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: New York Federal Criminal Practice

SDNY Judge Grants Bail to Defendant Accused of Large-Scale Fraud

Once again, a high-profile fraud case has yielded a notable decision on a defendant?s right to bail.  Granting the bail reduction motion of Marc Dreier, the once high-flying lawyer now charged with ?colossal criminality,? SDNY Judge Rakoff gives life both to the presumption of bail in federal criminal cases and the constitutional principle that bail should not be excessive.  Accepting Dreier?s argument that all of his assets are frozen and he has no ?cash hoard,? Judge Rakoff reduced his bail from a $10M cash bond to a $10M personal recognizance bond, along with a series of other conditions, including 24-hour home detention and supervision by armed body guards.  The full decision is available here.  

?Genuine Risk of Flight?

Bail in this case is a significant victory for Dreier, given the fact that his alleged fraud was extensive, exposes him to a long prison sentence, and allegedly involved bizarre acts of impersonation, which even his own lawyer conceded were ?desperate.?  Judge Rakoff concluded that the government had more than satisfied its burden of proving that Dreier ?would pose a genuine risk of flight? if released without conditions.  But, he concludes, Dreier?s proposed bail package ?goes far to minimize this risk.?  A key component of the victory was new testimony from the court receiver appointed in a parallel SEC proceeding that the bulk of funds at issue in the alleged fraud were accounted for and Dreier had no ?cash hoard.?  The other key component was Dreier?s proposal that he be detained at home with round-the-clock supervision by armed body guards, paid for by his relatives.  

Private Jails for the Rich

The decision is especially interesting for its discussion of the concept of monied defendants escaping pretrial detention by setting up a private jail at their homes with armed guards.  Judge Rakoff acknowledges that this procedure is ?controversial? ? it ?gives people of means . . . an opportunity for release that poorer people could never obtain? ? but the fact that ?many kinds of bail conditions favor the rich . . . is not a reason to deny a constitutional right to someone who, for whatever reason, can provide reasonable assurances against flight.?  He points out that the Bail Reform Act itself contemplates that a defendant may be released into ?the custody of a designated person[ ] who agrees to assume supervision.?  

Comment

This is an important precedent to support bail in a multitude of cases where bail is often denied: cases where the defendant is accused of deception (even at his own bail hearing) and impersonation; cases where the defendant may once have had access to large sums of money but now his assets are frozen and claims of secret stashes are purely speculative; and cases where the defendant proposes some alternative system of detention and supervision.  While few can afford private body guards for the duration of their pretrial proceedings (estimated by Dreier?s lawyers at $70,000 per month), release on electronic monitoring with assurances from relatives and friends that they will also personally monitor/supervise the defendant may in some cases be an adequate alternative.

Full post as published by New York Federal Criminal Practice on February 06, 2009 (boomark / email).