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United States v. McBride

United States District Court, D. Massachusetts

July 1, 2014

UNITED STATES OF AMERICA,
v.
JOHN C. McBRIDE, Defendant.

MEMORANDUM AND ORDER

PATTI B. SARIS, Chief District Judge.

Defendant John C. McBride has moved to dismiss the indictment on the grounds that it was improperly sealed, and that his arrest violated the Fourth Amendment and Rule 9 of the Federal Rules of Criminal Procedure. After hearing, the defendant's motion is DENIED.

FACTUAL BACKGROUND

Defendant McBride is a former defense attorney who currently resides in Braintree, MA with his wife and daughter. He is employed in Boston. Since 2008, McBride had been in contact with the Internal Revenue Service ("IRS") regarding past taxes he owed. He filed for bankruptcy in 2009 in the Bankruptcy Court for the District of Massachusetts, and regularly attended the proceedings. In 2012, McBride met with IRS and Federal Bureau of Investigation ("FBI") agents on two occasions and became aware that he was the target of a criminal investigation, but he declined to speak with agents about his conduct.

On June 26, 2013, McBride was indicted on one count of Corruptly Endeavoring to Obstruct or Impede the Due Administration of the Internal Revenue Laws, in violation of 26 U.S.C. § 7212(a), and one count of Bank Fraud, in violation of 18 U.S.C. § 1344. The charges arose in connection with alleged fraudulent releases of federal tax liens and a fraudulent mortgage discharge associated with McBride's residential properties in Marblehead and Edgartown, MA.

The government filed a motion pursuant to Fed. R. Crim. P. 6(e)(4) requesting that the indictment be sealed "until the defendant is in custody... and the Court has ordered the indictment unsealed." Dkt. #1. The magistrate judge granted the motion. Dkt. #2. McBride was arrested at his home in Braintree on July 1, 2013, by ten members of the FBI, IRS, and Braintree Police, armed with handguns and wearing bullet proof vests in front of his wife and daughter. He was arraigned the same day. The government moved to unseal the indictment immediately after McBride was in custody. Dkt. #7.

DISCUSSION

McBride argues that the government violated Rule 6(e)(4) when it moved to seal the indictment without asserting that he posed a risk of flight or providing any other justification. Further, McBride claims that his arrest constituted an "unreasonable seizure" of his person in violation of the Fourth Amendment and Fed. R. Crim. P. 9 because the warrant was not "properly supported" by a risk of flight. According to McBride, the remedy for these violations is dismissal of the indictment. The government states it requested that the indictment be sealed to secure custody of the defendant.

Rule 6(e)(4) states: "The magistrate judge to whom an indictment is returned may direct that the indictment be kept secret until the defendant is in custody or has been released pending trial." Fed. R. Crim. P. 6(e)(4). The First Circuit has held that "Rule 6(e) rests on the premise that criminal defendants not yet in custody may elude arrest upon learning of their indictment.... [T]he government need not articulate its reasons for requesting that an indictment be sealed, so long as its request is based on a ground set forth in Rule 6(e)." United States v. Balsam , 203 F.3d 72, 81 (1st Cir. 2000). Risk of flight is not the only basis for sealing an indictment. For example, sealing an indictment to protect a key prosecution witness qualifies as a "legitimate prosecutorial objective". Id.

McBride argues that there is no evidence he posed a risk of flight, pointing out that his whereabouts are well known and he has attended proceedings regularly in Bankruptcy Court. He points out that he has no passport, and has extensive family ties here. The government does not concede that there was no risk of flight, noting: "The government was aware of information about McBride that reasonably raised concerns about a potential risk of flight, including the following: McBride had been disbarred in 2005 after decades of practice; he had filed for bankruptcy in 2009; he had recently lost both of his multi-million dollar homes in Marblehead and Edgartown; he had concealed from his bankruptcy trustee his efforts to fraudulently re-finance his Edgartown property; he had engaged in fraud, fabricated documents, forged signatures, and recorded fraudulent documents at two registries of deeds; and he had recently admitted to sufficient facts on multiple state charges involving identity fraud, credit card fraud and practicing law while disbarred."

The Government essentially relies on evidence that Defendant committed a crime to support the position that he posed a risk of flight. While the weight of the evidence is certainly relevant to risk of flight, it is not necessarily dispositive, particularly here where there are such extensive community and family ties. At the hearing, the government vociferously and alternatively argued that white collar defendants should not be treated differently from defendants charged with street crime. While true, this argument does not defeat the basic principle that an indictment should not be sealed routinely without a legitimate prosecutorial objective.

Even though the evidence does not support a risk of flight in the circumstances of this case, the error is a non-constitutional one. There is no caselaw that suggests that dismissal of an indictment is the appropriate sanction for an unwarranted sealing. The Supreme Court has held that violations of at least some of the Federal Rules of Criminal Procedure, including Rule 6(e), are subject to harmless error review under Rule 52(a). Bank of Nova Scotia v. United States , 487 U.S. 250, 256, 258 (1988) (applying harmless error review where prosecutors violated Fed. R. Crim. P. 6(e) and 6(d) by failing to maintain the secrecy of grand jury proceedings and allowing improper appearances before the grand jury). While neither the Supreme Court nor the First Circuit has addressed harmless error review in the context of an improperly sealed indictment, the First Circuit has routinely applied harmless error review where defendants alleged other defects involving indictments. See, e.g., United States v. Mojica-Baez , 229 F.3d 292, 311 (1st Cir. 2000) (applying harmless error review to prosecutors' "failure to include an element in an indictment that otherwise provided the defendants with fair notice of the charges against them"); United States v. Yefsky , 994 F.2d 885, 892-93 (1st Cir. 1993) (applying harmless error review where an indictment failed to include sufficient facts to notify the defendant of the charges against him, in violation of Fed. R. Crim. P. 7(c)(1)).

Only the Tenth Circuit has squarely addressed whether harmless error review may be applied to an allegation that an indictment was improperly sealed, holding that an improperly sealed indictment should be dismissed if the sealing resulted in non-harmless error which "substantially affect[ed] the defendant's ability to defend against the indictment." United States v. Thompson , 287 F.3d 1244, 1247, 1253-1255 (10th Cir. 2002) (dismissing an indictment based on a harmless error analysis after the government conceded it was sealed for an improper purpose, and the defendant "innocently destroyed relevant documents" during the 11-month period the indictment was under seal).

Some courts in this district have dismissed indictments that were improperly sealed because the statute of limitations on the underlying offenses expired while the indictment was under seal. "[A]n improperly sealed indictment does not toll the statute of limitations." United States v. Upton , 339 F.Supp.2d 190, 194 (D. Mass. 2004); United States v. Maroun , 699 F.Supp. 5, 6-7 (D. Mass. 1988) (dismissing the indictment because the sealing order was based on an implicit false representation); United States v. Cosolito , 488 F.Supp. 531, 535, 537 (D. Mass. 1980)(dismissing the indictment on the ground that the ...


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