Ganias appealed his tax evasion conviction on two grounds: 1) the district court erred in denying his motion to suppress his personal computer records, which had been retained by the Government for more than 2 ½ years after it copied his hard drives pursuant to a search warrant calling for the seizure of his clients’ business records; and 2) the district court abused its discretion in failing to order a new trial where a juror posted comments on Facebook during trial. The Facebook issue was dealt with and denied quickly (but an interesting read).
Facts: Appellant had his own accounting business and provided services to McCarthy, who owned American Boiler and Industrial Property Management (IPM). IPM was hired by the Army for services. Army investigators (CID) received a tip that IPM employees were stealing copper wire and billing the Army for work that IPM employees performed for American Boiler (not for the Army). The source alleged that evidence of wrongdoing could be found at the office of American Boiler and IPM as well as Ganias’s office. A search warrant for Ganias’s office was issued Nov 17, 2003. The computers themselves were not seized, rather agents made forensic duplicates of the harddrives on the scene. This necessarily entailed copying files beyond the scope of the search. Ganias expressed concern about this and one agent “assured” Ganias that they were only looking into IPM and American Boiler issues, everything else “would be purged once they completed their search.”
The Forensic Duplicates were copied onto two sets of 19 DVDs, to be maintained as evidence. 8 months later, the crime lab began to review the files. Investigators discovered suspiscious payments from IPM to an unregistered business (who had not reported income tax). As such CID invited the IRS to join the investigation. 5 months after starting work on the hard drives, investigators had isolated and extracted the relevant files covered by the search warrant. They did not however, purge the other content (non-responsive files). Over time the IRS became suspicious that Ganias was underreporting his own income. They knew that his personal financial records were seized in the original search. After asking for consent, and receiving silence; the Government obtained another warrant to search the preserved images of Ganias’s personal financial records from the 2003 search and seizure.
Issue: Whether the Fourth Amendment permits officials executing a warrant for the seizure of particular data on a computer to seize and indefinitely retain every file on that computer for use in future criminal investigations?
Law: “Applying 18th Century notions about searches and seizures to modern technology, however, is easier said than done…We must keep in mind that ‘the ultimate touchstone of the Fourth Amendment is reasonableness.’” Missouri v. McNeely, 133 S.Ct.1552, 1569 (2013)(Roberts, C.J., concurring in part and dissenting in part).
Like 18th Century “papers,” computer files may contain intimate details regarding an individual’s thoughts, beliefs, and lifestyle, and they should be similarly guarded against unwarranted Government intrusion.” “In light of the significant burdens on-site review would place on both the individual and the Government, the creation of mirror images for offsite review is constitutionally permissible in most instances, even if wholesale removal of tangible papers would not be.”
Analysis: “The Government’s retention of copies of Ganias’s personal computer records for 2 ½ years deprived him of exclusive control over those files for an unreasonable amount of time. This…enabled the Government to possess indefinitely personal records of Ganias that were beyond the scope of the warrant while it looked for other evidence to give it probable cause to search the files. This was a meaningful interference with Ganias’s possessory rights in those files and constituted a seizure within the meaning of the Fourth Amendment.”
“[T]he unauthorized seizure and retention of these documents was unreasonable. The Government had no warrant authorizing the seizure of Ganias’s personal records in 2003.” By 2004 Ganias’s personal financial files were separated from the files relevant to the IPM American Boiler files; and the Government retained them for 1 ½ years until it “finally developed probable cause to seize them in 2006.” The court held this “clearly violated Ganias’s Fourth Amendment rights.”
The Government argued that it must be allowed to make a mirror image as a matter of practical necessity and those images become “government property.” The court rejected the government property notion saying that the non-responsive files do not become “ipso facto ‘the government’s property’ without running afoul of the Fourth Amendment.” Making mirror images “do not justify the indefinite retention of non-responsive documents.” See Comprehensive Drug Testing, Inc., 621 F.3d at 1171.
The Government next argued that the 2006 search warrant cured any defect in its search of the wrongfully retained files. The court rejected this and stated “If the Government could seize and retain non-responsive electronic records indefinitely, so it could search them whenever it developed probable cause, every warrant to search for particular electronic data would become, in essence, a general warrant.”
Third, the Government argued that it must be permitted to search the mirror images in its possession because the evidence no longer existed on Ganias’s computers (Ganias altered the original data). The court also rejected this argument saying the ends don’t justify the means.
Fourth, the Government says returning or destroying non-responsive files is “entirely impractical” because doing so would compromise the remaining data…making it impossible to authenticate or use in a criminal prosecution. The court did not agree with this but said even it that’s true it does not provide a basis for using the mirror image for any other purpose.
Finally, the Government argued that Ganias’s failure to file a motion for return of property precludes him from seeking suppression. This argument was quickly denied.
There was an argument for “good faith,” but the Court went to great lengths to show bad faith.
Holding: The Government violated Ganias’s Fourth Amendment rights by seizing and indefinitely retaining non-responsive computer records, and then searching them when it later developed probable cause.”
Practitioner Notes: I don’t read this as saying we need to somehow delete “non-responsive” files (I’m not even sure what that means). We often use non-incriminating information to prove our cases (facebook postings at the same time illegal child sexual exploitation images are downloaded) and other 404 type evidence. I read this as saying you can’t go back into the mirrored image to search for evidence of a crime you had no PC to support at the time of the original seizure.