United States of America v. Undetermined Amount of U. S. Currency

FILED: August 11, 2004
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 03-1977
(CA-02-112-1)
UNITED STATES OF AMERICA,
Plaintiff - Appellant,
versus
ROBERT WARREN; VIKI WARREN; CENTRAL CAROLINA
BANK AND TRUST COMPANY; FIRST CITIZENS BANK &
TRUST COMPANY,
Claimants - Appellees,
and
UNDETERMINED AMOUNT OF U. S. CURRENCY AND FUNDS IN THE
FOLLOWING ACCOUNTS: FIRST UNION NATIONAL BANK, account
number xxxxxxxxxx, held in the name of or on behalf of
Mountain Top Farms, LLC; FIRST UNION NATIONAL BANK, account
number xxxxxxxxxx, held in the name of or on behalf of R & V
Warren Farms, Inc.; FIRST UNION NATIONAL BANK, account
number, xxxxxxxxxx, held in the name of or on behalf of R &
V Warren Farms, Inc.; FIRST UNION NATIONAL BANK, account
number xxxxxxxxxx, held in the name of or on behalf of R & V
Warren Farms, Inc.; FIRST UNION NATIONAL BANK, account
number xxxxxxxxxx, held in the name of or on behalf of R & V
Warren Farms, Inc.; FIRST UNION NATIONAL BANK, account
number xxxxxxxxxx, held in the name of or on behalf of
Warren and Sandoval Farms, LLC; FIRST CITIZENS BANK & TRUST
COMPANY, account number xxxxxxxxxx, held in the name of or
on behalf of PVR Produce, Inc.; FIRST CITIZENS BANK & TRUST
COMPANY, account number xxxxxxxxxx, held in the name of or
on behalf of R & V Warren Farms, Inc., Cattle Division;
FIRST CITIZENS BANK & TRUST COMPANY, account number
xxxxxxxxxx, held in the name of or on behalf of R & V Warren
Trucking Co., Inc.; CENTRAL CAROLINA BANK AND TRUST COMPANY,
as successor in interest to First Union National Bank
account number xxxxxxxxxx, held in the name of or on behalf
of Mountain Top Farms, LLC; CENTRAL CAROLINA BANK AND TRUST

-- 1 of 18 --

COMPANY, as successor in interest to First Union National
Bank account number xxxxxxxxxx, held in the name of or on
behalf of Warren and Sandoval Farms, LLC; THE HARTFORD
FINANCIAL SERVICES GROUP, INCORPORATED, annuity policy
number xxxxxxxxxx (associated with First Union National Bank
account number xxxxxxxxxx,
Defendants.
O R D E R
The Court amends the caption of its opinion filed July 21,
2004, to delete references in the caption to specific financial
account numbers.
For the Court - By Direction
/s/ Patricia S. Connor
Clerk

-- 2 of 18 --

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 UNITED STATES OF AMERICA,
Plaintiff-Appellant,
v.
UNDETERMINED AMOUNT OF U. S.
CURRENCY AND FUNDS IN THE
FOLLOWING ACCOUNTS: FIRST UNION
NATIONAL BANK, Account number
xxxxxxxxxxxxx, held in the name
of or on behalf of Mountain Top
Farms, LLC; FIRST UNION NATIONAL
BANK, Account number
xxxxxxxxxxxxx, held in the name
of or on behalf of R & V Warren
Farms, Inc.; FIRST UNION NATIONAL
BANK, Account number No. 03-1977  xxxxxxxxxxxxx, held in the name
of or on behalf of R & V Warren
Farms, Inc.; FIRST UNION NATIONAL
BANK, Account number xxxxxxxxx,
held in the name of or on behalf of
R & V Warren Farms, Inc.; FIRST
UNION NATIONAL BANK, Account
number xxxxxxxx, held in the name
of or on behalf of R & V Warren
Farms, Inc.; FIRST UNION NATIONAL
BANK, Account number
xxxxxxxxxxxxx, held in the name
of or on behalf of Warren and
Sandoval Farms, LLC; FIRST
CITIZENS BANK & TRUST COMPANY,
Account number xxxxxxxxxxxx, 

