021. See Superseding Indictment, ECF No. 56. Now pending before
    the Court is Mr. Sullivan’s motion to release the seizure order
    related to his bank account in Utah and to forbid seizures of
    other accounts. See Def.’s Mot., ECF No. 25. Mr. Sullivan
    requests that the Court issue an order “discharging the seizure
    of his bank account in Utah and to prevent any further seizures
    of other bank accounts belonging to defendant.” Id. at 1. 1 In
    conjunction with his motion, Mr. Sullivan has also requested a
    “post-deprivation, pretrial hearing” to challenge the
    1
    When citing electronic filings throughout this Memorandum
    Opinion, the Court cites to the ECF page number, not the page
    number of the filed document.
    sufficiency of the government’s evidence supporting the seizure
    of assets. Id. at 4.
    Upon consideration of the motion, the response, and reply
    thereto, the applicable law, and the entire record herein, the
    Court DENIES Mr. Sullivan’s motion.
    I. Procedural History
    On February 3, 2021, Mr. Sullivan was charged in a six-
    count Indictment alleging the following violations of law: (1)
    obstruction of an official proceeding and aiding and abetting,
    in violation of 
    18 U.S.C. §§ 1512
    (c)(2) and 2; (2) civil
    disorder and aiding and abetting, in violation of 
    18 U.S.C. §§ 231
    (a)(3) and 2; (3) entering and remaining in a restricted
    building or grounds, in violation of 
    18 U.S.C. § 1752
    (a)(1); (4)
    disorderly and disruptive conduct in a restricted building or
    grounds, in violation of 
    18 U.S.C. § 1752
    (a)(2); (5) disorderly
    conduct in a Capitol building, in violation of 
    40 U.S.C. § 5104
    (e)(2)(D); and (6) parading, demonstrating, or picketing in
    a Capitol Building, in violation of 40 U.S.C. 5104(e)(2)(G). See
    Indictment, ECF No. 8.
    On April 28, 2021, a magistrate judge approved two sealed
    warrants authorizing the government’s seizure of $89,875 in Mr.
    Sullivan’s bank account ending in 7715 and $1,000 in the Venmo
    account linked to Mr. Sullivan’s bank account. See Gov’t’s
    Opp’n, ECF No. 29 at 10. The magistrate judge found probable
    2
    cause to believe that the assets were forfeitable based on the
    supporting affidavit stating that the “funds Sullivan obtained
    by filming and selling footage of the January 6, 2021 Capitol
    riots . . . would not have existed but for Sullivan’s illegal
    participation in and encouragement of the riots, property
    destruction, and violence inside the U.S. Capitol in violation
    of 
    18 U.S.C. § 1512
    (c).” 
    Id.
     The warrants were served on April
    29, 2021, and the government seized a balance of $62,813.76 from
    the bank account ending in 7715. 
    Id.
    On May 19, 2021, Mr. Sullivan was charged in a Superseding
    Indictment that included two further charges and a forfeiture
    allegation. In addition to the charges in the initial
    Indictment, the Superseding Indictment charged Mr. Sullivan with
    the following new violations: (1) unlawful possession of a
    dangerous weapon on Capitol grounds or buildings, in violation
    of 
    40 U.S.C. § 5104
    (e)(1)(A)(i); and (2) false statement or
    representation made to an agency of the United States, in
    violation of 
    18 U.S.C. § 1001
    (a)(2). See Superseding Indictment,
    ECF No. 26. The Superseding Indictment also sought, upon
    conviction of the offense of obstruction of an official
    proceeding, in violation of 
    18 U.S.C. §§ 1512
    (c)(2), forfeiture
    of “any property, real and personal, which constitutes or is
    derived from proceeds traceable to the commission of the offense
    alleged.” 
    Id.
     The forfeiture allegation specified, as property
    3
    to be sought upon such a conviction, $89,875 in Mr. Sullivan’s
    bank account ending in 7715 and $1,000 in the Venmo account
    ending in 2020 linked to Mr. Sullivan’s bank account. 
    Id.
     Mr.
    Sullivan was charged in a further Superseding Indictment on
    November 10, 2021. See Superseding Indictment, ECF No. 56.
