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Republic of the Philippines



G.R. No. 86163 April 26, 1990

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


The Solicitor General for plaintiff-appellee.

Resurreccion S. Salvilla for defendant-appellant.


Accused Bienvenido Salvilla alone appeals from the Decision of the Regional Trial Court,
Branch 28, Iloilo City, * dated 29 August 1988, in Criminal Case No. 20092, finding him and his
co-accused Reynaldo, Ronaldo and Simplicio, all surnamed Canasares, guilty beyond reasonable
doubt of the crime of "Robbery with Serious Physical Injuries and Serious Illegal Detention" and
sentencing them to suffer the penalty of reclusion perpetua.

The Information filed against them reads:

The undersigned City Fiscal accuses BIENVENIDO SALVILLA, REYNALDO

maternal surnames, dated and places of birth cannot be ascertained of the crime of
DETENTION (Art, 294, paragraph 3, in conjunction with Article 267 of the Revised
Penal Code), committed as follows:

That on or about the 12th day of April, 1986, in the City of Iloilo, Philippines and within
the jurisdiction of this Court, said accused, conspiring and confederating among
themselves, working together and helping one another, armed with guns and handgrenade
and with the use of violence or intimidation employed on the person of Severino Choco,
Mary Choco, Mimie Choco and Rodita Hablero did then and there wilfully, unlawfully
and criminally take and carry away, with intent of gain, cash in the amount of
P20,000.00, two (2) Men's wrist watches, one (1) Lady's Seiko quartz wrist watch and
one (1) Lady's Citizen wrist watch and assorted jewelries, all valued at P50,000.00; that
on the occasion and by reason of said robbery, Mary Choco suffered serious physical
injuries under paragraph 2 of Article 263, Bienvenido Salvilla likewise suffered serious
physical injuries and Reynaldo Canasares also suffered physical injuries; that the said
accused also illegally detained, at the compound of the New Iloilo Lumber Company,
Iznart Street, Iloilo City, Severino Choco, owner/proprietor of said Lumber Company,
Mary Choco, Mimie Choco, who is a minor, being 15 years of age, and Rodita Hablero,
who is a salesgirl at said Company; that likewise on the occasion of the robbery, the
accused also asked and were given a ransom money of P50,000.00; that the said crime
was attended by aggravating circumstances of band, and illegal possession of firearms
and explosives; that the amount of P20,000.00, the ransom money of P50,000.00, two (2)
Men's wrist watches, two (2) lady's wrist watches, one (1) .38 caliber revolver and one
(1) live grenade were recovered from the accused; to the damage and prejudice of the
New Iloilo Lumber Company in the amount of P120,000.00.

The evidence for the prosecution may be re-stated as follows:

On 12 April 1986, a robbery was staged by the four accused at the New Iloilo Lumber Yard at
about noon time. The plan was hatched about two days before. The accused were armed with
homemade guns and a hand grenade. When they entered the establishment, they met Rodita
Hablero an employee thereat who was on her way out for her meal break and announced to her
that it was a hold-up. She was made to go back to the office and there Appellant Salvilla pointed
his gun at the owner, Severino Choco, and his two daughters, Mary and Mimie the latter being a
minor 15 years of age, and told the former that all they needed was money. Hearing this,
Severino told his daughter, Mary, to get a paper bag wherein he placed P20,000.00 cash
(P5,000.00, according to the defense) and handed it to Appellant. Thereafter, Severino pleaded
with the four accused to leave the premises as they already had the money but they paid no heed.
Instead, accused Simplicio Canasares took the wallet and wristwatch of Severino after which the
latter, his two daughters, and Rodita, were herded to the office and kept there as hostages.

At about 2:00 o'clock of the same day, the hostages were allowed to eat. The four accused also
took turns eating while the others stood guard. Then, Appellant told Severino to produce
P100,000.00 so he and the other hostages could be released. Severino answered that he could not
do so because it was a Saturday and the banks were closed.

In the meantime, police and military authorities had surrounded the premises of the lumber yard.
Major Melquiades B. Sequio Station Commander of the INP of Iloilo City, negotiated with the
accused using a loud speaker and appealed to them to surrender with the assurance that no harm
would befall them as he would accompany them personally to the police station. The accused
refused to surrender or to release the hostages.

Thereafter, OIC Mayor, Rosa Caram, of Iloilo City arrived and joined the negotiations. In her
dialogue with the accused, which lasted for about four hours, Appellant demanded P100,000.00,
a coaster, and some raincoats. She offered them P50,000.00 instead, explaining the difficulty of
raising more as it was a Saturday. Later, the accused agreed to receive the same and to release
Rodita to be accompanied by Mary Choco in going out of the office. When they were out of the
door, one of the accused whose face was covered by a handkerchief, gave a key to Mayor Caram.
With this, Mayor Caram unlocked the padlocked door and handed to Rodita the P50,000.00,
which the latter, in turn, gave to one of the accused. Rodita was later set free but Mary was
herded back to the office.
Mayor Caram, Major Sequio and even volunteer radio newscasters continued to appeal to the
accused to surrender peacefully but they refused.1wphi1 UItimatums were given but the
accused did not budge. Finally, the police and military authorities decided to launch an offensive
and assault the place. This resulted in injuries to the girls, Mimie and Mary Choco as well as to
the accused Ronaldo and Reynaldo Canasares. Mary suffered a "macerated right lower extremity
just below the knee" so that her right leg had to be amputated. The medical certificate described
her condition as "in a state of hemorrhagic shock when she was brought in to the hospital and
had to undergo several major operations during the course of her confinement from April 13,
1986 to May 30, 1986."

For his part, Appellant Salvilla confirmed that at about noon time of 12 April 1986 he and his co-
accused entered the lumber yard and demanded money from the owner Severino Choco He
demanded P100,000.00 but was given only P5,000.00, which he placed on the counter of the
office of the lumber yard. He admitted that he and his co-accused kept Severino, his daughters,
and Rodita inside the office. He maintained, however, that he stopped his co-accused from
getting the wallet and wristwatch of Severino and, like the P5,000.00 were all left on the counter,
and were never touched by them. He claimed further that they had never fired on the military
because they intended to surrender. Appellant's version also was that during the gunfire,
Severino's daughter stood up and went outside; he wanted to stop her but he himself was hit by a
bullet and could not prevent her. Appellant also admitted the appeals directed to them to
surrender but that they gave themselves up only much later.

After trial, the Court a quo meted out a judgment of conviction and sentenced each of the
accused "to suffer the penalty of reclusion perpetua, with the accessory penalties provided by
law and to pay the costs."

Appellant Salvilla's present appeal is predicated on the following Assignments of Error:

1. The lower court erred in holding that the crime charged was consummated and in not
holding that the same was merely attempted.

2. The lower court erred in not appreciating the mitigating circumstance of voluntary

Upon the facts and the evidence, we affirm.

The defense contends that "The complete crime of larceny (theft/robbery) as distinguished from
an attempt requires asportation or carrying away, in addition to the taking, In other words, the
crime of robbery/theft has three consecutive stages: 1) the giving 2) the taking and 3) the
carrying away or asportation And without asportation the crime committed is only attempted"
(Memorandum for Appellant Salvilla, Records, p. 317).

There is no question that in robbery, it is required that there be a taking of personal property
belonging to another. This is known as the element of asportation the essence of which is the
taking of a thing out of the possession of the owner without his privity and consent and without
the animus revertendi (Aquino, Revised Penal Code, p. 97, citing 5 C.J. 607). In fact, if there is
no actual taking, there can be no robbery. Unlawful taking of personal property of another is an
essential part of the crime of robbery.

Appellant insists that while the "giving" has been proven, the "taking" has not. And this is
because neither he nor his three co-accused touched the P5,000.00 given by Severino nor the
latter's wallet or watch during the entire incident; proof of which is that none of those items were
recovered from their persons.

Those factual allegations are contradicted by the evidence. Rodita, the lumberyard employee,
testified that upon demand by Appellant, Severino put P20,000.00 inside a paper bag and
subsequently handed it to Appellant. In turn, accused Simplicio Canasares took the wallet and
wristwatch of Severino. In respect of the P50,000.00 from Mayor Caram, Rodita declared that
the Mayor handed the amount to her after she (the Mayor) had opened the padlocked door and
that she thereafter gave the amount to one of the holduppers. The "taking" was, therefore,
sufficiently proved (TSN, July 1, 1987, pp. 12-13, 15-16, 27-31). The money demanded, and the
wallet and wristwatch were within the dominion and control of the Appellant and his co-accused
and completed the taking.