-- 3 of 18 --

 held in the name of or on behalf of
PVR Produce, Inc.; FIRST CITIZENS
BANK & TRUST COMPANY, Account
Number xxxxxxxxxxxx, held in the
name of or on behalf of R & V
Warren Farms, Inc., Cattle Division;
FIRST CITIZENS BANK & TRUST
COMPANY, Account number
xxxxxxxxxxxx, held in the name of
or on behalf of R & V Warren
Trucking Co., Inc.; CENTRAL
CAROLINA BANK AND TRUST
COMPANY, as successor in interest to
First Union National Bank account
number xxxxxxxxxxxxx, held in the
name of or on behalf of Mountain
Top Farms, LLC; CENTRAL
CAROLINA BANK AND TRUST
COMPANY, as successor in interest to 
First Union National Bank account
number xxxxxxxxxxxxx, held in the
name of or on behalf of Warren and
Sandoval Farms, LLC; THE
HARTFORD FINANCIAL SERVICES
GROUP, INCORPORATED, annuity
policy number xxxxxxxxx
(associated with First Union
National Bank account number
xxxxxxxx),
Defendants-Appellees,
and
ROBERT WARREN; VIKI WARREN;
CENTRAL CAROLINA BANK AND TRUST
COMPANY; FIRST CITIZENS BANK &
TRUST COMPANY,
Claimants-Appellees. 
2 UNITED STATES v. UNDETERMINED AMOUNT

-- 4 of 18 --

Appeal from the United States District Court
for the Western District of North Carolina, at Asheville.
Lacy H. Thornburg, District Judge.
(CA-02-112-1).
Argued: June 2, 2004
Decided: July 21, 2004
Before MOTZ and KING, Circuit Judges, and
David R. HANSEN, Senior Circuit Judge of the
United States Court of Appeals for the Eighth Circuit,
sitting by designation.
Vacated and remanded by published opinion. Judge Motz wrote the
opinion, in which Judge King and Senior Judge Hansen joined.
COUNSEL
ARGUED: Thomas Richard Ascik, Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Asheville, North
Carolina, for Appellant. John Keating Wiles, CHESHIRE, PARKER,
SCHNEIDER, BRYAN & VITALE, Raleigh, North Carolina, for
Appellees. ON BRIEF: Robert J. Conrad, Jr., United States Attorney,
Asheville, North Carolina, for Appellant. Sean P. Devereux, Ashe-
ville, North Carolina, for Appellee Robert Warren.
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
In this civil forfeiture case, the Government appeals an order
directing that it release to the original owners property seized pursu-
ant to a properly obtained warrant. Because the district court clearly
erred in holding that the original owners’ likely hardship from the
3 UNITED STATES v. UNDETERMINED AMOUNT

-- 5 of 18 --

Government’s continued possession of the seized property out-
weighed the risk of loss of that property, we vacate this order and
remand for further proceedings.
I.
Robert G. Warren and his wife Viki B. Warren operate R & V
Warren Farms, a large farming concern devoted primarily to growing
tomatoes, as well as a number of smaller, related businesses. From
1997 through 2001, R&V Warren Farms enrolled in the Federal Crop
Insurance Program ("FCIP"), a government program funded by the
Federal Crop Insurance Corporation ("FCIC"), which helps farmers
insure against unavoidable losses caused by natural disaster. Under
the FCIP, a farmer purchases insurance from a private insurance com-
pany, but the FCIC subsidizes the farmer’s premiums, compensates
the private insurance company for certain administrative expenses,
and reinsures a portion of the risk.
The program essentially works by ascertaining a benchmark — the
amount of a crop that a field produces under normal conditions — and
indemnifying the farmer when the field produces less than this bench-
mark as a result of natural disaster. Because the FCIC generally deter-
mines payouts by the differential between the benchmark and actual
production, it sets forth specific guidelines explaining how to measure
and document these amounts. See 7 C.F.R. §§ 400.51-400.57 (2004);
7 C.F.R. § 457.8 (2004).
In the present case, the Government alleges that the Warrens inten-
tionally skewed the benchmark and production numbers for their
farms from crop year 1998 through crop year 2001 and thereby
received (or sought to receive)1 higher payouts than permitted under
their FCIP insurance policies. Specifically, the Government asserts
that the Warrens accomplished this in part by falsely attributing pro-
duction from certain farms that had experienced a loss to other farms,
thereby lowering production and increasing pay-outs at the "loss"
farms (in which production amounts were falsely decreased) and, con-
1The Warrens filed claims totaling $4,959,444 for the 2001 crop year,
but the claims involving two counties, which account for $3,805,610,
have not yet been paid and are presently in arbitration.
4 UNITED STATES v. UNDETERMINED AMOUNT

