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United States v. Mihilli

United States District Court, Ninth Circuit

October 23, 2013

United States of America, Plaintiff,
v.
Gjergi Kol Mihilli, Defendant.

ORDER

G. MURRAY SNOW, District Judge.

Pending before the Court are the Joint Motion by Victims/Third Parties Wells Fargo Bank, N.A. and Merchants Bank of California, N.A. for an Order Requiring Disclosure of Witness Statements and Documents, (Doc. 85), and the Request for Oral Argument on that Motion, (Doc. 98). For the following reasons, the Joint Motion is denied without prejudice. That Request for Oral Argument is denied because the parties have thoroughly discussed the law and the evidence, and oral argument will not aid the Court's decision. See Lake at Las Vegas Investors Group, Inc. v. Pac. Malibu Dev., 933 F.2d 724, 729 (9th Cir.1991). The Banks may renew their application for court-mandated discovery or subpoenas only after exhausting the remedies described herein.

BACKGROUND

A grand jury indicted Gjergi Kol Mihilli and his two sons, Nikolas George Mihilli and Nino Joseph Mihilli, on charges of conspiracy, bank fraud, money laundering, and identity theft. (Doc. 1.) The Defendants allegedly issued fraudulent money orders using equipment from Merchants Bank of California, N.A. ("Merchants") and then deposited the money orders into their account at Wells Fargo Bank, N.A. ("Wells Fargo"). Merchants would later withdraw the money from Defendants' accounts at Wells Fargo to pay for the money orders issued. ( Id. at 4-5.) Before the scheme was detected, Defendants are estimated to have issued, used, and deposited $10, 000, 000 in fraudulent money orders. ( Id. at 5.)

The Department of Homeland Security ("DHS") conducted an investigation in this case. Wells Fargo and Merchants (the "Banks") filed a joint motion as victims, asking the Court to order DHS to disclose records from that investigation. (Doc. 85.) In particular, the Banks are seeking disclosure of all 302 Reports covering DHS interviews with the Banks' current and former employees, and copies of all documents provided to DHS by the Banks. ( Id. at 2.)

The U.S. Attorney's Office filed a Response and Motion to Dismiss Victims' Motion for Disclosure Order. (Doc. 92.) They agreed to voluntarily return all documents provided by the Banks but opposed the disclosure of the witness interview reports. ( Id. at 1.) The Banks filed a Reply in Support of the Joint Motion, reasserting their request that the Court order the disclosure of the witness interview reports. (Doc. 95.)

DISCUSSION

I. Disclosure

The only remaining issue is the disclosure of the witness interview reports. The U.S. Attorney's Office has voluntarily agreed to return the other documents provided by the Banks and, therefore, the request for an order compelling DHS to disclose the same records is dismissed as moot.

There are several potential sources from which the Banks could receive the interview reports: the DHS's original records, the copies Defendants received, or the copies the U.S. Attorney's Office obtained from DHS. The Court will address each possible source in turn.

A. DHS's Original Reports

First, the Banks could obtain the interview records directly from DHS. The disclosure of DHS records in litigation is covered by its Touhy regulations. 6 C.F.R. §§ 5.41-.49 (2013). These regulations provide the requirements for private parties making information requests and for courts issuing summons and subpoenas. Id. § 5.41. The regulations provide that all such requests must be addressed to the Office of the General Counsel and that any other employee should not accept or honor such requests. Id. § 5.43. DHS employees are specifically prohibited from producing documents "unless authorized to do so by the Office of the General Counsel or the delegates thereof, as appropriate." Id. § 5.44. The required contents of Touhy requests are spelled out, id. at § 5.45; as are the factors that DHS will consider in determining whether to comply, id. at § 5.48.

Here, the Banks can submit a Touhy request on their own, and it will be considered in the same way that DHS would consider a subpoena from the Court. The Banks indicate that they made a phone call and later sent a letter to the DHS agent involved. (Doc. 85 at 2:25-3:3.) Based on the Bank's description, this does not appear to have been a proper Touhy request, which must be made to the Office of General Counsel. Although the Court can review a DHS refusal, it will not do so until the Banks have made a formal Touhy request and received an adverse final determination from DHS. See Myers v. Bethlehem Shipbuilding Corp., 303 U.S. ...


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