U.S. v. Vilar

• Decision Date: 17 January 2008
• Docket Number: No. 05 Crim. 0621(RJS).,05 Crim. 0621(RJS).
• Citation: 530 F.Supp.2d 616
• Parties: UNITED STATES of America, v. Alberto William VILAR and Gary Alan Tanaka, Defendants.
• Court: U.S. District Court — Southern District of New York

530 F.Supp.2d 616

UNITED STATES of America, v. Alberto William VILAR and Gary Alan Tanaka, Defendants.

No. 05 Crim. 0621(RJS).

United States District Court, S.D. New York.

January 17, 2008.

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Ivan S. Fisher, Esq., William Joseph Davis, Esq., Scheichet & Davis, P.C., New York, NY, for Defendant Vilar.

Glenn Charles Colton, Esq., Jessica L. Margolis, Esq., Wilson Sonsini Goodrich & Rosati, P.C., New York, NY, for Defendant Tanaka.

Marc O. Litt, Esq., Deirdre A. McEvoy, Esq., Benjamin Naftalis, Esq., United States Attorney's Office, Southern District of New York, New York. NY, for the United States of America.

MEMORANDUM AND ORDER

RICHARD J. SULLIVAN, District Judge.

Defendants Alberto William Vilar ("Vilar") and Gary Alan Tanaka ("Tanaka") are charged with conspiracy to commit securities fraud, as well as substantive counts alleging securities fraud, investment adviser fraud, mail fraud, wire fraud, and money laundering. The parties to this action now seek a finding as to whether the Government may offer at trial certain documents recovered from the New York office of Amerindo Investment Advisors Inc. ("Amerindo"), of which Defendants were co-founders and two of its shareholders, officers, and directors. Specifically, the parties dispute whether the inevitable discovery and independent source exceptions to the exclusionary rule permit the Government to offer the documents at trial notwithstanding the fact that they were seized from Amerindo's office during an unlawful search. In addition, Defendants seek to obtain certain disclosures from the Government relating to its purported use of unlawfully obtained evidence in procuring additional, "tainted" evidence, and assert that this Court must resolve any issues relating to such evidence prior to trial, rather than after the trial and verdict in this action.

For the reasons set forth below, the Court finds that the documents at issue in this action may be offered at trial by the Government on the basis of the inevitable discovery and independent source doctrines. In addition, Defendants' specific requests for disclosures from the Government are denied. However, prior to the trial in this action, the Government is directed to disclose to Defendants lists of the witnesses, the exhibits, and the Rule 404(b) evidence that it intends to offer at trial, upon which Defendants may rely in moving to suppress tainted evidence. Finally, although the Court reserves decision on the question of when it will resolve any taint motions filed in this action, it rejects Defendants' assertion that, as a matter of law, all such motions must be resolved prior to trial. Rather, this Court may, for good cause shown, resolve such motions after the trial and verdict in this action.

I. BACKGROUND

The Court presumes the parties' familiarity with the facts and procedural history of this action, and, therefore, recites only those facts necessary to resolve the instant motions.¹ In addition, in the body of the "Discussion" section, the Court recites certain additional facts relevant to specific portions of this opinion.

On May 26, 2005, at 8:15 a.m., the Government executed a search warrant (the "Warrant") at the New York office of Amerindo. (April 4, 2007 Order (hereinafter, the "Order") at 15.) The ensuing search lasted approximately twelve hours, and, as a result, the Government seized approximately 170 boxes of documents and 30 computers containing 1.6 terabytes of information. (Id.)

As discussed in greater detail below, at some point during the search, Marc Lift ("Mr.Lift"), the Assistant United States Attorney assigned to this case, had a conversation with Eugene Licker ("Mr.Licker"), Amerindo's counsel, wherein Mr. Licker asked whether the Government intended to serve a grand jury subpoena upon Amerindo. (Order at 18.) Subsequent to that conversation,' Mr. Litt drafted a grand jury subpoena (the "Subpoena") that was coextensive with the provisions of the Warrant. (Id. at 19; May 31 Tr. at 95.) Mr. Litt faxed the Subpoena to Mr. Licker at approximately 1:37 p.m. on May 26, 2005. (Id. at 19.)

At some point later that day, after Mr. Litt had already served the Subpoena on Mr. Licker, the two individuals had another conversation, wherein Mr. Licker stated that, because the search would not be completed in one day, Amerindo would produce documents pursuant to the Subpoena if the Government would cease its search of Amerindo's office. (Id. at 18-19; May 31 Tr. at 106-07.) Shortly thereafter, the Government ceased its search of Amerindo's office. (Order at 19.)