The State established a "taking" sufficient to support a conviction of robbery even though
the perpetrators were interrupted by police and so did not pick up the money offered by
the victim, where the defendant and an accomplice, armed with a knife and a club
respectively, had demanded the money from the female clerk of a convenience store, and
the clerk had complied with their instructions and placed money from the register in a
paper bag and then placed the bag on the counter in front of the two men; these actions
brought the money within the dominion and control of defendant and completed the
taking. (Johnson vs. State, 432 So 2d 758).

"Severance of the goods from the possession of the owner and absolute control of the
property by the taker, even for an instant, constitutes asportation (Adams vs.
Commonwealth, 154 SW 381; State vs. Murray, 280 SW 2d 809; Mason vs.
Commonwealth, 105 SE 2d 149) [Emphasis supplied].

It is no defense either that Appellant and his co-accused had no opportunity to dispose of the
personalities taken. That fact does not affect the nature of the crime, From the moment the
offender gained possession of the thing, even if the culprit had no opportunity to dispose of the
same, the unlawful taking is complete (Reyes, Revised Penal Code Annotated, Book II, 1981 ed.,
p. 594).

The crime is consummated when the robber acquires possession of the property, even if
for a short time, and it is not necessary that the property be taken into the hands of the
robber, or that he should have actually carried the property away, out of the physical
presence of the lawful possessor, or that he should have made his escape with it" (People
vs. Quinn, 176 P 2d 404; Woods vs. State, 220 SW 2d 644; People vs. Beal, 39 P 2d 504;
People vs. Clark, 160 P 2d 553).
Contrary to Appellant's submission, therefore, a conviction for consummated and not merely
attempted Robbery is in order.

It is the contention of Appellant that Rodita could not have seen the taking because the place was
dark since the doors were closed and there were no windows. It will be recalled, however, that
Rodita was one of the hostages herself and could observe the unfolding of events. Her failure to
mention the taking in her sworn statement would not militate against her credibility, it being
settled that an affidavit is almost always incomplete and inaccurate and does not disclose the
complete facts for want of inquiries or suggestions (People vs. Andaya, G.R. No. L-63862, 31
July 1987, 152 SCRA 570; People vs. Tan, et al., 89 Phil. 337 [1951]).

The fact, too, that Rodita was an employee of Severino would not lessen her credibility. The
defense has not proven that she was actuated by any improper motive in testifying against the

In the last analysis, the basic consideration centers around the credibility of witnesses in respect
of which the findings of the Trial Court are entitled to great weight as it was in a superior
position to assess the same in the course of the trial (see People vs. Ornoza G.R. No. L-56283, 30
June 1987, 151 SCRA 495; People vs. Alcantara, G.R. No. L-38042, 30 June 1987, 151 SCRA

Anent the second assignment of error, the "surrender" of the Appellant and his co-accused cannot
be considered in their favor to mitigate their liability. To be mitigating, a surrender must have the
following requisites: (a) that the offender had not been actually arrested; (b) that the offender
surrendered himself to a person in authority or to his agent; and (c) that the surrender was
voluntary (People vs. Canamo, G.R. No. L-62043, 13 August 1985, 138 SCRA 141).

The "surrender" by the Appellant and his co-accused hardly meets these requirements. They
were, indeed, asked to surrender by the police and military authorities but they refused until only
much later when they could no longer do otherwise by force of circumstances when they knew
they were completely surrounded and there was no chance of escape. The surrender of the
accused was held not to be mitigating as when he gave up only after he was surrounded by the
constabulary and police forces (People vs. Sigayan et al., G.R. Nos. L-18523-26, 30 April 1966,
16 SCRA 839; People vs. Mationg G.R. No. L-33488, 29 March 1982, 113 SCRA 167). Their
surrender was not spontaneous as it was motivated more by an intent to insure their safety. And
while it is claimed that they intended to surrender, the fact is that they did not despite several
opportunities to do so. There is no voluntary surrender to speak of (People vs. Dimdiman 106
Phil. 391 [1959]).

All told, the assigned errors remain unsubstantiated and we find the guilt of the accused-
appellant, Bienvenido Salvilla, established beyond reasonable doubt.

Although unassigned as an error, we deem it necessary to turn now to the nature of the linked
offenses involved and the penalty imposed by the Trial Court.
Appellant and his co-accused were charged in the Information with "Robbery with Serious
Physical Injuries and Serious Illegal Detention ("Art. 295, par. 3, in conjunction with Art. 267,
RPC )and sentenced to reclusion perpetua. We agree with the Trial Court that a complex crime
under Article 48 of the Revised Penal Code has been committed such that the penalty for the
more serious offense of Serious Illegal Detention (Art. 267, Revised Penal Code), or "reclusion
perpetua to death," is to be imposed instead of the penalty prescribed for Robbery with Serious
Physical Injuries (Art. 294 (3), which is reclusion temporal.

Under Article 48, a complex crime arises "when an offense is a necessary means for committing
the other." The term "necessary means" does not connote indispensable means for if it did then
the offense as a "necessary means" to commit another would be an indispensable element of the
latter and would be an ingredient thereof. The phrase "necessary means" merely signifies that
one crime is committed to facilitate and insure the commission of the other (Aquino, Revised
Penal Code, Vol. I, 1987 ed., p. 624, citing Dissent, Montemayor, J., Amado Hernandez, 99 Phil.
515). In this case, the crime of Serious Illegal Detention was such a "necessary means" as it was
selected by Appellant and his co-accused to facilitate and carry out more effectively their evil
design to stage a robbery.

The facts of this case differ from those in People vs. Astor, et al. (G.R. Nos. L-71765-66, 29
April 1987, 149 SCRA 325) where the accused were convicted of Robbery but acquitted in the
case for Serious Illegal Detention and where it was held that "the detention is absorbed in the
crime of robbery." For one, in Astor, there were two (2) separate Informations filed, one for
Robbery and another for Serious Illegal Detention. In the present case, only one Information was
filed charging the complex offense. For another, in Astor, the robbery had already been
consummated and the detention was merely to forestall the capture of the robbers by the police.
Not so in this case, where the detention was availed of as a means of insuring the consummation
of the robbery. Further, in Astor, the detention was only incidental to the main crime of robbery
so that it was held therein:

. . . were appellants themselves not trapped by the early arrival of the police at the scene
of the crime, they would have not anymore detained the people inside since they have
already completed their job. Obviously, appellants were left with no choice but to resort
to detention of these people as security, until arrangements for their safe passage were
made. This is not the crime of illegal detention punishable under the penal laws but an act
of restraint in order to delay the pursuit of the criminals by peace officers (People v. Sol,
9 Phil. 265; People v. Uday 55 Phil. 167, cited in the Revised Penal Code, Aquino, Vol.
3, 1976 ed., p. 1337). Where the victims in a robbery case were detained in the course of
robbery, the detention is absorbed by the crime of robbery (P. v. Baysa, 92 Phil. 1008,
id.). In the case at bar, the detention was only incidental to the main crime of robbery,
and although in the course thereof women and children were also held, that threats to kill
were made, the act should not be considered as a separate offense. Appellants should only
be held guilty of robbery.

In contract, the detention in the case at bar was not only incidental to the robbery but was a
necessary means to commit the same.1wphi1 After the amount of P20,000.00 was handed to
Appellant, the latter and his co-accused still refused to leave. The victims were then taken as
hostages and the demand to produce an additional P100,000.00 was made as a prerequisite for
their release. The detention was not because the accused were trapped by the police nor were the
victims held as security against the latter. The detention was not merely a matter of restraint to
enable the malefactors to escape, but deliberate as a means of extortion for an additional amount.
The police and other authorities arrived only much later after several hours of detention had
already passed. And, despite appeals to appellant and his co-accused to surrender, they
adamantly refused until the amount of P100,000.00 they demanded could be turned over to them.
They even considered P50,000.00, the amount being handed to them, as inadequate.