    On May 7, 2021, Mr. Sullivan filed a motion to release the
    seizure order related to his bank account in Utah and to forbid
    seizures of other accounts. See Def.’s Mot., ECF No. 25. The
    government filed its opposition on May 21, 2021, see Gov’t’s
    Opp’n, ECF No. 29; and Mr. Sullivan filed his reply brief on
    June 2, 2021, see Def.’s Reply, ECF No. 31. The motion is ripe
    for adjudication.
    II. Analysis
    Mr. Sullivan seeks a hearing on the government’s seizure of
    assets he claims he needs to pay his rent and other “household
    necessities.” Def.’s Mot., ECF No. 25 at 5. He does not argue
    that access to the seized assets is necessary for an effective
    exercise of the Sixth Amendment right to counsel. See Def.’s
    Reply, ECF No. 31 at 1. He does, however, argue that “the
    proceeds of the seized bank account are not the product of
    criminal activity alleged in the indictment,” and that he “is
    being deprived of his needed [assets] . . . in violation of the
    Due Process Clause of the United States Constitution.” Def.’s
    Mot., ECF No. 25 at 5.
    4
    The government opposes Mr. Sullivan’s request for the
    release of the seized assets and for a pretrial hearing. The
    government argues that there is a “dearth of caselaw supporting
    a pretrial hearing to contest the seizure where, as here, no
    Sixth Amendment right is at stake and the claimed basis is a
    need to pay household expenses.” Gov’t’s Opp’n, ECF No. 29 at
    17. Moreover, even if a pretrial hearing was appropriate in such
    a context, the government contends that “[m]ore than conclusory
    allegations of a need to pay rent and unspecified household
    expenses is required as a condition precedent.” 
    Id. at 18
    .
    Finally, the government argues that, even if the Court reaches
    the issues, the seized assets are sufficiently connected to Mr.
    Sullivan’s alleged obstruction of an official proceeding on
    January 6, 2021. 
    Id. at 22
    .
    For the reasons discussed below, the Court concludes that a
    hearing is not warranted in this case and denies Mr. Sullivan’s
    motion.
    A. Legal Framework
    “Forfeitures help to ensure that crime does not pay: They
    at once punish wrongdoing, deter future illegality, and ‘lessen
    the economic power’ of criminal enterprises.” Kaley v. United
    States, 
    571 U.S. 320
    , 323 (2014) (quoting Caplin & Drysdale,
    Chartered v. United States, 
    491 U.S. 617
    , 631 (1989)).
    Accordingly, the Supreme Court has long recognized the “strong
    5
    governmental interest in obtaining full recovery of all
    forfeitable assets.” 
    Id.
     (quoting Caplin & Drysdale, 
    491 U.S. at 631
    ).
    The pretrial seizure of forfeitable property is authorized
    by 
    21 U.S.C. § 853
    . 2 See United States v. Bikundi, 
    125 F. Supp. 3d 178
    , 184 (D.D.C. 2015). Under Section 853, the government may
    request a warrant from a federal court authorizing the pretrial
    seizure of property subject to forfeiture “in the same manner as
    provided for a search warrant.” 
    21 U.S.C. § 853
    (f). “Once the
    government has obtained a seizure warrant pursuant to 
    21 U.S.C. § 853
    (f), the Federal Rules of Criminal Procedure provide for no
    further inquiry into the property’s forfeitability until
    2 According to the government, the funds at issue are subject to
    seizure under 
    18 U.S.C. § 981
    (a)(1)(C), used in conjunction with
    
    28 U.S.C. § 2461
    (c), because Mr. Sullivan is charged with
    obstruction of an official proceeding in violation of 
    18 U.S.C. § 1512
    . See Gov’t’s Opp’n, ECF No. 29 at 12. Section 2461(c)
    states that “[i]f the defendant is convicted of the offense
    giving rise to the forfeiture, the court shall order the
    forfeiture of the property as part of the sentence in the
    criminal case.” See Gov’t’s Opp’n, ECF No. 29 at 12 (quoting 
    28 U.S.C. § 2461
    (c)). By application of Section 2461(c), forfeiture
    of property is mandated for an “obstruction of an official
    proceeding” violation because it is a racketeering activity
    identified in 
    18 U.S.C. § 1961
    (1), which is in turn a “specified
    unlawful activity” under 
    18 U.S.C. § 1956
    (c)(7)(A). Forfeiture
    is imposed through Section 981(a)(1)(C), which provides for
    forfeiture of “any property, real or personal, which constitutes
    or is derived from proceeds traceable to . . . any offense
    constituting ‘specified unlawful activity’ (as defined in
    [S]ection 1956(c)(7) of this title).” United States v. Clark,
    
    165 F. Supp. 3d 1215
    , 1218 (S.D. Fla. 2016).
