United States v. Under Seal
2013 U.S. App. LEXIS 24785
| 4th Cir. | 2013Background
- John and Jane Doe were targets of an Eastern District of Virginia grand jury probe into alleged use of secret Swiss accounts to hide income/assets from the IRS.
- Evidence showed John Doe opened a Clariden Leu account (beneficial owner) worth >$2.3M in 2008 and later moved $1.5M to another Swiss bank.
- On May 18, 2012 the Does were served grand jury subpoenas seeking foreign bank account records required to be retained under Treasury regulations implementing the Bank Secrecy Act (31 C.F.R. § 1010.420).
- The Does moved to quash, invoking the Fifth Amendment privilege against self‑incrimination; the government argued the required‑records doctrine made the privilege inapplicable.
- The district court denied the motion to quash, ordered compliance, and (by stipulation after refusal) held the Does in civil contempt; the Does appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the required‑records doctrine precludes a Fifth Amendment claim for foreign bank records subpoenaed by a grand jury | The Does: records compelled by regulation are effectively compelled testimony and protected by the Fifth Amendment | Government: records mandated by the BSA/regs are typical “required records” and not protected testimonial evidence | The court held the required‑records doctrine applies; the Fifth Amendment privilege is inapplicable |
| Whether the BSA recordkeeping purpose is "essentially regulatory" | The Does: BSA serves prosecutorial/law‑enforcement ends, so it’s criminal in nature, not regulatory | Government: BSA also serves tax, regulatory, counterterrorism, and statistical purposes; not limited to criminal enforcement | The court held the BSA’s recordkeeping requirements are essentially regulatory |
| Whether the records are of a kind customarily kept by the regulated party | The Does: account holders may not keep five years of records; foreign banks may not provide records | Government: regulation itself mandates retention; account holders reasonably keep the basic account records needed to access accounts | The court held the records are of a kind customarily kept and satisfy this prong |
| Whether the records have assumed "public aspects" analogous to public documents | The Does: private, unlicensed foreign accounts lack public character | Government: information is shared with government agencies and serves public regulatory/statistical purposes | The court held the records possess sufficient public aspects to satisfy the doctrine |
Key Cases Cited
- Shapiro v. United States, 335 U.S. 1 (1948) (establishes required‑records doctrine permitting compelled production of records kept pursuant to valid regulatory scheme)
- Marchetti v. United States, 390 U.S. 39 (1968) (limits Shapiro and articulates tests for required‑records doctrine applicability)
- Grosso v. United States, 390 U.S. 62 (1968) (companion to Marchetti refining required‑records criteria)
- Cal. Bankers Ass’n v. Shultz, 416 U.S. 21 (1974) (statutes with some law‑enforcement ends may still be essentially regulatory)
- In re M.H., 648 F.3d 1067 (9th Cir. 2011) (applies required‑records doctrine to BSA foreign‑account records)
- In re Grand Jury Subpoena, 696 F.3d 428 (5th Cir. 2012) (concludes BSA records fall within required‑records doctrine)