The foregoing features also distinguish this case from those of U.S. v. Sol, 9 Phil. 265 [1907]
where the restraint was for no other purpose than to prevent the victims from reporting the crime
to the authorities; from People v. Gamboa, 92 Phil. 1085 [1953] where the victims were taken to
a place one kilometer away and shot in order to liquidate the witnesses to the robbery; from
People v. Baysa, 92 Phil. 1008 [1953]; People v. Manzanilla, 43 Phil. 167 [1922], all of which
cases were cited in Astor and where the victims were only incidentally detained so that the
detention was deemed absorbed in robbery.

In other words, unlike in the above cases, the elements of the offense of Serious Illegal Detention
are present in this case. The victims were illegally deprived of their liberty. Two females (Mary
and Minnie) and a minor (Minnie), a specified circumstance in Article 267 (3), were among
those detained. The continuing detention was also for the purpose of extorting ransom, another
listed circumstance in Article 267 (last parag.) not only from the detained persons themselves but
even from the authorities who arrived to rescue them.

It follows then that as the detention in this case was not merely incidental to the robbery but a
necessary means employed to facilitate it, the penalty imposed by the Trial Court is proper.

WHEREFORE, the judgment appealed from is hereby AFFIRMED. Proportionate costs.


Paras, Padilla Sarmiento and Regalado JJ., concur.


G.R. No. L-2747 April 11, 1906

THE UNITED STATES,Plaintiff-Appellee, vs. AGUSTIN BASCO,Defendant-Appellant.

Vicente P. Delgado, for appellant.

Office of the Solicitor-General Araneta, for appellee.


It was proved at the trial of this case that the defendant attempted to pay for a package of
cigarettes which he bought at a certain store with what appeared to be silver coin, but which, as a
matter of fact, was a Philippine copper cent; that he insisted that the owner of the store should
accept the same as a peseta, that is to say, a twenty cent piece; that the latter refused to accept it
upon noticing what the real value and denomination of the coin was; that the defendant again
insisted that the money be accepted and the owner of the store refused to do so; that as a result of
such refusal a quarrel ensued between them; that a policeman then interfered, and upon being
informed of what had happened, placed the defendant under arrest and took him to the police
station, where several Mexican and Japanese coins were found in his possession together with a
roll of Philippine copper cents, the latter being silver plated, and identical with the coin which he
had attempted to pass at the store as a twenty-cent piece; and that upon an examination of these
plated coins it was found that they were genuine Philippine copper cents, which apparently and
been whitened with quicksilver to give them the color and brightness of silver. chanroblesvirtualawlibrary chanrobles virtual law library

The defendant having been asked as to where he had obtained the said coins, first answered that
he had received them as change, but later admitted that he had silvered them himself. chanroblesvirtualawlibrary chanrobles virtual law library

The court below found that these facts constituted the crime charged in the complaint - that is to
say, the counterfeiting of money - as defined and punished in article 286 of the Penal Code, and
sentenced the defendant to three years' imprisonment (presidio correccional), and to pay a fine
of 750 pesetas, and the costs of the proceedings. chanrobles virtualawlibrary chanrobles virtual law library

The Attorney-General, in his brief filed in this court, contends that these facts do not constitute
the crime of counterfeiting money, but that of estafa, and for this reasons asks that the defendant
be acquitted of the crime charged in the complaint without prejudice to the filing of another
complaint against him for estafa. chanroblesvirtualawlibrary chanrobles virtual law library
We think that the Attorney-General's contention is correct. There can be no counterfeiting of
money when, as in this case, no spurious or clipped coin was used. The coins in question were
genuine copper cents and bore their original designs and inscriptions. The defendant did not
make or attempt to make any alteration in the designs and inscriptions of the said coins. All that
he did was to give them the appearance of silver pieces for the purpose of passing them as
twenty-cent coins. He did not, however, attempt to imitate the peculiar design of such coins. The
acts committed by the defendant for the purpose of defrauding third persons by deceiving them
us to the real value of the coins in question constitute the crime of estafa and not of
counterfeiting money. There were not legal grounds upon which a charge for these latter offense
could be based.chanrobles virtualawlibrary chanrobles virtual law library

The judgment appealed from is hereby reversed and the defendant acquitted of the charge of
counterfeiting money contained in the complaint, and the Attorney-General is directed to present
another complaint against him for the crime of estafa. It is ordered that the Mexican and
Japanese coins found in the possession of the defendant be returned to him. The costs of both
instances are declared de oficio. After the expiration of ten days from the date of final judgment,
let the case be remanded to the Court of First Instance from whence it came for proper
procedure. So ordered. chanroblesvirtualawlibrary chanrobles virtual law library

Arellano, C.J., Torres, Johnson, Carson and Willard, JJ., concur.

UNITED STATES v. Lyman D. White,
ResetAA Font size: Print 6

United States Court of Appeals,Fifth Circuit.

UNITED STATES of America, Plaintiff-Appellee, v. MELROSE EAST
SUBDIVISION, Third Filing, East Baton Rouge Parish Louisiana; et al.,
Defendants, Lyman D. White, Claimant-Appellant.

No. 02-30743.

Decided: January 13, 2004

Before KING, Chief Judge, DENNIS, Circuit Judge, and LYNN, District Judge.*Stefan Dante
Cassella (argued), U.S. Dept. of Justice, Asset Forfeiture & Money Laundering, Washington,
DC, Lyman Edgar Thornton, III, Asst. U.S. Atty., Baton Rouge, LA, for Plaintiff-Appellee. John
E. DiGiulio, New Orleans, LA, Richard William Westling (argued), Law Offices of Richard W.
Westling, New Orleans, LA, for Claimant-Appellant.

The United States filed a civil forfeiture complaint in the district court and on the same day
obtained a pretrial restraining order under 18 U.S.C. 983(j)(1)(A) enjoining the transfer of the
defendant property. A claimant to the property, who was indicted on federal charges as part of
the same investigation that led to the civil forfeiture complaint, filed a motion in the district court
seeking to modify the restraining order to release funds needed to retain an attorney in the related
criminal case. After an evidentiary hearing, the district court denied the motion, finding that the
government had established probable cause to restrain the assets. The claimant appeals.

We decide that the standard of proof to be employed in ruling on such a motion is probable
cause, and we agree with the district court that the government satisfied that standard. We
accordingly affirm the district court's denial of the motion to modify the restraining order.


This civil forfeiture proceeding arises from a Medicaid fraud investigation into the activities of
Drug and Alcohol Counseling, Inc. (DAC), a corporation owned and operated by Claimant-
Appellant Lyman D. White. In addition to spawning this forfeiture action, the investigation has
led to the indictment of White and three others connected to DAC.
Located in Baton Rouge, DAC received Medicaid reimbursements for providing substance abuse
treatment to local youths. Medicaid paid DAC a total of approximately $175,000 for all of
1998. DAC's activities therefore aroused suspicion when, by September 1999, DAC's billings
had risen to over $1 million for the year to date, with many of DAC's monthly billings rivaling
the total for the whole of the previous year. The Louisiana Department of Health and Hospitals
(DHH), which administers the state's Medicaid program, instructed Unisys, the private
company that serves as DHH's claims intermediary, to examine DAC's billing activity. Unisys
determined that an on-site review was warranted. At that review, held in October 1999, Unisys
analysts noted that DAC employees were inordinately slow in providing the patient charts that
the analysts requested. The government has since suggested, based on interviews with DAC
employees, that the suspicious delay resulted from the employees needing time to falsify the
charts that were requested by the Unisys analysts. By early November 1999, Unisys decided
that the situation at DAC was sufficiently serious to justify withholding future Medicaid
payments. This determination was upheld after a hearing conducted later that month.

The investigation then continued at higher levels. Beginning in late December 1999, DHH's
Program Integrity Staff began calling some of the clients reflected on DAC's Medicaid billings.
Of the twenty-five clients selected, only thirteen could be located. Seven of those contacted
were unaware of DAC, five said that they attended DAC but only for tutoring or recreational
programs (activities which, while laudable, did not entitle DAC to Medicaid payments), and only
one mentioned a drug addiction. Based on these phone calls, together with the on-site review,
the case was referred to the Medicaid Fraud Control Unit, which launched a criminal
investigation in January 2000. The FBI soon joined the effort as well. Federal and state
investigators eventually interviewed a total of thirty-nine youths who had supposedly received
substance abuse counseling at DAC. Ten denied any knowledge of DAC, and the rest referred to
DAC as a camp or youth program where they went for tutoring and recreational activities.
None of them said they received substance abuse treatment at DAC of the type for which DAC
was billing Medicaid.

