Case 1:20-cr-00412-AT Document 42 Filed 10/27/20 Page 1 of 19

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
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:
UNITED STATES OF AMERICA :
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- v. - : 20 Cr. 412 (AT)
:
BRIAN KOLFAGE, et al., :
:
Defendants. :
:
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MEMORANDUM OF LAW OF THE UNITED STATES OF AMERICA

IN OPPOSITION TO NON-PARTIES’ MOTION TO MODIFY SEALED POST-
INDICTMENT RESTRAINING ORDER, OR FOR DISCLOSURE AND A HEARING

AUDREY STRAUSS
Acting United States Attorney
Southern District of New York

Robert B. Sobelman
Nicolas Roos
Alison G. Moe
Assistant United States Attorneys
- Of Counsel -
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TABLE OF CONTENTS

PRELIMINARY STATEMENT .................................................................................................... 1

STATEMENT OF FACTS ............................................................................................................. 1

A. The Indictment .................................................................................................................... 1

B. The Post-Indictment Restraining Order .............................................................................. 2

ARGUMENT .................................................................................................................................. 2

I. The Non-Parties Mischaracterize the Restraining Order .................................................... 3

II. The Non-Parties Are Statutorily Barred From Intervening In This Criminal Case ............ 4

A. 21 U.S.C. § 853(k) Bars The Non-Parties’ Challenge To The Restraining Order ....... 4

B. Enforcing The Statutory Bar Raises No Due Process Concerns .................................. 7

III. The Non-Parties Similarly Are Precluded From Seeking Relief Under Federal Rule
of Criminal Procedure 41(g) ............................................................................................... 9

IV. The Post-Indictment Restraining Order Was Properly Issued .......................................... 11

V. The Non-Parties’ Request for Unsealing and Production of the Application and
Affidavit Should Be Denied .............................................................................................. 14

CONCLUSION ............................................................................................................................. 16

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TABLE OF AUTHORITIES

Cases
Chaim v. United States, 692 F. Supp. 2d 461 (D.N.J. 2010) ........................................................ 12
De Almeida v. United States, 459 F.3d 377 (2d Cir. 2006) .................................................. 5, 7, 11
DSI Assocs. LLC v. United States, 496 F.3d 175 (2d Cir. 2007) ................................................ 5, 6
Honeycutt v. United States, 137 S. Ct. 1626 (2017) ............................................................... 14, 15
Kaley v. United States, 571 U.S. 320 (2014) .......................................................................... 14, 15
SEC v. Ahmed, No. 3:15-CV-675 (JBA), 2018 WL 4266079 (D. Conn. Sept. 6, 2018) .............. 18
Sunrise Acad. v. United States, 791 F. Supp. 2d 200 (D.D.C. 2011)............................................ 12
United States v. Amodeo, 71 F.3d 1044 (2d Cir. 1995) .......................................................... 17, 18
United States v. Bissell, 866 F.2d 1343 (11th Cir. 1989).............................................................. 14
United States v. Bonventre, 720 F.3d 126 (2d Cir. 2013) ....................................................... 10, 16
United States v. Cosme, 796 F.3d 226 (2d Cir. 2015) .................................................................. 10
United States v. Crozier, 777 F.2d 1376 (9th Cir. 1985) ............................................................ 8, 9
United States v. Datwani, No. 00 Cr. 851, 2009 WL 961123 (D.P.R. Apr. 8, 2009) ..................... 7
United States v. Egan, No. 10 Cr. 191 (JFK), 2010 WL 3258085 (S.D.N.Y. Aug. 16, 2010) ... 6, 8
United States v. E-Gold, Ltd., 521 F.3d 411 (D.C. Cir. 2008)...................................................... 14
United States v. Holy Land Found. for Relief & Dev., 493 F.3d 469 (5th Cir. 2007) (en banc) .. 14
United States v. Kozeny, No. 05 Cr. 518 (SAS), 2011 WL 1672473 (S.D.N.Y. Apr. 29, 2011) .... 6
United States v. Lazarenko, 476 F.3d 642 (9th Cir. 2007) ............................................................. 9
United States v. Lugo, No. 08 Cr. 739 (SLT), 2012 WL 32452 (E.D.N.Y. Jan. 5, 2012) ...... 11, 12
United States v. McHan, 345 F.2d 262 (4th Cir. 2003) .................................................................. 6
United States v. Monsanto, 924 F. 2d 1186 (2d Circ. 1991) (en banc)............................. 10, 14, 16
United States v. Nojay, 224 F. Supp. 3d 208 (W.D.N.Y. 2016) ................................................... 19
United States v. Park, 619 F. Supp. 2d 89 (S.D.N.Y. 2009) ........................................................ 18
United States v. Peters, 732 F.3d 93 (2d Cir. 2013) ....................................................................... 7
United States v. Rashid, No. 17 Cr. 20465 (DPH), 2017 WL 4467501 (E.D. Mich. Oct. 6, 2017)
............................................................................................................................................... 8, 14
United States v. Rogers, No. 09 Cr. 441 (TWT) (AJB), 2010 WL 1872855 (N.D. Ga. Apr. 12,
2010) ......................................................................................................................................... 12
United States v. Stein, 541 F.3d 130 (2d Cir. 2008) ............................................................... 15, 16
United States v. Valenti, 987 F.2d 708 (11th Cir. 1993)............................................................... 17
United States v. White, No. 13 Cr. 436 (PWG), 2014 WL 3898378 (D. Md. Aug. 7, 2014) ....... 12

