593 F.3d 155 (2nd Cir. 2010), 09-3561-cv, In re Grand Jury Subpoena Issued June 18, 2009

Docket Nº:09-3561-cv.
Citation:593 F.3d 155
Opinion Judge:PER CURIAM
Party Name:In re GRAND JURY SUBPOENA ISSUED JUNE 18, 2009. v. United States of America, Appellee.[*] Account Services Corporation [ASC], KJB Financial Corporation [KJB], Appellants,
Attorney:John V. Donnelly III, Cozen O'Connor, Philadelphia, PA (L. Barrett Boss, Cozen O'Connor, Washington, D.C., on the brief), for Appellants. Arlo Devlin-Brown, Assistant United States Attorney (Michael A. Levy, Assistant United States Attorney, on the brief), for Preet Bharara, United States Attorne...
Judge Panel:Before WALKER, McLAUGHLIN, RAGGI, Circuit Judges.
Case Date:February 01, 2010
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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593 F.3d 155 (2nd Cir. 2010)

In re GRAND JURY SUBPOENA ISSUED JUNE 18, 2009.

Account Services Corporation [ASC], KJB Financial Corporation [KJB], Appellants,

v.

United States of America, Appellee. [*]

No. 09-3561-cv.

United States Court of Appeals, Second Circuit.

February 1, 2010

Argued: Nov. 30, 2009.

Page 156

John V. Donnelly III, Cozen O'Connor, Philadelphia, PA (L. Barrett Boss, Cozen O'Connor, Washington, D.C., on the brief), for Appellants.

Arlo Devlin-Brown, Assistant United States Attorney (Michael A. Levy, Assistant United States Attorney, on the brief), for Preet Bharara, United States Attorney for the Southern District of New York, for Appellee.

Before WALKER, McLAUGHLIN, RAGGI, Circuit Judges.

PER CURIAM

Account Services Corporation and KJB Financial Corporation (collectively, " the Companies" ) appeal an August 17, 2009, order of the United States District Court for the Southern District of New York (Sullivan, J. ) holding them in contempt for

Page 157

failing to comply with a subpoena for corporate records. The Companies-which are wholly owned by Douglas Rennick, their sole shareholder, officer, and employee-argue that they may resist the subpoena on Fifth Amendment grounds since Rennick is the only person capable of producing the records and his act of production would be testimonial and potentially self-incriminating. Although the long-established " collective entity rule" prevents corporations from availing themselves of the Fifth Amendment privilege, the Companies contend that the Supreme Court's decision in Braswell v. United States, 487 U.S. 99, 108 S.Ct. 2284, 101 L.Ed.2d 98 (1988), compels us to carve out an exception for one-person corporations. We disagree and affirm the district court's contempt order.

BACKGROUND

On June 18, 2009, a grand jury sitting in the Southern District of New York issued a subpoena duces tecum to Account Services Corporation in connection with an investigation of alleged bank fraud, illegal gambling, and money laundering. The Government and the Companies agreed to construe the subpoena as being directed not just to Account Services Corporation, but to both of the Companies. On July 10, 2009, Rennick moved to quash the subpoena, arguing that his personal Fifth Amendment rights permitted the Companies to resist the subpoena since he was the only individual capable of producing the requested corporate records and the act of production would be testimonial and potentially self-incriminating. Judge Swain, sitting in the Southern District's emergency part, denied the motion. In re Grand Jury Subpoena Issued June 18, 2009, No. M11-189, 2009 U.S. Dist. LEXIS 71610 (S.D.N.Y. Aug. 4, 2009).

On August 5, 2009, Rennick was indicted on charges of conspiracy, bank fraud, illegal gambling, and money laundering. Subsequently, the Companies refused to comply with the subpoena, leading Judge Sullivan, who was then sitting in the emergency part, to hold them in...

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