924 F. Supp. 2d 648
D. Maryland2013Background
- Mr. Hailey was convicted of wire fraud, money laundering, and Clean Air Act violations; a preliminary forfeiture of assets was ordered.
- Mrs. Hailey claimed an interest in some forfeited assets and challenged discovery and forfeiture-related procedures.
- The government sought to compel discovery under 21 U.S.C. § 853(m) and to dismiss Mrs. Hailey’s claims, plus seek § 853(n)(3) pleading and discovery authorization.
- The court addressed spousal privilege, the propriety of dismissing various assets, pleading deficiencies, and discovery mechanics.
- Asset-specific disputes included substitute assets and whether preexisting interests exist; the court granted in part the government’s motions and denied others.
- The court ordered amendment of Mrs. Hailey’s petition and authorized discovery following amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the adverse spousal testimony privilege applies in a forfeiture deposition | Hailey asserts the privilege against adverse testimony should bar deposition | Government argues the privilege is limited and not triggered by forfeiture proceedings | Privilege does not apply; deposition compelled |
| Whether to dismiss Mrs. Hailey’s claims to certain assets | Claims should survive; policy reasons to allow hearing | Claims lack preexisting or superior interest; assets vest in government | Dismissal granted for assets 4, 8, 13, 14, 19, 20, 23, 33, 34, 35, 36, 37, 153; asset 86 denied |
| Whether amendment of the § 853(n)(3) petition is required | Petition is sufficiently detailed | Need more precise pleading to state interest and basis under § 853(n)(6) | Petition must be amended to specify nature of interest, employment basis, and § 853(n)(6) basis; amendment required |
| Whether discovery should be allowed before or after amendment | Discovery useful to resolve factual issues about funds and provenance | Discovery should await clarified petition | Discovery ordered to proceed after amendment under Rule 32.2(b); parties may conduct civil-rule discovery afterwards |
Key Cases Cited
- United States v. Yerardi, 192 F.3d 14 (1st Cir.1999) (forfeiture context; adverse spousal testimony privilege depends on criminal stakes; affidavit can negate privilege)
- Trammel v. United States, 445 U.S. 40 (U.S. 1980) (confirms two spousal privileges and strict construction of privilege against adverse testimony)
- United States v. Cherry, 330 F.3d 658 (4th Cir.2003) (forfeiture is penal; criminal forfeiture distinct from criminal conviction; affects privilege)
- United States v. McHan, 345 F.3d 262 (4th Cir.2003) (taint/relat back in substitute assets under forfeiture)
- United States v. Oregon, 671 F.3d 484 (4th Cir.2012) (rights of third-party claimants in § 853(n) proceedings; asset interests vesting)