541 F.Supp. 1 (D.N.J. 1981), Misc. 80-53, Matter of Grand Jury Empanelled March 19, 1980
|Docket Nº:||Misc. 80-53|
|Citation:||541 F.Supp. 1|
|Party Name:||Matter of Grand Jury Empanelled March 19, 1980|
|Case Date:||February 04, 1981|
|Court:||United States District Courts, 3th Circuit, District of New Jersey|
William W. Robertson, U. S. Atty. by James P. Ulwick, Asst. U. S. Atty., Newark, N. J., for plaintiff.
Checki & Politan by Glenn T. Leonard, Lyndhurst, N. J., for Milton Reid.
SAROKIN, District Judge.
The court has been called upon to determine the extent to which the Fifth Amendment allows the target of a grand jury investigation to resist the production of business records sought by the grand jury by a subpoena duces tecum. The issue arises upon the motion of the target, Mr.
Milton Reid, to quash five subpoenas directing him to turn over documents and records relating to the operation of several businesses of which he is the sole proprietor. For the reasons stated below, the motion is granted in part and denied in part.
In the fall of 1980, a United States Grand Jury began an investigation into alleged fraudulent activity relating to the submission of bids, bid bonds, and price quotes by various companies to Hudson County and municipal entities of Hudson County. In addition, the grand jury is delving into the awarding of bids and contracts by Hudson County and the municipalities to these companies, and the alleged diversion of income by these companies to circumvent the Internal Revenue laws. The investigation to date has centered around the involvement of Mr. Reid and of his several companies which do business with these municipal entities. Each of the companies involved is a sole proprietorship owned by Mr. Reid.
On November 19, 1980, the grand jury issued two subpoenas to Mr. Reid requiring production of (1) the telephone toll records of several companies of which he is a principal, and (2) "all records including but not limited to bank statements, cancelled checks, check stubs and deposit tickets, for the period January 1, 1977 to present" for four accounts held by Mr. Reid or his companies.
On November 25, 1980, the grand jury issued a subpoena to Mr. Reid calling for production of "any and all records as per the attached Schedule A for Eastern Equipment and Supply Company for the period January 1, 1976 to present." Schedule A lists twenty-eight items, including such documents as general ledgers, general journals, paid bills, invoices; payroll records, contracts and copies of contracts (including all retainer agreements), tax returns, safe deposit box records, all W-2 forms for each partner, associate and employee and workpapers. Another subpoena was issued on December 19, 1980, seeking access to a laundry list of documents relating to High Point Equipment and Supply Company.
Finally, on December 29, 1980, the grand jury directed Reid to produce "any and all bank statements and cancelled checks for the period January 1, 1976 to present" for accounts of his companies maintained at an off-shore bank.
Mr. Reid is resisting production of these documents and has filed the instant application to quash the five subpoenas, relying upon his Fifth Amendment right against self-incrimination. 1
The Fifth Amendment provides that "No person shall be compelled in any criminal case to be a witness against himself." Although the Fifth Amendment does not protect the records of corporations, unincorporated associations or partnerships, a sole proprietor can invoke the privilege to his benefit. Bellis v. United States, 417 U.S. 85, 87-88, 94 S.Ct. 2179, 2182-2183, 40 L.Ed.2d 678 (1974); I. C. C. v. Gould, 629 F.2d 847, 859 n.22 (3d Cir. 1980); In Re Grand Jury Empanelled (Colucci), 597 F.2d 851, 859 (3d Cir. 1979);...
To continue readingFREE SIGN UP