US v. Eng
| Decision Date | 31 March 1993 |
| Docket Number | No. CR-89-678.,CR-89-678. |
| Citation | 819 F. Supp. 1198 |
| Parties | UNITED STATES of America, Plaintiff, v. Shu Yan ENG, also known as Ah Shu, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
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Patricia Pileggi, Asst. U.S. Atty., Brooklyn, NY, for plaintiff.
Margaret E. Alverson, Peluso Touger and Alverson, New York City, for defendant.
On March 26, 1991, this court denied defendant Shu Yan Eng's motion to suppress certain illegally seized financial records on the ground that the challenged evidence fell within the "inevitable discovery" exception to the exclusionary rule enunciated by the Supreme Court in Nix v. Williams, 467 U.S. 431, 104 S.Ct. 2501, 81 L.Ed.2d 377 (1984). After conviction for tax evasion, defendant appealed this court's denial of his motion to the Second Circuit. In an order dated July 28, 1992, the court of appeals vacated the suppression ruling and remanded the case for "particularized findings" as to how discovery of "each piece of evidence challenged by Eng and claimed by the government to be admissible" "`would have been' more likely than not `inevitable' absent the search of Eng's safe." United States v. Eng, 971 F.2d 854, 862 (2d Cir.1992). Those "particularized findings" are provided, and this court reaffirms its initial conclusion that the majority of evidence challenged by defendant Eng fell within the parameters of Nix v. Williams and its progeny. Recognizing that the government failed to satisfy its burden of proof as to some of the evidence admitted at trial, this court nevertheless finds that the paucity of evidence incorrectly presented to the jury would not have changed the trial outcome and therefore constituted harmless error.
The Second Circuit opinion in this case, United States v. Eng, 971 F.2d 854 (2d Cir. 1992), sets forth the pertinent facts leading up to and following defendant's arrest and conviction, and familiarity with that decision is presumed. However, in order to memorialize the detailed exposition necessitated by the Second Circuit's vacatur and remand, this court includes in this opinion such other information as was relevant to its determination that the government ultimately would have discovered, by lawful means, the evidence challenged by Eng. In addition, where appropriate, inaccuracies and additions to the factual analysis reflected in the opinion of the court of appeals are included. The discussion and conclusions which follow rest on this court's observation of Agent Interdonato's demeanor, on an assessment of his testimony at the suppression hearing, and on a close examination of the transcript and exhibits from that hearing.1
In February of 1989, the Drug Enforcement Administration ("DEA") and the Internal Revenue Service ("IRS") began investigating Shu Yan Eng for violations of various narcotics and money laundering statutes. Information from confidential informants that Eng was importing large quantities of narcotics from the Far East and laundering the money from this narcotics trade through various businesses and properties in the United States provided the impetus for these initial investigations. Several months later — in August or September of 1989 — the IRS commenced a tax evasion investigation of Eng. Tr. at 78. Although tax investigations customarily follow commencement of narcotics and money laundering investigations, Eng, 971 F.2d at 856, in this case the "precipitating fact" that led the government to delve into defendant's tax activity was Eng's purchase of a building at 26 Bowery on behalf of a corporation over which he presided. Tr. at 78-79. IRS Special Agent Thomas Interdonato, assigned to the DEA Southeast Asian Task Force, discovered Eng's purchase of this property through an examination of public records in the summer of 1989; Interdonato thereafter took primary responsibility for the tax investigation. Tr. at 78-79.
In conducting this tax evasion investigation of Shu Yan Eng, Interdonato used the "tax expenditures" method of proof, which essentially compares the taxpayer's income and non-taxable resources, such as gifts and loans, with the taxpayer's expenditures. Tr. at 3-4. In order to prove tax evasion by this indirect method, the government must show to a "reasonable probability" that non-taxable sources of funds spent by the taxpayer did not exist, a burden that involves a "thorough search of assets, sources of money, and cash inflows and outflows." Eng, 971 F.2d at 856 (citing United States v. Bianco, 534 F.2d 501 (2d Cir.), cert. denied, 429 U.S. 822, 97 S.Ct. 73, 50 L.Ed.2d 84 (1976)). The materials that Interdonato gathered in connection with the initial phase of his investigation are discussed in detail below.
