Documents Seized Pursuant to a Search Warrant, Matter of

• Citation: 478 N.Y.S.2d 490,124 Misc.2d 897
• Parties: In the Matter of DOCUMENTS SEIZED PURSUANT TO A SEARCH WARRANT.
• Decision Date: 22 May 1984
• Court: United States State Supreme Court (New York)

Page 490

478 N.Y.S.2d 490

124 Misc.2d 897

In the Matter of DOCUMENTS SEIZED PURSUANT TO A SEARCH WARRANT.

Supreme Court, Criminal Term,

New York County, Part 50.

May 22, 1984.

Rodney A. Brown, Golenbock & Barrell, New York City, for petitioner.

Robert Morgenthau, Dist. Atty., New York County, for respondent; Merri Bernstein, Asst. Dist. Atty., of counsel.

HAROLD J. ROTHWAX, Judge:

On October 20, 1983 this court issued a warrant which authorized the search of the premises of a restaurant, Tom's Shangri-La, owned and operated by Tom's Associates, Inc., for books and records of the corporation which constituted evidence, inter alia, of sales tax and corporate income tax evasion. The search was upheld under the Fourth Amendment (U.S. Const. Amd. IV) in a separate opinion. Following the return on the warrant, the documents were placed in custody of the District Attorney (CPL 690.55, subd. 2). In November and December, 1983, the New York State Department of Taxation and Finance issued notices of deficiency in regard to personal income tax owed by officers of Tom's Associates Inc. individually for the years 1976 through 1979, and in regard to income tax owed by the corporation for the tax years 1979 and 1980, together with a delinquent sales tax assessment. The New York City Department of Finance has also instituted a proceeding to recover $67,000 in business taxes from the corporation for 1980. The petitioner is president of the corporation. He is before the court under indictment for the alleged bribery of a tax auditor, which in turn led to the issuance of the warrant. The District Attorney concedes that documents seized pursuant to the warrant have been made available to civil tax authorities and that the tax assessments are undoubtedly based, in large part, upon such documents. The petitioner seeks to have the documents or copies of the documents in possession of civil agencies returned to the District Attorney and to preclude these civil agencies from using the documents or copies in any civil litigation or proceeding. The court has previously held, in a related action, that the District Attorney could enlist the assistance of experts within the city or state government to evaluate business records for presentation to a grand jury (CPL 190.25, subd. 4). To the extent that members of civil tax authorities were given access to the documents upon that basis, the court approved the procedure. The court's previous order did not, however, contemplate the obtaining by civil authorities from the District Attorney of documents or copies of documents seized pursuant to the search warrant, for use in civil tax proceedings. The propriety of this disclosure is the only issue presently before the court.

JURISDICTION

A preliminary question is whether this court has jurisdiction over the subject matter of the petition. The court's authority to control the disposition of property seized pursuant to its warrant is established by statute (CPL 690.55) and by long usage. (Simpson v. St. John, 93 N.Y. 363, 365 Courts retain an "inherent authority" to decide questions concerning

                an allegedly unreasonable use of their process.  (Wise v. Henkel, 220 U.S. 556, 558, 31 S.Ct. 599, 600, 55 L.Ed. 581  Moreover, property seized pursuant to a search warrant technically remains in the custody of the court, and the District Attorney or property clerk possesses the property only as an officer of the court, subject to the court's direction and disposition.  (Simpson v. St. John, supra;  1973 Opn A.G. 239, 240;  Wise v. Henkel, supra;  compare Hunsucker v. Phinney, 497 F.2d 29, 32 and n. 3 cert. den. 420 U.S. 927, 95 S.Ct. 1124, 43 L.Ed.2d 397.)   Moreover, apart from invoking this court's authority to control the disposition of items seized pursuant to its process, the petitioner has no adequate remedy.  An action for replevin is unavailable where the property sought to be recovered is being held as evidence in a pending criminal proceeding.  (Goodman v. Lane, 48 F.2d 32, 35  1973 Opn A.G. 239, 240].)  In any event, the instant petition seeks to restore possession of the documents to the court, not to the owner.  (Simpson v. St. John, supra.)   The civil tax assessment proceeding will not afford petitioner an opportunity to litigate the means by which the documents were obtained.  The documents are concededly relevant and admissible evidence.  (See Adams v. New York, 192 U.S. 585, 587, 24 S.Ct. 372, 373, 48 L.Ed. 575  Burdeau v. McDowell, 256 U.S. 465, 475, 41 S.Ct. 574, 576, 65 L.Ed. 1048  The petition, which seeks in effect to enjoin dissemination of the seized documents by the District Attorney to civil authorities (see CPLR 7109), sounds in equity.  (Hunsucker v. Phinney, supra, 497 F.2d at p. 34;  compare Boyle v. Kelley, 42 N.Y.2d 88, 91, 396 N.Y.S.2d 834, 365 N.E.2d 866  Since no other remedy appears available to the petitioner, the court will consider the merits.  (Goodman v. Lane, supra, 48 F.2d at pp. 34-35.)
                