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PRELIMINARY STATEMENT

The Government respectfully submits this memorandum of law in opposition to the motion

to modify a sealed post-indictment restraining order, or for disclosure and a hearing (“Mot.”), filed

by non-parties We Build the Wall, Inc. (“We Build the Wall”), and Kris Kobach (collectively, the

“non-parties”). The non-parties’ attempt to inject themselves into this proceeding is entirely

without a legal basis and should be rejected.

STATEMENT OF FACTS

A. The Indictment

On August 17, 2020, a grand jury sitting in this District returned a sealed Indictment

charging defendants Brian Kolfage, Stephen Bannon, Andrew Badolato, and Timothy Shea with

orchestrating a scheme to defraud hundreds of thousands of donors, including donors in the

Southern District of New York, in connection with an online crowdfunding campaign ultimately

known as “We Build the Wall” that raised more than $25,000,000 to build a wall along the southern

border of the United States. (Dkt. No. 2 ¶ 1.) Specifically, the Indictment charges the defendants

with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and one count

of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). (Id. ¶¶ 27-29, 31-

33.) As described in the Indictment, between December 2018 and August 2020, the defendants

induced donors to contribute millions of dollars to the We Build the Wall campaign through

material false and fraudulent statements about the use of the funds and how no money would go

to Kolfage. (Id. ¶¶ 1-2, 8-25.)

The Indictment included forfeiture allegations that provided notice that, upon the

conviction of one or more of the defendants, the Government intends to seek forfeiture of, among
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other things, any and all funds contained in three bank accounts held in the name of We Build the

Wall. (Id. ¶¶ 34(a)-(c).)

On August 20, 2020, the Honorable Stewart D. Aaron, United States Magistrate Judge for

the Southern District of New York, unsealed the Indictment. (Dkt. No. 3.)

B. The Post-Indictment Restraining Order

On August 24, 2020, the Government filed, ex parte and under seal, an application and

affidavit in support of a post-indictment restraining order pursuant to 18 U.S.C. §§ 981, 982, 21

U.S.C. § 853, and 28 U.S.C. § 2461. More specifically, the application sought an order restraining,

among other things, all funds in three bank accounts listed in the Indictment’s forfeiture

allegations, all of which were held in the name of We Build the Wall (the “Accounts”). The

application and affidavit set forth, among other things, probable cause that any and all funds in the

Accounts are forfeitable as (i) proceeds traceable to the wire fraud conspiracy charged in Count

One of the Indictment and/or (ii) property involved in the charged money laundering offense

charged in Count Two of the Indictment, and the legal authority justifying the restraint of such

funds. That same day, this Court issued the post-indictment restraining order (the “Restraining

Order”), which it filed under seal. Pursuant to the terms of the Restraining Order, the Government

served the order upon the banks who maintain the Accounts. The Government has produced copies

of the Restraining Order in discovery and also provided a copy of the Restraining Order to Kobach

(through Kobach’s attorney), in light of Kobach’s role as general counsel to We Build the Wall.

Kobach, however, is not a signatory on the Accounts.