The investigation later spread beyond DAC and White. Agents learned that White had formed
a personal relationship with Marion Slaton, a manager in a department of Unisys responsible for
fraud detection. They learned that, at some point in February 1999, she had given White a list
of juvenile Medicaid recipients in East Baton Rouge Parish. Slaton knew that it was illegal to
give White this list, which contained all of the identifying information necessary to file Medicaid
claims in the juveniles' names. The spike in DAC's Medicaid billings, noted earlier, began
shortly after Slaton gave White the list. Slaton used her position at Unisys to shield DAC's
questionable billings from review. She later accepted several thousand dollars from White,
though at least some of this money might be attributable to Slaton's status as White's girlfriend,
rather than to kickbacks.

Investigators also learned that White contacted Dana White (no relation) in April 1999 about an
opportunity to expand the business of Dana White's company, Healthcare Laboratory Services,
LLC (HLS). HLS soon began filing false Medicaid claims using patient information supplied
by White, and Dana White in turn paid kickbacks to DAC. At White's behest, Dana White also
made payments to Slaton to ensure that HLS's increased Medicaid billings would not come under
As part of the growing investigation, agents examined DAC's financial records. During the
early part of 1999, Unisys electronically deposited DAC's Medicaid reimbursements into DAC's
account at Liberty Bank. At some point in April, White opened an account at Dryades Bank,
and the deposits began to flow there instead. The agents formed a basis to believe that White
had funneled DAC's increased (and fraudulent) Medicaid revenues from those bank accounts
into purchases of real estate and annuities. As a result, on August 22, 2001, the government
filed a civil complaint for forfeiture, under 18 U.S.C. 981 and 985, against six parcels of
real property and three annuities purchased with funds allegedly derived from the DAC scheme.
According to the government, the property was subject to forfeiture under both 981(a)(1)(A)
as property involved in a money laundering offense and 981(a)(1)(C) as property that
constitutes or is derived from proceeds traceable to a federal health care offense. The
complaint was accompanied by a declaration by one of the investigating FBI agents, which
recounted facts that avowedly showed probable cause to believe that the government's forfeiture
claim was meritorious. The government simultaneously requested, and the district court on the
same day issued, an ex parte pretrial restraining order under 983(j)(1)(A). The restraining
order generally enjoined the sale, pledge, or any other means of disposing of the property
without the court's approval. The order further provided that any person wishing to transfer the
property could do so, with the government's permission, as long as the proceeds were put into an
escrow account which would itself be forfeited to the government if the government prevailed on
the merits of the case. According to the terms of the order, it remained in force until judgment
is rendered on the civil forfeiture complaint or until further order of the Court.

White was indicted a few months later, on October 31, 2001, for offenses arising from the same
events described in the civil forfeiture complaint. On November 26, White filed a motion
seeking either an adversary hearing on the restraining order or the release of restrained funds to
the extent that he needed the funds to pay for his defense attorney in the criminal case. The
government opposed the motion. The government contended that funds needed to pay counsel
are not exempt from forfeiture, and, moreover, the government argued that White was not even
entitled to a hearing on the restraining order unless he first showed both that he lacked any other
funds with which to pay counsel and that there was no probable cause to believe that the
restrained assets were subject to forfeiture.1 The district judge held a hearing on March 22,
2002. The hearing transcript shows that the parties and the court were at times uncertain as to
the standards and procedures that should be employed in ruling on White's motion. The court
appears to have orally ruled that White need not make the threshold showings requested by the
government and that the government would instead bear the initial burden of showing that it was
substantially likely to prevail on the merits of its forfeiture claim. To satisfy that burden, the
government tendered the declaration that accompanied the forfeiture complaint, White's
indictment, the factual statements adopted by Dana White and Slaton as part of their plea
bargains, and several charts tracing the connections between DAC's Medicaid receipts and the
restrained assets. The court did not receive any live testimony during the hearing, although
White asked to question some of the government witnesses. Both sides filed post-hearing briefs
arguing whether the government had met the burden set forth by the district court, and the
government additionally filed a motion asking the court to reconsider its procedural rulings on
the allocation of the burden of proof.
In a written order dated April 17, 2002, the district court ruled that the government had met its
initial burden and that it was therefore necessary for White to adduce evidence and present his
case at an evidentiary hearing, which was set for May 1. The court denied the government's
motion to reconsider as moot.

At the May 1 hearing, the court suggested that its rulings at the March 22 hearing had been a
little too hard on the government. After reflecting on the Supreme Court's decision in United
States v. Monsanto, 491 U.S. 600, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989), the court now
believed that the pretrial restraining order should be continued as long as there was probable
cause to believe that the property was subject to forfeiture. Over the government's
protestations, the court permitted White's attorneys to contest the existence of probable cause by
examining three government witnesses: the two lead investigating agents and Slaton. At the
conclusion of the hearing, the court expressed its view that the examinations had only bolstered
the government's showing of probable cause. A written ruling later formalized the court's
denial of White's motion to modify the restraining order to release funds needed to pay counsel
in his criminal case.

White now appeals the decision to continue the pretrial restraining order.2 He argues that the
district court should have applied a standard higher than that of probable cause or, if probable
cause is the proper standard, that the evidence failed to meet that standard.


Although the district court's ultimate decision to grant, deny, or continue injunctive relief is
reviewed only for abuse of discretion, Castillo v. Cameron County, 238 F.3d 339, 347 (5th
Cir.2001), the district court abuses its discretion if it grounds its decision on an erroneous view
of the governing legal standards, Cargill, Inc. v. United States, 173 F.3d 323, 341 (5th Cir.1999).
The question whether the district court applied the proper standard of proof is a question of law
that we review de novo. See Stevens Shipping & Terminal Co. v. JAPAN RAINBOW II MV,
334 F.3d 439, 443 (5th Cir.2003). In addition, [a]lthough we review the district court's finding
of facts for clear error, the question of whether the facts are sufficient to constitute probable
cause is a question of law, which we review de novo. United States v. 1988 Oldsmobile
Cutlass Supreme 2 Door, 983 F.2d 670, 673 (5th Cir.1993).


White contends that the district court erred both by employing the probable cause standard and
in determining that the evidence satisfied that standard. We first decide the evidentiary
standard that the district court should employ in ruling on a motion to modify a pretrial
restraining order under 18 U.S.C. 983(j)(1)(A). This precise question is a matter of first
impression, though the Supreme Court has provided guidance in a closely related context.

A. Standard Under 18 U.S.C. 983(j)(1)(A)

The government seeks the civil forfeiture of the defendant properties under the authority of 18
U.S.C. 981. The statutory provision authorizing pretrial restraining orders in civil forfeiture
proceedings is found in 18 U.S.C. 983, and it provides in relevant part:

(1) Upon application of the United States, the court may enter a restraining order or injunction
or take any other action to seize, secure, maintain, or preserve the availability of property subject
to civil forfeiture-

(A) upon the filing of a civil forfeiture complaint alleging that the property with respect to
which the order is sought is subject to civil forfeiture; or

(B) prior to the filing of such a complaint, if, after notice to persons appearing to have an
interest in the property and opportunity for a hearing, the court determines that-

(i) there is a substantial probability that the United States will prevail on the issue of forfeiture
and that failure to enter the order will result in the property being destroyed, removed from the
jurisdiction of the court, or otherwise made unavailable for forfeiture; and

(ii) the need to preserve the availability of the property through the entry of the requested order
outweighs the hardship on any party against whom the order is to be entered.

