case law update

CBP Seizure of Securities Fraud Evidence in Border Search was Constitutional

The United States Government investigated Mr. David Levy for his role in a stock manipulation scheme.  Mr. Levy was aware that he faced potential criminal charges; his wife had been indicted in a related matter nearly a year earlier, and his attorney held a telephone conversation with federal prosecutors to discuss potential charges against Mr. Levy.

Aware of his potential prosecution, Mr. Levy decided to return to the United States from a business trip in Panama to face the anticipated criminal charges.  The Drug Enforcement Administration (“DEA”) informed United States Customs and Border Protection (“CBP”) of the investigation. 

On December 17, 2011, Mr. Levy arrived at Miami International Airport from Panama.  There, CBP detained him and examined his belongings.  In the course of doing so, CBP photocopied the handwritten contents of a notebook.  The notebook’s contents included travel information, business contacts, bank and trading account data, and limited details of Mr. Levy’s personal affairs. 

On December 20, 2011, Mr. Levy was indicted on charges of securities fraud and conspiracy to commit securities fraud and wire fraud.  In a superseding indictment filed June 28, 2012, Mr. Levy was also charged with conspiracy to commit money laundering.  At trial in the United States District Court for the Southern District of New York, the Government used the contents of Mr. Levy’s notebook against him in the criminal trial in order to show that forged documents were written in the same handwriting as was found in Mr. Levy’s notebook, and to use his list of business contacts to link him to co-conspirators. 

Mr. Levy moved to suppress the notebook’s contents, arguing that the search was beyond the scope of a routine border search.   The District Court agreed with Mr. Levy that the search of the notebook was a “non‐routine” border search because “[t]he close reading and photocopying of an entrant’s documents goes beyond the general searching one expects at a point of entry” and may “intrude greatly on a person’s privacy.”  But it held that the search was still justified under the Fourth Amendment because the CBP officers reasonably suspected that Levy was “engaged in a stock fraud conspiracy.”

Mr. Levy also argued that CBP’s search exceeded its regulatory scope, and that CBP is limited to investigating crimes concerning contraband or dutiable merchandise.  The District Court rejected this argument, suggesting that customs agents may conduct broader, non‐routine searches if they have a reasonable suspicion to do so. 

Mr. Levy was found guilty and sentenced to nine years imprisonment.  He appealed his conviction to the United States Court of Appeals for the Second Circuit, arguing that the photocopies from the notebook should be suppressed. 

The Court of Appeals found that routine border searches are permitted when an individual enters into the United States, and that an examination of the notebook would have fallen within that routine use.  The Court of Appeals declined to decide whether CBP’s photocopying of the notebook exceeded the scope of a routine search permissible without reasonable suspicion, because the officers possessed reasonable suspicion to conduct a search beyond what would be permitted in a routine border search. 

The Court of Appeals found that the level of suspicion linking Mr. Levy to securities fraud was high, as illustrated by the indictment which followed Mr. Levy’s entry into the country.  Indeed, Mr. Levy was aware of this suspicion even before returning to the United States, as illustrated by the fact that his lawyer contacted federal prosecutors to discuss potential criminal charges. 

The fact that CBP’s suspicion was not the product of its own investigation, but based upon information from the DEA, did not undercut the reasonable suspicion.  As the Court of Appeals explained, law enforcement officers are generally permitted to rely on facts conveyed by other officers, and a high-degree of interagency cooperation is both permissible and desirable as a matter of policy.  The Court of Appeals also noted that DEA and the Federal Bureau of Investigation frequently collaborate with and assist CBP in the execution of border searches without exceeding the limits of a border search. 

While the Court of Appeals agreed with Mr. Levy that CBP’s primary mission was to “focus . . . on contraband, dutiable merchandise, immigration fraud, and terrorism,” it disagreed with his argument that CBP could only enforce or investigate laws related to those matters.  “CBP officers are neither expected nor required to ignore tangible or documentary evidence of a federal crime.  They have the authority to search and review a traveler’s documents and other items at the border when they reasonably suspect that the traveler is engaged in criminal activity, even if the crime falls outside the primary scope of their official duties. Because their conduct was fully supported by reasonable suspicion that Levy was engaged in a financial crime, the CBP officer in this case was entitled to inspect and copy the notebook as evidence of that crime.”

The Court of Appeals thus affirmed the District Court’s denial of the suppression motion and Mr. Levy’s conviction. 

Read the full case: United States v. Levy

 

This case law update was written by Michael S. Causey, associate attorney, Shaw Bransford & Roth, PC.

For thirty years, Shaw Bransford & Roth P.C. has provided superior representation on a wide range of federal employment law issues, from representing federal employees nationwide in administrative investigations, disciplinary and performance actions, and Bivens lawsuits, to handling security clearance adjudications and employment discrimination cases

Posted in Case Law Update

Tags: case law update, michael s causey

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