    6
    disposition of the criminal charges on which the forfeiture is
    predicated.” Bikundi, 125 F. Supp. 3d at 184 (citing Fed. R.
    Crim. P. 32.2(b)(1)(A)). At a post-trial or post-plea hearing,
    “[i]f the government seeks forfeiture of specific property, the
    court must determine whether the government has established the
    requisite nexus between the property and the offense.” Fed. R.
    Crim. P. 32.2(b)(1)(A).
    “Notwithstanding the post-conviction process provided by
    Rule 32.2, the Supreme Court [in Kaley v. United States, 
    571 U.S. 320
     (2014)] has made clear that pretrial seizure, pursuant
    to 
    21 U.S.C. § 853
    (f), necessarily requires two probable cause
    findings: (1) that ‘the defendant has committed an offense
    permitting forfeiture;’ and (2) that ‘the property at issue has
    the requisite connection to that crime.’” Bikundi, 125 F. Supp.
    3d at 184 (quoting Kaley, 571 U.S. at 324). In Kaley, the
    Supreme Court addressed “‘whether the Due Process Clause
    requires a [pretrial] hearing’ to establish either or both . . .
    aspects of forfeitability.” 571 U.S. at 324. The Supreme Court
    explained that a defendant is not entitled to a pretrial hearing
    on the first requirement—whether there is probable cause that
    the defendant has committed an offense permitting forfeiture—
    because “[t]he grand jury’s determination is conclusive.” Id. at
    331; see also id. at 322. However, the court declined to decide
    whether a pretrial hearing should be provided when the defendant
    7
    challenges the second requirement—whether there is probable
    cause that the property at issue is traceable to the crime. Id.
    at 324 n.3.
    Though the Supreme Court declined to opine on whether a
    hearing is required to establish traceability, lower courts,
    including the United States Court of Appeals for the District of
    Columbia Circuit (“D.C. Circuit”), “have generally provided a
    hearing to any indicted defendant seeking to lift an asset
    restraint to pay for a lawyer.” Id. at 324. For example, in
    United States v. E-Gold, Ltd., 
    521 F.3d 411
     (D.C. Cir. 2008),
    the D.C. Circuit recognized that when the Sixth Amendment right
    to counsel is implicated, a pre-trial hearing on the
    forfeitability of the property at issue is required under the
    three-pronged test set out in Mathews v. Eldridge, 
    424 U.S. 319
    (1976), for “determining the due process rights of citizens who
    were subjected to the seizure of their property or other
    constitutionally protected interests.” E-Gold, 
    521 F.3d at 416
    .
    However, the D.C. Circuit has never addressed the question
    at issue in this case: whether the due process rights of a
    defendant require a pretrial evidentiary hearing “when the
    assets are not necessary to obtaining counsel of choice.” 
    Id. at 421
     (declining to consider “whether the due process rights of
    the defendants compel such a hearing when the assets are not
    necessary to obtaining counsel of choice”). But while the
    8
    question in this case remains undecided before the D.C. Circuit
    and Supreme Court, at least one court in this District has taken
    up the issue. In United States v. Bikundi, 
    125 F. Supp. 3d 178
    (D.D.C. 2015), the district court found that Rule 32.2 did not
    “preclude[] an indicted defendant from invoking his due process
    rights before trial to test the sufficiency of probable cause
    for the forfeitability of seized property.” 
    Id. at 187-88
    .
    Though the defendant’s request was based upon the alleged need
    to access seized funds to pay for household necessities, the
    court weighed the Mathews factors and found that due process
    required it to provide “pretrial judicial review of the
    challenged seizure warrants,” even though the defendant raised
    “no Sixth Amendment claim that the seizure of the Disputed Funds
    implicates his right to counsel.” 
    Id. at 183, 191
    . Critical to
    its decision were the defendant’s substantial evidence regarding
    “near-term financial obligations and his apparent inability to
    meet those obligations without release of the seized assets,” as
    well as express disclaimers regarding the traceability of the
    assets in the government’s affidavit supporting the seizure
    warrant. 
    Id.
    Set against this legal backdrop, the Court now turns to the
    parties’ arguments.