MERITS

The several lines of precedent relied upon by the parties are not dispositive of the issue.

The Supreme Court's recent decision prohibiting the criminal division of the Internal Revenue Service from disclosing documents obtained by Grand Jury subpoena to the civil division, was based upon principles of secrecy in regard to disclosures of the nature and substance of Grand Jury evidence (F.R.Crim.Pro. 6) which are not applicable here, since the documents at issue were obtained by the court pursuant to search warrant independent of any Grand Jury proceeding and have not been introduced in evidence before a Grand Jury. (United States v. Sells Engineering Inc., 463 U.S. 418, 103 S.Ct. 3133, 77 L.Ed.2d 743 see Consumer Credit Insurance Agency Inc. v. United States, 599 F.2d 770 cf. Shea v. Gabriel, 520 F.2d 879 In the Matter of District Attorney of Suffolk County, 58 N.Y.2d 436, 461 N.Y.S.2d 773, 448 N.E.2d 448 CPL 190.25[4].)

On the other hand, the Supreme Court's ruling that documents unlawfully seized by law enforcement agents could be introduced as evidence in civil tax proceedings under certain circumstances, was based upon the perceived limitations of the deterrent effect of applying the exclusionary rule to such proceedings, and did not constitute sanction or approval for the disclosure of such documents by law enforcement to civil tax authorities. (United States v. Janis, 428 U.S. 433, 447, 96 S.Ct. 3021, 3028, 49 L.Ed.2d 1046 see Tirado v. Commissioner of Internal Revenue, 689 F.2d 307, 309-312 There was no occasion to review the propriety of the disclosure, as opposed to the seizure, of the documents in those proceedings. It is a general principle of procedure that courts will not inquire into the source of relevant and admissible evidence. (Adams v. New York, supra, 192 U.S. at p. 587, 24 S.Ct. at p. 373; In re Grand Jury Proceedings, 466 F.Supp. 863, 867 compare United States v. Janis, supra, 428 U.S. at p. 447, 96 S.Ct. at p. 3028.) The exclusionary rule, designed to promote the policies of the Fourth Amendment, is an exception. (Weeks v. United States, 232 U.S. 383, 395, 34 S.Ct. 341, 345, 54 L.Ed. 652 However, once evidence has been lawfully seized, Fourth Amendment criteria are met, regardless of the subsequent application of the evidence by the government. (See Gouled v. United States, 255 U.S. 298, 311-312, 41 S.Ct. 261, 265-266, 65 L.Ed. 647 The intragovernmental transfer of evidence is not a new seizure requiring de novo application of Fourth Amendment criteria. (See Elkins v. United States, 364 U.S. 206, 80 S.Ct. 1437, 4 L.Ed.2d 1669 It should be noted, however, that were it to appear that the seizure was to obtain evidence of civil wrongdoing, probable cause for the seizure would be lacking, since the validity of the warrant depends upon the establishment of a nexus between the thing seized and a stated crime, and necessarily entails consideration of the police purposes in making the seizure. (Warden v. Hayden, 387 U.S. 294, 307, 87 S.Ct. 1642, 4650, 18 L.Ed.2d 782 Matter of BT Productions v. Barr, 44 N.Y.2d 226, 236-237, 405 N.Y.S.2d 9, 376 N.E.2d 171 see People ex rel. Simpson Co. v. Kempner, 208 N.Y. 16, 20-23, 101 N.E. 794 cf. Camara v. Municipal Court, 387 U.S. 523, 87 S.Ct. 1727, 18 L.Ed.2d 930 There is no doubt in this case that the documents were seized as evidence of the stated crimes.

The same principle was recognized by one Circuit Court in the context of court-ordered electronic surveillance, where it was held that the applicable statute (18 U.S.C. § 2517 see CPL 700.65) did not prohibit the disclosure of conversations lawfully intercepted by law enforcement agents to civil tax authorities in the course of performing law enforcement duties and in the absence of reason to believe the surveillance was "a subterfuge for developing information for civil tax proceedings" (Griffin v. United States, 588 F.2d 521, 524 Fleming v. United States, 547 F.2d 872, 874 cert. den. 434 U.S. 831, 98 S.Ct. 113, 54 L.Ed.2d 90] ).

At first blush these cases present an attractive precedent. They are, however, ultimately unpersuasive for several reasons. There is statutory authorization for disclosure of information obtained pursuant to court-ordered electronic surveillance where "appropriate to the proper performance of ... law enforcement duties" (18 U.S.C. § 2517 CPL 700.65). There is no similar authorization in the search warrant statute (CPL Art. 690). The court has, nonetheless, accepted this principle in regard to physical evidence by permitting disclosure of documents to civil tax authorities engaged to assist the prosecution and other law enforcement agents in evaluating the evidence in regard to criminal wrongdoing. The civil tax authorities may undoubtedly, through whatever procedures are ordinarily available to them, act upon the basis of information thus obtained. (Griffin v. United States, supra.) However, the disclosure of information in order to obtain advice in preparation of a...