U.S. v. Srivastava

• Decision Date: 03 September 2008
• Docket Number: No. 07-4386.,07-4386.
• Citation: 540 F.3d 277
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Pradeep SRIVASTAVA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

540 F.3d 277

UNITED STATES of America, Plaintiff-Appellant, v. Pradeep SRIVASTAVA, Defendant-Appellee.

No. 07-4386.

United States Court of Appeals, Fourth Circuit.

Argued: March 19, 2008.

Decided: September 3, 2008.

ARGUED:

Stuart A. Berman, Office of the United States Attorney, Greenbelt, Maryland, for Appellant. Paula Marie Junghans, Zuckerman & Spaeder, L.L.P., Washington, D.C., for Appellee.

ON BRIEF:

Rod J. Rosenstein, United States Attorney, Baltimore, Maryland, for Appellant. P. Andrew Torrez, Zuckerman & Spaeder, L.L.P., Washington, D.C., for Appellee.

Before NIEMEYER and KING, Circuit Judges, and David R. HANSEN, Senior Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation.

Vacated and remanded by published opinion. Judge KING wrote the opinion, in which Judge NIEMEYER and Senior Judge HANSEN joined.

OPINION

KING, Circuit Judge:

The government seeks relief, by way of this interlocutory appeal, from the Memorandum Opinion and Order entered in the District of Maryland on August 4, 2006, suppressing evidence seized by federal officers from the residence and medical offices of Dr. Pradeep Srivastava pursuant to search warrants issued by a magistrate judge. See United States v. Srivastava, 444 F.Supp.2d 385 (D.Md.2006) (the "Suppression Ruling"). The government also appeals from the court's order of March 6, 2007, declining to reconsider its Suppression Ruling. See United States v. Srivastava, 476 F.Supp.2d 509 (D.Md.2007). Put succinctly, the government contends that the evidence suppressed was constitutionally seized and within the scope of the search warrants, and that the court's blanket suppression of all seized evidence was erroneous. As explained below, we agree with the government that the Suppression Ruling was legally unsound, and thus vacate and remand.

I.

A.

In early 2003, a criminal investigation was initiated by the Department of Health and Human Services (the "HHS"), the Federal Bureau of Investigation (the "FBI"), and the government's Office of Personnel Management, into an alleged health care fraud scheme involving Srivastava, a licensed cardiologist practicing with two associates in Maryland. The federal authorities suspected that Srivastava and his associates were involved in the submission of false claims to various health care benefit programs, in violation of 18 U.S.C. § 1347.¹ As a result, the authorities commenced an investigation into Srivastava's billing practices.

In March 2003, the fraud investigation had progressed to the stage where Jason Marrero, an HHS agent specializing in the investigation of health care fraud ("Agent Marrero"), applied to a magistrate judge in the District of Maryland for three search warrants. By Agent Marrero's submission to the judge, the government sought the seizure of the "fruits, evidence and instrumentalities of false claims submissions" from Srivastava's medical offices in Greenbelt and Oxon Hill (the "Greenbelt office" and the "Oxon Hill office," respectively), and from his residence in Potomac (the "Potomac residence"). J.A. 31.² The applications for the search warrants were supported by Agent Marrero's nineteen-page affidavit (the "Affidavit"), in which he specified, inter alia, that Srivastava and his medical practice group had defrauded health care benefit programs in various ways: billing for medical services not rendered; billing for duplicate medical services through different insurers; specifying inappropriate diagnosis codes for patient services on medical claims; improperly billing for incidental services; and altering medical records. The Affidavit also described specific instances of false billing for services not rendered, as well as for duplicate services, including dollar amounts paid for excess reimbursements.

Significantly, the Affidavit made factual assertions indicating that documents and records related to Srivastava's medical practice—constituting possible evidence of health care fraud—would be found in the Potomac residence:

• A former employee of Srivastava, who was a confidential informant in the fraud investigation, confirmed that Srivastava "directed most of the billing to health care benefit programs," and that such programs "sent most payments and Explanation of Benefit letters to Srivastava's house," J.A. 42;

• Srivastava had the medical practice's "insurance billing done from [his] house," and the practice submitted such billing to insurers both "by mail and electronically by computer," id.; and

• Srivastava had "listed and currently lists [the Potomac] residence ... as the billing address for claims submitted electronically to Medicare," id. at 46.