    9
    B. A Pretrial Hearing Is Not Warranted
    Even if the Court agreed with the reasoning of Bikundi and
    concluded that Rule 32.2 did not preclude a pretrial hearing
    where access to the assets is necessary to pay for household
    necessities, a pretrial hearing would not be warranted in this
    case.
    First, Mr. Sullivan has not made the threshold showing that
    he cannot pay for rent or other household necessities without
    access to the seized assets. See United States v. Edwards, 
    856 F. Supp. 2d 42
    , 45 (D.D.C. 2012) (denying motion for release of
    funds where defendant failed to make “threshold showing” that he
    could not obtain counsel without the seized funds); United
    States v. Emor, 
    794 F. Supp. 2d 143
    , 149-50 (D.D.C. 2011)
    (same). “Every court that has addressed the issue has found that
    a defendant’s merely conclusory allegation that he lacks the
    funds to retain counsel of choice is insufficient to trigger the
    need for a . . . hearing; in order to obtain a hearing the
    defendant must present some evidence that he will be deprived of
    counsel of choice if he cannot access the seized assets.” United
    States v. Emor, 
    794 F. Supp. 2d 143
    , 149 (D.D.C. 2011) (citing
    cases); see also E-Gold, 
    521 F.3d at 417, 421
     (stating that a
    defendant has right to hearing where “need is clearly
    established,” and where “access to assets is necessary for an
    effective exercise of the Sixth Amendment right to counsel”).
    10
    Here, Mr. Sullivan has submitted a declaration to the Court
    that merely provides a “summary” of his “monthly household
    needs” totaling $4,800 a month, as well as a “partial listing of
    sources of . . . income.” Sullivan Decl., ECF No. 31-1 at 1
    (emphasis added). Mr. Sullivan does not provide any further
    information relevant to his ability to pay rent, including what
    his other sources of income may entail. For example, the Court
    is aware that Mr. Sullivan is currently employed by his father,
    see Status Report, ECF No. 38 at 2; yet he provides no
    documentation regarding this employment and it is not listed as
    a source of income in his declaration. Nor does the Court have
    any information regarding how much Mr. Sullivan earns or the
    value of any assets he may have. Without such information, the
    Court cannot determine whether Mr. Sullivan lacks the funds
    necessary to provide for his household needs, or whether he is
    presently able to pay his monthly expenses via other methods.
    Cf. Emor, 
    794 F. Supp. 2d at 150
     (“[N]o legal authority of which
    the Court is aware can be read to suggest that due process
    requires a hearing whenever a defendant merely prefers to use
    restrained funds rather than untainted assets to pay his counsel
    of choice.” (internal quotation marks omitted)).
    The cases Mr. Sullivan primarily relies upon in support of
    his motion only serve to emphasize the deficiencies in his
    declaration. For example, in Bikundi, the district court granted
    11
    pretrial review of the seizure warrants partially based on
    evidence that the defendant “[was] unable to pay his utility
    bills, such that he must rely on borrowed funds to do so”;
    “evidence that he [was] unable to pay for his children’s
    preschool education and ha[d] recently lost private insurance
    coverage”; and evidence regarding his “property taxes, such that
    his home [was] subject to a tax sale.” Bikundi, 125 F. Supp. 3d
    at 190. Similarly in E-Gold, the D.C. Circuit found sufficient
    an affidavit from one of the defendants “detailing his status as
    a potential beneficiary of a trust, his lack of other sources of
    income, his liquid and non-liquid assets (including cars), his
    debts (including credit cards and monthly rent), his wife’s
    income, and his dependents and assets held in the name of the
    dependents.” Edwards, 856 F. Supp. 2d at 54 (summarizing the
    facts of E-Gold). Another defendant in the same case “likewise
    outlined his monthly expenses, gross and net income from his law
    practice, all assets and their values, as well as his other
    outstanding debts.” Id. (summarizing the facts of E-Gold).
    And significantly, Mr. Sullivan does not address
    information included within a pretrial services agency report
    documenting “multiple vehicles owned by the defendant,” as well
    as “significant funds in unspecified bank accounts of the
    defendant – funds that wholly predate, and lie entirely outside
    the scope of, the government’s seizure warrants.” See Gov’t’s
    12
    Opp’n, ECF No. 29 at 21. Mr. Sullivan also does not dispute the
    government’s contention that he has “at least one other bank
    account . . . with America First Credit in which he retained a
    positive balance as of March 19, 2021.” Gov’t’s Opp’n, ECF No.