-- 6 of 18 --

comitantly, falsely increasing production amounts at other farms,
which would raise the benchmark for those farms and potentially
increase payouts in the future.
In March 2002, the Government applied for seizure warrants to
authorize seizure of some of the Warrens’ property, identified as sub-
ject to forfeiture. The Government supported its application for the
seizure warrants with an extensive affidavit describing the Warrens’
alleged misconduct involving the FCIP. This affidavit also detailed
vehicles and bank accounts, which the Government sought to seize,
and real property on which the Government proposed to place lis pen-
dens. A magistrate judge concluded that the affidavit "establish[ed]
probable cause to believe" that the bank accounts were "subject to sei-
zure and that grounds exist[ed] for the issuance" of a warrant.
Accordingly, the judge authorized issuance of a seizure warrant. The
Government proceeded to seize $303,162.28 from the listed bank
accounts; the Government also filed lis pendens against the listed real
property.
Shortly thereafter, the Government filed complaints for civil forfei-
ture in rem against this real property, vehicles, and bank accounts.
The complaint against the bank accounts sought forfeiture pursuant to
18 U.S.C. § 981(a)(1)(A) (2000 & Supp. I), which permits forfeiture
of property "involved in" money laundering, and 18 U.S.C.
§ 981(a)(1)(C)(2000), which permits forfeiture of property "derived
from proceeds" resulting from making false statements to the FCIC
in violation of 18 U.S.C. § 1014 (2000). The complaint alleges that
all of the funds in the bank accounts are forfeitable because "in whole
or in part" they constituted the direct proceeds of the FCIP fraud or
were involved in or facilitated money laundering transactions. Gov-
ernment affidavits similarly attest that the amounts in the bank
accounts were "commingled [with] the illegally obtained crop insur-
ance payments" and were "used to promote and carry on money laun-
dering offenses" and that illegally obtained crop insurance payments
were used to purchase or refinance the real property through cash
payments in an effort to "conceal the origin" of that money.
The Warrens responded by filing an answer, as claimants to the
property, asserting their interest in the seized property and objecting
to its seizure. They also filed a motion asking the court to release
5 UNITED STATES v. UNDETERMINED AMOUNT

-- 7 of 18 --

"$350,000 from the seized [bank] accounts" so that they could pay
their attorneys’ fees. In support of this motion, the Warrens asserted
that they satisfied the requirements for "hardship" release set forth in
18 U.S.C. § 983(f) (2000), which permits release pending the comple-
tion of forfeiture proceedings in limited circumstances.2
After the parties submitted additional memoranda and affidavits,
including an affidavit from Robert Warren and an affidavit under seal
from the Government, the district court held a hearing on the matter.
On July 7, 2003, the court issued a memorandum and order directing
the Government to release the amounts seized from the bank
accounts, totaling $303,162.28, to an interest bearing account. The
court directed that:
The attorneys for [the Warrens] shall present to the Clerk of
Court unpaid bills for services rendered in connection with
the criminal investigation as well as this action and any
other related, pending civil forfeiture actions. Upon presen-
tation of those bills, the Clerk of Court shall disburse the
amount requested, after review by and written approval of
this Court, and shall seal the invoices and any supporting
documentation until further Order of this Court.
The Government noted a timely appeal.3 We have jurisdiction over
this "pretrial asset restraining order" under 28 U.S.C.
§ 1292(a)(1)(2000). See In re Assets of Martin, 1 F.3d 1351, 1355 (3d
Cir. 1993) (collecting cases).
2In this motion, the Warrens alternatively asserted rights under United
States v. Farmer, 274 F.3d 800, 805 (4th Cir. 2001) (holding that a crimi-
nal defendant has a due process right to a hearing to challenge probable
cause as to untainted assets seized pursuant to civil forfeiture when those
assets are needed to hire counsel in his criminal case). The district court,
however, acted pursuant to § 983(f), not Farmer, and on appeal, the War-
rens have disclaimed reliance on Farmer.
3On October 8, 2003, after appealing the judgment in this case, the
Government indicted the Warrens on criminal charges stemming from
their involvement with FCIP program. No claims involving the criminal
case are before us.
6 UNITED STATES v. UNDETERMINED AMOUNT