On October 18, 1989, Eng was arrested pursuant to a grand jury indictment charging him with administration of a continuing criminal enterprise, money laundering, and various narcotics violations. Lawfully seized from Eng's person at the time of his arrest were American Express Cards, three vehicle registrations, a social security card, a life insurance card, a driver's license, and several business cards. Tr. at 177; GX 357. In addition, on the day of defendant's arrest, law enforcement authorities took possession of two of his business properties: the 26 Bowery building, mentioned above as the impetus for the tax investigation, and the French Ice Cream Parlor. A search of Eng's personal safe in the French Ice cream parlor ensued, and a variety of materials — also discussed below — were seized from that safe. The government concedes that the search and seizure of the safe were conducted without a warrant and were thus unlawful. Tr. at 184.
In April of 1990, approximately six months after the illegal search and eight months after Interdonato's tax evasion investigation commenced, a superseding indictment was handed up. That indictment added to the existing charges against Eng three tax evasion counts relating to the tax years 1986 through 1988. Eng then moved to suppress various financial documents seized in the search of the French Ice Cream Parlor safe and evidence allegedly derived from the seized materials, contending that this evidence was tainted by the illegal search and therefore could not be admitted at trial to support the tax evasion counts. After holding a suppression hearing, at which Agent Interdonato was the only witness, reading the parties' briefs and proposed findings of fact, and examining Nix v. Williams and its progeny, this court determined that the government had met its burden of proof under the "inevitable discovery" doctrine by demonstrating that it was more likely than not that the government would have discovered the challenged evidence even absent the illegal search. Defendant's motion to suppress was therefore denied, and, as expected, the government introduced many of the challenged documents into evidence at Eng's trial.
In April of 1991, a jury convicted Eng on all three tax evasion charges but acquitted him on all other counts. Eng thereafter appealed this court's suppression ruling to the Second Circuit which, as already mentioned, vacated the determination that the inevitable discovery doctrine applied generally to all the seized evidence and remanded the case for particularized findings of fact. The remainder of this opinion complies with that remand as follows: first, it discusses the relevant "inevitable discovery" law in the Second Circuit; second, it explains how the inevitable discovery doctrine relates to the particular investigation against Eng; third, it describes the evidence that the government presented at trial to support Eng's conviction on tax evasion; and fourth, it analyzes in detail each of the challenged pieces of evidence — in accordance with the Second Circuit's mandate — to explain why the majority of that evidence falls within the inevitable discovery exception to the exclusionary rule.
"The exclusionary rule prohibits introduction into evidence of tangible materials seized during an unlawful search, Weeks v. United States, 232 U.S. 383 34 S.Ct. 341, 58 L.Ed. 652 (1914), and of testimony concerning knowledge acquired during an unlawful search, Silverman v. United States, 365 U.S. 505 81 S.Ct. 679, 5 L.Ed.2d 734 (1961)." Murray v. United States, 487 U.S. 533, 536, 108 S.Ct. 2529, 2532, 101 L.Ed.2d 472 (1988). In the oft-quoted words of Wong Sun v. United States, 371 U.S. 471, 484-84, 83 S.Ct. 407, 414-15, 9 L.Ed.2d 441 (1963), the exclusionary rule also bars introduction of derivative evidence — "fruit of the poisonous tree" — unless the relationship between that evidence and the search is sufficiently attenuated:
We need not hold that all evidence is "fruit of the poisonous tree" simply because it would not have come to light but for the illegal actions of the police. Rather, the more apt question in such a case is "whether, granting establishment of the primary illegality, the evidence to which instant objection is made has been come at by exploitation of that illegality or instead by means sufficiently distinguishable to be purged of the primary taint." Maguire, Evidence of Guilt, 221 (1959).
Id. at 487-88, 83 S.Ct. at 417-18. The rationale of the inevitable discovery doctrine evolved from this quotation. See Nix v. Williams, 467 U.S. 431, 441-43, 104 S.Ct. 2501, 2507-09, 81 L.Ed.2d 377 (1984); see also United States v. Alvarez-Porras, 643 F.2d 54, 59 (2d Cir.) ...
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U.S. v. Eng
...required by our remand were provided to us in a seventy-five page "Memorandum and Order" dated March 31, 1993. See United States v. Eng, 819 F.Supp. 1198, 1208 (E.D.N.Y.1993). After considering the district court's factual determinations and reviewing its legal conclusion of inevitable disc......
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