UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
February 28, 2007
UNITED STATES OF AMERICA
PHILIP RECHNITZER; RONALD PERSAUD; ESTHER PERSAUD; INDRANIE PERSAUD; AND SHAWN PERSAUD, DEFENDANTS.
The opinion of the court was delivered by: David R. Homer U.S. Magistrate Judge
MEMORANDUM-DECISION AND ORDER
Following her arrest on December 4, 2006, defendant Esther Persaud ("Persaud") was released on various conditions pending trial. Those conditions included requirements that Persaud report information concerning her employment and finances to the Pretrial Services Office.*fn1 On advice of counsel, Persaud declined to do so, Pretrial Services moved to revoke or modify the conditions of her release, and Persaud asserted that her Fifth Amendment privilege against self-incrimination protected her against disclosure of the requested information. The Court then directed the parties to submit legal briefs on Persaud's claim, which they have now done. Docket Nos. 59, 64, 67. For the reasons which follow, Persaud's assertion of her Fifth Amendment privilege is overruled and she is directed to disclose the information requested by Pretrial Services.
On November 29, 2006, a grand jury returned a second superseding indictment in the above-captioned case charging Persaud and four others in twelve counts with conspiracy, fraud, and money laundering in violation of 18 U.S.C. §§ 2, 371, 1341, 1343, and 1956(h). Docket No. 43. The indictment also alleges that certain property of the defendants is subject to forfeiture. The indictment charges that between October 2003 and December 2005, the defendants falsely representing themselves as bank executives to solicit advance fee payments from various individuals and entities in return for commercial funding. The indictment alleges that the defendants obtained over $500,000 in this fashion which they converted to their own use. Id.
Persaud was arrested on December 4, 2006, pleaded not guilty, and was released on certain conditions. As relevant here, those conditions included supervision by Pretrial Services and the following additional conditions:
(e) Maintain or actively seek employment. . . .
(I) You shall provide the probation officer with access to any requested financial information.
(ii) You shall not open additional lines of credit without the approval of the probation officer.
(iii) The Court finds there is a reasonably foreseeable risk that you may engage in criminal conduct similar or related to the present offense. Therefore, the Court orders that if deemed necessary by the probation office or Court, you may be directed to notify your employer of risks that may be occasioned by your criminal record, personal history or characteristics, and the Court further authorizes the probation officer to confirm your compliance with this notification requirement.
Conditions of Release (Docket No. 46) at 2.
Probation Officer Joanne M. DeFreest ("DeFreest") was assigned to supervise Persaud. Persaud met with DeFreest for the first time on December 11, 2006 at which DeFreest questioned Persaud about her employment status and directed her to complete Form 48 entitled "Net Worth Statement." Docket No. 59, Ex. C. Form 48 consists of a one- page instruction sheet, eight pages of specific requests for information and documentation on assets and liabilities, five pages of instructions and requests for information and documentation on monthly cash flow, and four pages containing a certification, request for self-employment records, a consent for Probation Office access to financial records and credit reports, and a statement of rights under the Right to Financial Privacy Act of 1978, 12 U.S.C. § 3401 et seq. Id. The information and communications required from Persaud thus fell into three categories: her consent for Pretrial Services to obtain credit reports, oral information on Persaud's employment, and a written summary of Persaud's net worth.
On advice of counsel, Persaud declined to answer the employment questions, complete Form 48, or provide the requested documents. DeFreest then moved to revoke or modify the conditions of Persaud's release pursuant to 18 U.S.C. § 3148(b) and a summons was issued to Persaud. Docket No. 57. Persaud appeared before the undersigned on this motion on January 16, 2007 and asserted her Fifth Amendment privilege against providing the requested information and documents. Persaud's release on the conditions previously set was continued pending resolution of her claim of privilege.
Persaud contends that the conditions at issue here, and the information sought by Pretrial Services, do not further the goals of bail or pretrial release and should, therefore, be vacated.
A court is authorized in appropriate cases to impose conditions of release pending trial by the Bail Reform Act of 1984 in 18 U.S.C. § 3142(a)(2).*fn2 The conditions imposed shall include the least restrictive . . . condition or conditions that [the Court] determines will reasonably assure the appearance of the person as required and the safety of any other person and the community, which may include the condition that the person--
(ii) maintain employment, or, if unemployed, actively seek employment; . . .
(xiv) satisfy any other condition that is reasonably necessary to assure the appearance of the person as required and to assure the safety of any other person as required and the community.
18 U.S.C. § 3142(c)(1)(B). Thus, to insure the appearance of Persaud and the safety of others, the conditions imposed here must satisfy the requirements that they are (1) the least restrictive available and (2) rationally and reasonably related to assuring Persaud's appearance and the safety of others. See United States v. Goosens, 84 F.3d 697, 702 (4th cir. 1996); United States v. Vargas, 925 F.2d 1260, 1265 (10th Cir. 1991). The fact that Persaud remains presumptively innocent does not obviate the fact that probable cause has been found to believe that she committed the offenses alleged in the indictment, giving rise to the identified risks.
