In re Search of Harmony Gold USA Inc, No. 2:2006cv07663 - Document 48 (C.D. Cal. 2020)
Court Description: ORDER DENYING MOTION TO ENFORCE COURT ORDER, 37 by Judge Dean D. Pregerson: Movants Motion to Enforce Court Order is DENIED. See order for further details. IT IS SO ORDERED. (shb)
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In re Search of Harmony Gold USA Inc Doc. 48 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 13 14 IN RE: SEARCH OF HARMONY GOLD, USA, INC., 7655 Sunset Boulevard, Los Angeles, California, and the premises located at 2265 Canyonback Road, Los Angeles, California, 15 Plaintiff, 16 ) ) ) ) ) ) ) ) ) ) Case No. CV 06-07663 DDP (JCx) ORDER DENYING MOTION TO ENFORCE COURT ORDER [Dkt. 37] v. 17 , 18 Defendants. ___________________________ 19 20 Presently before the court is a motion by Frank Agrama and 21 Harmony Gold USA, Inc. to enforce an order entered by this Court on 22 January 26, 2007 (“the 2007 Order”). 23 submissions of the parties and heard oral argument, the court 24 denies the motion and adopts the following Order. 25 I. Having considered the Background 26 A. 27 The facts of this matter are not in dispute. 28 The 2006 search In late 2006, Italian prosecutor Fabio De Pasquale sought, pursuant to a Treaty on Mutual Legal Assistance in Criminal Matters (“MLAT”) between Dockets.Justia.com 1 Italy and the United States, U.S. government assistance with an 2 Italian investigation of Movant Frank Agrama. 3 the MLAT and De Pasquale’s request, the FBI sought and obtained 4 search warrants for Agrama’s home and his business, Movant Harmony 5 Gold USA, Inc. 6 In compliance with FBI agents executed the search warrants on November 15, 2006. 7 De Pasquale and two of his assistants were present during the 8 searches. 9 documents, among other items. 10 The FBI ultimately seized approximately 100 boxes of Soon after, Movants filed a Motion for Return of Unlawfully 11 Seized Property (Dkt. 1) in this Court. 12 other things, that the affidavits underlying the search warrants 13 were defective, that government agents failed to follow search 14 protocols set forth in the warrants, and that approximately half of 15 the documents seized were privileged materials relating to an 16 upcoming trial in Italy. Movants asserted, among 17 The government initially opposed the motion for return of 18 property, relying in part upon a declaration from De Pasquale. 19 (Dkt. 18.) 20 Regarding [] Response to Motion for Return of Property” (“the 21 government’s Notice”). (Dkt. 24.) 22 acknowledged that agents failed to follow certain search protocols. 23 Agents failed, for example, to sequester privileged materials and 24 allowed De Pasquale and his team to review privileged materials. 25 The government also withdrew De Pasquale’s declaration and 26 represented that the government “no longer relie[d] upon the 27 assertions therein to support its Response” to Movants’ motion for 28 return of property. Later, however, the government filed a “Notice In that notice, the government (Dkt. 24 at 2.) 2 Soon after, the government 1 withdrew its opposition to the motion. 2 government’s withdrawal stated that the government “agrees that the 3 warrants should be withdrawn, and agrees to return all materials . 4 . . forthwith. 5 be transmitted to Italy.” 6 (Dkt. 25.) The No materials seized . . . , or copies thereof, will (Dkt. 25 at 2:22-26.) This Court subsequently entered an order granting Movants’ 7 motion for return of property, the 2007 Order.1 8 order, summarizing the procedural history of the matter, stated 9 that the government’s Notice “brought to the Court’s attention (Dkt. 20.) That 10 that, among other things, the government would no longer rely upon 11 the assertions of Fabio De Pasquale.” 12 court ordered the search warrants withdrawn and ordered the 13 government (1) to return all property seized to Movants, without 14 retaining any copies, and (2) “not to transmit to Italy or 15 otherwise provide to Fabio De Pasquale or his prosecution team, or 16 to any third party, any item of property seized . . . or any copy 17 of same.” (Dkt. 20 at 2:9-11.) The (Id. at 3:10-18.) 18 B. 19 Now, approximately twelve years later, Movants ask that this The instant motion 20 Court enforce the 2007 Order. 