18 U.S.C. 983(j) (2000) (emphasis added). This provision, along with all of the civil
forfeiture procedures set forth in 983, is a product of the Civil Asset Forfeiture Reform Act of
2000 (CAFRA), Pub. L. No. 106-185, 114 Stat. 202. As the restraining order in this case was
requested contemporaneously with the filing of the forfeiture complaint, issuance of the
restraining order was authorized under paragraph (A) above. Paragraph (A) makes no mention
of a hearing, either before or after issuance of the restraining order. The absence of any
mention of a hearing is notable because paragraph (B), which concerns pre-complaint restraining
orders, says that such orders may issue only after notice and an opportunity for a hearing. In
this case, the district court did not hold a hearing before issuing the restraining order, and White
does not contend that it should have held a pre-restraint hearing.3

The government recognizes, however, that considerations of due process can require the court to
hold a post-restraint pretrial hearing in certain circumstances. Although there does not seem to
be a reported holding to this effect regarding the still fairly new provision at issue here, 18
U.S.C. 983(j), authorities interpreting its criminal analogue, 21 U.S.C. 853(e), are in broad
agreement that due process requires the district court to hold a prompt hearing at which the
property owner can contest the restraining order-without waiting until trial to do so-at least when
the restrained assets are needed to pay for an attorney to defend him on associated criminal
charges. See United States v. Jones, 160 F.3d 641, 645-48 (10th Cir.1998); Monsanto, 924
F.2d at 1203; United States v. Moya-Gomez, 860 F.2d 706, 729-30 (7th Cir.1988); United
States v. Harvey, 814 F.2d 905, 928-29 (4th Cir.1987), superceded as to other issues, In re
Forfeiture Hearing as to Caplin & Drysdale, Chartered, 837 F.2d 637 (4th Cir.1988) (en banc),
aff'd, 491 U.S. 617, 109 S.Ct. 2646, 105 L.Ed.2d 528 (1989).4 Other courts have held that due
process requires that a claimant to assets that have been civilly seized be afforded a prompt
opportunity to challenge the seizure when the assets are needed to pay counsel in a related
criminal case. See United States v. Farmer, 274 F.3d 800, 805 (4th Cir.2001); United States v.
Michelle's Lounge, 39 F.3d 684, 700-01 (7th Cir.1994).

Note that neither due process, nor the Sixth Amendment right to counsel, requires that assets
needed to pay an attorney be exempted from restraining orders or, ultimately, from forfeiture.
Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 623-35, 109 S.Ct. 2646 (1989);
Monsanto, 491 U.S. at 616, 109 S.Ct. 2657. Rather, the constitutional requirement set forth in
the circuit court cases cited above is simply a requirement that the district court in certain
circumstances hold a hearing on the restraining order and make a determination that the assets
are properly subject to forfeiture. Because the district court held a hearing in this case, and
because the government does not dispute that due process can require such hearings, we can
assume without deciding that due process can mandate a post-restraint hearing under
983(j)(1)(A), at least in certain circumstances. But in order to resolve White's appeal, we do
need to decide the question of the standard of proof that should be used in such a post-restraint
hearing. In particular, we must decide whether the district court erred in continuing the
restraining order based on a showing of probable cause to believe that the assets were subject to

According to White, the government should not be permitted to restrain assets that he needs to
pay his criminal counsel unless the government can make a post-restraint showing that it is likely
to succeed on the merits of the forfeiture action. Essentially, the government would be required
to meet the burden generally imposed on parties seeking preliminary injunctions, which is
presumably somewhat higher than a mere showing of probable cause. In support of that
proposition, White relies on our decision in United States v. Thier, 801 F.2d 1463 (5th Cir.1986),
modified, 809 F.2d 249 (5th Cir.1987), which applied the substantial-likelihood-of-success-on-
the-merits standard in the context of 21 U.S.C. 853(e)(1)(A), which authorizes post-
indictment, pretrial restraining orders in criminal forfeiture cases. White further explains that
the ultimate showing required for the government to succeed on the merits of a civil forfeiture
action recently changed with the passage of CAFRA in April 2000. Before CAFRA, the
government could prevail on the merits of a civil forfeiture action merely by showing probable
cause to believe that the subject property was forfeitable. After CAFRA, however, the
government can prevail on the merits only by establishing forfeitability by a preponderance of
the evidence. 18 U.S.C. 983(c)(1) (2000). Combining CAFRA's higher standard of proof
with Thier's statements regarding the standard for pretrial restraining orders, White concludes
that the government should be required to defend its 983(j)(1)(A) pretrial restraining order by
showing that it is substantially likely to succeed at trial in proving by a preponderance of the
evidence that the assets are subject to forfeiture. Again, in White's view, what is required is
basically the familiar inquiry into whether a plaintiff is entitled to a preliminary injunction.

According to the government, a pretrial restraining order issued under 983(j)(1)(A) should be
continued if the government shows probable cause to believe that the assets are subject to
forfeiture. To the extent that White would read Thier to say otherwise, the government
contends that the issue is instead controlled by the Supreme Court's post-Thier decision in United
States v. Monsanto. In Monsanto, which involved a restraining order under a criminal
forfeiture statute, the Supreme Court held that due process permitted the government to restrain
assets needed to pay attorneys' fees as long as the government showed that there was probable
cause to believe that the assets were subject to forfeiture. 491 U.S. at 615-16, 109 S.Ct. 2657.
Regarding the impact of CAFRA, the government argues that while CAFRA increased the
standard of proof on the merits of a civil forfeiture case, CAFRA does not affect the standard at a
due process hearing challenging a pretrial restraining order. On that issue, according to the
government, Monsanto still controls.5

Having weighed the parties' contentions, we are persuaded that probable cause is the proper
standard of proof for continuing a pretrial restraining order under 983(j)(1)(A). Under pre-
CAFRA law, property could be civilly forfeited to the government under 18 U.S.C. 981 based
merely on a showing of probable cause to believe that the property was implicated in certain
offenses, unless the claimant could establish, by a preponderance of the evidence, that some
defense was applicable or that the property was otherwise not subject to forfeiture. See United
States v. $9,041,598.68, 163 F.3d 238, 246 (5th Cir.1998); United States v. 1988 Oldsmobile
Cutlass Supreme 2 Door, 983 F.2d 670, 673-74 (5th Cir.1993).6 Courts consistently held that
this scheme comported with due process. See United States v. One Beechcraft King Air 300
Aircraft, 107 F.3d 829, 829-30 (11th Cir.1997) (per curiam) (collecting cases). Moreover, the
government could seize property pending the resolution of the forfeiture case, and this too
required no more than probable cause. See 18 U.S.C. 981(b)(2) (1994); Marine Midland
Bank, N.A. v. United States, 11 F.3d 1119, 1124-26 (2d Cir.1993); United States v. One 1978
Mercedes Benz, Four-Door Sedan, 711 F.2d 1297, 1302-03 (5th Cir.1983).7

Congress enacted CAFRA in 2000 in order to provide a more just and uniform procedure for
Federal civil forfeitures. Pub. L. No. 106-185 pmbl., 114 Stat. 202, 202.8 CAFRA added 18
U.S.C. 983, which sets forth a uniform (though not comprehensive) set of procedures and
standards applicable to most civil forfeiture proceedings. Among other changes, CAFRA
increased the government's required showing on the merits: In a suit or action brought under
any civil forfeiture statute for the civil forfeiture of any property the burden of proof is on the
Government to establish, by a preponderance of the evidence, that the property is subject to
forfeiture. 18 U.S.C. 983(c)(1). CAFRA also added 983(j), which authorizes pretrial
restraining orders and other measures to preserve property pending resolution of the case. The
particular provision at issue in this appeal is 983(j)(1)(A), which concerns post-complaint
restraining orders.