ARGUMENT

The non-parties’ attempt to challenge the Restraining Order—which is intended to

safeguard funds that will be subject to forfeiture following a conviction in this case—should be

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rejected. As an initial matter, the non-parties mischaracterize the Restraining Order and exaggerate

the restrictions placed upon their conduct by the Order. Moreover, the motion should be denied

on multiple independent grounds. First, as non-parties, We Build the Wall and Kobach are

statutorily barred from intervening in this criminal case. Second, the non-parties’ attempt to

refashion Federal Rule of Criminal Procedure 41(g) into an alternative mechanism for intervention

is similarly precluded by statute and case law. Third, the substance of the non-parties’ motion,

which this Court need not address in light of the statutory bar to intervention, is entirely without

merit.

I. The Non-Parties Mischaracterize the Restraining Order

The non-parties’ description of the limitations placed on their conduct by the Restraining

Order is inaccurate and exaggerated. With respect to We Build the Wall, the Restraining Order

only restricted the movement of funds out of three particular bank accounts held in the

organization’s name (defined above as the Accounts). That is the only limitation the Restraining

Order imposes with respect to We Build the Wall—a limitation that this Court already found

supported by probable cause to believe that the funds in the Accounts as of August 24, 2020,

constitute forfeitable crime proceeds. The Restraining Order has no provision governing what the

non-parties may do with respect to the “over 4,000 pieces of mail” potentially containing

“additional donations” that We Build the Wall purportedly has received since the Restraining

Order was issued. (Mot. 2). Indeed, the Restraining Order does not interfere in any way with the

non-parties ability to continue to operate We Build the Wall, or to receive and use new, untainted

donations to pay for legitimate expenses, including those which the non-parties apparently wish to

pay. (See Mot. 3, 11-12.) The non-parties’ attempt to mischaracterize the Restraining Order and

exaggerate the restrictions placed upon their conduct should be disregarded.

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II. The Non-Parties Are Statutorily Barred From Intervening In This Criminal Case

Neither We Build the Wall nor Kobach are defendants in this criminal case, and therefore

they are plainly barred by statute and controlling Second Circuit authority from intervening to

challenge the Restraining Order issued by this Court. To the extent they have interests in the

restrained Accounts, they will have ample opportunity to make a claim following the issuance of

a preliminary order of forfeiture.

A. 21 U.S.C. § 853(k) Bars The Non-Parties’ Challenge To The Restraining Order

The criminal forfeiture proceedings in this case are governed by Federal Rule of Criminal

Procedure 32.2 and 21 U.S.C. § 853 (other than Section 853(d), which applies only in cases in

which the defendant is convicted of a violation of the Controlled Substances Act). See 28 U.S.C.

§ 2461(c).

Section 853(k), entitled “bar on intervention,” explicitly provides:

Except as provided in subsection n of this section [i.e., through

ancillary proceedings], no party claiming an interest in property
subject to forfeiture under this section may—

(1) Intervene in a trial or appeal of a criminal case involving the

forfeiture of such property under this section; or

(2) commence an action at law or equity against the United States

concerning the validity of his alleged interest in the property
subsequent to the filing of an indictment or information alleging
that the property is subject to forfeiture under this action.

21 U.S.C. § 853(k). Thus, under the plain language of subsection (1), no third party has standing

to intervene in a criminal case (except by filing a third-party petition pursuant to Section 853(n)),

and under subsection (2), no party may challenge the forfeiture or otherwise assert an interest in

the property subject to forfeiture in any other forum, once the defendant has been indicted and

notice of forfeiture given. Likewise, Rule 32.2(b)(2) provides that “whether a third party has such

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an interest must be deferred until any third party files a claim in an ancillary proceeding under

Rule 32.2(c).” Those unambiguous statutory provisions exist for good reason: allowing

intervention by third parties would prematurely require the Court to make factual findings early in

a criminal case and open the doors to endless claims by third parties on restrained funds.

Under Rule 32.2, once a criminal defendant is convicted of the offenses giving rise to the

forfeiture allegations, either by trial or plea, the court must enter a preliminary order of forfeiture.

The preliminary order divests the criminal defendant of any right to the property, and requires the

Government to serve notice of its intent to finally forfeit the property on any potentially interested

third parties. See 21 U.S.C. § 853(n)(1); Fed. R. Crim. P. 32.2(b). After the court enters a

preliminary order of forfeiture, the court conducts a so-called “ancillary proceeding” in order to

determine the interest of third parties in property that is subject to the order. See 21 U.S.C.

