United States v. Ramesh Patel , 429 F. App'x 885 ( 2011 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 10-15603 ELEVENTH CIRCUIT
Non-Argument Calendar JUNE 10, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:09-cr-00564-ODE-JFK-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RAMESH PATEL,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(June 10, 2011)
Before BARKETT, MARCUS and FAY, Circuit Judges.
PER CURIAM:
Ramesh Patel appeals his conviction following a guilty plea to one count of
filing a false tax return, in violation of 26 U.S.C. § 7206(1). He argues that the
draft and filed tax returns seized during the search of his business were outside the
scope of the search warrant.1 For the reasons set forth below, we affirm.
I.
Patel was the manager of a family-owned Comfort Inn hotel in Union City,
Georgia. An investigation in 2007 revealed that he had over-billed the Federal
Emergency Management Agency (“FEMA”) for lodging expenses for displaced
victims of Hurricane Katrina. A search warrant was issued that authorized seizure
of certain classes of documents:
7. [a]ll financial records including financial statements, charts of
accounts, general ledgers, general journals, gross receipts and income
records, charge journals, cashier checks, money orders, credit balance
reports, financial statements, payment journals, cash receipts,
disbursement records or journals, account receivable and payable
ledgers, monthly billing charts, expense reports, invoices, or related
documents, pertaining to the housing of displaced victims of
Hurricane Katrina; [and]
....
10. [a]ny and all other records that constitute evidence of the
commission of the offenses outlined by the government, fruits of the
crimes outlined by the government, and property designed or intended
1
Patel also asserts that a warrant broad enough to include documents entirely unrelated to
the fraud offense that was under investigation at the time would be overly broad, and he argues
that the good-faith exception to the exclusionary rule did not apply in this case. In light of our
holding herein, we decline to address these arguments.
2
for use or which has been used as the means of committing the crimes
described by the government.
On June 25, 2007, agents of the Federal Bureau of Investigation (“FBI”) executed
the warrant on the hotel and confiscated business records, including drafts of tax
returns and filed tax returns for the years 2005 and 2006. Agents discovered that
the copies were prepared by two separate tax preparers and had noticeably
different tax adjustments and allowances.
Agents learned that Patel had asked the accountant who initially prepared
his individual 2005 tax return to omit the profits from the 2005 sale of his dry-
cleaning business, amounting to $299,600. Patel indicated to the accountant that
he would not be able to pay the taxes due if those profits were included, and he
discussed writing off a $50,000 franchise fee all at once, rather than doing so over
the course of 15 years. The accountant prepared Patel’s taxes, but he refused to
make the requested changes. Patel subsequently asked another accountant to
prepare his individual 2005 return, providing her with a copy of the first
accountant’s version and indicating that he did not agree with how it had been
prepared. The second accountant prepared several drafts before Patel was
satisfied, but Patel continued to disagree with her treatment of the profits from the
sale of the dry-cleaning business. The second accountant also prepared a
3
corporate 2005 tax return for SRI OM Inc., which had controlled the dry-cleaning
business.
Agents discovered that neither the corporate nor the individual tax returns
that Patel actually filed for 2005 listed the sale of the dry-cleaning business. In
each year that Patel had owned the dry-cleaning business, he had filed taxes
writing off its cost. When he sold it in mid-2005, he deposited the check for
$299,600 into the SRI OM business account, then transferred the money into his
personal account. Later that year, he used $435,000 from his personal account to
purchase the Comfort Inn. As a result of his failure to report the profits from the
sale of the dry-cleaning business, Patel owed additional corporate taxes of $93,389
and additional individual taxes of $40,448.
Patel was charged in a superseding indictment with (1) filing a false
corporate income-tax return, and (2) filing a false personal income-tax return, both
in violation of 26 U.S.C. § 7206(1) and 18 U.S.C. § 2. He moved to suppress the
seized tax returns, as well as any statements that were obtained as a result of the
investigation of those returns, on grounds that the seizure exceeded the scope of
the search warrant. He argued that they were not listed in Paragraph 7’s detailed
description of financial records or in any other section of the warrant, and that
Paragraph 7 was limited to records “pertaining to the housing of displaced victims
4
of Hurricane Katrina,” which Patel did not believe to encompass the tax returns.