On the basis of these and other facts spelled out in the Affidavit, Agent Marrero asserted "that there is probable cause to believe that Srivastava's [Greenbelt and Oxon Hill] offices ... and Srivastava's [Potomac] residence ... contain fruits, evidence and instrumentalities of [health care fraud] and that the items [sought] are fruits, evidence and instrumentalities of the violation." Id. at 48.

On March 20, 2003, the magistrate judge issued three search warrants, each accompanied by an identical two-page "Attachment A," captioned "Items To Be Seized Pursuant To A Search Warrant." J.A. 49-51.³ The warrants "commanded" the searching officers, inter alia, to search the Greenbelt office, the Oxon Hill office, and the Potomac residence on or before March 27, 2003, and, if the property listed in Attachment A "be found there to seize same." Id. at 49. Attachment A introduced the list of documents and records to be seized under each warrant as follows:

The following records including, but not limited to, financial, business, patient, insurance and other records related to the business of Dr. Pradeep Srivastava [and his two associates], for the period January 1, 1998 to Present, which may constitute evidence of violations of Title 18, United States Code, Section 1347.

Id. at 50. Attachment A then specified in some detail ten categories of things that were to be seized, including personnel records; health care benefit program manuals and documentation; correspondence between medical office personnel and health care benefits program personnel; documents relating to investigations of the medical group's billing practices; records of complaints about patient treatment; records of certain specified patients; computer files or programs related to the other materials identified; plus calendars, appointment books, correspondence, passports, photographs, and other documents indicating Srivastava's whereabouts during the period under investigation. Id. at 50-51. Importantly, category 2 of Attachment A commanded the seizure of "[f]inancial records, including but not limited to accounting records, tax records, accounts receivable logs and ledgers, banking records, and other records reflecting income and expenditures of the business." Id. at 50.⁴

B.

On March 21, 2003, HHS and FBI agents simultaneously executed the search warrants at the three specified locations. Prior to the searches being conducted, Agent Marrero briefed the executing officers on what was to be done, summarizing for them the contents of the warrants and the Affidavit. Two of the searches—those conducted at the Greenbelt office and the Potomac residence—yielded the seizure of documents and records that are specifically implicated in this appeal.⁵

From the Potomac residence, the officers seized, inter alia, copies of the tax returns of Dr. Srivastava and his wife; stock brokerage account records; information about the construction of a second home; bank records relating to several family financial transactions; travel information; Srivastava's wallet; unopened mail; credit cards; Indian currency; a pharmacy card; and checks from various banks. From the Greenbelt office, the agents seized, inter alia, copies of bank remittance records relating to the State Bank of India (collectively, the "Bank of India Transfers"). The Bank of India Transfers reflected, inter alia, that Srivastava had, over a period of several months in 1999 and 2000, transferred more than $4 million to the State Bank of India.

In April 2003, after the searches had been completed, the government returned to Srivastava approximately 80% of the documents and records seized from the Potomac residence.⁶ During the same time frame, Agent Marrero provided the United States Attorney with a copy of the Bank of India Transfers, which were also provided to the Internal Revenue Service (the "IRS"). IRS agents thereafter concluded that the Bank of India Transfers indicated a likely failure to disclose a foreign financial account.⁷ After obtaining other information relating to the Transfers—for example, that Srivastava had not acknowledged any foreign bank accounts on his 1999, 2000, and 2001 personal income tax returns—the IRS initiated an investigation of Srivastava for possible reporting violations. This investigation ultimately led to his indictment for tax fraud.

C.

On October 12, 2005, Srivastava was indicted by a grand jury in the District of Maryland on two counts of tax evasion, in violation of 26 U.S.C. § 7201, plus one count of making false statements on a tax return, in violation of 26 U.S.C. § 7206(1).⁸ According to the indictment, Srivastava had concealed more than $40 million in capital gains on investments in technology stocks and stock options, and underpaid his income taxes for tax years 1998 and 1999 by more than $16 million. The indictment alleges, inter alia, that:

• Srivastava invested a substantial portion of income from his medical practice in stocks and stock options, but failed to provide important information relating to his stock and stock options trading to the accountant who prepared his tax returns;

• As a consequence of those omissions, the accountant prepared, and Srivastava filed, tax returns that resulted in an underpayment of taxes in 1998 by approximately...