U.S. v. Ponds, 03-3134.

• Decision Date: 14 July 2006
• Docket Number: No. 03-3135.,No. 03-3134.,03-3134.,03-3135.
• Citation: 454 F.3d 313
• Parties: UNITED STATES of America, Appellee v. Navron PONDS, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

454 F.3d 313

UNITED STATES of America, Appellee v. Navron PONDS, Appellant.

No. 03-3134.

No. 03-3135.

United States Court of Appeals, District of Columbia Circuit.

Argued April 13, 2006.

Decided July 14, 2006.

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Appeals from the United States District Court for the District of Columbia (No. 02cr00495-01) (No. 03cr00283-01).

Ketanji B. Jackson, Assistant Federal Public Defender, argued the cause for appellant. With her on the briefs was A.J. Kramer, Federal Public Defender.

John P. Mannarino, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Kenneth L. Wainstein, U.S. Attorney, and Roy W. McLeese, III and Mark H. Dubester, Assistant U.S. Attorneys.

Before: ROGERS, TATEL and BROWN, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge.

This appeal challenges the government's use of documents produced by Navron Ponds pursuant to a grant of immunity under 18 U.S.C. § 6002. Ponds' appeal of his convictions for tax evasion and fraud requires the court to address the breadth of that immunity for an act of production that, in its testimonial character, falls somewhere between the response to a fishing expedition addressed in United States v. Hubbell, 530 U.S. 27, 120 S.Ct. 2037, 147 L.Ed.2d 24 (2000), and the production of documents whose existence was a "foregone conclusion" in Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976). Because the government has failed to show with reasonable particularity that it knew of the existence and location of most of the subpoenaed documents, we hold that Ponds' act of production was sufficiently testimonial to implicate his right against self-incrimination under the Fifth Amendment to the Constitution. Although the government, to some extent, violated its immunity agreement with Ponds by impermissibly using his self-incriminating testimony and its derivative evidence, questions remain regarding the precise nature of its use and whether the constitutional error was harmless beyond a reasonable doubt. Accordingly, we reverse the judgment of conviction and remand the case to the district court to determine the extent of the government's impermissible use and whether that use was harmless beyond a reasonable doubt.

I.

In 1996, Navron Ponds, a criminal defense lawyer, agreed to represent a drug dealer named Jerome Harris. See, e.g., United States v. Harris, 176 F.3d 476 (4th Cir.1999). As a retainer, Harris's mother agreed to give Ponds a white 1991 Mercedes Benz 500SL, which Ponds registered in his sister's name. Harris pled guilty. At his sentencing, the district court asked Harris about the whereabouts of the Mercedes for forfeiture purposes. Ponds failed to inform the court that he had the car. In 2000, when the United States Attorney's Office for the District of Maryland learned this from Harris, it began a grand jury investigation of Ponds' acquisition of the Mercedes and his failure to reveal his possession of the car to the court, focusing on potential charges of contempt of court, obstruction of justice, and money laundering. See United States v. Ponds, 290 F.Supp.2d 71, 74 (D.D.C.2003).

Maryland Assistant United States Attorney ("MD-AUSA") Sandra Wilkinson executed a search warrant for Harris's jail cell to obtain the retainer agreement discussing the Mercedes. Federal Drug Enforcement Administration agents went to Ponds' apartment complex, Albemarle House, looking for the car. Parked outside were the Mercedes, and in another parking space rented by Ponds, a Porsche with the vanity license plate "I OBJECT." According to apartment personnel, Ponds drove the Mercedes and his sister, Laura Ponds Pelzer, drove the Porsche. MD-AUSA Wilkinson issued a subpoena duces tecum ordering Ponds to produce seven categories of documents and the Mercedes. When Ponds expressed his intent to invoke his Fifth Amendment privilege against self-incrimination, Wilkinson revised the subpoena to omit requests that Ponds actually produce the car and that he produce financial and tax records, and filed a motion pursuant to 18 U.S.C. § 6003 for a judicial order authorizing act-of-production immunity under 18 U.S.C. § 6002. The subpoena made six demands of Ponds to produce "any and all documents" from 1996 forward:

1. Referencing use, ownership, possession, custody and/or control of a white Mercedes Benz ...;

2. That refer or relate to payment of legal fees by or on behalf of Jerome Harris whether by cash, currency, or some other form of payment;

3. That refer or relate to any vehicles in the custody or control of Jerome Harris if access to that vehicle was provided to you by any means, direct or indirect; and,

4. That refer or relate to Sloan Solomon, Christine Privott [Harris's mother] or Laura P. Pelzer [Ponds' sister];

5. Any and all correspondence between the Law Offices of Navron Ponds [and courts and prosecutors] in the matter of U.S. v. Jerome Harris, PJM 96-0269;

6. Records of employees of the law Office of Navron Ponds in the time frame of 1996 to the present.

The district court granted the immunity request and ordered Ponds to produce the subpoenaed documents.

