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Patel v. United States

United States District Court, S.D. Florida

September 9, 2019

Minalkumar Patel, Movant,
v.
United States of America, Respondent.

          ORDER DENYING MOTION FOR RETURN OF SEIZED FUNDS TDE 51 AND MOTION TO UNSEAL SEIZURE WARRANT AFFIDAVITS AND RELATED PLEADINGS [DE 61

          WILLIAM MATTHEWMAN United States Magistrate Judge

         THIS CAUSE is before the Court on Movant Minalkumar Patel's ("Movant") Motion for Return of Seized Funds and Request for Expedited Hearing [DE 5] and Motion to Unseal Seizure Warrant Affidavits and Related Pleadings and Request for Expedited Hearing [DE 6]. In the first motion [DE 5], Movant seeks the return or release of the funds held in six bank accounts seized by the Government pursuant to pre-indictment seizure warrants issued under 21 U.S.C. § 853(f). In the second [DE 6], he urges the Court to unseal the affidavits underlying the pre-indictment seizure warrants, as well as any pleadings related to the sealing of those documents.[1] The Government filed a combined response in opposition to both motions. [DE 16]. After holding a hearing and carefully considering the motions, all supporting and opposing filings, and the record in this case, the Court denies the motions.

         I. Issues Presented

         This dispute concerns two important issues. The first issue is whether Movant is entitled to the return or release of funds held in six bank accounts the Government seized pursuant to six seizure warrants issued by this Court under 21 U.S.C. § 853(f). The second issue is whether Movant has a pre-indictment right to obtain copies of the sealed affidavit underlying those seizure warrants, and the related sealed pleadings, under the First Amendment, Fourth Amendment, and federal common law. The second issue appears to be an issue of first impression as neither the Court nor the parties have located a federal court order or opinion addressing a movant's asserted pre-indictment right to obtain copies of a sealed seizure warrant affidavit (and related sealed pleadings) underlying seizure warrants directed to a movant's bank accounts issued pursuant to 21 U.S.C. § 853(f).

         II. Background

         On August 15, 2019, after reviewing a lengthy and detailed affidavit, the undersigned, pursuant to 21 U.S.C. § 853(f), approved and issued six seizure warrants directed to six bank accounts held in Movant's name. The six sealed seizure warrant applications were assigned six different case numbers, to wit: 19-MJ-8323-WM; 19-MJ-8324-WM; 19-MJ-8325-WM; 19-MJ-8326-WM; 19-MJ-8327-WM; and 19-MJ-8328-WM. The six seizure warrants issued by the Court were then immediately served by the Government upon the various banks where the accounts were held. Shortly thereafter, on August 21, 2019, Movant filed motions in each of the six sealed cases which sought the return or release of the funds held in those accounts and copies of the underlying affidavit and related pleadings.

         On August 22, 2019, the Court entered an order consolidating the six cases under case number 19-MC-81181-WM and ordered the consolidated case sealed until further Order of the Court. [DE l].[2] Through his motions, Movant seeks an order (1) unsealing the Government's seizure warrant applications and supporting affidavit; (2) unsealing the Government's motion to seal those documents; (3) unsealing any documents or motions explaining why the Government sought seizure warrants under 21 U.S.C. § 853(f) in this case rather than a protective order under § 853(e); and (4) releasing any seized funds not shown to be proceeds of any criminal activity or used to facilitate criminal activity. [DE 5, 6].

         As to the seized bank accounts, Movant argues that, pursuant to Federal Rule of Criminal Procedure Rule 41 (g) and the Sixth Amendment to the United States Constitution, the Court should order the return or release of any "untainted" funds seized by the Government and set this matter for an evidentiary hearing where he intends to show that: (1) because of the Government's seizure of all his funds, he is unable to secure counsel of his choice and (2) "substantial portions of the funds seized were untainted, i.e., not derived from any unlawful activity." [DE 5 at 2]. Movant states "[approximately 30% of all revenue paid to" his employer, LabSolutions, LLC, came from traditional toxicology tests "that have no relationship to any telemedicine-genetic practice, or any other supposedly illegal conduct presumably described in the seizure warrants" and he "does not have any of his own funds that are not frozen to retain counsel." Id. As to the sealed documents in this matter, including the affidavit underlying the seizure warrants, Movant contends he has a right to obtain copies of those documents under the First Amendment, Fourth Amendment, and federal common law.

         For its part, the Government states its investigation is ongoing and urges the Court to deny Movant's requests to protect the integrity of that investigation and prevent the possible destruction or transfer of forfeitable assets. [DE 16]. The Court held a hearing regarding this dispute on August 27, 2019. At the end of the lengthy public portion of the hearing, the Court also heard from the Government in a brief sealed, ex parte hearing.

         III. Discussion

         A. Motion for Return or Release of Seized Funds

         Movant seeks the return or release of the funds held in his six seized bank accounts under both Rule 41(g) of the Federal Rules of Criminal Procedure and the Sixth Amendment to the United States Constitution. [DE 5 at 1]. In this regard, it is important to note that the Government has yet to initiate forfeiture proceedings as to Movant's six bank accounts.

         Federal courts have "the power to order the suppression or return of unlawfully seized property even though no indictment has been returned and thus no criminal prosecution is yet in existence." Hunsucker v. Phinney, 497 F.2d 29, 32 (5th Cir. 1974). The United States Court of Appeals for the Eleventh Circuit has held this remedy is equitable in nature. See U.S. v. Dean, 80 F.3d 1535, 1542 (11th Cir. 1996) (explaining the doctrine of equitable jurisdiction permits federal courts to take jurisdiction over property to adjudicate actions for that property's return even though no indictment has been returned). "The decision to invoke equitable jurisdiction is highly discretionary and must be exercised with caution and restraint." Matter of $67, 470.00, 901 F.2d 1540, 1544 (11th Cir. 1990). "Such jurisdiction, therefore, is only appropriate in exceptional cases where equity demands intervention." Id.

         In Richey v. Smith, the former United States Court of Appeals for the Fifth Circuit elucidated several factors federal courts should consider when deciding motions to return seized property. 515 F.2d 1239, 1243-44 (5th Cir. 1975). First, whether the Government showed a "callous disregard" for a movant's constitutional rights. Id. at 1234. Second, whether the movant has an individual interest in and need for the seized property. Id. Third, whether the movant would be irreparably injured if the property is not returned. Id. ...


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