§ 853(n). It is well-settled that the ancillary proceeding, which begins after the entry of the

preliminary order of forfeiture, is the exclusive forum in which third parties may assert an interest

in property subject to forfeiture. E.g., DSI Assocs. LLC v. United States, 496 F.3d 175, 183 (2d

Cir. 2007) (“It is . . . well settled that section 853(n) provides the exclusive means by which a third

party may lay claim to forfeited assets – after the preliminary forfeiture order has been entered.”); 1

De Almeida v. United States, 459 F.3d 377, 381 (2d Cir. 2006) (“An ancillary proceeding is

evidently the only avenue for a post-indictment third-party claim to forfeited property, because the

statutory scheme bars commencement of ‘an action at law or equity against the United States

concerning the validity of [a third party’s] alleged interest in the property . . . subsequent to the

filing of an indictment or information alleging that the property is subject to forfeiture under this

1
Unless otherwise indicated, all internal quotation marks and citations are omitted.
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section.’” (quoting 21 U.S.C. § 853(k)) (alterations and emphasis in original)); United States v.

Egan, No. 10 Cr. 191 (JFK), 2010 WL 3258085, at *2 (S.D.N.Y. Aug. 16, 2010) (in the context

of challenge to restraining order, recognizing that “[t]he Court of Appeals has made clear that the

exclusive avenue available to third parties wishing to assert their interest in property charged to be

forfeitable is an ‘ancillary proceeding’ as set forth in § 853(n)”).

Is it also well-settled that third parties are prohibited from intervening in a criminal case to

assert an interest in property being forfeited prior to the court’s entry of a preliminary order of

forfeiture. E.g., DSI Assocs. LLC, 496 F.3d at 183 (“It is well established that third parties may

not intervene during criminal forfeiture proceedings to assert their interests in the property being

forfeited.” (citing 21 U.S.C. § 853(k) and United States v. McHan, 345 F.2d 262, 269 (4th Cir.

2003))); United States v. Kozeny, No. 05 Cr. 518 (SAS), 2011 WL 1672473, at *3 (S.D.N.Y.

Apr. 29, 2011) (in the context of challenge to post-indictment restraining order, recognizing that

it is “well-settled that a third party is prohibited from intervening in a criminal case to assert an

interest in property subject to forfeiture prior to the court’s entry of a preliminary order of

forfeiture”).

Accordingly, it is clear that the non-parties are statutorily barred, pursuant to 21 U.S.C.

§ 853(k), from intervening in this criminal case to challenge the Restraining Order. We Build the

Wall is not a defendant in this matter, and the fact that the Accounts are in the name of We Build

the Wall does not permit its intervening now. See, e.g., United States v. Peters, 732 F.3d 93, 103-

04 (2d Cir. 2013) (forfeiture of corporate accounts permissible in prosecution of individuals where

the individuals indirectly obtained the proceeds of his criminal conduct through the corporation);

De Almeida, 459 F.3d at 381 (rejecting application by corporate holders of bank accounts seized

by criminal forfeiture); United States v. Datwani, No. 00 Cr. 851, 2009 WL 961123, at *2-3

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(D.P.R. Apr. 8, 2009) (investment corporation not allowed an early adjudication of underlying

ownership of sequestered proceeds). Additionally, Kobach is neither a defendant nor the owner

of the Accounts, and therefore in this context is nothing more than an unsecured creditor with no

property interest in the Accounts. 2 While the non-parties engage in a strained and futile attempt

to distinguish the applicable Second Circuit case law (see Mot. 18 n.5), it is telling that they have

not identified a single case where a third party was permitted to challenge a restraining order issued

pursuant to Section 853(e)(1)(A).

The statutory bar is a threshold inquiry that the non-parties’ motion cannot survive, and

their motion should be denied on that ground alone. See, e.g., United States v. Rashid, No. 17 Cr.

20465 (DPH), 2017 WL 4467501, at *3 (E.D. Mich. Oct. 6, 2017) (holding that under Section

853(k), a third party “has no right or ability to challenge the Application or the entry of the post-

indictment restraining order requested by the Government”); Egan, 2010 WL 3258085, at *2

(rejecting as barred by Section 853(k) third-party’s attempt to intervene in criminal case to

challenge restraining order).

