The opinion of the court was delivered by: Hurley, Senior District Judge
On Defendant's Motion for a Temporary Stay (doc. #161)
The Defendant moves this Court for an order granting a temporary stay of a portion of the Ex Parte Post-Indictment Restraining Order (the "Restraining Order") this Court issued July 11, 2006. (See Restraining Order (doc. #98).) Pursuant to the Restraining Order, the Defendant was to, inter alia, "repatriate certain funds and other things of value on deposit in accounts located in foreign jurisdictions." (See id. at 2.) At issue are four accounts maintained in Costa Rica (the "Costa Rican accounts") (see id., Attachment A at ¶¶1-4), an account maintained in Mexico (the "Mexican account") (see id., Attachment A at ¶12), and an account maintained in Switzerland (the "Swiss account") (see id., Attachment A at ¶15).*fn1 The Swiss government has advised the U.S. Government that it has restrained the Defendant's Swiss account maintained at Credit Suisse. (See Letter from Richard T. Lunger, Assistant U.S. Attorney, to Hon. A. Kathleen Tomlinson, Magistrate Judge, at 2 (July 31, 2006) (doc. #130).) However, Defendant has not repatriated the Costa Rican or Mexican accounts, arguing that to do so will violate his Fifth Amendment privilege against self-incrimination. (See Def.'s Affirmation in Support of Mot. at Point I, ¶8 ("Affirmation") (part of doc. #161).)
Upon consideration of the papers submitted and the evidence in record, and for the reasons stated below, the Defendant's motion is DENIED.
While the Court assumes the parties' familiarity with the facts of the case, it will summarily provide relevant background for context. In early May 2006, prior to the Government's Superseding Indictment and its application for the Restraining Order in mid-July 2006, the Defendant sought release from custody, making a bail application to this Court. It was Defendant's third bail request. As part of his bail application, Defendant voluntarily submitted a financial compilation of assets over which he asserted control. This compilation revealed assets in excess of $56 million, including the Costa Rican, Mexican, and Swiss accounts. Ruling from the bench, Magistrate Judge Tomlinson denied Defendant's bail application. (See May 16, 2006, doc. entry #81.) Defendant moved for reconsideration. (See doc. #86.) After oral argument, the Court issued a detailed order denying Defendant's reconsideration motion. (See July 21, 2006 Order at 9-24 (doc. #120).) The Defendant appealed to the United State Court of Appeals for the Second Circuit. In a summary order and based on the reasoning articulated by this Court, the Second Circuit affirmed the denial of Defendant's latest bail request. United States v. Morrison, No. 06-3621-CR, slip op., 2006 WL 2793018 (2d Cir. Sept. 25, 2006) ("Upon a review of the record, and substantially for the reasons set forth in Judge Hurley's careful and comprehensive order, we conclude that the District Court committed no error. Accordingly, we AFFIRM the order of the District Court.") (emphasis in original).
The Defendant now argues that complying with the Court's Restraining Order will violate his Fifth Amendment privilege against self-incrimination. He claims he was required to seek court intervention because the Government refused to grant him limited act-of-production immunity.
The Government opposes the Defendant's motion, arguing: although the government intends to introduce in its case-in-chief at trial evidence of the existence and location of Morrison's foreign assets that he disclosed at this bail hearing, it does not intend to use the ministerial act of repatriation to incriminate him. Moreover, the act of repatriating the funds in these accounts does not require incriminating testimony since the existence and location of the accounts are already known to the government based upon Morrison's prior voluntary introduction of records and testimony disclosing his foreign assets during the course of his bail hearing.
(Letter from Richard T. Lunger, Assistant U.S. Attorney, to Hon. Denis R. Hurley, Sr. District Judge, at 1 (Sept. 13, 2006) (hereinafter, "Gov't Opp'n Letter") (doc. #169).)*fn2 The thrust of the Government's argument is that since it was the Defendant who revealed the existence of the foreign accounts through the production of the compilation and through the testimony of Certified Public Account ("CPA") Lynn T. Domachowski at his bail hearing, "the existence and location of the subject accounts are 'foregone conclusion[s]' and Morrison's repatriation of them 'adds little or nothing to the sum total of the Government's information.'" (Id. at 3 (quoting Fisher v. United States, 425 U.S. 391, 411 (1976); and citing In re Grand Jury Subpoena Duces Tecum dated Oct. 29, 1992, 1 F.3d 87, 93 (2d Cir. 1993)).) Therefore, the Government posits, there is no basis for Morrison to assert an act-of-production privilege. (See id.)
In reply, Morrison's newest attorney, Daniel Nobel, counters:
The government's theory of why Peace Pipe is a racketeering enterprise, and why all assets purchased from profits earned by Peace Pipe are forfeitable under 18 U.S.C. § 1963, is entirely dependent on their [sic] proving that Rodney Morrison, the defendant in this matter, is not just the manager of Peace Pipe but is in fact its owner. (Letter from Daniel Nobel, Esq., to Hon. Denis R. Hurley, Sr. District Judge, at 1-2 (Sept. 25, 2006) (hereinafter, "Nobel Reply Letter") (doc. #176).) The crux of Nobel's counter-argument is that the Government has glossed over the issue of ownership, but that "[t]he ownership issue is central . . . to the forfeiture action" and "[a]n action that concedes ownership invokes Mr. Morrison's 5th Amendment rights." (Id. at 2.) In any event, the Defendant requests an evidentiary hearing as to the restraint sought to be exercised over the subject foreign accounts, arguing that repatriation of the funds in these accounts could adversely affect the investment income generated by these account. (See id. at 14-15.) There is no argument that the Defendant needs these funds to pay for counsel or for living expenses. Rather, Defendant clearly concedes that these "issues [are] not presently relevant here." (Id. at 14.)
In its sur-reply, the Government reiterates that it "does not intend to introduce evidence of Morrison's act of repatriating the subject accounts against him in its case-in-chief at trial." (Letter from Richard T. Lunger, Assistant U.S. Attorney, to Hon. Denis R. Hurley, Sr. District Judge, at 1 (Sept. 29, 2006) (hereinafter, "Gov't Sur-Reply Letter") (doc. #182).) The Government further points out that it is federal forfeiture law, not state property rights law, that is controlling in this instance. (See id. at 2.) "In forfeiture cases, the court must look beyond bare legal title in order to determine whether the record owner of the property is the true owner, or merely a 'strawman' set up to avoid forfeiture." (Id. at 3 (citing United States v. One 1990 Nissan Pathfinder, No. 92-1336, 1994 WL 476704, at *3 (N.D.N.Y. Sept. 2, 1994)).) In this context, "the issue of ownership "'turns primarily upon the identity of the individual exercising dominion and control over the [property], they being regarded as the true owner.'" (Id. (quoting One 1990 Nissan Pathfinder, 1994 WL 476704, at *3 (quoting United States v. One 1982 Porsche 928, 732 F. Supp. 447, 451 (S.D.N.Y. 1990)).) The Government, making short shrift of Defendant's claim that it is his wife who owns the Peace Pipe, points to various indications that Mrs. Morrison is merely the Defendant's nominee; thus, assertions of Mrs. Morrison's ownership ring ...