-- 8 of 18 --

II.
Congress enacted § 983(f) as part of the Civil Asset Forfeiture
Reform Act of 2000, Pub. L. No. 106-185, § 2, 114 Stat. 202, 208-09
(2000), to provide a mechanism for the release of property during the
pendency of a civil forfeiture proceeding in certain circumstances in
which the Government’s continued possession would create a sub-
stantial hardship on persons claiming an interest in the property. The
statute provides:
(1) A claimant under subsection (a) is entitled to immedi-
ate release of seized property if —
(A) the claimant has a possessory interest in the
property;
(B) the claimant has sufficient ties to the com-
munity to provide assurance that the property will
be available at the time of the trial;
(C) the continued possession by the Government
pending the final disposition of forfeiture proceed-
ings will cause substantial hardship to the claim-
ant, such as preventing the functioning of a
business, preventing an individual from working,
or leaving an individual homeless;
(D) the claimant’s likely hardship from the con-
tinued possession by the Government of the seized
property outweighs the risk that the property will
be destroyed, damaged, lost, concealed, or trans-
ferred if it is returned to the claimant during the
pendency of the proceeding; and
(E) none of the conditions set forth in paragraph
(8) applies.
. . . . .
7 UNITED STATES v. UNDETERMINED AMOUNT

-- 9 of 18 --

(8) This subsection shall not apply if the seized property
—
(A) is contraband, currency, or other monetary
instrument, or electronic funds unless such cur-
rency or other monetary instrument or electronic
funds constitutes the assets of a legitimate business
which has been seized;
(B) is to be used as evidence of a violation of the
law;
(C) by reason of design or other characteristic, is
particularly suited for use in illegal activities; or
(D) is likely to be used to commit additional
criminal acts if returned to the claimant.
18 U.S.C. § 983(f)(1), (8). To obtain release under this statute, a
claimant must submit a petition to the district court setting forth "the
basis on which" the claimant has met all of these "requirements" for
release. § 983(f)(3)(A),(B). The district court, in turn, can order
release of properly seized property only if "the claimant demonstrates
that the requirements . . . have been met." § 983(f)(6).
The Government challenges the district court’s finding that the
Warrens satisfied the requirements of § 983(f)(1)(C), (D), (E), and
(f)(8). With respect to § 983(f)(1)(E) and (f)(8), the district court
found that the amounts in the bank accounts seized by the Govern-
ment constituted "the assets of" the Warrens’ "legitimate" tomato
farming business, § 983(f)(8), and for this reason the statutory prohi-
bition against the release of currency and the like did not bar release
of the bank account funds. The court further found that the Warrens
had satisfied the requirements of § 983(f)(1)(C) by demonstrating that
"[c]ontinued possession by the Government of the currency will result
in a substantial hardship to the [Warrens] who will be forced to sell
their home and liquidate their remaining bank accounts and retirement
plans [to pay their attorneys] if the funds are not released." Finally,
the court found that the Warrens had also satisfied § 983(f)(1)(D) by
8 UNITED STATES v. UNDETERMINED AMOUNT