Armed with act-of-production immunity, Ponds appeared before the grand jury and produced approximately 300 pages of documents. The documents included records showing that: (1) the Mercedes and Porsche were registered in the name of Ponds' sister; (2) Ponds had financial accounts with his sister; (3) Ponds and his sister sold a Georgia property they had jointly owned; (4) Ponds possessed money order receipts used to pay for various services, mostly involving the Mercedes; and (5) Ponds had a health insurance document indicating he had purchased insurance for himself and Magdalene Alexander. Ponds also testified before the grand jury, responding to the prosecutors' questions about the document production, including affirming that the health insurance document was responsive to the subpoena request for documents regarding his employees. Magdalene "Maggie" Alexander, Ponds' employee, was then called before the grand jury, where she testified about many of the produced documents and in detail about the process by which she helped Ponds produce them.

Soon after Ponds responded to the subpoena duces tecum, the Maryland United States Attorney's Office filed an ex parte application it had prepared before the subpoena response with the Maryland federal district court to authorize the Internal Revenue Service ("IRS") to disclose Ponds' 1996 and 1997 tax returns. The application was granted, and the IRS reported that Ponds had not filed tax returns in those years. Because Ponds was a resident of the District of Columbia, the Maryland prosecutors contacted the United States Attorney's Office for the District of Columbia about conducting a tax investigation of Ponds. These contacts involved several meetings and the transfer of documents produced by Ponds and of Maryland grand jury transcripts to DC-AUSA Mark Dubester and IRS Special Agent Nancy Becker.

The investigation continued, and in 2001, DC-AUSA Dubester applied for search warrants on the basis of an affidavit provided by Agent Becker that included information first learned in the Maryland grand jury. Based on those applications, the D.C. United States Attorney's Office secured warrants to search Ponds' home and office, where Agent Becker seized six boxes of documents. The documents revealed that Ponds had used a tax preparer, and the preparer's records were subpoenaed, uncovering further details about Ponds' financial affairs. With these materials and others subpoenaed from financial institutions, Ponds was indicted in the District of Columbia on five counts of tax evasion under 26 U.S.C. § 7201, one count of wire fraud under 18 U.S.C. § 1343, and one count of fraud in the first degree under 22 D.C.Code §§ 3821(a), 3822(a)(1).

Ponds filed a pretrial motion for a hearing pursuant to Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972), that would force the government to "demonstrate that the charges in this matter and the evidence it proposes to use ... at trial do not derive directly or indirectly from Mr. Ponds's immunized testimony and production of documents." The district court conducted an evidentiary hearing at which it heard testimony from Agent Becker and MD-AUSA Wilkinson, and accepted proffered testimony from DC-AUSA Dubester. See Ponds, 290 F.Supp.2d at 73. The district court denied Ponds' motion to dismiss the indictment. Id. The jury convicted Ponds on all counts,¹ and the district court, upon denying Ponds' motion for reconsideration of the Kastigar ruling or for a new trial, sentenced Ponds to twenty months imprisonment and restitution to the federal and District governments. Ponds appeals.

II.

18 U.S.C. § 6002 provides that:

no testimony or other information compelled under [an immunity] order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order.

This federal witness immunity statute has a constitutional dimension, as the Supreme Court in Kastigar, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212, held that § 6002 "immunity from use and derivative use is coextensive with the scope of the [Fifth Amendment] privilege against self-incrimination" in that "[i]t prohibits the prosecutorial authorities from using the compelled testimony in any respect." Id. at 453, 92 S.Ct. 1653. Thus, at issue in document production cases in which a witness with § 6002 immunity is subsequently prosecuted are two basic questions: (1) Was the defendant's act of producing the documents sufficiently testimonial that the Fifth Amendment privilege is implicated? (2) If so, did the government violate the defendant's ...