In re Various Grand Jury Subpoenas
235 F. Supp. 3d 472
S.D.N.Y.2017Background
- Subject E was served a 2010 grand jury subpoena seeking foreign bank-account “required records” under the Bank Secrecy Act; she asserted the Fifth Amendment act-of-production privilege and initially refused.
- In 2013 the court issued a Compulsion Order directing production of narrow “required records,” and a Contempt Order imposing $1,000/day until compliance.
- In March 2014 Subject E produced two emails (three pages) and represented that production was complete; the Government later obtained Liechtenstein documents (Dec. 2015) showing large Foundation accounts and other account activity not produced.
- The Government moved (2016) for additional contempt sanctions and served a new June 2016 subpoena; Subject E did not comply with the 2016 subpoena and was later indicted in a separate criminal case.
- The principal dispute: whether Subject E had “care, custody, or control” (i.e., legal right or practical ability to obtain) of additional foreign-account records (Foundation accounts, HSBC France, Credit Suisse), and whether enforcement now interferes with trial rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of “care, custody, or control” for subpoenaed documents | Government: phrase includes legal right or practical ability to obtain documents (even if located abroad). | Subject E: obligation limited to documents in her actual possession; cannot produce what she does not have. | Court: Control test applied—legal right or practical ability to obtain suffices; Subject E had control over HSBC records, Credit Suisse (during POA period), and Foundation accounts and therefore must produce responsive records. |
| Production of Foundation account records | Gov: Liechtenstein documents show Subject E was beneficial owner, had authority and access to Foundation records; anti-avoidance rule applies. | Subject E: lacked associational relationship; ex post facto and jury-trial concerns; matters for criminal trial. | Court: Foundation documents and tax returns establish associational relationship and control; anti-avoidance rule and regulatory nature of BSA permit production; ex post facto not applicable here. |
| Cost-shifting for bank processing fees (HSBC France) | Government: subpoenaed party bears production costs; $430 fee is not oppressive. | Subject E: bank demanded $430; sought Government to pay fee. | Court: production costs ordinarily borne by subpoenaed party; $430 is not unreasonable; Subject E obligated to produce (and indicated willingness to pay). |
| Effect of pending indictment on grand-jury subpoena enforcement | Subject E: enforcing subpoena now would improperly aid prosecution and impair trial rights. | Government: grand jury may continue post-indictment for related or additional investigations; presumption of regularity not rebutted. | Court: No evidence of improper motive; enforcement may continue; limited Fifth Amendment concern because only required records (non-communicative) were sought. |
Key Cases Cited
- United States v. Stein, 488 F. Supp. 2d 350 (S.D.N.Y.) (use of uniform construction for possession/custody/control across rules)
- Marc Rich & Co. v. United States, 707 F.2d 663 (2d Cir.) (witness cannot resist production because documents are abroad)
- In re Grand Jury Subpoena dated Aug. 9, 2000, 218 F. Supp. 2d 544 (S.D.N.Y.) (location is not the test; control is)
- United States v. Doe (In re Grand Jury Subpoena Dated Feb. 2, 2012), 741 F.3d 339 (2d Cir.) (beneficiaries commonly keep records; access supports production)
- United States v. Greenfield, 831 F.3d 106 (2d Cir.) (control includes practical ability to obtain documents)
- United States v. Dionisio, 410 U.S. 1 (U.S.) (grand jury may call numerous witnesses; no per-witness overbreadth defense)