B. Enforcing The Statutory Bar Raises No Due Process Concerns

Enforcing the plain terms of Section 853(k) raises no due process concerns here. The non-

parties rely upon United States v. Crozier, 777 F.2d 1376 (9th Cir. 1985), to argue that a lengthy

2
The concerns about safeguarding funds are particularly acute here because Kobach has
made clear, through his counsel, that he seeks release of the funds from We Build the Wall’s
accounts so that he may pay himself and his attorney who filed this motion. This raises the
question of whether counsel can provide conflict-free guidance to both We Build the Wall and an
individual who hopes to spend its funds on himself. Moreover, allowing Kobach to intervene now
as a creditor in an effort to recover legal fees that are purportedly owed to him—or to enable him
to seek indemnification to cover the cost of his counsel who made this motion—would unjustly
privilege him over We Build the Wall’s other creditors, including other employees, third-party
creditors, and most importantly, the victims of the fraud. (See Mot. 19, 22.)

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pretrial restraint on property could implicate due process concerns (see Mot. 18-19), but that case

is easily distinguishable and has never been adopted by any court within this Circuit. In Crozier,

the Ninth Circuit held that the lack of an opportunity to be heard in advance of trial regarding a

pretrial restraining order would violate due process based on the specific facts of that case, which

involved a case that had been pending for more than five years, with a pretrial restraining order

issued years earlier, and where the defendants’ trial and appeals could delay ancillary proceedings

for several more years. Id. at 1383-84. Notably, no court in this Circuit appears to have adopted

the Ninth Circuit’s view—first articulated 35 years ago—that the interplay between Section 853(k)

and an unusually lengthy pretrial restraint on property could raise due process concerns. To the

contrary, as discussed above, the Second Circuit repeatedly has emphasized that an ancillary

proceeding is the only forum in which third parties may claim an interest in property subject to

forfeiture.

In any event, there are no such concerns here. The Restraining Order was issued on

August 24, 2020. The defendants are set for trial on May 24, 2021, less than seven months from

now. Upon the conviction of one or more defendants, a preliminary order of forfeiture would

enter, then permitting the non-parties to challenge the forfeiture in an ancillary proceeding.

Awaiting that opportunity for seven months is far short of the five-year delay that the Ninth Circuit

has found could potentially raise due process concerns. See, e.g., United States v. Lazarenko, 476

F.3d 642, 651 (9th Cir. 2007) (“delay of sixteen months” “is not of such magnitude that it violates

the Constitution because the period of delay differs from the period in Crozier by a matter of

years”). 3

3
To the extent the non-parties appear to urge this Court to apply Ninth Circuit case law,
the Government notes that under Ninth Circuit precedent the non-parties’ motion should be denied
on at least two additional, independent grounds: that they lack prudential standing and their request
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Moreover, the relief the non-parties seek is virtually identical to a hearing pursuant to

United States v. Monsanto, which held that “a pre-trial adversary hearing is required where the

question of attorney’s fees is implicated.” 924 F.2d 1186, 1191 (2d Circ. 1991) (en banc).

However, such a hearing can only be granted where a defendant—not a third party—needs the

restrained assets to retain counsel of choice. 4 See United States v. Cosme, 796 F.3d 226, 232 (2d

Cir. 2015) (explaining that Monsanto hearing intends to “vindicate[] a defendant’s Sixth

Amendment right to counsel by testing in an adversary hearing whether seized assets are properly

forfeitable in circumstances where the defendant has insufficient assets from which to fund his

defense”). The only exception to this—that is, the strict statutory limitations placed on revisiting

pretrial restraints and seizures of forfeitable property—in order to accommodate a hearing on

constitutional grounds was made in the context of a defendant’s right to counsel of choice. See

id.; Monsanto, 924 F.2d at 1203. But the non-parties plainly are not defendants and therefore

cannot qualify for such relief.

III. The Non-Parties Similarly Are Precluded From Seeking Relief Under Federal Rule
of Criminal Procedure 41(g)

Seeking an end-run around the clear prohibitions of Section 853(k), the non-parties ask this

Court, in the alternative, to grant the unprecedented relief they seek under the catch-all provision

of Rule 41(g) of the Federal Rules of Criminal Procedure. (Mot. 20.) This argument fares no

better.

for relief is not yet ripe. See, e.g., Lazarenko, 476 F.3d at 651-53.
4
Even if the non-parties were theoretically eligible for a Monsanto hearing, which they are
not, they have nonetheless failed to satisfy the prerequisite for such a hearing: they have failed to
establish by affidavit or other means that they have no assets, other than those seized, with which
to retain counsel. See United States v. Bonventre, 720 F.3d 126, 130-33 (2d Cir. 2013).
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“A Rule 41(g) motion is an equitable remedy that is available only when there is no remedy

at law and the equities favor the exercise of jurisdiction.” De Almeida, 459 F.3d at 381. The