-- 10 of 18 --

proving that this hardship outweighed the risk that the released funds
would be dissipated or lost.
We review the district court’s interpretation of statutory provisions
de novo, e.g., Scott v. United States, 328 F.3d 132, 137 (4th Cir.
2003), but will reverse its findings of fact only if we find them clearly
erroneous, see e.g., HSBC Bank USA v. F&M Bank Northern Vir-
ginia, 246 F.3d 335, 338 (4th Cir. 2001); see also United States v.
Funds Held in the Name or for the Benefit of Wetterer, 210 F.3d 96,
106 (2d Cir. 2000) (reviewing legal determination de novo and factual
findings for clear error in applying civil forfeiture statute); cf. United
States v. Morgan, 224 F.3d 339, 342 (4th Cir. 2000) (applying crimi-
nal forfeiture statute).
III.
We need not here address the district court’s holdings as to
§ 983(f)(1)(C), (E), or (f)(8) because we conclude that the court
clearly erred in determining that the Warrens satisfied the require-
ments of § 983(f)(1)(D). See § 983(f)(requiring satisfaction of all of
the listed requirements). Indeed, we believe the district court erred
repeatedly in the factual findings it made with respect to those
requirements. First, the court erred in finding that there was little to
no "risk" that the bank account funds would be lost or dissipated if
released to the Warrens. Second, it erred in assessing the hardship
suffered by the Warrens from the Government’s continued possession
of the seized property. Finally, the court erred in finding that the War-
rens’ hardship outweighed the risk that the released funds would be
lost or dissipated. We consider each of these errors in turn.
A.
We note at the outset that § 983(f) places great emphasis on ensur-
ing the preservation of any released property pending final disposition
of forfeiture proceedings. Thus, in addition to § 983(f)(1)(D), which
requires the district court to weigh the "risk" of loss, two other provi-
sions of the statute also seek to ensure that released property will be
available to the Government if the court ultimately orders forfeiture.
A claimant must additionally demonstrate "sufficient ties to the com-
munity to provide assurance that the property will be available at the
9 UNITED STATES v. UNDETERMINED AMOUNT

-- 11 of 18 --

time of [the forfeiture] trial." § 983(f)(1)(B). Moreover, the statute
gives a court the authority to "enter any order necessary to ensure that
the value of the property is maintained while the forfeiture action is
pending." See § 983(f)(7)(A).4
In the present case, the Warrens concede that they sought use of the
released bank account funds to pay attorneys’ fees, and the district
court’s order directing the distribution of the released funds antici-
pates, and in fact specifically provides for, that use. The "risk" of
"loss" or dissipation of these funds, therefore, appears to be almost
certain.
Nevertheless, the district court found this risk negligible. The court
reasoned that even if the Warrens spent all of the seized bank account
funds on attorneys’ fees prior to the civil forfeiture trial, if the court
ultimately ordered forfeiture, it could substitute other property owned
by the Warrens for those funds and in that way satisfy the forfeiture
order. Section 983(f), however, gives no indication that it permits
substitution of assets in this manner.
But even if substitution of assets might in some circumstances be
appropriate, the risk of loss here is clearly significant. The district
court could only reach a contrary conclusion by (1) forecasting the
amount to which the Government would be entitled if successful at
a civil forfeiture trial and (2) regarding as a proper substitute for the
released funds other Warren property also subject to forfeiture.5 Spe-
4A court may, of course, order release of liquid assets — currency,
monetary instruments, and electronic funds — which probably would not
be available for return in precisely the same form. See § 983(f)(8)(A).
But a court can only order the release of currency and the like if they
constitute the "assets of a legitimate business which has been seized." Id.
In this context, it seems unlikely the value of the currency would be
"lost"; rather, a "legitimate business" would presumably use the currency
to continue operating as a going concern. Accordingly, if a court ulti-
mately ordered forfeiture, business assets would remain available to
assure return to the government of an amount equal to the previously
seized currency.
5The district court also based its determination that there was little risk
of loss on the fact that "the sum of $3.8 million is owed to the Claimants
10 UNITED STATES v. UNDETERMINED AMOUNT