As we observed above, 983(j)(1)(A) does not mention a hearing, let alone fix the standard of
proof in such a hearing. When due process requires a hearing, as both sides agree that it
sometimes does, we think that the standard of proof applied at such a hearing should likewise be
a function of what due process requires. In deciding what due process requires, we find
compelling guidance in the Supreme Court's decision in Monsanto, which involved 21 U.S.C.
853(e)(1)(A). In that case, like the case before us today, the government had obtained a pretrial
restraining order that froze assets that the government contended were subject to forfeiture.
The owner objected that the assets were necessary to pay for an attorney to defend him on the
related criminal charges. The court of appeals had originally held that, although funds needed
to pay for an attorney were subject to forfeiture and pretrial restraint, due process required a
post-restraint, pretrial hearing at which the government would be required to show a likelihood
of succeeding in the criminal forfeiture case. United States v. Monsanto, 836 F.2d 74, 83-84 &
n. 9 (2d Cir.1987). On rehearing, the en banc court went further and held that funds needed to
pay for a criminal defense attorney were not subject to forfeiture or pretrial restraint at all.
United States v. Monsanto, 852 F.2d 1400, 1402 (2d Cir.1988) (en banc). The Supreme Court
reversed, holding that funds needed to pay for a criminal defense were not exempt from
forfeiture and that such assets could properly be restrained under 853(e)(1)(A) pending trial
based on a finding of probable cause to believe that the assets are forfeitable. 491 U.S. at 615,
109 S.Ct. 2657 (emphasis added). The Court supported its decision by noting that its
precedents required the government to make only a showing of probable cause before physically
seizing property alleged to be subject to forfeiture, a more severe form of interference than a
restraining order. Id. Moreover, the Court pointed out that the government may restrain a
person (i.e., arrest him or her) based on a finding of probable cause. Id. at 615-16, 109 S.Ct.
2657. The Court concluded by observing that if the Government may, post-trial, forbid the use
of forfeited assets to pay an attorney, then surely no constitutional violation occurs when, after
probable cause is adequately established, the Government obtains an order barring a defendant
from frustrating that end by dissipating his assets prior to trial. Id. at 616, 109 S.Ct. 2657. It
is true that Monsanto arose in connection with a criminal forfeiture proceeding, but we see no
reason why due process should require a different standard of proof when the assets needed to
pay an attorney to provide a criminal defense are restrained as part of a related civil forfeiture

The recent passage of CAFRA does not mean that we should now require more than what
Monsanto required. CAFRA raised the government's ultimate burden of proof on the merits in
a civil forfeiture case from probable cause (subject to rebuttal by a preponderance) to a
preponderance of the evidence. But it is important to remember that since Monsanto was a
criminal forfeiture case under 21 U.S.C. 853(a), the government's ultimate burden on the
merits was to prove the crime beyond a reasonable doubt and prove the forfeitability of the
property by a preponderance of the evidence.10 Given that ultimate standard of proof, Monsanto
held that the pretrial restraining order could continue in effect based on a showing of probable
cause. With the passage of CAFRA, the ultimate standard on the merits in civil cases has been
raised, but it has not been raised beyond the ultimate standard that was applicable in Monsanto, a
criminal case. That CAFRA raised the merits standard in civil cases is therefore no reason to
go beyond what Monsanto required at the pretrial stage.

While Monsanto is the primary basis for our decision, we note as well that employing the
probable cause standard in the context of 983(j)(1)(A) has the additional virtue of aligning
with the standard for obtaining the alternative device for preserving assets subject to forfeiture:
outright seizure. Property subject to forfeiture can in many cases be seized by the government,
pending trial, upon no more than an initial showing of probable cause. See 18 U.S.C.
981(b)(2), 985(d) (2000). When the seizure is later challenged in a due process hearing, the
standard has likewise been held to be probable cause. See Farmer, 274 F.3d at 805; Michelle's
Lounge, 39 F.3d at 700-01. Both Congress and the Constitution see pretrial restraining orders
as preferable, somewhat less restrictive alternatives to outright seizure. See 985(d)(2);
James Daniel Good Real Prop., 510 U.S. at 58-59, 62, 114 S.Ct. 492. It would frustrate that
preference were the government able to seize property more easily than it could restrain it.

Against these considerations, White presses our decision in Thier. Some aspects of Thier
appear to be in tension with Monsanto, and future cases may need to consider whether certain
portions of Thier were overruled. Today's case, however, only requires that we decide the
relatively narrow question whether continuing a pretrial restraining order under 983(j)(1)(A)
demands a government showing of probable cause or instead a (presumably somewhat higher)
showing of a substantial likelihood of success on the merits. Thier held, in a case involving a
separate but textually very similar statute, that the government should be required to make the
latter showing, as that is the showing typically required for preliminary injunctions. The
opinion in Thier was ostensibly based on an interpretation of the statute itself, not on due process
directly, but the opinion nonetheless makes clear that the court's interpretation of the statute was
guided by the need to make the statute comport with due process. 801 F.2d at 1468. The
Supreme Court, however, did reach the constitutional question in Monsanto, and there the Court
concluded that due process permitted the government to restrain assets needed to pay counsel
upon a showing of probable cause. 491 U.S. at 615-16, 109 S.Ct. 2657. Whether or not all of
Thier remains good law in the context of 21 U.S.C. 853(e)(1)(A),11 this new guidance from the
Supreme Court convinces us that in the context of 983(j)(1)(A)-a statute enacted after
Monsanto-Thier should not be carried over to the extent that it would require the government to
show more than probable cause in order to restrain assets. On that particular question, we find
the Supreme Court's decision in Monsanto controlling.12 Accordingly, we hold that probable
cause is the proper standard of proof.

B. Application of the Standard

The forfeiture complaint named the following property: three parcels of real property in the
Melrose East Subdivision in East Baton Rouge Parish (the Melrose lots), two parcels of real
property in the Fairwoods subdivision in East Baton Rouge Parish, a parcel of real property in
Ascension Parish, a $30,000 USG annuity in the name of one of White's children, a $100,000
American National Insurance Co. annuity in White's name, and a $100,000 USG annuity in
White's name.

The government seeks forfeiture of the above property under two separate theories. First, under
the proceeds theory, the government contends that the subject property constitutes or is derived
from proceeds of a specified unlawful activity, namely health care fraud. See 18 U.S.C.
981(a)(1)(C) (2000); see also id. 1956(c)(7)(F) (defining specified unlawful activity to
include federal health care offenses). Second, under the money laundering theory, the
government contends that the property is involved in a money laundering offense. See id.
981(a)(1)(A). Since the proceedings below focused on the proceeds theory, we begin there.

White contends that the government's evidentiary showing was weakest with respect to the
Melrose lots. The Melrose lots were purchased with three cashier's checks, totaling $130,000,
drawn on DAC's account at Liberty Bank and dated April 6, 1999. From January until some
point in April 1999, Unisys had deposited approximately $390,000 of Medicaid funds into the
Liberty Bank account. White does not dispute that there is probable cause to believe that some
of the billings were fraudulent, nor has he suggested that the funds in the Liberty Bank account
came from a source other than DAC's Medicaid billings.13 He argues, rather, that the
government has not shown that all of DAC's billings in the relevant time period were fraudulent.
And, he continues, if not all of the billings were fraudulent, then the government is not entitled to
forfeiture of all of the property traceable to DAC's Medicaid receipts, unless the government
shows that the particular funds used to purchase the defendant property are among that portion of
DAC's Medicaid receipts that actually are tainted. In so arguing, White relies on our decision
in United States v. One 1980 Rolls Royce, 905 F.2d 89, 90 (5th Cir.1990), for the proposition
that an asset does not become subject to forfeiture in its entirety simply because it was purchased
in part with tainted funds.

As we held above, the proper standard for judging the government's showing is probable
cause. Previous forfeiture cases have defined probable cause as a reasonable ground for belief
supported by less than prima facie proof but more than mere suspicion. 1988 Oldsmobile
Cutlass Supreme, 983 F.2d at 674 (alteration in original and internal quotation marks omitted).14
The probable cause determination in forfeiture cases looks to all of the circumstances and must
be judged with a common sense view to the realities of normal life. United States v. One
Gates Learjet, 861 F.2d 868, 870 (5th Cir.1988) (internal quotation marks omitted).

The government presented persuasive evidence that DAC was engaged in pervasive Medicaid
fraud during the months immediately preceding the purchase of the Melrose lots.15 The list of
local Medicaid recipients that White obtained from Slaton in February 1999 would allow DAC to
submit bills for people who had never attended DAC. Right after White obtained the list,
DAC's billings skyrocketed from approximately $25,000 in January 1999 and $39,000 in
February 1999 to $163,000 in March 1999, with DAC's billings remaining over $150,000 per
month for much of the rest of the year. (By comparison, DAC had received only $175,000 from
Medicaid for all of 1998.) In other words, DAC's Medicaid receipts for March exceeded the
receipts from previous months by roughly the same amount-$130,000-as White used to purchase
the Melrose lots on April 6. Investigators would later interview a sample of thirty-nine of
DAC's supposed patients from 1999, billings for whom amounted to approximately $240,000, a
sum that is roughly equivalent to a fifth of DAC's total 1999 Medicaid receipts.16 Admittedly,
the government did not present evidence that traced billings for those patients to particular
deposits into DAC's account, and it appears that the thirty-nine people received services at
various times in 1999, both before and after the purchase of the Melrose lots. Still, the pattern
of responses from this sample was indicative of widespread fraud. Ten of the thirty-nine had
never heard of DAC, and, while most said that they had attended certain programs at DAC, all of
them denied receiving the drug treatment services for which DAC billed Medicaid.
Investigators learned that DAC billed Medicaid for services rendered to persons who were in jail
or in the hospital at the time that the services were supposedly rendered. At the hearing, there
was testimony that investigators spoke to some DAC employees and, at least according to those
employees, DAC was not providing the type of individualized addiction counseling for which
DAC was billing Medicaid.