Second Circuit has emphasized that, “[j]urisdiction under Rule 41 is to be exercised with great

restraint and caution since it rests upon the court’s supervisory power over the actions of federal

law enforcement officials.” Id. Accordingly, where a “claimant is afforded the opportunity to test

the legality of the seizure in [a] forfeiture proceeding” pursuant to 21 U.S.C. § 853(n), id., “the

Second Circuit has implied” that “dismiss[ing] the 41(g) motion and relegat[ing] the claimant to

his or her remedies under § 853(n)” is “sound practice,” United States v. Lugo, No. 08 Cr. 739

(SLT), 2012 WL 32452, at *2 (E.D.N.Y. Jan. 5, 2012) (citing De Almeida, 459 F.3d at 382).

As discussed above, 21 U.S.C. § 853(k) bars non-parties from intervening in a criminal

case involving the forfeiture of property under Section 853 except in the context of an ancillary

proceeding pursuant to Section 853(n). This bar also applies to a non-party’s motion under

Rule 41(g) of the Federal Rules of Criminal Procedure. United States v. White, No. 13 Cr. 436

(PWG), 2014 WL 3898378, at *4 (D. Md. Aug. 7, 2014) (“Given that 21 U.S.C. § 853 prohibits

any other action to recover property allegedly subject to forfeiture once a criminal case begins, a

Rule 41(g) motion may only be brought to return seized property that is not [] alleged to be

forfeitable in an indictment.”); Lugo, 2012 WL 32452, at *2 (“Since Ms. Carter herself was not a

party to the criminal case, subsection (k)(1) barred Ms. Carter from filing a Rule 41(g) motion on

her on behalf in that case.”); Sunrise Acad. v. United States, 791 F. Supp. 2d 200, 203 (D.D.C.

2011) (Rule 41(g)’s “general pronouncement” that “[a] person aggrieved by an unlawful search

and seizure of property or by the deprivation of property may move for the property’s return”

“must give way to Rule 32.2(b)(2)(A)’s specific requirement that adjudication of any third-party

claims to property be deferred until the entry of a preliminary forfeiture order”); United States v.

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Rogers, No. 09 Cr. 441 (TWT) (AJB), 2010 WL 1872855, at *4 (N.D. Ga. Apr. 12, 2010)

(“Mr. Stone cannot bring his Rule 41(g) motion for return of the firearms because § 853(k)

precludes his action.”); Chaim v. United States, 692 F. Supp. 2d 461, 471 (D.N.J. 2010) (“It is also

clear that once there is an indictment with a forfeiture allegation, an innocent third party . . . cannot

then commence a Rule 41(g) proceeding.” (citing 21 U.S.C. § 853(k)).

The non-parties’ alternative styling of their motion as a Rule 41(g) proceeding accords it

no additional viability, and their attempt to avoid the plain import of Section 853(k) should be

rejected. The shortcut they seek is precluded both by Section 853(k) and because they do have a

remedy at law available to them, as provided by statute, to contest any preliminary order of

forfeiture in the ancillary proceeding.

IV. The Post-Indictment Restraining Order Was Properly Issued

Even if the non-parties could lawfully intervene in this action—which, as discussed in

detail above, they cannot—their motion still fails on the merits. First, the non-parties appear to

argue that the Government was not permitted to rely solely on the grand jury’s determination of

probable cause as to the charges in the Indictment and the forfeiture allegations set forth therein to

support the issuance of a Restraining Order. (Mot. 16-17.) However, the Government did no such

thing. As the Court is aware, and as referenced in the Restraining Order, the Government

submitted an application and an affidavit setting forth facts establishing probable cause that the

funds contained in Accounts, among other property, as listed in the Restraining Order, are subject

to restraint and forfeiture as proceeds of the offenses charged in the Indictment. Upon this Court’s

review of the application and affidavit, this Court found that the Restraining Order was supported

by probable cause. The non-parties identify no legal mechanism within the applicable statutory

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scheme that would permit them to challenge this Court’s probable cause determination at this point

in the proceeding, and the Government is aware of no such authority.

Second, the non-parties argue that the Restraining Order is invalid because it was issued

without notice or an opportunity to be heard. (Mot. 15.) But no such notice was required here.

