Criminal Justice Insider

This blog posts marks a welcome return to blogging on topics related to Federal and New York State criminal practice. It will be regularly updated on developments regarding substantive and procedural criminal law. It is a perfect time to make such a return as only yesterday, the Court of Appeals for the Second Circuit released a significant opinion with regard to bail options for wealthy criminal defendants.

The media makes much of the "gilded cage" of pretrial home confinement that many wealthy criminal defendants seek as an alternative to imprisonment in a public facility. The public bristles when economically advantaged defendants are allowed to stay in their stately mansions or penthouse apartments under their own private security force instead of in jail. Until recently. the Second Circuit has never issued clear guidance as to when such home confinement for federal criminal defendants was permitted.

On August 1, 2019, the Second Circuit published its opinion in United States v. Boustani, 19-1018-cr. The Court used Boustani to clarify the circumstances under which the Bail Reform Act permits the district court to release a defendant pending trial on the condition that the defendant pays for a private security force.

Boustani was charged with conspiracy to commit wire fraud, securities fraud, and money laundering. He moved the trial court for home confinement under the supervision of private security guards financed by him. The district court denied his request. Boustani appealed, and the Second Circuit affirmed the lower court's order on May 16, 2019. A supplemental decision, dated August 1, 2019, was released to further explain the reasoning of the May 16th decision.

The Bail Reform Act requires the court to release a defendant pretrial on some combination of bond or combination of conditions unless the defendant poses a flight risk or a danger to the community. In Boustani, the Second Circuit recognized that it has, in limited circumstances, permitted home confinement where the defendant paid for private armed security guards. However, the Court had not previously visited the topic of whether it would run contrary to the principles of detention to allow "wealthy defendants to buy their way out by constructing a private jail."

The Court took Boustani as an opportunity to answer that very question. The Second Circuit, for the first time, expressly held that, "The Bail Reform Act does not permit a two‐tiered bail system in which defendants of lesser means are detained pending trial while wealthy defendants are released to self‐funded private jails." The Court continued by stating that a two‐tiered system, where a wealthy defendant would be treated differently than a similarly situated, but less wealthy one, would “foster inequity and unequal treatment in favor of a very small cohort of criminal defendants who are extremely wealthy."

The Second Circuit summarized its holding by saying that home confinement is only appropriate where, but for his or her wealth, the defendant would not have been detained. Put differently, home confinement is available where the defendant is a flight risk only because his or her extreme wealth would allow the defendant to flee and live comfortably elsewhere. If a similarly situated but less wealthy defendant would have been detained, a wealthy defendant cannot simply buy his way out of pretrial incarceration by paying for private detention. This holding constitutes a significant limitation on the availability of pretrial home incarceration to wealthy defendants.

This supplemental ruling is certainly timely given the plethora of rich defendants who are awaiting trial in the Second Circuit. The most public of these is Jeffery Epstein, who was also seeking home confinement, and has appealed the denial of this application. Given the guidance offered by Boustani, the odds that Mr. Epstein will prevail on appeal have diminished substantially.

This ruling will have a profound impact on bail applications by wealthy defendants in a wide range of white-collar cases, and may result in the incarceration of many more such defendants. This blog will continue to provide updates on this issue, and the impact it has on bail applications in the Second Circuit.

For more information on the topic discussed, contact:

• Adam M. Felsenstein  |  felsenstein@thsh.com  |  212-508-7533