Against this, White's evidence was an affidavit from a person who had seen, at an unspecified
date, children attending individual and group counseling sessions at DAC. White did not present
evidence that the Liberty Bank account contained funds from any source other than Medicaid
receipts. His lawyers examined the government's witnesses and attempted to show that the
government could not link the receipts attributable to the thirty-nine clients with the funds used
to buy the Melrose lots, but White did not present any affirmative evidence that the Melrose lots
were purchased with clean funds, if there were any.17
Examining all of the circumstances as a whole, we conclude that the government satisfied its
burden, under the probable cause standard, of establishing that the Melrose lots were purchased
with funds that constituted the proceeds of Medicaid fraud. The results of the thirty-nine
interviews, combined with the other significant evidence of fraudulent billings, provide a
reasonable basis to believe that DAC was not performing any of the services for which it was
billing Medicaid during the relevant time period. While the record does not clearly establish
whether some of the funds in the Liberty Bank account might have been left over from a time
when DAC was legitimately billing Medicaid, the district court was entitled to draw the
inference, as a matter of probable cause, that the purchase of the Melrose lots for $130,000 on
April 6, which came on the heels of a spike in Medicaid billings of approximately the same
amount, was accomplished with tainted funds. While we do not express an opinion as to
whether the government would ultimately succeed on the merits with this evidence, it is enough
to establish probable cause.18

White has focused his arguments on appeal on the Melrose lots and does not make any
contentions specific to any of the remaining restrained properties. As discussed above, his
general argument regarding all of the restrained assets is that the government has not shown with
any particularity that the specific funds used to purchase the assets were tainted. Aside from
the Melrose lots and the $30,000 USG annuity, all of the restrained property was purchased from
July to December 1999 with funds traceable to Medicaid deposits into DAC's account at Dryades
Bank.19 Apart from the initial $5000 used to open that account, all of the money in the Dryades
Bank account came from Medicaid deposits, which began flowing into the account in April
1999, when DAC switched banks. Since we concluded above that there was a sufficient basis
to conclude that all of DAC's billings during this time frame were fraudulent, there is probable
cause to continue to restrain these properties, which are derived from the billings.

Because we conclude that the government made a sufficient showing to justify the restraint of
White's assets under the proceeds theory, which was the focus of the proceedings below, we need
not discuss the money laundering theory.


For the foregoing reasons, the district court's denial of White's motion to modify the pretrial
restraining order is AFFIRMED.


1. White's November 26 motion referred to an affidavit in which White swore that the
restrained funds were needed to pay counsel, but the affidavit was apparently not included in the
government's copy of the motion. The government later received a copy of the affidavit, but
the government continued to assert that White had other assets that he could use to pay his
attorney. At the subsequent hearing on White's motion, the government accordingly asked the
district court to examine White about the availability of other funds before entertaining the
motion to release funds from the restraining order.
2. We entertain this appeal under 28 U.S.C. 1292(a)(1), which confers jurisdiction over
appeals of [i]nterlocutory orders granting, continuing, modifying, refusing or dissolving
injunctions, or refusing to dissolve or modify injunctions. See United States v. Floyd, 992
F.2d 498, 499-500 (5th Cir.1993) (holding that 1292(a)(1) provides jurisdiction to review
decisions regarding pretrial asset restraining orders issued under 21 U.S.C. 853(e), the
criminal analogue to 18 U.S.C. 983(j)); see also United States v. Kirschenbaum, 156 F.3d
784, 788 (7th Cir.1998) (citing cases).

3. This case therefore does not implicate the question whether the district court may in its
discretion hold a pre-restraint hearing, or indeed whether it must hold a pre-restraint hearing as a
matter of due process. There is authority for the proposition that due process does not require a
pre-restraint hearing in the context of post-indictment restraining orders under 21 U.S.C.
853(e)(1)(A), the criminal analogue of 983(j)(1)(A). See United States v. Monsanto, 924
F.2d 1186, 1192-93 (2d Cir.1991) (en banc), on remand from 491 U.S. 600, 109 S.Ct. 2657, 105
L.Ed.2d 512 (1989); United States v. Musson, 802 F.2d 384, 387 (10th Cir.1986). But cf.
United States v. James Daniel Good Real Prop., 510 U.S. 43, 52-57, 62, 114 S.Ct. 492, 126
L.Ed.2d 490 (1993) (holding that due process requires a hearing before the government may
seize real property pending the resolution of a civil forfeiture action).

4. The Eleventh Circuit, on the contrary, holds that no pretrial hearing is required under 21
U.S.C. 853(e) even when the restrained assets are needed to pay counsel. See United States
v. Bissell, 866 F.2d 1343, 1354 (11th Cir.1989); see also United States v. Register, 182 F.3d
820, 835 (11th Cir.1999) (We appear to be the only circuit holding that, although pre-trial
restraint of assets needed to retain counsel implicates the Due Process Clause, the trial itself
satisfies this requirement.). The government concedes that the better view is that embraced by
the other authorities.This court has held that the requirements of Federal Rule of Civil Procedure
65, including Rule 65's hearing requirements and time limits on ex parte restraining orders, apply
to ex parte restraining orders and injunctions issued under 21 U.S.C. 853(e)(1)(A). See
United States v. Thier, 801 F.2d 1463, 1468-69 (5th Cir.1986), modified, 809 F.2d 249 (5th
Cir.1987); accord United States v. Crozier, 777 F.2d 1376, 1384 (9th Cir.1985). Contra United
States v. Jamieson, 189 F.Supp.2d 754, 756 (N.D.Ohio 2002). Thier's hearing requirement
would evidently apply without regard to whether the restrained assets are needed to pay counsel.
In today's case, which involves the added element of the Sixth Amendment right to counsel, the
district court did hold a post-restraint hearing. Thus, we have no need to consider the issue
whether post-restraint hearings are more generally appropriate under 18 U.S.C. 983(j)(1)(A),
as Thier apparently envisioned they would be under 21 U.S.C. 853(e)(1)(A).

5. Although the government believes that the district court applied the proper standard of
proof (i.e. probable cause) and correctly concluded that probable cause was present, the
government also argues that the district court should not have held a hearing in the first place
because White did not make a sufficient threshold showing that the restrained funds were
necessary to pay counsel. White presented an affidavit stating that he had no other funds with
which to pay for a defense attorney, and there were suggestions, which the district judge
apparently credited, that White had been found to qualify for appointed counsel in the related
criminal prosecution. This showing appears quite similar to the showings described in cases
that, according to the government's own argument, set forth the proper threshold showing. See,
e.g., Farmer, 274 F.3d at 802, 804. Since the district court decided to hold a hearing and the
government still prevailed, we think it would be imprudent to use this case to elaborate the
precise details of the circumstances and showings necessary to trigger a due process hearing-a
constitutional question that we are not required to decide here. Cf. Monsanto, 491 U.S. at 615
n. 10, 109 S.Ct. 2657 ([G]iven that the Government prevailed in the District Court
notwithstanding the hearing, it would be pointless for us now to consider whether a hearing was
required by the Due Process Clause.).

6. Section 981 is a generic provision that provides for civil forfeiture of property involved in a
host of offenses. See 18 U.S.C. 981(a)(1) (2000) (listing offenses). Federal law also
contains a number of specific civil forfeiture provisions tied to particular regulatory regimes.
The discussion here focuses on the background of 981 because it is the provision that
authorizes the forfeitures at issue in this case.