-- 12 of 18 --

cifically, the district court predicted that the Government would ulti-
mately be entitled to forfeiture of only $2,074,062 — the amount of
FCIC insurance payouts that the forfeiture complaint identified as
obtained through false statements. And the court believed that the
more than $2 million in real property owned by the Warrens on which
the Government had attached lis pendens "assure[d] that property
equal in value" to the amounts in the bank accounts would "be avail-
able at the time of trial," eliminating any risk of loss of the funds in
the bank accounts.
We believe it far too early to determine what amount the Govern-
ment may be able to prove subject to forfeiture at trial.6 But even if
by Fireman’s Fund which is withholding payment pending the investiga-
tion." That $3.8 million, however, represents the Warrens’ claim against
a private insurance company participating in FCIP; we find it highly
unlikely that, if the Government succeeds in proving that it is entitled to
forfeiture of the Warrens’ assets, this insurer would make any further
payments to the Warrens.
6Although we need not and do not here decide the total amount to
which the Government may ultimately be entitled, we note that the ques-
tion appears more complicated than the district court’s analysis suggests.
The district court arrived at what it determined to be the maximum for-
feitable sum ($2,074,062) by totaling the amount of fradulently obtained
insurance payments as described in the Government affidavit used to
establish probable cause for the seizure; at trial, however, the Govern-
ment may offer additional evidence on this and other points affecting the
value of forfeitable property. See § 983(c)(2). Further, the Government
contends that the entire amount received by the Warrens through the
FCIP (roughly $8.5 million) is forfeitable as "proceeds traceable to" the
Warrens’ false statements to the FCIC in violation of § 1014. See 18
U.S.C. § 981(a)(1)(C); cf. United States v. 3814 NW Thurman Street, 164
F.3d 1191, 1196 (9th Cir. 1999) (viewing entire amount of loan made by
bank in reliance on claimant’s false statements as the "proceeds" of vio-
lation of 18 U.S.C. § 1014 and other statutes). And finally, the Govern-
ment submitted evidence that the Warrens used the real property against
which it filed lis pendens to launder the illegally obtained funds, raising
the possibility that all of that real property is properly forfeitable as well.
See 18 U.S.C. § 981(a)(1)(A) (entitling the Government to forfeiture of
"[a]ny property . . . involved in a transaction . . . in violation of" the
money laundering statutes) (emphasis added).
11 UNITED STATES v. UNDETERMINED AMOUNT

-- 13 of 18 --

the district court’s finding on this question did not constitute error,
clearly the court did err in allowing other forfeitable property to sub-
stitute for the released bank account funds.
A magistrate judge found "probable cause to believe" that all of the
Warren property described in the Government’s affidavit — the real
property and the bank accounts — was "subject to seizure." The dis-
trict court never held this probable cause finding erroneous. Thus, if
the Government prevails at the civil forfeiture trial, it will be entitled
to forfeiture of the Warrens’ listed real property and listed bank
account funds. See § 981(f) ("All right, title, and interest in property
[subject to forfeiture] . . . shall vest in the United States upon commis-
sion of the act giving rise to forfeiture under this section."). The avail-
ability of the listed forfeitable real property cannot compensate the
Government for possible dissipation of the listed forfeitable bank
account funds. See United States v. Swank Corp., 797 F. Supp. 497,
502-03 (E.D. Va. 1992) (holding in the context of in personam crimi-
nal forfeiture that "[a]ny order of forfeiture for substitute assets would
have to be satisfied out of something which was not itself subject to
forfeiture").
Accordingly, the district court clearly erred in finding that the War-
rens demonstrated little or no risk of dissipation of the bank account
funds; indeed, the "risk" was nearly guaranteed.
B.
The district court also erred in evaluating the "likely hardship"
faced by the Warrens from the Government’s continued possession of
the bank account funds. Section 983(f)(1)(D) requires the court to
assess the claimants’ "likely hardship" in order to determine whether
that hardship outweighs the risk of loss. Here, the district court
reviewed the Warrens’ circumstances and determined that they had
shown a "substantial hardship" as required by § 983(f)(1)(C). The
court then relied on its finding of "substantial hardship" under
§ 983(f)(1)(C) to conclude that this hardship outweighed what it
viewed as a near-zero risk of loss.7
7The district court merely recited its finding that the Warrens satisfied
the "substantial hardship" requirement of § 983(f)(1)(C) because
12 UNITED STATES v. UNDETERMINED AMOUNT

