Argued: March 7, 2013
Daniel R. Bonventre appeals from the July 5, 2012 order of the District Court for the Southern District of New York (Jones, Judge) denying his motion for a Monsanto hearing in his civil action (to prevent forfeiture of monies allegedly needed to fund his defense in a companion criminal case). We clarify the threshold requirement for motions for Monsanto hearings in criminal in personam actions or Monsanto-like hearings in civil in rem actions and AFFIRM the district court's judgment.
MATTHEW L. SCHWARTZ (Justin S. Weddle, on the brief), Assistant United States Attorneys, of counsel to Preet Bharara, United States Attorney, Southern District of New York, New York, NY, for Plaintiff-Appellee.
ANDREW J. FRISCH (Jeremy B. Sporn, on the brief), The Law Offices of Andrew J. Frisch, 40 Fulton St., New York, NY, for Defendants-Appellants.
Before: WALKER, SACK, and LYNCH, Circuit Judges.
JOHN M. WALKER, JR., Circuit Judge
In United States v. Monsanto, 924 F.2d 1186 (2d Cir. 1991) (en banc), we held that the Fifth and Sixth Amendments entitle a criminal defendant seeking to use restrained funds to hire counsel of choice to an adversarial, pre-trial hearing at which the court evaluates whether there is probable cause to believe (1) that the defendant committed the crimes that provide the basis for the forfeiture; and (2) that the contested funds are properly forfeitable.
Defendant-Appellant Daniel R. Bonventre seeks a similar hearing in a civil action to recover restrained monies to fund his counsel of choice in a parallel criminal case. This appeal raises questions of whether a defendant seeking a Monsanto or Monsanto-like hearing must first make a threshold showing that such a hearing is warranted, and if so, what the standard for such a showing should be. We hold that a defendant seeking a Monsanto or Monsanto-like hearing must demonstrate, beyond the bare recitation of the claim, that he or she has insufficient alternative assets to fund counsel of choice.
Ordinarily, "[t]he district court's denial of an evidentiary hearing is subject to an abuse of discretion standard of review." Zappia Middle E. Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 2000). Bonventre's appeal, however, raises a question of law concerning the threshold requirement for motions for Monsanto and Monsanto-like hearings, so we review the district court's judgment de novo. Because the district court gave Bonventre ample opportunity to demonstrate that he had insufficient unrestrained assets to fund his defense with counsel of choice in his parallel criminal case—which he failed to do—we affirm its denial of his motion.
Bonventre appeals from a July 5, 2012 order of the District Court for the Southern District of New York (Jones, Judge) denying his motion for a Monsanto hearing. United States v. All Funds on Deposit in Account Nos. 94660869, 9948199297, 80007487, 9115606297, 9116151903, and 9931127481, et al., No. 10 Cv. 4858 (BSJ) (JCF), 2012 WL 2900487 (S.D.N.Y. Jul. 5, 2012). Although this is an appeal from a civil action, Bonventre's parallel criminal case undergirds his arguments. We therefore describe the relevant facts and history of both actions.
The Criminal Action
In the S2 Indictment in United States v. Bonventre, 10 Cr. 228 (LTS), returned on November 17, 2010,  Bonventre was charged with various securities and tax crimes related to the massive Madoff fraud. The S2 Indictment contained broad forfeiture allegations and specifically identified as forfeitable real and personal property in which Bonventre had ownership interests. It did not, however, specifically identify the brokerage accounts or transferred monies subject to forfeiture.
In January 2011, Bonventre moved to dismiss the Indictment, arguing that the government's forfeiture efforts (1) violated his Fifth and Sixth Amendment rights because all forfeitable property must be specifically identified in the indictment, information, and/or restraining order; (2) were retaliatory; and (3) were untimely because forfeitable property must be restrained upon the filing of the indictment. The district court denied the motion on the grounds that the government's actions were proper and that Bonventre had no right to fund his defense with stolen money. Bonventre ...