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Media Alerts - U.S. v. Joseph Konrad - Third Circuit
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September 10, 2013
  U.S. v. Joseph Konrad - Third Circuit
Headline: Defendant ordered to repay the market value of court-appointed counsel's services

Area of Law: Criminal Justice Act - court appointed counsel

Issues Presented: (1) Whether retirement accounts and jointly held bank accounts are available funds within the Criminal Justice Act? (2) Whether the District Court abused its discretion in ordering Defendant to repay the market value rather than hourly rate paid to an attorney under the Criminal Justice Act?

Brief Summary: Joseph Konrad was charged for making fraudulent statements to the Federal Aviation Administration. The Criminal Justice Act ("CJA") requires that a district court provide a criminal defendant with legal counsel if the defendant is charged with a felony and cannot afford to pay for an attorney. He was appointed counsel from the Federal Community Defender Office after the Magistrate Judge determined that he was financially eligible for court-appointed counsel. After Konrad pleaded guilty, there were discrepancies between his financial disclosure and sentencing report. The District Court held an order to show cause hearing as to why he was financially eligible for court appointed counsel. In particular, Konrad did not disclose that he had a house valued at $258,000 and failed to disclose the true amount in his retirement accounts. Furthermore, he understated his monthly income. The District Court found that he was financially able to pay for the cost of legal representation and ordered him to repay $6,000.

On appeal, the Court addressed whether Konrad's retirement account and jointly held bank accounts were available to pay his legal counsel. The Court determined that the retirement account was available to pay for legal counsel because it was liquid enough. The Court also determined that the joint bank account Konrad shared with his wife in the amount of $34,893 was available to pay for legal counsel because he had control over in the bank account. The Court lastly determined that the market value of $6,000 was the appropriate amount to pay counsel because Konrad did not qualify for a court appointed legal attorney and was therefore not qualified for the hourly rate under the CJA.

Significance (if any):

Extended Summary: Joseph Konrad was appointed a counsel from the Federal Community Defender Office based on the financial information he disclosed. Konrad was charged with making fraudulent statements to the Federal Aviation Administration ("FAA") and pleaded guilty. After he was sentenced, an order to show cause hearing was held for why he should be appointed legal counsel. Konrad did not disclose that he had $258,000 in his home and a $70,463 retirement account. Furthermore, he underreported his monthly income stating it at $2,500 rather than $8,600. The District Court found that Konrad had significant funds in two retirement accounts and ordered him to pay $6,000 for his legal representation because he was not eligible to be represented by a court-appointed legal counsel. Konrad appealed that order.
The Criminal Justice Act ("CJA") requires that a district court provide a criminal defendant with legal counsel if the defendant is charged with a felony and cannot afford to pay for an attorney. The defendant bears the burden to prove the he cannot afford an attorney. A person is financially unable to obtain counsel if he or she does not have enough money after subtracting the costs of the necessities of life. Here, the District Court determined that Konrad had the financial resources to pay for his legal representation. The Court determined that the District Court's decision was correct because the net financial resources exceeded the amount Konrad needed for the necessities of life.
The Court then addressed the personal and family needs and the liquidity of his finances. The District Court determined that Konrad was able to pay for legal representation because there was $70,463 in Konrad's retirement accounts. Konrad argued that the money was not liquid because there was an early-withdrawal penalty and IRA accounts were future income. The Court rejected this argument and agreed with the District Court that IRA accounts were not future income. The Court then determined the liquidity of the retirement account. The Court noted that before finding that funds were available, the District Court had to determine that the defendant would not suffer from extreme hardship. In this case, Konrad's retirement funds were more liquid than real property and he had not shown that liquidating his retirement funds would cause an extreme hardship. The Court acknowledged the early-withdrawal penalty but did not believe that it would work an extreme hardship on Konrad. Thus, the Court determined that Konrad had funds available to pay his legal counsel.
The Court next addressed the $6,007 in Konrad's individual checking account and $34,893 in a money market account held jointly with his wife. Whether this money was available under the CJA depended on Konrad's control over the money. The CJA form requires information about a defendant's spouse such as their earnings even though spouses are not required to contribute to the counsel fees. However, jointly held property has been considered when determining whether a defendant has the ability to pay. This turns to whether the defendant has control over the disposal of the property. The District Court determined that Konrad had some control over the bank accounts because he owned them in part. Furthermore, Konrad had the ability to write checks and withdraw money from the accounts. Therefore, the Court found that the funds in the joint account were available to pay for the cost of Konrad's legal counsel.
After determining that Konrad had to repay the cost of an attorney, the Court determined whether reimburse meant to pay back the value received in legal services or to pay back the costs expended on the legal defense. The Court ultimately concluded that the District Court did not err in requiring Konrad to pay $6,000 for the cost of private legal representation.

To read the full opinion, please visit http://www.ca3.uscourts.gov/opinarch/121393p.pdf.

Panel (if known): Scirica, Ambro, and Fuentes, Circuit Judges

Argument Date: April 2, 2013

Argument Location: Philadelphia, PA

Date of Issued Opinion: September 5, 2013

Docket Number: No. 12-1393

Decided: affirmed

Case Alert Author: Kathleen D. Tran

Counsel: Brett G. Sweitzer, Esq., for Appellants; Mary Kay Costello, Esq., for Appellee

Author of Opinion: Judge Scirica

Circuit: 3rd Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 09/10/2013 01:08 PM     3rd Circuit  

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