CFTC v. Walsh : District Court Releases Funds Frozen in Civil Case to Pay for Attorney in Parallel Criminal Case

This Comment is about asset forfeiture in “parallel proceedings” — when the government files simultaneous civil and criminal charges against the same defendant based on the same underlying conduct. This practice often occurs in securities enforcement cases because willful violations of federal securities laws violate both civil and criminal laws. Recently, the government has chosen to use the broad civil asset forfeiture process to freeze all of a defendant's assets pretrial, even those assets not necessarily traceable to the alleged crime, which has the effect of depriving the defendant with sufficient funds to pay for a lawyer in the parallel criminal case. Once the civil freeze becomes permanent, typically the government will almost immediately move to stay the civil case until the criminal case is over, thereby depriving the defendant of the broad civil discovery rules while keeping all of his or her assets frozen. This Comment focuses on a recent case — CFTC v. Walsh — where the United States District Court for the Southern District of New York released some funds frozen in the civil case to allow the defendant to pay for an attorney in the parallel criminal case. In the end, this Comment argues that the government's asset forfeiture practice may violate the defendant's Sixth Amendment right to counsel in the criminal case. In order to resolve this problem, courts should follow the approach adopted in Walsh