7. One 1978 Mercedes Benz might be taken to suggest that the Attorney General could use
admiralty procedures to seize property even without probable cause. See 711 F.2d at 1302.
Other courts held that probable cause must be present in all cases, regardless of the procedure, as
a matter of constitutional law. See United States v. Daccarett, 6 F.3d 37, 49-50 (2d Cir.1993).
If One 1978 Mercedes Benz did not require probable cause for the seizure, it is unclear whether
the case would still be a correct statement of the law, as both the civil forfeiture statutes and Rule
C of the Supplemental Rules for Certain Admiralty and Maritime Claims have since been
amended to afford greater procedural protections. See 12 Charles Alan Wright et al., Federal
Practice and Procedure 3222 (2d ed. 1997) (discussing amendments to admiralty warrant
rules). Compare 18 U.S.C. 981(b)(2) (1994) with id. (2000). For present purposes, the
important point is simply that pretrial seizure in civil forfeiture cases has traditionally been
available upon a relatively low showing by the government.

8. The purposes behind CAFRA are also recounted in two committee reports that discuss
previous versions of the bill. See H.R.Rep. No. 106-192 (1999); H.R.Rep. No. 105-358
(1997). Neither report discusses the precise provision at issue here, as it was added as part of
an amendment on the Senate floor.

9. This is not to deny that there are important differences between the civil and criminal
contexts, including differences that might bear on the circumstances in which due process
requires a speedy post-restraint hearing. In the criminal context, an ex parte pretrial restraining
order under 21 U.S.C. 853(e)(1)(A) is at least supported by a grand jury finding of probable
cause, but that need not be the case in civil forfeitures. Moreover, the ultimate resolution of a
civil forfeiture case may be longer in coming, as such a case is not governed by the speedy trial
considerations operative in a criminal case. While a claimant in a civil forfeiture case might
hope to regain restrained property quickly by filing a motion for summary judgment, the
government can block this tactic by moving to stay the civil forfeiture proceeding pending the
criminal trial. See 18 U.S.C 981(g)(1) (2000); Michelle's Lounge, 39 F.3d at 699-700.
These differences might bear on the need for a post-restraint hearing, but the differences do not
seem to us to affect Monsanto's resolution of the standard of proof to be applied at such a
10. That appears to be the view embraced by most courts at around the time of the Supreme
Court's decision. See, e.g., United States v. Elgersma, 971 F.2d 690 (11th Cir.1992) (en banc);
United States v. Hernandez-Escarsega, 886 F.2d 1560, 1576-77 (9th Cir.1989); United States v.
Sandini, 816 F.2d 869, 874-76 (3d Cir.1987). But see Monsanto, 852 F.2d at 1412 & n. 1
(Mahoney, J., dissenting) (stating that the majority of courts held that forfeitability must be
shown beyond a reasonable doubt). Whether the standard for criminal forfeiture was beyond a
reasonable doubt or a preponderance of the evidence, the important point is that CAFRA does
not require a higher showing on the merits than was required in Monsanto.

11. In the wake of the Supreme Court's decision, several courts have rejected or questioned
pre-Monsanto rulings that required a showing beyond probable cause in the context of 21 U.S.C.
853(e)(1)(A). See Michelle's Lounge, 39 F.3d at 695-96 & n. 9; Monsanto, 924 F.2d at
1195. The Ninth Circuit, which early on had adopted a view similar to that expressed in Thier,
has in the wake of Monsanto reaffirmed its earlier cases to the extent that they generally apply
Rule 65, but the court appears to require only a showing of probable cause in order to continue a
restraining order. See United States v. Roth, 912 F.2d 1131, 1133-34 (9th Cir.1990).

12. We do not here decide whether other aspects of Thier should be carried over to the
context of 983(j)(1)(A). In particular, we do not rule on whether the statute incorporates all
or any of the procedural protections of Rule 65. See supra note 4. As a general matter, the
Federal Rules presumptively apply except to the extent that they actually conflict with a
subsequent statute. See Jackson v. Stinnett, 102 F.3d 132, 134-36 (5th Cir.1996); 1 James
Wm. Moore et al., Moore's Federal Practice 1.06 ( 3d ed.2003).

13. Since White does not contend that no fraud occurred, this case does not involve the
question whether the district court can look behind the grand jury's indictment, which is based
on a finding that probable cause exists as to the commission of the indicted fraud offenses.

14. This definition of probable cause is typical of the definitions given in our many pre-
CAFRA forfeiture cases. In those cases, of course, probable cause was the ultimate showing
necessary for the government to prevail in a civil forfeiture action, subject to the claimant's
rebuttal by a preponderance of the evidence. Here, by contrast, we are conducting the probable
cause inquiry in the distinct context of a pretrial restraining order under 983(j)(1)(A).
Although it is possible that the phrase probable cause could mean something slightly different
in this context, we expect that the large body of probable cause law that developed under the pre-
CAFRA forfeiture statutes will frequently be useful to courts that are faced with the post-
CAFRA task of determining whether certain facts constitute probable cause to continue a pretrial
restraining order. In any event, the definition of probable cause used in our pre-CAFRA law
generally comports with the concept of probable cause as it is used elsewhere. See, e.g.,
Black's Law Dictionary 1219 (7th ed.1999) (defining probable cause as, inter alia, more than
a bare suspicion but less than evidence that would justify a conviction).

15. Although we refer to the government's evidence, much of the material relied upon by
the government would not be admissible under the Federal Rules of Evidence. Such material
can be considered at a hearing on a pretrial restraining order, however. See 18 U.S.C.
983(j)(4) (2000).
16. It is unclear what percentage of DAC's clientele this thirty-nine-person sample represents.
White has at times suggested that DAC served as many as 500 people during the relevant period,
though there does not appear to be any record evidence to that effect. For its part, the
government says that DAC served substantially fewer clients, roughly 300.

17. Although the government contends that the district court ultimately reached the correct
conclusion that probable cause existed, the government has strenuously argued that the district
court employed an improper procedure, particularly by permitting White to preview the
government's criminal case by examining its witnesses. Pretrial discovery in criminal cases is
of course much more limited than discovery in civil cases, and so the district court must be
careful, when exercising its considerable discretion over pretrial procedural matters, to give
proper weight to the government's legitimate interests in protecting certain evidence and
witnesses from pretrial exposure. Although the government bears the burden at a pretrial
hearing of persuading the court that probable cause exists, we agree with the government that the
district court generally should not permit a person in White's position to examine the
government's witnesses without first producing some evidence suggesting that the restrained
assets were untainted. Cf. Jones, 160 F.3d at 647.

18. We pause to explain why we are not persuaded by White's argument that some of the
factual inferences that we have permitted in past forfeiture cases, which involved drug crimes,
are not appropriate in the case of a fraudulent business scheme. If there is a basis to believe that
a person has no source of income other than selling illicit drugs, then we can often presume,
because drug dealing is illegal, that all of the drug dealer's significant purchases are
accomplished with tainted funds and are therefore subject to forfeiture. When drug-dealing is
apparently the only source of income, our cases have therefore relieved the government of the
burden of demonstrating a connection between the money used to buy a particular item and a
particular drug transaction; we instead have required the drug dealer to point to a non-drug
source for the funds used in the purchase. See, e.g., United States v. One 1987 Mercedes 560
SEL, 919 F.2d 327, 331 (5th Cir.1990); see also 21 U.S.C. 853(d) (2000) (creating a similar
presumption in criminal drug forfeiture cases). White argues that such inferences are
inappropriate in his case, as operating a drug treatment business is not inherently illegal, and thus
even when some fraud is occurring, there can be lawful receipts mixed in. The government, in
his view, should therefore be required to show in a more particularized way that the restrained
properties were purchased with receipts that actually are tainted. In its strongest form, the
argument asks us to limit the restraining order to assets that can be shown to have been
purchased with funds traceable to the thirty-nine interviewees. The flaw in White's argument is
that the government has established probable cause, based upon persuasive circumstantial
evidence, to believe that all of DAC's receipts during the relevant period were fraudulent. And
there is also probable cause to connect the restrained assets to those same receipts. Therefore,
while White's argument may have some truth to it as a general matter, it is no help in this case.

19. The $30,000 USG annuity was apparently purchased with a kickback check from Dana
White of HLS.