consent to the act, have knowledge of the act, or prevent the
act. Therefore, they assert that they are innocent owners of
property — their earned attorney's fees.
This court, however, cannot agree with this analysis. The
attorneys are not property owners whose property, without their
knowledge or consent, was used for an illicit purpose. The
Government acquired an interest in all monies and all proceeds at
the time those funds were used to violate the drug laws. United
States v. $84,000 U.S. Currency, 717 F.2d 1090 (7th Cir. 1983),
cert. denied, ___ U.S. ___, 105 S.Ct. 131, 83 L.Ed.2d 71 (1984).
See 21 U.S.C. § 881(h). The forfeiture actually occurs at the
moment of illegal use and no third party can acquire a legally
recognizable interest in the property after the activity that
subjects it to forfeiture. United States v. One Piece of Real
Estate, 571 F. Supp. 723 (W.D.Tex. 1983). Therefore, if these
"tainted" funds are used to pay the attorneys, the Government has
an interest in them which it will seek to establish in the
forfeiture proceedings. The attorneys are not innocent owners,
but may establish their adverse interest in the funds by
establishing that untainted legal funds were used to pay them for
their services and, therefore, the funds are property not subject
The legislative history of section 881 does not suggest a
different interpretation. Congress amended section 881 in 1978 to
include the categories of "all monies" and "all proceeds," but
there is no discussion or treatment of attorney's fees within the
new terms. Joint Explanatory Statement, 124 Cong.Rec. S17647
(Oct. 7, 1978), 1978 U.S.Code Cong. & Adm.News 9518. Congress has
acted consistently to attack the economic aspects of drug crimes
and has sought to "increase the use of forfeiture and criminal
fines. . . ." H.R. 98-845, 98th Cong., 2d Sess. at 1 (Committee
on the Judiciary). The Committee on the Judiciary discussed
attorney's fees in the context of the RICO amendments, but did
not settle existing court conflicts regarding restraining orders
and the right to retain counsel. Id. at 19, n. 1.
The Report of the Senate Judiciary Committee, in addressing the
related forfeiture provisions of RICO, states that third party
claims to property will prevail where the third party acquired
his or her legal interest after the acts giving rise to the
forfeiture, but did so in the context of a bona fide purchase for
value and had no reason to believe that the property was subject
to forfeiture. It has been held that an indictment constitutes
notice that the assets are subject to forfeiture. United States
v. Raimondo, 721 F.2d 476 (4th Cir. 1983), cert. denied, ___ U.S.
___, 105 S.Ct. 133, 83 L.Ed.2d 74 (1984). The notice is no less
when the complaint in a forfeiture action contains allegations
that virtually all of the assets of the person named were
acquired through illegal drug deals. Notice that assets may have
been so acquired defeats the notion of an innocent and bona fide
purchaser for value. That is particularly true when the transfer
of the assets under siege has not yet been effected.
Finally, Hilt's attorneys have argued that to permit forfeiture
under section 881 of any fees paid them would render the statute
unconstitutional in several respects. The attorneys assert their
own constitutional rights would be infringed by the forfeiture of
fees. They argue that they would be deprived of their property,
the fees, without due process. The Government, however, has
asserted rights in the money at issue and both parties will be
permitted to participate in the forfeiture proceedings. The
attorneys further argue that the forfeiture would constitute
government interference in their right to practice their
profession. The court is not persuaded that the eventual
forfeiture of money paid to attorneys which has been determined
to be derived from drug crimes creates unwarranted government
interference with the attorneys' practice of law.
Hilt's constitutional rights are also raised. Hilt's Sixth
Amendment right to
assistance of counsel in a criminal trial is not applicable to
the civil case currently before the court. While the court does
not resolve this issue today, the purpose of the forfeiture
statutes is to attack the economic base of the illicit drug
industry and Hilt's right to choose his counsel may be dictated
by his ability to use legally obtained resources to pay his
The attorney-client relationship between Hilt and his attorney
is also alleged to be destroyed by the threat of fee forfeiture.
Generally, information about the fees paid to an attorney is not
considered privileged information and its production does not
destroy the attorney-client relationship. In Re Witnesses Before
Special March 1980 Grand Jury, 729 F.2d 489, 492 (7th Cir. 1984).
The attorneys argue further that Hilt's inability to retain
counsel in this forfeiture proceeding will deny him due process.
They assume, apparently, that the threat of forfeiture of fees
and adverse publicity will deprive Hilt of counsel and leave him
to face the forfeiture proceedings pro se. If all competent
attorneys refuse to accept Hilt as a client and he is indigent,
counsel may be appointed.
In brief, this court cannot grant the motion to exclude all
attorney's fees and litigation costs from a potential forfeiture
under section 881. If the fees prove to be monies or proceeds
from illicit drug transactions, this court has no power to
exclude them from forfeiture.
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