The condition requiring Persaud to maintain or actively seek employment is a standard condition explicitly authorized by § 3142(c)(1)(B)(ii). Given the nature and scope of the offenses alleged against Persaud in the indictment, this condition serves to assure, inter alia, that Persaud has a legitimate means of supporting herself, reduces any motive to engage in illegal activity to obtain money, and provides additional ties to the community to reduce the risk of flight. It is, therefore, both reasonably limited in its requirements and reasonably related to the dual purposes identified in the Bail Reform Act.
The next condition at issue is the requirement that Persaud not open any new lines of credit without the approval of the probation officer. Again, given the nature and scope of the offenses charged against Persaud, there exists a risk that she will incur additional debt beyond her ability to pay or utilize additional lines of credit to perpetrate frauds similar in kind to those alleged in the indictment. This condition thus reasonably relates to avoiding those dangers and is reasonably limited in scope.
The final condition at issue is that requiring notification to Persaud's employer, "if deemed necessary," of risks that may exist from Persaud's alleged criminal conduct. The need for such notification depends on the nature of Persaud's employment. If she is employed by a bank or similar financial institution akin to those alleged in the pending indictment, such entity may reasonably be at risk to Persaud's activities and notification of the risk becomes obligatory to avoid that danger. If Persaud is employed in a position not involving any risk of financial manipulation or breach of fiduciary duty or other identifiable danger, such notification may not be deemed necessary. The condition, however, remains reasonably related to the potential danger created by Persaud's release and is limited to circumstances where that danger may actually exist.
Persaud further challenges the employment and financial disclosures required to enforce these conditions. The need for the employment information is twofold. First, it is necessary to determine Persaud's compliance with the condition that she seek or maintain employment. Absent this information, Pretrial Services cannot determine whether Persaud is complying with the condition. Second, the information is necessary to permit a determination whether the notification to the employer is necessary to avoid any risk of harm to the employer or others from Persaud's employment there. The employment information is, therefore, rationally related to both conditions.
The required financial disclosures serve to identify Persaud's credit status and her ability to incur and pay additional lines of credit. As a general proposition, then, financial disclosure reasonably relates to enforcement of that condition because it permits a rational determination as to the extent to which, if at all, Persaud is financially able to assume additional debt. Form 48 requires extensive disclosures of information and related documents. However, the necessity of determining Persaud's net worth as accurately as possible to evaluate her ability to assume additional debt makes the required disclosures both reasonable and necessary.
Accordingly, Persaud's contention that both the conditions at issue and the methods by which Pretrial Services seeks to enforce those conditions are unrelated to either assuring her appearance or the safety of others is without merit.
B. Privilege Against Self-Incrimination
Persaud principally contends that the employment and financial information and documents required by Pretrial Services are protected from disclosure by her Fifth Amendment privilege against self-incrimination. As a general rule, all relevant evidence must be produced. See, e.g., Fed. R. Evid. 402. The privilege against self-incrimination constitutes an exception to this general rule. See Fed. R. Evid. 501; see also 18 U.S.C. § 3153(c)(1).*fn3 As such, the scope of any privilege or rule of confidentiality must be narrowly construed. United States v. Barrow, 400 F.3d 109, 116 (2d Cir. 2005); United States v. Griffith, 385 F.3d 124, 126 (2d Cir. 2004); see generally United States v. Nixon, 418 U.S. 683, 719 (1974) ("Whatever their origins, . . . exceptions to the demand for every man's evidence are not lightly created nor expansively construed, for they are in derogation of the search for truth.").
The Fifth Amendment provides that "[n]o person ... shall be compelled in any criminal case to be a witness against himself." U.S. Const. Amend. V. That privilege thus "protects a person . . . against being incriminated by his own compelled testimonial communications." Fisher v. United states, 425 U.S. 391, 409 (1976). The privilege "applies only when the accused is compelled to make a testimonial communication that is incriminating." Id. at 408 (emphasis in original). To be protected from disclosure, then, a communication must be (1) compelled, (2) testimonial, and (3) incriminating. Id.
With one exception, the United States does not contest that the communications sought here are compelled. That exception concerns the consent form in Form 48 to permit Pretrial Services to obtain a credit report for Persaud. Gov't Mem. of Law (Docket No. 64) at 2-3. Compulsion requires coercion and involuntariness. Persaud has been directed to sign the consent form as a condition of her pretrial release. Persaud's execution of the consent form may not be testimonial, see subsection (2) infra, but it is certainly compelled. The argument of the United States that execution of the consent form is not compelled because it leads to the production of credit reports prepared by others misses this central fact. Accordingly, all three categories of information and documents at issue satisfy the requirement of compulsion.
The United States contends that none of the three categories of information and documents constitute testimony protected by the privilege. This element of the privilege protects an individual from becoming a witness against himself. Thus, if the information required to be produced might tend to be incriminating, or if the act of producing documents already in existence might serve to identify the location of documents or to authenticate documents as those of the individual producing them, the testimonial requirement of the privilege is satisfied. See Fisher, 425 U.S. at 410.
