United States v. Thomas

165 F. Supp. 3d 992, 2015 U.S. Dist. LEXIS 57901, 2015 WL 1926409
CourtDistrict Court, D. Colorado
DecidedApril 27, 2015
DocketCriminal Action No. 07-cr-00516-MSK
StatusPublished

This text of 165 F. Supp. 3d 992 (United States v. Thomas) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Thomas, 165 F. Supp. 3d 992, 2015 U.S. Dist. LEXIS 57901, 2015 WL 1926409 (D. Colo. 2015).

Opinion

ORDER DENYING MOTION TO QUASH

Marcia S. Krieger, Chief United States District Judge

THIS MATTER comes before the Court on the Motions to Quash (# 75, 76) a subpoena issued to Edward D. Jones & Co., L.P. (“Edward Jones”), filed by the Defendant David William Thomas, his wife, Diane Thomas, and the Thomas Family Trust (collectively, the Movants), and the government’s Response (# 78).

In 2008, the Defendant pled guilty to conspiracy to commit securities fraud and money laundering. The Court entered judgment against him, sentencing him to 42 months imprisonment and three years’ supervised release, and ordering him to pay restitution in the amount of $4,427,828.02. The government represents that the Defendant still owes $4,366,575.97 in restitution, and seeks to collect it from his assets.

According to the government, an investigation into the Defendant’s financial condition has been ongoing since 2014. The government represents that the investigation revealed that after being charged, but prior to pleading guilty, the Defendant attempted to conceal assets by transferring all of his interests in real or personal property to the Thomas Family Trust and to at least one Edward Jones’ account held in Mrs. Thomas’s name. In response to the Defendant’s attempt to conceal assets and as part of its ongoing investigation, the government obtained account statements from seven accounts at Edward Jones belonging to the Defendant, his wife, and/or the Family Trust. The government asserts that the statements indicate a rea[994]*994son to believe that the Defendant has fraudulently transferred additional funds from his Edward Jones’ accounts into accounts owned by Mrs. Thomas or the Family Trust.

The government obtained a writ of garnishment as to the seven Edward Jones accounts. The government represents that it intends to seek an order of garnishment of $85,002.78 from several of the accounts — a portion of the funds coming from a “joint” account held by the Defendant and Mrs. Thomas, and other funds coming from transfers made from the joint account into separate accounts held solely by Mrs. Thomas.

The parties disagree, however, about the legal status and ownership of the Edward Jones accounts. Purportedly to clear up the confusion regarding the accounts, the government served a subpoena on Edward Jones. Although the box for “production” of documents on the subpoena is not checked, Attachment A to the subpoena requests testimony and responsive documents regarding the past and current ownership status of each of the accounts. The government asserts that such evidence is necessary’to establish whether the Defendant has engaged in additional fraudulent transfers and to determine what interest, if any, the Defendant has had in the accounts over the course of Edward Jones’s administration of the property held in the accounts.

The Defendant, his wife, and the Family Trust move to quash the subpoena pursuant to the customer challenge provision of the Right to Financial Privacy Act of 1978 (RFPA), 12 U.S.C. § 3410. Section 3410 provides that when the government seeks to obtain a customer’s financial records from a financial institution, the customer may file an appropriate motion to quash or modify the subpoena. The motion must state, among other things, the applicant’s reasons for believing that the financial records sought are not relevant to the legitimate law enforcement inquiry stated by the government, or that there has not been substantial compliance with the provisions of the RFPA.1 28 U.S.C. § 3410.

In their motions, the Movants argue that the subpoena must be quashed for several reasons. First, they argue that the subpoena is “incomplete, inaccurate, invalid, and improper as to form and substance.” Specifically, the Movants asset that the subpoena must be quashed because (1) it is undated, (2) it is confusing as to whether documents are requested because the box for “production” is not checked, but the attachment and the government’s notices indicate that records are requested, and (3) the subpoena was issued on a form used in civil cases, but this is a criminal action.

To the extent the Movants are arguing that the government failed to substantially comply with the RFPA, the Court rejects that argument. There is no evidence of record that the government did not substantially comply with the RFPA. Nor do the minor defects identified by the Movants (if they can be considered defects at all) otherwise invalidate the subpoena. A date was included on the proof of service attached to the subpoena, and Attachment A clearly indicates that documents are requested from Edward Jones. Moreover, the government represents that it has [995]*995communicated with Edward Jones’s counsel, who understands that the subpoena' does request the production of documents, in addition to testimony. The government also represents that it has cured such defects by serving a corrected subpoena, with the box for “production” checked, on Edward Jones’s and the Movants’ counsel.

In addition, the Court finds no merit to the argument that the subpoena is invalid because it is on a civil subpoena form. Under 18 U.S.C. § 3613, the government has the authority to enforce a restitution “in accordance with the practices and procedures for the enforcement of a civil judgment” under federal law. See also 18 U.S.C. § 3664(m)(l)(A). Thus, the issuance of a civil subpoena under Fed. R. Civ. P. 45 by the government is an appropriate means of seeking information related to the enforcement of the restitution order.

Next, the Movants argue that the subpoena must be quashed because it is “inaccurate, vague, broad and overreaching with confusing and questionable requests for production and testimony of records and information regarding accounts that are not connected or relevant to the above-referenced criminal case.” Despite the conclusory nature of this assertion, the Court understands the Movants to argue that information related to accounts held by Mrs. Thomas and/or the Family Trust, neither of whom are defendants in this action, is irrelevant to the government’s law enforcement inquiry. Mrs. Thomas states that the Defendant “has no interest, control or authority in [her] accounts.”

The Court disagrees. The imposition of a restitution order results in a lien in favor of the government on all of the Defendant’s property, and rights to property. 18 U.S.C. § 3613(c), (f). Thus, the government has an interest in all of the Defendant’s property for purposes of enforcing the restitution order and collecting the unpaid debt. As previously noted, the government may enforce the restitution order in accordance with the practices and procedures for collecting a civil judgment under federal law. 18 U.S.C. § 3613(c); see also 28 U.S.C. § 3202

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Bluebook (online)
165 F. Supp. 3d 992, 2015 U.S. Dist. LEXIS 57901, 2015 WL 1926409, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-thomas-cod-2015.