U.S. v. Mann, 86-3141

• Decision Date: 05 October 1987
• Docket Number: No. 86-3141,86-3141
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. David R. MANN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 849

829 F.2d 849

56 USLW 2277

UNITED STATES of America, Plaintiff-Appellee, v. David R. MANN, Defendant-Appellant.

No. 86-3141.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 7, 1987.

Decided Oct. 5, 1987.

Sara Criscitelli, Washington, D.C., for plaintiff-appellee.

Robert J. McCrea, Eugene, Or., for defendant-appellant.

Appeal from the United States District Court for the District of Oregon.

Before GOODWIN and FERGUSON, Circuit Judges, and STEPHENS, ^* District Judge.

FERGUSON, Circuit Judge:

Appellant/Defendant David R. Mann, after entering a conditional guilty plea, appeals from the district court's decision to deny his motion to suppress bank records obtained from his Cayman Islands bank account. The district court ruled that Mann had no protected interest in the bank records and that he had no standing to challenge the alleged violation of the international treaty that allowed access to those records. The district court also ordered sealed a number of the affidavits and exhibits produced by the government. We affirm the district court, since Mann had no protected privacy interest in the Cayman Islands records. ¹

I.

Appellant/Defendant David R. Mann, and his wife, Sandra Mann, were indicted on eight counts, including income tax evasion, filing of false income tax returns, and failure to disclose foreign financial interests. The charges arose in large part from records of funds deposited in Mann's account with Barclays Bank, Grand Cayman Island. Mann moved the district court to suppress the evidence obtained from Barclays Bank. The evidence had been obtained via a certificate of the Attorney General issued pursuant to an anti-drug trafficking treaty signed by the United States and the United Kingdom. ² A letter agreement to the treaty provides that the Attorney General may certify a formal request to the Attorney General of the Cayman Islands for relevant documentary information when the United States has reason to believe that identified persons are involved in illegal narcotics.

Attorney General Meese issued a certificate for Mann's bank records on October 23, 1985. An internal Justice Department memorandum suggested a number of justifications for the certificate: (1) the IRS was unable to find a legitimate source for Mann's income; (2) Mann refused to identify the source of the income; (3) an informant identified Mann as the operator of a boat used by a convicted marijuana importer; and (4) the IRS had reason to believe that Mann maintained a bank account in the Cayman Islands.

The Barclays Bank records formed the basis for the indictment against Mann and his wife. Mann moved to suppress the evidence, arguing that the certificate was based upon false information and that the Bank's delivery of the records to the United States government was in violation of his privacy rights under Cayman law.

Mann's factual challenge to the certificate was based upon his counsel's affidavit concerning the meeting with the government's allegedly secret informant. During this meeting, the informant apparently denied connecting Mann with drug smuggling, and denied testifying before a grand jury against Mann's alleged ringleader. Mann's legal attack challenged the certificate as a violation of a Cayman privilege of banking privacy.

In answer to Mann's challenge, the government argued that the Cayman privilege created no protected privacy interest. The government also argued that, even if a privacy interest existed, the records were properly obtained. In support of this contention, the government produced a variety of evidence in camera, portions of which the government requested be placed under seal. The government provided an affidavit from an IRS agent who was investigating the Manns for possible criminal tax violations. The agent's affidavit asserted that Mann had deposited funds in Barclays Bank from the sale of a house. After discovering the bank account, the agent learned from Rhode Island police of a possible link between Mann and drug smuggling. The informant purportedly identified Mann as "Dave the Marine," a previously unidentified captain of a drug smuggling ship. The district court ordered sealed a further portion of the affidavit and the transcript of the in camera conference.

The district court found that Mann lacked "standing" to contest the acquisition of the records. After this denial of defendant's motion to suppress, Mann entered a conditional guilty plea pursuant to Fed.R.Crim.P. 11(a)(2), and timely appealed. ³

II.

The district court's decision that Mann had no protected Fourth Amendment interest in his Cayman bank records is one of law, reviewed de novo. See United States v. McConney, 728 F.2d 1195, 1200 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).

In United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976), an alleged bootlegger attempted to suppress copies of checks and other bank records obtained by allegedly invalid subpoenas duce tecum served upon his banks. The Fifth Circuit found that the defendant had the requisite Fourth Amendment interest to contest the validity, that the subpoenas were in fact invalid, and that suppression was the proper remedy. 500 F.2d 751, 756 (5th Cir.1974), rev'd, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976). The Supreme Court found it unnecessary to resolve the latter two issues, since "there was no intrusion into any area in which the respondent had a protected Fourth Amendment interest." 425 U.S. at 440, 96 S.Ct. at 1622. The ordinary rule to subpoenas is thus applied, and the Fourth Amendment " 'at the most guards against the abuse only by way of too much indefiniteness or breadth in the things required to be "particularly described," if also the inquiry is one the demanding agency is authorized by law to make and the materials specified are relevant.' " Id. at 445-46, 96 S.Ct. at 1625-26 (quoting Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186, 208, 66 S.Ct. 494, 505, 90 L.Ed. 614 (1946)).

Congress, in response to Miller, enacted the Right to Financial Privacy Act of 1978, 12 U.S.C. Secs. 3401-3422 (1982). The statutory rights granted by Congress, however, apply only to financial institutions within the United States. See 12 U.S.C. Sec. 3401(1). The rule of Miller, then, is in full force with respect to foreign banks.

Mann argues that the rule of Miller was the impetus for maintaining an account in the Caymans, since Cayman law protects an individual's bank records from disclosure. Mann concludes that the Cayman restrictions on disclosure create a protected [t]he statute is hardly a blanket guarantee of privacy. Its application is limited; it is hedged with exceptions; and we have been directed to no authority construing its terms. Moreover, American depositors know that their own country requires them to report relationships with foreign financial institutions. We conclude that [the defendant] lacked a reasonable expectation of privacy in the [Bahamian bank] records that documented his account.

                Fourth Amendment privacy interest that allows him to challenge the propriety of the Attorney General's request for the records.  Mann's argument, curiously unadorned by citation, has been considered and rejected by the Supreme Court.  In United States v. Payner, 447 U.S. 727, 100 S.Ct. 2439, 65 L.Ed.2d 468 (1980), the criminal defendant asserted that "the Bahamian law of bank secrecy creates an expectation of privacy not present in United States v. Miller."    Id. at 732 n. 4, 100 S.Ct. at 2444 n. 4.  The Bahamian law prevented the disclosure of a banking customer's affairs, but was subject to a number of exceptions.  The Court concluded that
                

Id. (citations omitted) The Court has thus ruled that foreign privacy statutes do not normally create a greater expectation of privacy than that discussed in Miller.

The Cayman Islands statute is directly analogous to the Bahamian statute in Payner. It provides for a general privilege against the disclosure of bank records, but it is subject to a vast array of exceptions. Mann argues that none of these exceptions apply to the Attorney General's request for documents. Mann's argument, however, missed the import of the Court's discussion in Payner. The existence of exceptions to foreign privacy statutes indicates that a bank customer does not have a reasonable expectation of privacy, since the customer knows that his records may be revealed in a variety of situations. That the treaty is not one of the exceptions enumerated in the...