687 F. Supp. 125

UNITED STATES of America, v. Wayne Franklyn Mohamed Farid CHINN, et al.

No. 87 Cr. 985.

United States District Court, S.D. New York.

June 30, 1988.

Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City, for plaintiff; Baruch Weiss, of counsel.

Cooper & Arguedas, Berkeley, Cal., for defendant Chinn; Penelope M. Cooper, Cristina C. Arguedas, of counsel.

MEMORANDUM AND ORDER

OWEN, District Judge.

On December 22, 1987, Wayne Franklyn Mohamed Farid Chinn, a director of Wed-tech Corporation, was charged, inter alia, with having received criminally improper payments from the company as a participant in a racketeering enterprise in violation of the Organized Crime Control Act of 1970, 18 U.S.C. §§ 1961-1963. The indictment further charges that pursuant to 18 U.S.C. § 1963(a)1 the money so acquired by Chinn, totaling $690,000, is subject to forfeiture upon conviction.2 In order to protect any future right to forfeit this amount, *126the government the same day applied for and was granted an Order of Restraints and Prohibitions against Chinn’s assets pursuant to 18 U.S.C. § 1963(d).3 On January 15, 1988, upon application of the parties, the restraining order was modified to permit Chinn to withdraw certain amounts from his accounts each month to cover business and living expenses.

Chinn now contends that the modified order of restraint works an impermissible restriction on his right to the assistance of counsel under the Sixth Amendment to the United States Constitution since it leaves him no assets with which to pay his lawyers, particularly because the restraint includes certain properties he bought before the period covered by the indictment. These assets include two valuable automobiles, and an interest in a limited partnership, “Palomar”, Chinn transferred to his wife after he became a target of the investigation, but before he was indicted.

I turn first to Chinn’s statutory argument that assets obtained by him before the period covered by the indictment may not be restrained prior to conviction, and that he should be permitted to use them in order to retain counsel, his wife having consented to such use of Palomar. These assets do not fall within the facial definition of forfeitable property enumerated in Section 1963(a) since they are wholly unconnected to Chinn’s alleged criminal activity. The government, however, points to 18 U.S.C. § 1963(n)4 which under certain conditions allows forfeiture, as opposed to restraint, of any asset of a defendant, and argues that if this 1986 Amendment merely codified the rule set forth in cases interpreting the 1982 version of Section 1963(a),5 Chinn’s previously obtained assets will be subject to forfeiture upon conviction under the theory 1963(n) codified. Following this theory, they contend that upon the exercise of due diligence the alleged *127fraudulently obtained proceeds, assuming them to be so, appear to be unavailable here, and therefore urge that the assets Chinn purchased earlier should be restrained now in order to preserve their availability for possible post-conviction forfeiture.

Chinn correctly observes that Section 1963(n), enacted in October 1987, cannot be applied retroactively to levy against assets he obtained before the period covered by the indictment, 1985-86. See e.g. United States v. Lizza Industries, Inc., 775 F.2d 492, 497 n. 3 (2d Cir.1985), cert. denied 475 U.S. 1082, 106 S.Ct. 1459, 89 L.Ed.2d 716 (1986). Moreover, although the Second Circuit has ruled that the RICO post-conviction forfeiture provision in place before the 1984 and 1986 Amendments imposes in ;personam liability, and that the government therefore need not trace the proceeds of racketeering activity to identifiable assets after conviction, United States v. Robilito, 828 F.2d 940, 948-49 (2d Cir.1987), cert. denied, — U.S. —, 108 S.Ct. 711, 98 L.Ed.2d 662 (1988), there is no authority permitting application of that rule where an accused has neither been tried, nor convicted.6 In the absence of any authority for pre-trial attachment of assets not specifically named in Section 1963(a), and therefore not covered by Section 1963(d), I decline to order such an extension by judicial fiat.

Accordingly, Chinn’s automobiles and the interest in Palomar, purchased prior to any alleged involvement with Wedtech, and according to his counsel, his only substantial assets, Tr. Mar. 31, 1988, pp. 2-3, are released from the Order of Prohibitions and Restraints. Given Chinn’s counsel’s observation to the court that Chinn’s “greatest interest is that these funds be released so that we might be retained to represent him,” Tr. Mar. 31, 1988, pp. 11-12, the constitutional issue raised by Chinn as to his inability to retain counsel of his choice is now moot.

Submit order on notice. All parties in this case are to appear before the court on July 18,1988 at 4:00 p.m. in Courtroom 128 in order to set a date for trial.

United States v. Chinn
687 F. Supp. 125

Case Details

Name
United States v. Chinn
Decision Date
Jun 30, 1988
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687 F. Supp. 125

Jurisdiction
United States

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