The provision pursuant to which the Restraining Order was issued, 21 U.S.C. § 853(e)(1)(A),

affords no right to notice or a hearing prior to entry of the order. See Monsanto, 924 F.2d at 1193

(“notice and a hearing need not occur before an ex parte restraining order is entered pursuant to

section 853(e)(1)(A)”); see also United States v. E-Gold, Ltd., 521 F.3d 411, 417 (D.C. Cir. 2008);

United States v. Holy Land Found. for Relief & Dev., 493 F.3d 469, 475 (5th Cir. 2007) (en banc);

United States v. Bissell, 866 F.2d 1343, 1352 (11th Cir. 1989); Rashid, 2017 WL 4467501, at *4

(“Pursuant to 21 U.S.C. § 853(e)(1), this Court is authorized to enter an ex parte restraining

order . . . .”). Although other subsections of Section 853 do, under certain circumstances, require

notice, e.g., 21 U.S.C. § 21 U.S.C. § 853(e)(1)(B), those provisions by their plain terms do not

apply to the facts of this case, and the non-parties have failed to explain—much less offer any legal

support—for their sweeping assertion that all restraining orders under Section 853 require notice

and an opportunity to be heard.

Neither Honeycutt v. United States, 137 S. Ct. 1626 (2017), nor Kaley v. United States, 571

U.S. 320 (2014), are contrary to the foregoing authorities. (See Mot. 14-16.) In Honeycutt, the

Supreme Court held that, under 21 U.S.C. § 853(a), a defendant may not be held jointly and

severally liable for property that his co-conspirator derived from the crime but that the defendant

himself did not acquire. 137 S. Ct. at 1630. That holding has no relevance to the non-parties’

motion. In the course of pointing out that other provisions within Section 853 authorize only

restraints and seizures of “property at issue [that] has the requisite connection to [the] crime,” the

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Court referenced in passing Section 853(e)(1)(B)’s “opportunity for a hearing” provision. Id. The

non-parties imply this was some type of holding that modified the plain language of

Section 853(e)(1)(A), the operative provision here. (Mot. 16.) There is nothing in Honeycutt to

support such a reading, and the plain language of the statute is to the contrary. Compare 21 U.S.C.

§ 853(e)(1)(B) (providing for “notice to persons appearing to have an interest in the property and

opportunity for a hearing”) with 21 U.S.C. § 853(e)(1)(A) (no such provision).

In Kaley, the Supreme Court held that criminal defendants have no constitutional

entitlement to a hearing to contest a grand jury’s determination of probable cause to believe they

committed the crimes charged in the context of challenging a pretrial restraint on their property.

571 U.S. at 322. That holding is entirely unhelpful to the non-parties’ motion. Indeed, it is difficult

to imagine that the law would preclude defendants from challenging probable cause in the context

of a restraining order, but then permit a pretrial intervention by non-parties to assert a similar

challenge. 5

Third, the non-parties suggest that the Restraining Order was somehow overbroad.

(Mot. 21.) They are wrong. As to the temporal scope, the Indictment alleges that the scheme

continued up until the date that the charges were returned by the grand jury (Dkt. No. 2 ¶¶ 27, 31),

meaning that there has been a probable cause determination that the charged wire fraud and money

5
The non-parties also appear to suggest that they have a Sixth Amendment right to use the
restrained funds to pay for counsel fees, their own salaries, and expenses not associated with this
case. They have no such right. The Sixth Amendment right to counsel does not attach to non-
parties to a criminal case. See United States v. Stein, 541 F.3d 130, 152 (2d Cir. 2008) (“The Sixth
Amendment right of the accused to assistance of counsel in all criminal prosecutions is limited by
its terms: it does not attach until a prosecution is commenced.”). Any purported “deprivations” do
not “ripen into cognizable Sixth Amendment deprivations [until after] indictment.” Id. at 153.
Moreover, as discussed above, only defendants in a criminal case may attempt to demonstrate
entitlement to a Monsanto hearing. See Bonventre, 720 F.3d at 130-32.
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laundering conspiracies continued well past the January 2020 time period that the non-parties

assert to be the end of the charged scheme. (See Mot. 21-22.)

As discussed above, the non-parties incorrectly imply that the Restraining Order imposes

some restraint beyond its plain terms, which only restricts the movement of funds in the Accounts.