    29 at 21. At the least, this information suggests that Mr.
    Sullivan enjoys assets beyond those seized by the government
    that he could use toward paying for rent and his other household
    necessities. Thus, absent more information, the Court finds that
    Mr. Sullivan has not met the threshold standard for a pretrial
    hearing relating to his seized assets. See, e.g., Edwards, 856
    F. Supp. 2d at 45 (finding defendant failed to make threshold
    showing for a hearing where defendant submitted a declaration
    stating only that “[b]eyond the money seized, I do not have any
    available funds to pay Attorney Balarezo’s retainer”); Emor, 
    794 F. Supp. 2d at 149
     (finding declaration insufficient to trigger
    a hearing where defendant submitted a declaration stating “that
    he lacks any income or investments, that his spouse is not
    employed, that he has six dependents, and that he has only
    between $22,000 and $50,000 in cash on hand or money in savings
    or checking accounts”).
    Second, even if the Court proceeded to “ascertaining the
    requirements of the due process clause” by “look[ing] . . . to
    the Supreme Court’s declarations in Mathews v. Eldridge,” E-
    Gold, 
    521 F.3d at 415
    ; the result would remain the same. The
    13
    Mathews factors, as articulated by Kaley, require a court to
    weigh “(1) the burdens that a requested procedure would impose
    on the Government against (2) the private interest at stake, as
    viewed alongside (3) the risk of an erroneous deprivation of
    that interest without the procedure and the probable value, if
    any, of the additional procedural safeguard.” Kaley, 571 U.S. at
    333 (quoting Mathews, 
    424 U.S. at 335
    ) (internal quotations and
    alterations omitted). Regarding the first factor, the Court
    notes that even assuming that “the requested pretrial hearing
    would necessarily impose some burden of time and resources on
    the government to preview how” the seized assets were tracked to
    the alleged offense, Bikundi, 125 F. Supp. 3d at 190; courts
    have found that these interests may be “outweighed by a criminal
    defendant’s interest in obtaining the counsel of his or her
    choice,” Sunrise Academy v. United States, 
    791 F. Supp. 2d 200
    ,
    207 (D.D.C. 2011) (citing E-Gold, 
    521 F.3d at 419
    ). Here,
    however, Mr. Sullivan’s interest in acquiring access to the
    seized funds for rent and household necessities “is obviously
    far less pressing” than a defendant’s exercise of his Sixth
    Amendment right. See 
    id.
     And regarding the second factor—Mr.
    Sullivan’s private interest—the Court acknowledges that Mr.
    Sullivan does not “expect[] that this matter will be tried in
    the near future” due to the complex nature of discovery in this
    case and his anticipated “numerous pretrial motions.” Def.’s
    14
    Reply, ECF No. 31 at 5. But, as stated above, Mr. Sullivan has
    not provided any evidence demonstrating that he is unable to pay
    for rent or other household necessities without the seized
    assets. Put simply, the Court has no reason to believe that Mr.
    Sullivan will be significantly harmed if adjudication of his
    claim is delayed until a post-trial proceeding pursuant to
    Federal Rule of Criminal Procedure 32.2. Finally, the third
    factor—risk of erroneous deprivation—also does not fall in Mr.
    Sullivan’s favor. While there may inevitably be “some risk” that
    the “probable cause finding reached in a nonadversarial context
    by a magistrate judge” is erroneous, Sunrise Academy, 
    791 F. Supp. 2d at 206
    ; Mr. Sullivan’s conclusory allegation that the
    proceeds of the seized bank account are not the product of the
    criminal activity alleged in the indictment carries little
    weight. Indeed, in the declaration attached to his reply brief,
    Mr. Sullivan “acknowledge[s] that some of [his] assets were
    obtained from sale of videotape from January 6, 2021.” See
    Sullivan Decl., ECF No. 31-1 at 2. Based on the above, the Court
    thus finds that Mr. Sullivan has fallen short of the showing
    required to justify the holding of a pretrial hearing.
    II. Conclusion
    For the reasons stated above, Mr. Sullivan’s motion to
    release the seizure order related to his bank account in Utah
    15
    and to forbid seizures of other accounts, ECF No. 25, is DENIED.
    An appropriate Order accompanies this Memorandum Opinion.
    SO ORDERED.
    Signed:   Emmet G. Sullivan
    United States District Judge
    December 6, 2021
    16