21 government failed to return all of the property seized during the 22 November 2006 search, nor do they contend that the government 23 transmitted any seized item or information to Italy or to any 24 member of De Pasquale’s team. Movants do not contend that the Rather, this motion appears to arise 25 26 27 28 1 The 2007 Order took the form of Movants’ Proposed Order granting their motion for return of property, which Movants lodged in connection with that motion. The form of the order was therefore known to the government at the time it withdrew its opposition to the motion and to the relief requested therein. 3 1 out of investigatory activity undertaken by the Internal Revenue 2 Service. 3 Some years after the events of 2006 and 2007, Agrama and his 4 family indicated to the IRS an interest in participating in the 5 IRS’ voluntary disclosure program for offshore accounts, and made 6 certain representations to the IRS in connection with that program. 7 The IRS initially accepted the proffered disclosures and allowed 8 the Agramas to participate in the voluntary disclosure program, but 9 later came to doubt the veracity of some of the Agramas’ 10 representations. 11 acceptance into the voluntary disclosure program and began an 12 examination of several of the Agramas’ tax returns. 13 In 2013, the IRS rescinded the Agramas’ In 2015, the IRS issued penalty notices to Movant Frank 14 Agrama’s daughter. (Declaration of Dennis L. Perez, ¶ 9.) An 15 attorney representing the Agrama family contacted IRS agents to 16 ascertain the basis for the notices, and was told “that the IRS had 17 received information from a report written by Gabriela Chersicla.” 18 (Id. ¶ 11.) 19 the members of De Pasquale’s prosecution team, and was present 20 during the flawed 2006 search. 21 the IRS has possession of a report written by Chersicla in 2013. 22 (Declaration of James Pack ¶ 9.) 23 early as 2012, the IRS obtained information suggesting that 24 Agrama’s representations with respect to the voluntary disclosure 25 program were not accurate.2 (Pack Decl., ¶ 19.) The parties do not dispute that Chersicla was one of The government acknowledges that It appears, however, that as 26 2 27 28 The IRS appears to be aware of other information suggesting the same, some of it resulting from investigations and legal proceedings in Italy and Switzerland. (Pack Decl. ¶¶ 33-43). It (continued...) 4 1 Approximately four years after IRS agents informed the 2 Agramas’ attorney that the IRS had received information from 3 Chersicla, Movants filed the instant motion. 4 the government, through the IRS, has violated the 2007 Order, and 5 ask that this Court forbid the IRS from relying, for any purpose, 6 upon any information obtained by Chersicla by any means. 7 II. 8 9 Movants contend that Discussion Much of Movants’ argument is premised on the contention that in 2007, the government represented, both to Movants and to the 10 court, that “it would not rely upon the representations of De 11 Pasquale and his team for any purpose.” 12 read that supposed representation to apply to any government 13 activity, including by the IRS, for any purpose, for all time. 14 Movant’s interpretation, however, is not supported in the record. 15 The government’s Notice stated, “The government . . . has withdrawn 16 the Declaration of Fabio DePasquale . . ., and therefore no longer 17 relies upon the assertions therein to support its Response.” 18 20 at 2:24-27 (emphasis added).) 19 recounting the procedural history of the matter, did state that the 20 government’s Notice “brought to the court’s attention that . . . 21 the government would no longer rely upon the assertions of Fabio De 22 Pasquale.” 23 statement can hardly be read as a recitation of a government pledge 24 never to consider any information obtained from De Pasquale or any (Dkt. 20 at 2:9-11.) (Reply at 3:4-6.) Movants (Dkt. Granted, this Court’s order, Read in context, however, that 25 26 27 28 2 (...continued) is unclear, however whether any of that information was derived from Chersicla’s report. 5 1 member of his team, however and whenever obtained, for any purpose, 2 at any time in the future. 3 Movants also contend that the effect of the court’s 2006 order 4 “is to prohibit the Government from relying in any way on De 5 Pasquale or the information seized during the unlawful raid.” 6 (Motion at 11:12-13.) 