Accordingly, Patel argued that the tax records, as well as the statements from the
accountants that were the fruits of the seizure of the tax records, should be
suppressed.
The magistrate judge stated that the warrant did not specifically identify tax
returns or tax-return-related documents, but that the agents reasonably interpreted
Paragraph 7 as including those documents. The 2005 and 2006 tax-return
information fell within the scope of financial statements, gross receipts and
income records, and expense reports, and the agents would reasonably have
concluded that the tax returns and related documents could contain information
referencing or relying on all of the items specifically listed in Paragraph 7. Thus,
the agents did not exceed the scope of the warrant.
Over Patel’s objections, the district court adopted the magistrate’s report
and denied the motion to suppress, noting in particular that the agents had
reasonable grounds to believe that the 2005 tax returns were “financial records . . .
or related documents[] pertaining to the housing of displaced victims of Hurricane
Katrina.” The court also concluded that the tax documents were within the scope
of Paragraph 10 and that the courts have upheld such catch-all provisions if
5
properly limited to some direct relation to the crimes outlined in the warrant and
supporting attachments.
Patel subsequently entered a negotiated guilty plea to Count 1 of the
superseding indictment, whereby he reserved the right to appeal the denial of his
motion to suppress. The district court convicted Patel and sentenced him to two
years’ probation.
II.
In reviewing the denial of a motion to suppress, we review the district
court’s findings of fact for clear error and its application of law to those facts de
novo. United States v. Ramirez, 476 F.3d 1231, 1235 (11th Cir. 2007). All facts
are construed in the light most favorable to the prevailing party. Id. at 1235-36.
Officers executing a warrant may search as extensively as reasonably
necessary to locate the items described in the warrant. United States v. Jackson,
120 F.3d 1226, 1228 (11th Cir. 1997). If a search exceeds the scope of the terms
of a warrant, any subsequent seizure is unconstitutional. Id. Yet “[t]he crucial
inquiry is always whether the search and seizures were reasonable under all the
circumstances.” United States v. Schandl, 947 F.2d 462, 465 (11th Cir. 1991)
(quotation marks omitted). “Such things as the scope of the warrant, the behavior
of the searching agents, the conditions under which the search was conducted, and
6
the nature of the evidence being sought must be considered in determining
whether or not the search was reasonable.” Id. The particularity requirement for
search warrants “must be applied with a practical margin of flexibility, taking into
account the nature of the items to be seized and the complexity of the case under
investigation.” United States v. Sawyer, 799 F.2d 1494, 1508 (11th Cir. 1986). A
complex investigation “may require piecing together like a jigsaw puzzle a number
of items of evidence that may not appear incriminating when taken alone.” Id.(quotation and alteration marks omitted). “Moreover, in cases involving a
pervasive scheme to defraud, all the business records of the enterprise may
properly be seized.” Id.Paragraph 7 of the warrant authorized the seizure of “[a]ll financial records
including financial statements, . . . gross receipts and income records, . . . expense
reports, . . . or related documents, pertaining to the housing of displaced victims of
Hurricane Katrina.” Paragraph 10 authorized the seizure of “[a]ny and all other
records that constitute[d] evidence of the commission of the [FEMA fraud]
offenses [or] fruits of [those] crimes.” In light of the nature of the offense under
investigation, the district court did not clearly err when it found that the agents
reasonably believed that the draft and filed tax returns for the relevant time period
would document income and expenses arising from the housing of the Katrina
7
evacuees or otherwise would reflect the fruits of the alleged FEMA fraud. See
Ramirez, 476 F.3d at 1235; Schandl, 947 F.2d at 465; Sawyer, 799 F.2d at 1508.
Therefore, the district court did not clearly err in finding that the seizure of the tax
documents was authorized by Paragraphs 7 and 10 of the warrant. See Ramirez,
476 F.3d at 1235.
For the foregoing reasons, we affirm Patel’s conviction. However, we note
that a typographical error in the district court’s judgment mistakenly identifies the
incorrect statute of conviction. Accordingly, we remand to the district court for
the limited purpose of entering a nunc pro tunc order correcting the typographical
error.
AFFIRMED. LIMITED REMAND WITH INSTRUCTIONS.
8