58 F.3d 423 (9th Cir. 1995), 94-10258, United States v. Kow
|Citation:||58 F.3d 423|
|Party Name:||UNITED STATES of America, Plaintiff-Appellant, v. Stephen KOW; Helen Kim Noi Soo; and Hong Tho Luu, Defendants-Appellees.|
|Case Date:||June 21, 1995|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Argued and Submitted March 17, 1995.
[Copyrighted Material Omitted]
Joseph Douglas Wilson, U.S. Dept. of Justice, Washington, DC, for plaintiff-appellant.
Doron Weinberg, Weinberg & Wilder, San Francisco, CA, for defendants-appellees.
Appeal from the United States District Court for the Northern District of California.
Before FLETCHER, REINHARDT, and NOONAN, Circuit Judges.
FLETCHER, Circuit Judge:
The government appeals the district court's suppression of evidence seized pursuant to a search warrant. We have jurisdiction under 18 U.S.C. Sec. 3731 and affirm.
On October 15, 1990, FBI agents entered the offices of the defendants' business, Hong Kong T.V. Video Program, Inc. ("HK Video"), and seized essentially all of the business's records, computer hardware and software, files, ledgers, and invoices pursuant to a warrant issued by a magistrate judge based on the affidavit of FBI Special Agent John Gordon.
HK Video enjoys an almost exclusive license to distribute within the United States video cassettes from Hong Kong TVB ("HK T.V."), a television company in Hong Kong. Gordon's affidavit alleged that HK Video maintained multiple sets of accounting records, paid falsified invoices submitted by phony corporations, and paid employees under the table, all for the purpose of defrauding the Internal Revenue Service and HK T.V., sending the skimmed profits to fictitious companies in Hong Kong. The affidavit also alleged that when HK Video learned that its license with HK T.V. was in jeopardy and might be awarded instead to H.K. Video's competitor, Shaw Home Entertainment ("Shaw"), Shaw's employees became the targets of threatened and actual violence until Shaw notified HK T.V. that it was no longer interested in the license.
A substantial portion of Gordon's affidavit summarizes various threats and criminal acts for and against people associated with Shaw and HK Video. With regard to HK Video's bookkeeping procedures, Gordon summarized information provided by two informants who claimed that HK Video maintained multiple sets of accounting books to avoid paying income taxes. Gordon's more detailed information came from the second informant ("CI-2"), who, for instance, reported that HK Video also falsified its invoices to avoid paying taxes and that the profits of the scheme often were wired through the Bank of Trade to J & P Studios, Ltd., a dubbing business involved with HK Video, or to Ever Spring, a fictitious company sharing the same address as J & P Studios. CI-2 also described where agents could find incriminating documents within H.K. Video's offices.
The warrant authorized the seizure of:
A. Bank statements, cancelled checks, deposit slips, wire transfer records, cashier's checks, money orders, checkbooks or check registers, and other records relating to bank transactions;
B. Journals or records reflecting funds received or funds disbursed;
C. Ledgers or other records summarizing financial transactions;
D. Journals or other records listing adjustments to the ledgers or books of account;
E. Balance sheets, income statements or other financial statements;
F. Contracts, invoices, titles, or other documents evidencing their receipt and disposition of funds or income;
G. Records relating to the preparation of Federal Tax Returns for the years 1983 through the present, including but not limited to work papers, Forms 1099, retained copies of Form 1040 and 1120, and Employee Wage Statement Forms W-2, Payroll Tax Returns, including quarterly Forms 940 and 941, and Sales Tax Returns filed with the California State Board of Equalization;
H. Correspondence, policies, billings, invoices, claims, notes and records relating to insurance, finances, or corporate activities reflective of false or fraudulent financial transactions;
I. Records relating to any fake or fraudulent transactions between or among Jack Soo, Helen Soo, Stephen Kow, and Hong. T. Luu;
J. Records of all loans received or granted by or for [HK Video] and records of payments;
K. Computers, magnetic floppy disks or diskettes, including 3 1/2 inch, 5 1/4 inch, or 8 inch sizes, compact disks, magnetic tapes, including cassettes, cartridges, streaming tape, video tape, hard disk units (with attached control card), magnetic cards, and any other electronic data processing storage medium;
L. Articles of Incorporation, corporate resolutions, corporate minute books, and corporate stock books;
M. Records and documents relating to [HK Video's] business dealings and transactions with Rainbow Video and any and all video stores and businesses sub-licensed by [HK Video] to do business;
N. Notes, memorandae, schedules, and written recollections reflecting any disparity between income earned and income officially reported.
After FBI agents executed the warrant, a grand jury returned a 26-count indictment charging the defendants with corporate tax evasion, individual tax fraud, and profit skimming. Judge Lynch, the district court judge, in a careful and thorough opinion holding that the warrant was not sufficiently specific, suppressed the evidence seized incident to the execution of the warrant. We review his decision de novo. United States v. Spilotro, 800 F.2d 959, 963 (9th Cir.1986).
To continue readingFREE SIGN UP