-- 14 of 18 --

Section 983(f)(1)(D), however, clearly anticipates some instances
in which a hardship, though "substantial," will not be severe enough
to outweigh the risk of loss. Therefore, even accepting the district
court’s finding of substantial hardship under § 983(f)(1)(C), we must
determine if the Warrens produced sufficient evidence to sustain the
district court’s implicit finding as to the relative severity of the "likely
hardship" they faced.
Although § 983(f) never defines "hardship," it does provide some
examples of the hardship Congress deemed sufficient to provide
grounds for release of seized property, i.e. hardship "preventing the
functioning of a business, preventing an individual from working, or
leaving an individual homeless." § 983(f)(1)(C). These examples sup-
ply a basis on which to assess the Warrens’ asserted hardship.
Before the district court, prior to their indictment on any criminal
charges, the Warrens represented that they needed the bank account
funds in part to pay "back bills," including legal work performed in
connection with the civil forfeiture proceeding. In response, the dis-
trict court ordered the release of funds to pay for legal services,
including those "rendered in connection with . . . this action and any
other related, pending civil forfeiture actions." Although, as recounted
above, after noting its appeal in this case, the Government indicted
the Warrens, and the district court has since interpreted its order to
permit the release of funds to pay the Warrens’ attorneys’ fees in their
criminal case, this appeal challenges only the district court’s pre-
indictment finding that their inability to hire counsel to assist them "in
connection with" the civil forfeiture case, and a possible future crimi-
nal action, constituted a hardship outweighing the risk of loss.
Moreover, although the bank accounts purportedly belong to War-
ren corporate entities, the Warrens have signatory authority over the
accounts and have made no effort to distinguish between amounts that
"[c]ontinued possession by the Government of the currency will result in
a substantial hardship to the Claimants who will be forced to sell their
home and liquidate their remaining bank accounts and retirement plans
if the funds are not released," and then noted in conclusory fashion that
"[t]his hardship outweighs the risk that pending trial, property equal in
value to the currency released will be destroyed." (emphasis added).
13 UNITED STATES v. UNDETERMINED AMOUNT

-- 15 of 18 --

they intend to use for their personal attorneys’ fees and those (if any)
to be paid for legal services provided to the corporate entities. Nor
have the Warrens suggested that the continued operation of their cor-
porate entities necessitated release of the bank account funds. Indeed,
the district court stated that the amounts released were "not to be used
to continue the business." Thus, the Warrens do not contend that they
sought release of the seized funds to alleviate the hardship of being
forced to close their businesses.
In fact, the Warrens did not, and do not, even assert that, absent
release of the bank account funds, they could not pay their attorneys.
Rather, counsel for the Warrens acknowledged before the district
court that the Warrens "could pay" their attorneys "and they’d proba-
bly have [$]125[,000], $130,000 left over." The district court
observed that the Warrens "own a home worth between $150,000 and
$200,000 and have [non-seized] bank accounts, business and per-
sonal, and retirement accounts which total approximately $78,000."
Thus, the Warrens’ asserted hardship is not that they are unable to pay
their attorneys, but that they might have to liquidate certain assets in
order to do so.8
This, then, is the substance of the Warrens’ claimed hardship:
Absent release of the seized bank account funds, they might need to
liquidate certain assets to pay attorneys’ fees, at least some of which
are personal attorneys’ fees incurred to pursue their interests in a civil
forfeiture action. Clearly, the Warrens’ hardship — the possible need
to pay their attorneys’ fees in a civil forfeiture action — falls far short
8In this connection, we cannot accept the district court’s finding that
the Warrens would, in fact, have to "sell their home and liquidate [all of]
their remaining bank accounts and retirement plans" to pay their attor-
neys if the court did not order release of the seized bank account funds.
The district court placed the burden of proof on the Government to "pre-
sent . . . evidence that the Claimants have other substantial assets with
which to hire counsel" and based its determination that the Warrens did
not have other assets on the fact that the government "did not" present
such evidence. This was error. Under § 983(f)(6), the Warrens clearly
bore the burden to "demonstrate[ ]" their hardship and that they did not,
actually have assets available to pay counsel. § 983(f)(6). At oral argu-
ment, the Warrens could offer no explanation as to why they could not,
if necessary, simply take out a mortgage on their home.
14 UNITED STATES v. UNDETERMINED AMOUNT

