U.S. v. Hoang Anh Thi Duong

• Decision Date: 24 July 2001
• Docket Number: No. CR. 01-126-A.,CR. 01-126-A.
• Citation: 156 F.Supp.2d 564
• Parties: UNITED STATES of America v. HOANG ANH THI DUONG, Tu Anh Phan, and Danh Anh Phan, Defendants.
• Court: U.S. District Court — Eastern District of Virginia

156 F.Supp.2d 564

UNITED STATES of America v. HOANG ANH THI DUONG, Tu Anh Phan, and Danh Anh Phan, Defendants.

No. CR. 01-126-A.

United States District Court, E.D. Virginia, Alexandria Division.

July 24, 2001.

Bruce E. Morton, William J. Lovett, U.S. Dept. of Justice, Washington, DC, for plaintiff.

John Kenneth Zwerling, Lisa Bondareff Kemler, Zwerling & Kemler, P.C., Alexandria, VA, Bernard S. Bailor, Washington, DC, for defendants.

MEMORANDUM OPINION

ELLIS, District Judge.

In this prosecution for conspiracy and tax fraud, defendants seek to suppress the evidence seized in two searches: (i) a 1995 Federal Bureau of Investigation ("FBI") search conducted at defendants' home in connection with an unrelated criminal investigation, and (ii) a 1997 search conducted by the Internal Revenue Service ("IRS") in connection with the investigation that led to this prosecution. Plaintiffs contend that evidence seized in the 1995 FBI search and seizure should be suppressed, inter alia, on the ground that the scope of the search and the materials seized were beyond the scope of the warrant. Defendants further contend that all evidence from the 1997 IRS search and seizure constitute "fruit of the poisonous tree" and thus should be suppressed, as that search stems from and is tainted by the 1995 FBI search.¹

Following hearings² at which evidence was taken and arguments heard, the Court granted in part and denied in part defendants' motion to suppress. See United States v. Duong, Crim. No. 01-126-A (E.D.Va. July 13, 2001) (Order). Defendants thereafter filed a motion for reconsideration. This Memorandum Opinion sets forth the reasons for the initial ruling and for the denial of the motion for reconsideration.

I.³

Defendant Hoang Anh Thi Duong and her daughters, defendants Tu Anh Phan and Danh Anh Phan, are alleged to have been officers of Phuoc-Lai, Inc. ("Phuoc-Lai") or otherwise responsible for its gross receipts. Phuoc-Lai is a Virginia corporation doing business as Café Dalat, a Vietnamese restaurant in Arlington, Virginia. All defendants are charged in the first count of the six-count indictment with participation in a conspiracy to under-report the gross receipts of Phuoc-Lai on federal corporate income tax returns for the years 1991 through 1995, in violation of 18 U.S.C. § 371 and 26 U.S.C. § 7206(1). In the remaining five counts only defendant Tu Anh Phan is charged with filing false federal corporate income tax returns for each of the five years involved, in violation of 26 U.S.C. § 7206(1). The 1991 and 1992 tax returns were filed on April 17, 1995; the 1993 return on September 8, 1995; the 1994 return on November 6, 1995; and the 1995 return on October 1, 1996.

On January 6, 1994, FBI agents investigating the unrelated criminal activities of Tai Anh Phan⁴ conducted a "trash cover" at 3309 Potterton Drive, Falls Church, Virginia, the residence of Tai Anh Phan and defendants. According to FBI Special Agent Charles Knowles, the agent assigned to the Tai Anh Phan investigation, he and another agent went to the Phan residence at around 4:30 a.m. and seized several bags of trash left on the sidewalk for collection. Examining the seized items later, Agent Knowles found numerous documents, including Phuoc-Lai bank records, Café Dalat credit card statements and meal tax reports, and individual envelopes containing daily Café Dalat guest checks for 1991, 1992, and 1993.⁵ After concluding at the time that these items were of no use in the Tai Anh Phan investigation, Agent Knowles placed the items in two boxes for storage in the evidence control room at the FBI field office.⁶

Eighteen months later, on June 30, 1995, the FBI arrested Tai Anh Phan and three co-conspirators unrelated to the Phan family at the culmination of a month-long investigation into the planned robbery of a federally licensed gun dealer in suburban Maryland. Later that night and through the following morning, FBI agents searched the Phan residence ("1995 FBI search") pursuant to a warrant issued by a magistrate judge. The affidavit filed in support of the warrant application stated that the FBI learned through a confidential informant that Tai Anh Phan and others were planning to rob the Maryland gun dealer. Except for a statement relating that the confidential informant observed defendant Hoang Anh Thi Duong counting money at the residence, however, there were no other statements in the affidavit suggesting that any other member of the Phan family was involved in the robbery conspiracy. Indeed, the affidavit did not even disclose that other members of the Phan family in addition to Tai Anh Phan and his mother lived at the Potterton Drive residence.