7 that position is at odds with the relief Movants seek, which 8 includes an order stating that “the IRS can no longer rely upon the 9 assertions of Fabio De Pasquale, including, but not limited to, any As an initial matter, the court notes that 10 information or documentation obtained or used by Fabie De Pasquale 11 and his prosecution team, including Gabriela Chersicla, whether 12 from the unlawful search and seizure that occurred in 2006 or 13 otherwise.” 14 2007 Order was not so broad as Movants suggest. 15 government action required by the 2007 Order was the return of all 16 seized property to Movants, without retention of any copies or 17 transmittal to any third party. 18 government complied with that mandate.3 19 (Mot. at 20:10-14 (emphases added).) Furthermore, the The only Movants acknowledge that the In the alternative, Movants ask that this court “order the 20 exclusion of the Chersicla Report . . . as a remedy for the 21 violations of Mr. Agrama’s constitutional rights in the 2006 search 22 of his home . . . .” (Mot. at 15:19-21). Movants contend that the 23 24 25 26 27 28 3 Movants made this acknowledgment at oral argument, notwithstanding their written contention that the government “violated the order by not only permitting Chersicla to rely on what she learned from the unlawfully obtained documents in foreign proceedings, but from relying on it itself for the purpose of a domestic tax examination.” (Reply at 5:10-13.) It is unclear to the court how, even if the 2007 Order had required it, the government could possibly have prevented Chersicla from relying on any particular information in the course of a foreign proceeding. 6 1 2006 search violated Agrama’s Fourth Amendment rights because the 2 search warrants were defective and, in any event, were not adhered 3 to. (Mot. at 15-16.) 4 Agrama’s Fifth and Sixth Amendment rights because De Pasquale 5 accessed privileged attorney work product and attorney-client 6 communications. Movants also argue that the search violated (Mot. at 18.) 7 The court declines to address these constitutional arguments. 8 Although Movants ask that this Court exclude all Chersicla-derived 9 information, it is not clear to the court what the information 10 could be excluded from. 11 restrain the government from assessing or collecting taxes. 12 at 12:23-24.) 13 seeking to “limit the sources on which the IRS could rely in 14 conducting its ‘information gathering.’” (Id. at 13:8-9.) 15 do not cite, nor is the court aware of, any authority for the 16 proposition that this Court has the power to dictate to a 17 government agency what information it can or cannot consider in the 18 course of an investigation. 19 become relevant in some other proceeding at some later time, they 20 are not ripe at this stage. 21 States, 429 U.S. 338, 359 (1977) (“The suppression issue . . . 22 obviously is premature and may be considered if and when 23 proceedings arise in which the Government seeks to use the 24 documents or information obtained from them.”); see also Mitchell 25 v. Riddell, 402 F.2d 842, 846 (9th Cir. 1968) (“It appears 26 undisputed in the record that no assessment for federal income 27 taxes has ever been levied . . . . 28 controversy’ exists under the record before us.”); Swartz v. KPMG, Movants represent that they do not seek to (Reply Rather, Movants characterize their efforts as Movants Although constitutional claims may See G. M. Leasing Corp. v. United 7 For such reason no ‘actual 1 LLC, 401 F. Supp. 2d 1146, 1155 (W.D. Wash. 2004) (reversed in part 2 on other grounds, Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007)) 3 (“A declaratory judgment is “not ripe for adjudication if it rests 4 upon contingent future events that may not occur as anticipated, or 5 indeed may not occur at all. Any assessment of penalties against 6 the plaintiff by the IRS remains a future event which may not occur 7 as anticipated, if at all.”) (internal citations and quotations 8 omitted); Grier v. Hilton Worldwide Inc., No. CV-14-00189-PHX-DLR, 9 2014 WL 11515700, at *2 (D. Ariz. July 21, 2014); In re J.C. Watson 10 Co., No. MS-5682, 2005 WL 1079362, at *4 (D. Idaho May 5, 2005). 11 III. Conclusion 12 13 For the reasons stated above, Movants’ Motion to Enforce Court Order is DENIED. 14 15 16 17 IT IS SO ORDERED. 18 19 20 Dated: August 25, 2020 DEAN D. PREGERSON United States District Judge 21 22 23 24 25 26 27 28 8
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