As to the consent form, Persaud's execution of that form will only permit Pretrial Services to obtain documents maintained and created by others. It will neither identify the location of such documents for Pretrial Services nor authenticate them for admission against Persaud. The consent will simply permit the United States to obtain documents created and maintained by others than Persaud. Persaud's execution of the consent form is not, therefore, testimonial. See Doe v. United States, 487 U.S. 201, 215-17 (1988) (holding that a court order compelling the target of a grand jury investigation to authorize foreign banks to disclose records of his accounts which did not identify those documents or acknowledge their existence did not violate the target's Fifth Amendment privilege against self-incrimination). Pretrial Services' requirement that Persaud execute the consent form did not, therefore, violate Persaud's privilege against self-incrimination and Persaud must execute the consent form.*fn4
As to the employment inquiries and net worth statement, both seek to elicit directly from Persaud information which themselves "relate  factual assertion[s] or disclose information." Doe v. United States, 487 U.S. at 210. They require Persaud to communicate information concerning herself and her finances which could be used to establish relevant facts. Both such required disclosures are, therefore, testimonial.
The United States contends that neither the employment inquiries nor the net worth disclosures in Form 48 are self-incriminating.
To be self-incriminating, evidence obtained from a defendant must (1) tend to prove the defendant's guilt of any criminal offense, and (2) be admissible as substantive evidence of guilt against the defendant. See United States v. Griffith, 385 F.3d at 126; see also Mitchell v. United States, 525 U.S. 314, 328 (1999) (holding that a defendant retains the privilege against self-incrimination through the sentencing phase).
Here, the charges against Persaud include allegations concerning her employment and her interest in various bank accounts. See, e.g., Second Superseding Indictment at 3, 5. The Pretrial Services inquiries concerning her employment and her net worth, therefore, could reasonably compel Persaud to disclose evidence tending to establish facts which would support a finding of Persaud's guilt. The first requirement for self-incrimination has, therefore, been satisfied.
Such evidence is protected by the privilege, however, only if it would be admissible against the defendant in the determination of his or her guilt. Under 18 U.S.C. § 3153(c)(3), with exceptions not applicable here, information obtained by Pretrial Services in the course of its duties "is not admissible on the issue of guilt in a criminal judicial proceeding . . . ." Thus, where evidence obtained from a defendant by Pretrial Services is admitted as proof of guilt, the defendant's privilege against self-incrimination is violated. See United States v. Perez, 473 F.3d 1147, 1151-52 (11th Cir. 2006) (holding that the testimony of a Pretrial Services officer as to objective observations and identifiable physical characteristics of a defendant obtained as part of Pretrial Services functions violated § 3153(c)(3), but conviction affirmed where such error did not constitute plain error). However, where evidence obtained from a defendant by Pretrial Services is admitted solely for purposes of impeaching a defendant's credibility and not on the issue of guilt, neither § 3153(c)(3) nor the privilege against self-incrimination are violated. See United States v. Griffith, 385 F.3d at 126 (holding that the admission of two allegedly false statements made by the defendant to his Pretrial Services officer were properly admitted at trial solely as impeachment of the defendant's testimony); United States v. Zapata, 369 F. Supp. 2d 454, 463 (S.D.N.Y. 2005) (holding that the admission at trial of documents obtained by Pretrial Services bearing the defendant's signature were admissible solely to impeach the defendant's trial testimony denying that it was her signature and handwriting on two wire transfer records).
As these cases illustrate, the confidentiality accorded information obtained by Pretrial Services in the course of its duties by § 3153(c)(3) protects that information from use against a defendant to prove his or her guilt. Because § 3153(c)(3) protects such information at least to the same extent as the privilege against self-incrimination, information compelled to be disclosed to Pretrial Services by a defendant cannot be incriminating for purposes of that privilege. Thus, Persaud's assertion of the privilege to avoid the compelled disclosure of the information on employment and net worth is misplaced and affords her no protection. See also United States v. Zehntner, No. 1:06-cr-0219, 2007 WL 201106, at *1 (N.D.N.Y. Jan. 23, 2007) (McAvoy, J.) (denying the defendant's objection on ground of self-incrimination to disclosure of a report to the Bureau of Prisons in part because "Defendant retains the right to assert his Fifth Amendment right if he is subjected to the possibility of a penalty.").
The fact that under Griffith, Persaud's responses to the questions of Pretrial Services may be used to impeach her testimony does not conflict with this holding. Impeachment evidence does not constitute substantive evidence of guilt. See United States v. Deavault, 190 F.3d 926, 929 (8th Cir. 1999); United States v. Librach, 609 F.2d 919, 922 (8th Cir. 1979). Thus, while Persaud's concern for the risk that her disclosures to Pretrial Services might some day be used to impeach her testimony, that risk is beyond the protection of the privilege.*fn5
For the reasons stated above, it is hereby
1. Persaud's objections to disclosing the information which she was directed to disclose by Pretrial Services is DENIED in all respects;
2. Persaud shall provide to Pretrial Services the information and disclosures it has requested in all respects on or before March 15, 2007; and
3. The motion of the United States to revoke or modify the conditions of Persaud's release (Docket No. 57) is DENIED without prejudice to renewal after March 15, 2007.
IT IS SO ORDERED.