On August 12, 2005, both Defendants filed, inter alia, motions to suppress the materials seized pursuant to the Warrant. (Id. at 34.) On December 14', 2005, the Honorable Kenneth M. Karas, District Judge, held a hearing regarding Defendants' motions. (Id.) On December 15, 2005, Defendants filed a motion to quash the Subpoena. (Id. at 34.) Judge Karas conducted additional hearings regarding the motions to suppress and to quash on May 31, June 1, July 7, July 10, August 8, and August 9, 2006. (Id.)

On April 4, 2007, Judge Karas issued the Order denying in part and granting in part both (1) Defendants' motions to suppress the evidence seized pursuant to the Warrant, and (2) Defendants' motion to quash the Subpoena. (See Order at 35-66, 76-99.) Pursuant to the Fourth Amendment's probable cause, particularity, and reasonableness requirements, Judge Karas narrowed the scope of the Warrant, and, to a lesser extent, narrowed the scope of the Subpoena. (See id.)

Accordingly, Judge Karas found that the documents seized from Amerindo's office pursuant to the invalid portions of the Warrant could not be offered at trial by the Government. (Id. at 67.) Nevertheless, Judge Karas found that, "given the more relaxed relevancy requirements applied in evaluating a subpoena," there was a "broader set of documents" that could be lawfully pursued by means of the Subpoena rather than by means of the Warrant. (Id. at 94.) As a result, Judge Karas' modifications of the Warrant and the Subpoena, respectively, created a category of documents that, although they were illegally seized from Amerindo's office pursuant to the invalid portions of the Warrant, fell within the scope of the valid portions of the Subpoena.²

On August 17, 2007, defendant Tanaka filed a "Motion to Effectuate the Court's April 4, 2007 Order of Suppression," wherein he argued that the Challenged Documents should be suppressed. On August 20, 2007, defendant Vilar filed a "Motion to Suppress Fruits of Unlawful Search, and Related Relief," seeking (1) discovery from the Government regarding its use, if any, of illegally seized evidence, and (2) a finding that Defendants' anticipated "taint" motion should be resolved prior to trial in this action.³ The Court heard oral argument regarding Defendants' motions on December 17, 2007.⁴

II. DISCUSSION

A. The Challenged Documents

Judge Karas held in the Order that the Government seized the Challenged Documents pursuant to portions of the Warrant that were later found to be invalid. (Order at 67.) As such, Judge Karas suppressed the Challenged Documents on the basis of the exclusionary rule. (Id.) At the same time, Judge Karas found, as noted above, that the Subpoena contained lawful requests for "a broader set of documents than that permissible under the severed Warrant" — namely, the requests for the Challenged Documents — and deemed that result "unsurprising ... given the more relaxed relevancy requirements applied in evaluating a subpoena." (Id. at 94.) Ultimately, however, Judge Karas did not resolve — or even reach — the question of whether the Challenged Documents should be suppressed pursuant to the Warrant or deemed admissible as evidence obtained pursuant to the lawful portions of the Subpoena. It is left to this Court to do so.

The Government now asserts that the Challenged Documents are admissible on the basis of the inevitable discovery and independent source exceptions to the exclusionary rule.⁵ By contrast, Defendants assert that the Challenge Documents must be excluded from use at trial because: (1) the Government has failed to assert in a timely fashion its arguments relating to the inevitable discovery and independent source doctrines, and, thus, has waived its right to do so; and, (2) even assuming arguendo that the Government had properly asserted such arguments, the Government has failed to establish that those exceptions to the exclusionary rule apply in the instant case.

For the following reasons, the Court rejects Defendants' waiver argument, and holds that the Challenged Documents may be offered at trial pursuant to the inevitable discovery and independent source doctrines.

1. Timeliness of the Government's Arguments Relating to Suppression

The Court rejects Defendants' assertion that the Government has waived its ability to raise arguments regarding the admissibility of the Challenged Documents by failing to assert arguments relating to that issue in response to Defendants' initial suppression motion. (See Tanaka Mem. at 4-5.)

Indeed, the Government promptly presented arguments relating to the admissibility of the Challenged Documents at the appropriate stages of this case. On December 13, 2006, prior to issuance of the Order, the Government relayed its position as to the admissibility of evidence obtained pursuant to the Subpoena by asserting that:

Because the grand jury subpoena was in large part co-extensive with the search warrant, were the Court to deny defendants' motion to quash [the Subpoena] ... the Court would not need to decide the defendants' motion concerning ... the Warrant ...

(Gov't's Dec. 13, 2006 Post-Hr'g. Mem. at 38.) This argument unambiguously conveyed to the Court and to Defendants the Government's view that the Subpoena constituted a lawful method of procuring evidence from Amerindo's office, and that the Government should be...