Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Impounded Case

argued: January 5, 1988.

IN RE IMPOUNDED CASE (LAW FIRM)


Appeal from the United States District Court for the District of New Jersey. D.C. Civil No. 85-1114.

Seitz, Hutchinson and Rosenn, Circuit Judges.

Author: Seitz

Opinion OF THE COURT

SEITZ, Circuit Judge.

I. JURISDICTION

Appellants, a named Special Agent in the Criminal Investigation Division of the Internal Revenue Service ("I.R.S."), fifteen unidentified I.R.S. agents and two Department of Justice attorneys (collectively "the government"), appeal from paragraph 1 of the order of the district court entering judgment on the pleadings in favor of appellee law firm, a professional corporation. Paragraph 1 granted the law firm's prayer for injunctive relief by ordering the government to return all documents seized pursuant to a search warrant, as well as any duplicates thereof.

The district court had jurisdiction of this action pursuant to 28 U.S.C. § 1331 (1982).*fn1 The law firm's prayer for injunctive relief stated a claim for which relief can be granted. Klitzman, Klitzman & Gallagher v. Krut, 744 F.2d 955, 959 (3d Cir. 1984).*fn2 Because the injunction issued by the district court goes to the merits of the controversy and has serious consequences, we have jurisdiction under 28 U.S.C. § 1292(a)(1) (1982). Williams Elecs., Inc. v. Artic Int'l, Inc., 685 F.2d 870, 871 (3d Cir. 1982).

II. FACTS

The government sought a search warrant authorizing the search of the law firm's office and the seizure of certain items from the office. The government's application was supported by the affidavit of the Special Agent. The magistrate found that there was probable cause to believe that evidence of certain crimes would be found at the office. They involved tax evasion, 26 U.S.C. § 7201 (1982), filing false or fraudulent returns, 26 U.S.C. § 7206 (1982), mail fraud, 18 U.S.C. § 1341 (1982), and conspiracy to commit mail fraud, 18 U.S.C. § 371 (1982). After the magistrate issued the warrant, and the documents in question were seized,*fn3 the law firm filed a complaint in the district court seeking injunctive relief and damages for injuries allegedly sustained as a result of the search and seizure.*fn4

In response to the law firm's motion for judgment on the pleadings, the district court, inter alia, entered judgment in favor of the law firm on count I of the complaint.*fn5 The district court granted relief solely on the ground that the warrant was overbroad and thereby violated the law firm's fourth amendment right to be free from unreasonable searches and seizures. In addition, the district court ordered the government to return all documents and materials seized from the office of the law firm as well as any copies, facsimiles or duplicates thereof. The injunctive portion of the order has been stayed with the law firm's consent. This appeal followed.

In his affidavit, the Special Agent asserted that there was probable cause to believe that the law firm and some of its owners and employees had been and were engaged in violations of federal criminal statutory provisions. The Special Agent based this belief on information given him by two informants: a named former accountant of the law firm and a confidential informant.

The accountant had informed the Special Agent inter alia, that: 1) each closed case file contained financial documents that showed the amount received in settlement of the case and the law firm's costs attributed to the lawsuit; 2) he had been told by a member of the law firm to determine the gross receipts of the firm by adding up the deposits made to the firm's bank account; 3) the gross receipts figure thus obtained was then reported on the Forms 1120 filed by the law firm; 4) on a regular basis, members or employees of the law firm would accompany clients to the bank, cash settlement checks received in lawsuits and retain the firm's share in cash rather than depositing it into the law firm's bank account; 5) the law firm's practice had been to deposit into its bank account gross receipts only slightly in excess of the firm's expenses; and 6) the law firm had engaged in a practice of inflating the supposed medical bills of some of its clients.

The confidential informant had informed the Special Agent, inter alia, that: 1) on a continuing, regular basis, a member or employee of the law firm would accompany clients to the bank where settlement checks would be cashed and the law firm would retain its share in cash; 2) closed case files contained documents showing the amounts received in settlements or judgments and the costs attributed by the law firm to the action; 3) in some instances, the law firm procured doctor's statements that overstated the treatment given, thus inflating the medical costs attributed to clients' injuries; these inflated cost figures were used by insurance companies in arriving at settlement figures; 4) the law firm engaged in the practice of fabricating insurance claims and causes of action; 5) personal injury files were identified by specified markings; 6) criminal case files were marked "crim"; 7) when a file was closed, the date on which it was closed was marked on its exterior; 8) every file marked with a star contained fraudulent doctor's reports and/or statements; 9) every file marked with an orange sticker was a case in which the cause of action or claim was fabricated; ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.