-- 16 of 18 --

in degree and kind from the hardships recognized by Congress in
§ 983(f). The latter all involve serious dislocation of claimants’ daily
existence; the Warrens’ asserted hardship does not.
Moreover, in contrast to the statutory exemplars of hardship, there
is some indication that the statute does not generally contemplate
court-ordered release of seized property to pay attorneys fees arising
from a civil forfeiture action.9 In particular, Congress has explicitly
provided for the legal "[r]epresentation" of civil forfeiture claimants
under certain conditions. See 18 U.S.C. § 983(b) (providing that when
a claimant is "financially unable to obtain representation by counsel,"
a court may, if the court has appointed counsel in a related criminal
case, "authorize [appointed] counsel to represent" the claimant in the
civil forfeiture claims and that when "the property subject to forfei-
ture . . . is being used" by the claimant as "a primary residence," the
court shall, at the claimant’s request, "insure that the person is repre-
sented by an attorney for the Legal Services Corporation with respect
to the claim"). Congress would hardly have expressly permitted
appointment of legal counsel for civil forfeiture claimants in § 983(b)
if it had anticipated that released assets could generally be used for
this purpose under § 983(f).
Nor do we agree with the district court that the Warrens’ asserted
hardship is of constitutional dimension. Even if we were to accept the
district court’s dubious conclusion that the Warrens had a pre-
indictment Sixth Amendment right to counsel at the time the court
ordered the funds released,10 the fact remains that a criminal defen-
9The Government argues that a claimant’s purported inability to pay
attorneys’ fees can never, as a matter of law, constitute a hardship war-
ranting release under § 983(f). We need not and do not decide whether
the need for funds to pay attorneys can ever constitute a statutorily-
recognized hardship; for purposes of the present appeal, we assume that
it can.
10The district court observed that the Warrens voluntarily used
untainted funds to avoid foreclosure on properties subject to lis pendens,
thereby generating a benefit for the Government. The court then
appeared to reason that, because the Warrens could have instead used the
untainted funds to pay counsel and criminal defendants have a qualified
Sixth Amendment right to use untainted funds to pay counsel, the War-
rens should now be permitted to "use . . . the [tainted] funds sought
which are necessary to their defense by counsel of choice."
15 UNITED STATES v. UNDETERMINED AMOUNT

-- 17 of 18 --

dant has no constitutional right to use forfeitable property to pay
counsel. See Caplin & Drysdale, Chartered v. United States, 491 U.S.
617, 624-33 (1989); United States v. Monsanto, 491 U.S. 600, 614-16
(1989); Farmer, 274 F.3d at 802-03.
For these reasons, assuming that the need to pay attorneys’ fees can
properly be considered a hardship under § 983(f), the Warrens have
utterly failed to demonstrate that their purported hardship should be
afforded much weight for purposes of the balancing requirement set
forth in § 983(f)(1)(D). The district court clearly erred in finding to
the contrary.
C.
Finally, we turn to the balancing requirement itself. Our analysis
above requires the conclusion that the district court erred in finding
that the Warrens demonstrated, as required by § 983(f)(1)(D), that
their "likely hardship" from the Government’s continued possession
of the seized bank account funds outweighed the "risk" that those
seized funds would be lost or dissipated if released to them. Indeed,
the risk of dissipation seems almost certain and plainly not out-
weighed by the Warrens’ limited asserted hardship.
IV.
In sum, we hold that the district court clearly erred in finding that
the Warrens had satisfied the requirements of § 983(f)(1)(D). Accord-
ingly, we vacate the district court’s order releasing the seized bank
account funds and remand for further proceedings consistent with this
opinion.
VACATED AND REMANDED
16 UNITED STATES v. UNDETERMINED AMOUNT

-- 18 of 18 --