(Mot. 21-22.) However, the Restraining Order does not prohibit We Build the Wall from raising

or spending other money it may have. The non-parties complain that the Government (correctly)

informed them that transacting in proceeds of wire fraud may itself be a crime, see, e.g., 18 U.S.C.

§ 1957(a), and that the Government declined to express a view on whether transacting in funds

raised after the unsealing of the Indictment would constitute a crime. (Mot. 2.) But those

complaints are nothing more than a request for an advisory opinion from this Court blessing the

use of certain unrestrained funds, and the non-parties have not cited any legal authority for seeking

such an opinion.

V. The Non-Parties’ Request for Unsealing and Production of the Application and
Affidavit Should Be Denied

Finally, the non-parties request that the application and affidavit submitted in support of

the Restraining Order be unsealed or, in the alternative, provided to the non-parties. (Mot. 23.)

This request should be rejected.

Pursuant to the terms of the Restraining Order, the application and affidavit have been or

will be provided shortly to all defendants—that is, the parties to this case—in the Government’s

production of discovery. The non-parties, like any other third party, have no entitlement to those

documents. For good reason: as explained above, there is no legal mechanism for the non-parties

to challenge this Court’s probable cause determination and the issuance of the Restraining Order,

and therefore the documents would have no utility to the non-parties. Accordingly, the application

and affidavit should remain sealed and should not be provided to the non-parties.
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Although the Government has no objection to the Restraining Order itself being unsealed

and placed on the public docket, 6 the application and affidavit were submitted and remain under

seal for at least three reasons. First, they contain non-public details of the Government’s ongoing

investigation, that, if disclosed publicly or to the non-parties could impair the Government’s

investigation. See United States v. Amodeo, 71 F.3d 1044, 1050 (2d Cir. 1995) (citing United

States v. Valenti, 987 F.2d 708, 714 (11th Cir. 1993) (affirming district court’s refusal to unseal

transcripts of in camera proceedings on the ground that it would damage continuing law

enforcement investigations)). Although the Indictment has been unsealed, it (1) did not make

public the full scope and nature of the investigation, (2) did not reveal the identities of individuals

and entities that may be implicated in the investigation aside from the four charged defendants,

and (3) did not reveal details about the evidence collected in the investigation. Continued sealing

of the application and affidavit are necessary because revealing any of the foregoing categories of

information would seriously jeopardize the ongoing investigation. See, e.g., United States v. Park,

619 F. Supp. 2d 89, 94 (S.D.N.Y. 2009) (holding that the need to “maintain the secrecy of the

Government’s investigation” outweighed the public’s right of access to certain sentencing

documents).

Second, the proposed redactions are necessary to protect the privacy and identity of certain

individuals and entities. See Amodeo, 71 F.3d at 1050 (“the privacy interests of innocent third

parties . . . should weigh heavily in a court’s balancing equation”); see, e.g., SEC v. Ahmed,

No. 3:15-CV-675 (JBA), 2018 WL 4266079, at *3 (D. Conn. Sept. 6, 2018) (sealing certain

6
Upon the Court’s unsealing of the Restraining Order, the Government respectfully
requests that the Court direct the non-parties to publicly file their motion after redacting email
addresses, phone numbers, and any other similar identifiers consistent with Rule 49.1 of the
Federal Rules of Criminal Procedure.
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documents based, in part, on privacy interests of a third party). There are references in the

documents to uncharged individuals and/or entities. The indictment did not contain the names of

any individuals or entities other than the charged defendants and one entity that they operated. The

disclosure of additional individuals’ and entities’ names could invade the privacy interests of third

parties.

Third, continued sealing of the application and affidavit is necessary to mitigate the risk of

prejudicial pretrial publicity that may arise from the disclosure before trial of certain evidence

gathered in the course of the investigation. See United States v. Nojay, 224 F. Supp. 3d 208

(W.D.N.Y. 2016) (describing “avoiding prejudicial pretrial publicity with respect to a

codefendant” as one of the justifications for sealing parts of a record in a criminal case). The

documents at issue describe facts that are not publicly known. The concern about prejudicial

pretrial publicity is particularly significant in this case because the charges in the Indictment have

received substantial coverage in the national media.

CONCLUSION

For the foregoing reasons, the non-parties’ motion should be denied.

Dated: New York, New York

October 27, 2020
Respectfully submitted,

AUDREY STRAUSS
Acting United States Attorney

By:
Robert B. Sobelman
Nicolas Roos
Alison G. Moe
Assistant United States Attorneys

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