case law update

Second Circuit: No Fourth Amendment Resolution in Ganias

In October 2015, we informed you the U.S. Court of Appeals for the Second Circuit had granted en banc review of Fourth Amendment issues in United States v. Ganias, regarding whether the government may retain computer evidence obtained outside the scope of an original, probable-cause search warrant and prosecute people for crimes based on that evidence.

In a decision issued last week, that full-court panel declined to resolve Ganias on those issues, instead finding the government acted in good faith reliance on a second warrant they obtained to search the computer evidence, making suppression of that evidence an appropriate remedy for any Fourth Amendment violation that may have occurred.

To recap, Army Criminal Investigation Command agents obtained a search warrant in November 2003, for files related to one of accountant Stavros Ganias’s clients, for CID’s investigation into whether that client was overbilling the Army for contracted services. Executing the warrant, CID agents made exact, digital copies of three of Ganias’s business computers, copying Ganias’s personal financial records in addition to records related to the subject of CID’s investigation.

CID invited the Internal Revenue Service to join in its investigation in May 2004, giving the IRS a complete copy of Ganias’s computers. In February 2006, Ganias learned the government had retained his personal financial records when agents asked him to consent to a search of those files. When Ganias did not respond to that request, the government obtained a warrant in April 2006, to search its copy of Ganias’s computers for data related to the business, financial, and accounting activities of Ganias and his client.

After obtaining the 2006 search warrant, the government examined Ganias’s personal financial records and used the information therein to charge and to convict Ganias with tax evasion. Ganias appealed the district court’s pre-trial denial of his motion to suppress the computer evidence to the Second Circuit, where a three-judge panel held the government “clearly violated Ganias’s Fourth Amendment rights” when it seized his non-responsive personal files and retained them for two and a half years without judicial approval, until “finally developing probably cause to search and seize them.” The appeals court subsequently approved the government’s request for a rehearing en banc.

The en banc panel discussed Ganias’s arguments, addressing his reliance on case law regarding filing cabinets and other physical file storage containers. On those comparisons, the court wrote that the analogy between the physical and digital storage is imperfect. While physical files are contained together in individual files, digital files are stored as data interspersed throughout the digital storage medium, making seizure and retention of a whole computer mirror practical to maintain the integrity of the evidence.

But ultimately, the court made no decision on Ganias’s attempts to compare physical and digital files, holding that the government’s good-faith reliance on the 2006 search warrant would make suppression an inappropriate remedy for any Fourth Amendment violation that may have occurred.

Read the full case: U.S. v. Ganias

 


This case law update was written by James G. Heelan, associate attorney, Shaw Bransford & Roth, PC.

For thirty years, Shaw Bransford & Roth P.C. has provided superior representation on a wide range of federal employment law issues, from representing federal employees nationwide in administrative investigations, disciplinary and performance actions, and Bivens lawsuits, to handling security clearance adjudications and employment discrimination cases.

Posted in Case Law Update

Tags: case law update, james p. garay heelan

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