Based on this affidavit, the magistrate judge issued a warrant that referred to, and to which was attached, a document entitled "Attachment A" listing categories of items authorized to be seized. Attachment A is apparently a standard drug search warrant attachment, not one specifically tailored to a robbery conspiracy. Recognizing this, the magistrate judge deleted from the attachment a paragraph that authorized seizure of "books, records, receipts, notes, ledgers and other papers, including any computerized or electronic records, relating to the transportation, ordering, purchase and distribution of controlled substances." But significantly, the magistrate judge left untouched the remaining categories listed in the attachment, including paragraph c, which authorized seizure of "books, records, receipts, bank statements, and records, money drafts, letters of credit, money order and cashiers checks, receipts, pass books, bank checks and any other items evidencing the obtaining, secreting, transfer, concealment and/or expenditure of money."

Neither the warrant itself, nor Attachment A, described the purpose for the search — namely, to seize evidence relating to a conspiracy to commit robbery in violation of 18 U.S.C. § 1951.⁷ This information was conveyed to the agents conducting the search by way of Agent Knowles's affidavit, which was referenced in, and attached to, the warrant. Thus, the warrant stated that "the affidavit[ ] ... establish[es] probable cause to believe that the ... property so described is now concealed on the ... premises above described and establish[es] grounds for the issuance of this warrant." The affidavit, in turn, averred that "there is probable cause to charge TAI ANH PHAN ... with a violation of 18 U.S.C. § 1951 and 18 U.S.C. § 2 for ... conspiring to obstruct, delay, and affect commerce and the movement of articles and commodities in commerce by robbery," and that

there is probable cause to believe that the residence located at 3309 Potterton Drive, Falls Church, Virginia.. contains evidence, instrumentalities and fruits of criminal activities and property used to commit criminal activities, including but not limited to those items set forth in Attachment A, herewith attached and made part of this affidavit.

The search pursuant to the FBI warrant began at around 11:30 p.m. on the night of June 30, 1995 and continued until approximately 3:00 a.m. in the early morning of July 1. The scope of the search was extensive, covering every room in the house, including the bedrooms of family members not mentioned in the warrant or affidavit and not involved or even suspected of involvement in the targeted robbery conspiracy. The expansive breadth of the FBI search is also reflected in the range and volume of documents seized. Thus, agents seized, inter alia, (i) documents relating to Café Dalat, including a file folder containing ledgers of Café Dalat sales from February 1994 through May 1995, and Phuoc-Lai bank account statements, insurance bills, and 1991-1995 deposit records; (ii) defendants' personal records, including school records, bank and other financial records, warranties, and receipts; (iii) personal tax returns of defendants Tu Anh Phan and Danh Anh Phan and of their sister, Anh Minh Phan; (iv) home videotapes; (v) records relating to rental property owned by Anh Minh Phan and defendant Tu Phan; and (vi) family life insurance records. Significantly, very few documents seized in the 1995 FBI search related to the targeted robbery conspiracy. When asked during the course of the suppression hearing whether the FBI in fact seized any documents that proved to be evidence of the robbery conspiracy, Agent Knowles identified only a note that Tai Anh Phan wrote to a co-conspirator, instructing him where to store the guns that they planned to steal. By contrast, many of the documents seized in the 1995 FBI search have been designated by the government under Rule 12(d)(2), Fed.R.Crim.P., as evidence it intends to use at trial for its case-in-chief. Specifically, these documents include (i) the February 1994 through May 1995 sales reports ledgers; (ii) 1994 and 1995 First Union bank account statements for Phuoc-Lai; (iii) Phuoc-Lai deposit records for 1991 through 1995; (iv) Hartford Insurance bills and notice; and (v) Café Dalat tip records for January 1994.

The arrest of Tai Anh Phan and his co-conspirators occurred on June 30, 1995 contemporaneously with the FBI search. Thereafter, in November 1995, Tai Anh Phan was convicted of conspiracy to commit robbery and of using a firearm in connection with a crime of violence. Agent Knowles testified during the suppression hearing that while he and the Assistant United States Attorney prosecuting Tai Anh Phan were reviewing documents from a file cabinet seized during the 1995 FBI search in preparation for the Tai Anh Phan trial, they found nothing relevant to the robbery conspiracy, but, as Agent Knowles put it, "it became obvious that there were some issues regarding taxes and so forth." Specifically, Agent Knowles testified that they reviewed documents from the 1995 FBI search indicating "some ownership of what looked like a lot of assets and property" that "on the surface appeared not to match up" with the information...