United States v. Fridman
974 F.3d 163
2d Cir.2020Background
- IRS investigated Natalio Fridman for undisclosed foreign accounts and trusts after receiving bank records and FBARs showing multiple personal, corporate, and a trust-held HSBC account (the David Marcelo Trust).
- In December 2013 the IRS served two summonses on Fridman (one personal, one as trustee) seeking customary account documents (opening/closing records, statements, KYC, transaction records) for specified known accounts and trust-related records.
- Fridman asserted the Fifth Amendment act-of-production privilege and refused to produce the documents; the Government petitioned to enforce the summonses.
- The district court granted enforcement, applying the foregone-conclusion doctrine to several requests and holding that a traditional trust is a collective entity so trust records are not covered by the Fifth Amendment privilege.
- This Court affirmed: it found the Government had shown with reasonable particularity existence, prior control, and independent means of authentication for the requested customary bank documents, and adopted that trusts are collective entities requiring production of trust-related records.
Issues
| Issue | Plaintiff's Argument (Government) | Defendant's Argument (Fridman) | Held |
|---|---|---|---|
| Whether foregone-conclusion exception permits enforcement of summonses for customary bank documents | Government: Knows accounts existed and therefore customary account documents are a foregone conclusion; can authenticate independently | Fridman: Gov’t lacks reasonable particularity about existence, control, and contents; production is testimonial | Held: Affirmed — existence, prior control, and authentication shown as to Requests 1,2,4,7; foregone-conclusion applies |
| Whether Government proved existence of specific requested documents with reasonable particularity | Government: Knowledge of accounts suffices for customary account documents; need not know every specific document | Fridman: Gov’t must know specific documents and their contents | Held: Account existence + nature of documents suffices under Greenfield; contents need not be known |
| Whether a traditional trust is a ‘collective entity’ and thus cannot invoke Fifth Amendment through its custodian | Government: Trusts are legally distinct, institutional, and records belong to the trust, not the trustee | Fridman: Trusts resemble sole proprietorships/trustee and trust are not separate for all purposes | Held: Affirmed — traditional common-law trusts are collective entities; trustee must produce trust records |
| Whether Fridman must produce corporate records he holds in a representative capacity | Government: Has reasonable basis to believe Fridman controls corporate records (FBARs, prior disclosures); burden shifts to Fridman to disprove | Fridman: Gov’t must prove custodial relationship; former-employee precedents limit production | Held: Affirmed — Government met initial showing; Fridman failed to rebut; must produce records held in representative capacity |
Key Cases Cited
- Fisher v. United States, 425 U.S. 391 (1976) (established act-of-production privilege and limits; contents of voluntarily prepared documents not privileged)
- United States v. Hubbell, 530 U.S. 27 (2000) (discussed testimonial aspects of identifying and producing documents)
- United States v. Greenfield, 831 F.3d 106 (2d Cir.) (2016) (articulated Greenfield three-part reasonable-particularity test for foregone-conclusion: existence, possession/control, authenticity)
- Braswell v. United States, 487 U.S. 99 (1988) (collective-entity doctrine: custodian must produce organizational records)
- Bellis v. United States, 417 U.S. 85 (1974) (collective-entity exception; distinction from purely personal records)
- In re Marc Rich & Co., A.G., 707 F.2d 663 (2d Cir. 1983) (control, not location, is the test for document production)
- United States v. Rylander, 460 U.S. 752 (1983) (permitted inference of continuing possession over a multi-month period)
- In re Grand Jury Subpoena, 973 F.2d 45 (1st Cir. 1992) (treats trusts as collective entities for subpoena purposes)
- United States v. Harrison, 653 F.2d 359 (8th Cir. 1981) (trusts are formally organized and distinct; collective-entity treatment)