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United States v. Ali

United States District Court, D. Maryland, Southern Division

November 5, 2014

UNITED STATES OF AMERICA, Petitioner,
v.
MELINA ALI, Respondent.

MEMORANDUM OPINION

PAUL W. GRIMM, District Judge.

The United States brought this civil action to enforce an IRS Summons and Respondent moved to quash it on statutory and Fifth Amendment grounds. Following an initial hearing at which I ruled that the Summons itself was valid and certain materials sought were not protected by the Fifth Amendment, I ordered the parties to provide additional briefing on the remaining issues. The Government argues that Respondent is not protected by the Fifth Amendment, that the existence of the documents it seeks is a foregone conclusion, and that she has not shown why her testimony would be incriminating. Respondent contends that the mere act of production would be incriminating, as would be readily apparent from the context of the requests themselves, and the documents produced in response thereto. Because I find that the mere production of most of the documents sought by the Summons would not require Respondent to incriminate herself, I order her to comply with the Summons, except for specified documents with respect to which I find her assertion of privilege to be warranted.[1]

I. BACKGROUND

The facts of this case are discussed in detail in my earlier Memorandum Opinion and Order issued April 24, 2014. United States v. Ali, No. PWG-13-3398, 2014 WL 1660280 (D. Md. Apr. 24, 2014). In a nutshell, Respondent Melina Ali was served with a summons (the "Summons") by the Internal Revenue Service on April 26, 2013, directing her to provide testimony and to produce various categories of documents for the period December 31, 2004 through December 31, 2011. Id. at *1. Ali appeared in response to the Summons but refused to answer any questions or to produce any documents, asserting the Fifth Amendment privilege against self-incrimination. Id. On November 14, 2013, the Government filed a Petition to Enforce Summons ("Gov't's Pet."), ECF NO.1, in this Court, seeking to compel Ali to testify and to produce certain categories of documents sought in the Summons. Specifically, the Government seeks to compel the production of:

• Summons Item 1.A, seeking records required to be maintained pursuant to 31 C.F.R. § 1010.420 relating to certain foreign financial accounts;
• Summons Item 1.B, seeking a list of foreign bank accounts that Ali provided to her attorney and/or tax preparer;
• Summons Items 1.C-H, seeking a broad range of documents relating to Ali's foreign and domestic bank accounts during the relevant period;[2]
• Summons Item 2.A, seeking records required to be maintained pursuant to 31 C.F.R. § 1010.420 relating to certain foreign financial accounts;
• Summons Item 2.B, seeking additional information with respect to Ali's domestic and foreign brokerage accounts, mutual funds, and security accounts;
• Summons Items 3.A-I, seeking information relating to various business entities;
• Summons Items 6.A-B, seeking Ali's passports and driver's licenses;[3] and
• Summons Item 9.A, seeking Ali's income tax returns, with schedules and attachments, for the tax years 2004-2011.

I issued an Order to requiring Ali to show cause why she should not be required to comply with the Summons, and Ali responded with a Petition to Quash Summons and/or Deny Enforcement of the IRS Summons Served on Respondent Melina Ali ("Resp't's Mot. to Quash"), ECF No.7.

I held a hearing on April 21, 2014 to address the enforceability of the Summons generally and Ali's Fifth Amendment arguments. At that hearing, I ruled that the Summons was proper and that Ali had not met her "heavy burden" to obtain an evidentiary hearing on whether the Summons had been issued in bad faith. Ali, 2014 WL 1660280, at *4. However, I noted that Item 9.A, seeking Ali's previously filed tax returns, appeared to seek information that was within the possession of the IRS and therefore was not appropriate unless and until the Government made a diligent search for those tax returns and determined that they could not be located. Id.

I also ruled that Summons Item 1.A, insofar as it sought only records required to be maintained pursuant to 31 C.F.R. § 1010.420, was covered by the required records doctrine and documents responsive to that category must be produced. Id. at *7. I asked for clarification as to whether Summons Item 2.A, which also seeks documents required to be maintained pursuant to 31 C.F.R. § 1010.420 (and therefore also within the required records doctrine), sought a different class of documents or merely duplicated Item 1.A. Id. With respect to the remaining documents, I found that the parties had not provided sufficient information to determine whether production of those documents was privileged under the Fifth Amendment, and ordered the parties to provide additional briefing on the matter. Id. at *7-8.

The Government also sought to compel Ali to respond to questions after she had refused to do so at an interview in June 2013. I found that she had not made a sufficient record at that interview properly to invoke her Fifth Amendment rights. Id. at *5. Accordingly, I ordered the parties to work together to develop a more complete record to present the issue in a manner that would facilitate meaningful review, id. at *5-6, and to address it in their supplemental briefs as well, id. at *8.

On May 27, 2014, Ali appeared for a second interview (the "2014 Interview") at which time she "answered many questions, but continued to decline to answer more than 200 questions" relating to specific topics. Gov't's Supp. Br. in Supp. of Its Pet. to Enforce Summons (Privilege) ("Gov't's Supp. Br.") 3, ECF No. 19. Subsequently, the Government filed its Supplemental Brief, seeking to require her to answer those 238 questions and to produce documents in response to the Summons Items listed above, with the exception of Items 9.A-C. Id. at 6, 14. Ali responded by filing her Supplemental Response ("Ali's Supp. Resp."), ECF No. 20, arguing not only that she should not be compelled to answer any additional questions or produce any additional documents, but also seeking reconsideration of my earlier ruling that the Summons is enforceable and Items 1.A and 2.A are not covered by the Fifth Amendment. Ali's Supp. Resp. The Government has replied, Gov't's Reply to Resp't's Supp. Resp. Brief ("Gov't's Supp. Reply"), ECF No. 23, and the matter is fully briefed (although in contesting every issue regardless of whether the argument had merit, the parties have, in many instances, succeeded more in obfuscating the issues than in clarifying them). Having reviewed the filings, I find that a hearing is not necessary. Loc. R. 105.6.

II. ALI'S REQUESTS TO RECONSIDER

A substantial portion of Ali's Supplemental Response is spent reargumg that the Summons is unenforceable because it was issued in bad faith and that, in any event, the Fifth Amendment shields Ali from producing documents in response to Summons Items 1.A and 2.A. Because I already have ruled on these issues in my earlier Memorandum Opinion and Order, Ali, 2014 WL 1660280, at *4, *7, this properly is viewed as a motion to reconsider my earlier ruling.

At the outset, this Court's local rules require a motion to reconsider to be filed not more than fourteen days after entry of the order sought to be reconsidered. Loc. R. 105.10. Ali's request to reconsider-which was not filed as a free-standing motion in any event-was filed on July 8, 2014, and therefore is untimely as relates to my ruling on April 24, 2014. But even if the fact that I reserved final ruling on the Government's Petition and Ali's Motion to Quash ...


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