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United States v. Bank

United States District Court, E.D. Virginia, Norfolk Division

April 5, 2019

DARYL G. BANK, Defendant.



         This matter is before the Court on Defendant's Motions for Issuance of Subpoenas Duces Tecum Ex Parte, ECF Nos. 161, 162, and on the Government's Motion to Quash Subpoenas, ECF No. 164. For the reasons stated below, the Defendant's motions for issuance of subpoenas are DENIED and the Government's motion to quash is DISSMISSED AS MOOT.

         I. Background

         Defendant Daryl G. Bank ("Defendant") has been charged with mail fraud, wire fraud, securities fraud, unlawful sale of unregistered securities, securities fraud, and conspiracy to commit those offenses, as well as conspiracy to launder monetary instruments and engaging in unlawful monetary transactions. Second Superseding Indictment, ECF No. 105. These charges arise from allegations that Defendant and others executed a scheme to defraud numerous individuals by creating, promoting, and selling fraudulent investment opportunities. Id. at 3-4. At least some of these opportunities allegedly involved investing in different business entities. Id. For example, it is alleged that Bank and others "pitched" an investment that offered partial ownership of a franchise that was not actually in operation. Id. at 4-6.

         On January 24, 2019, Defendant filed two motions for issuance of subpoenas duces tecum for records from two business entities. ECF Nos. 161, 162. These motions were labeled as ex parte, but were actually filed under seal with such docket entry visible to the Government. Having received electronic filing notifications about Defendant's motions, the Government requested copies of the motions, which Defendant then provided to the Government. The Government filed its motion to quash said subpoenas on January 30, 2019, arguing that Defendant did not adequately explain why the requested documents need to be produced months before trial is set to begin. ECF No. 164. Defendant filed a response to the Government's motion on March 7, 2019.[1] ECF No. 166.

         II. Legal Standard

         Pursuant to Federal Rule of Criminal Procedure 17, a defendant is permitted to file an ex parte request for issuance of a pretrial subpoena duces tecum, United States v. Beckford, 964 F.Supp. 1010, 1026-27 (E.D. Va. 1997), and, in response to such a request, a district court has the authority to order a witness ``to produce any books, papers, documents, data, or other objects .... before trial or before they are to be offered in evidence." Fed. R. Crim. P. 17(c)(1). In the context of an ex parte motion for a subpoena duces tecum, a district court has the authority to quash or modify the subpoena. Beckford, 964 F.Supp. at 1024-25. A district court may also `` [o] n a motion made promptly, quash or modify the subpoena if compliance would be unreasonable or oppressive." Fed. R. Crim P. 17(c)(2).

         A district court has discretion to decide whether to require that subpoenaed documents be produced before trial. United States v. Nixon, 418 U.S. 683, 699 (1973); United States v. Rand, 835 F.3d 451, 462 (4th Cir. 2016). In a criminal case, the party seeking the pretrial production of documents ``must clear three hurdles: (1) relevancy; (2) admissibility; (3) specificity." Nixon, 418 U.S. at 700. More specifically, the moving party has the burden to show the following:

(1) that the documents are evidentiary and relevant; (2) that they are not otherwise procurable reasonably in advance of trial by exercise of due diligence; (3) that the party cannot properly prepare for trial without such production and inspection in advance of trial and that the failure to obtain such inspection may tend unreasonably to delay the trial; and (4) that the application is made in good faith and is not intended as a general ``fishing expedition."

Nixon, 418 U.S. at 699-700; Rand, 835 F.3d at 462. ``Rule 17(c) implements the Sixth Amendment guarantee that an accused have compulsory process to secure evidence in his favor." In re Martin Marietta Corp., 856 F.2d 619, 621 (4th Cir. 1988) (citing California v. Trombetta, 467 U.S. 479, 485 (1984)). But, ``Rule 17(c) is not intended to provide a means of pretrial discovery; rather, its primary purpose is simply to expedite the trial by providing a time and place before trial for the inspection of subpoenaed materials." Rand, 835 F.3d at 462 (quoting United States v. Richardson, 607 F.3d 357, 368 (4th Cir. 2010)) (internal quotation marks omitted).

         III. Analysis

         Here, Defendant requests subpoenas for the financial statements, tax returns, documents detailing capital structure, operating agreements, and valuation documents from two business entities: Warped Cigars, LLC and Collins Asset Group, LLC. Def's Mot.'s, ECF Nos. 161, 162. The Government has moved to quash such subpoenas on the ground that the motions filed by Defendant were insufficient to meet the standard established by the Supreme Court in Nixon because Defendant did not provide a detailed recitation of the Nixon requirements.[2] Gov't Mot. ¶ 6, ECF No. 164. Defendant's reply expands on its motion and specifically addresses the Nixon requirements. Def.'s Resp., ECF No. 166.

         Defendant's motions are insufficient because Defendant fails to address the Nixon requirements in either of them. See Def.'s Mots., ECF Nos. 161, 162. The only justification Defendant provides the Court in his motions is that he ``has a good-faith basis to believe that the documents, records, and other materials sought are necessary and material to [his] defense." Def.'s Mots., ECF Nos. 161, 162. Such justification is not enough for this Court to issue the requested subpoenas. See Fitzgerald, 416 Fed.Appx. at 244-45 (holding that it was appropriate to deny a motion for issuance of a subpoena duces tecum where ``[t]he only reason given in [Defendant's] motion for the subpoenas was `for the defendant to raise his defense of innocence, as well as cast doubt on the evidence of the government.'") .

         Although Defendant has provided more detail in his reply to the Government's motion, the Court still finds such detail insufficient to meet the Nixon standard. See id. (finding that, even when the defendant gave more detail at a hearing, he ``failed to make the necessary showing" under Nixon). While Defendant's reply adequately demonstrates that (1) the documents are relevant to his defense, [3] (2) there is a need for the production of the documents before trial, [4] and (3) the application is made in good faith and is sufficiently specific that it is not a "fishing expedition, [5] he does not adequately demonstrate other requirements under Nixon. See Nixon, 418 U.S. at 699-700 (listing the requirements for issuance of a subpoena). For example, Defendant has not addressed the admissibility of the documents, one of the three main "hurdles" that must be overcome under Nixon. Nixon, 418 U.S. at 700. Further, Defendant has not shown that the documents are not otherwise procurable. See Nixon, 418 U.S. at 699-700 (holding that a defendant must show that the documents "are not otherwise procurable reasonably in advance of trial by exercise of due diligence."). While Defendant has indicated that, ...

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