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United States v. Chen

United States District Court, D. Massachusetts

January 22, 2019

UNITED STATES OF AMERICA
v.
CHARLIE JINAN CHEN, Defendant.

          MEMORANDUM AND ORDER

          DENISE J. CASPER UNITED STATES DISTRICT JUDGE.

         I. Introduction

         Defendant Charlie Jinan Chen (“Chen”) has moved to suppress statements made to law enforcement agents at his restaurant on March 30, 2016. D. 53. Having considered the motion, the government's opposition, D. 57, Chen's reply brief, D. 62 and the evidence presented at the evidentiary hearing on December 19, 2018, D. 65, 67, the Court DENIES the motion. Accordingly, the Court makes its findings of fact and legal analysis below.

         II. Findings of Facts

         These findings are based upon the testimony of Federal Bureau of Investigation (“FBI”) Special Agents (“SA”) John Keelan and Ryan Lane during the December 19th hearing.

         A. Investigation of Vistaprint Trading

         Chen's motion to suppress concerns his March 30, 2016 interview by SA Keelan and Lane. The agents conducted this interview in the course of investigating allegations of insider trading in Vistaprint N.V. (“Vistaprint”) securities. D. 67 at 21. In the course of the investigation, the FBI received information that an individual who worked in financial forecasting at Vistaprint, Jenny Xu and/or her spouse, Kun Xu, allegedly provided Chen with material nonpublic information (“MNPI”) concerning Vistaprint's quarterly financial performance upon which he allegedly traded.

         B. Special Agents Interview Chen at His Restaurant

         The agents' purpose in interviewing Chen on March 30, 2016 was to inquire about his suspicious options trading in Vistaprint stock. D. 67 at 8. At the time of the interview, the agents considered Chen, and others, in the agents' parlance, a focus, subject or target of their investigation. D. 67 at 23-24, 44, 79-80. The agents had intended to interview Chen at his residence, but he left his home that morning with his children to drop them at school, so the agents instead decided to interview him at his restaurant, Feng Shui, in Chelmsford, Massachusetts. D. 67 at 9, 50. Shortly after 10 a.m., the agents arrived at the restaurant. D. 67 at 50. It was not clear that it was open for business, but restaurant employees were present. D. 67 at 9-10, 22, 52. The agents introduced themselves to Chen as FBI agents, displaying their credentials, and explained that they wanted to ask him some questions about his trading. D. 67 at 10, 53. Chen showed them to a booth in the restaurant so that they could sit down. D. 67 at 10, 54. The agents sat across from Chen in the booth. D. 67 at 11. Although the agents were armed, their firearms were not visible. D. 67 at 11-12, 52.

         After the three sat down in the booth, the agents asked Chen questions about his stock trading. D. 67 at 12. In response to their questions, Chen described himself as a day trader, but indicated that he did not recall specifically what options trading he had done in Vistaprint. D. 67 at 12-13, 26, 60-61. He acknowledged that he was familiar with Vistaprint and followed the company, but Chen denied knowing anyone who worked there. D. 67 at 14, 70. The agents specifically asked Chen about whether he knew Kun (“Kevin”) Xu, the husband of Jenny Xu, who was a former accountant at Vistaprint. D. 67 at 14-15. Although he initially said he did not recognize his name, he indicated that he knew “Kevin, ” as a fellow parent from his daughter's school, but only as an acquaintance. D. 67 at 15, 29, 61-62, 70. He also indicated that he had not spoken with Kevin about Vistaprint. D. 67 at 15. Chen indicated that he was aware that Kevin was married to Jenny Xu, but that he did not know where she worked, thought that she might work in real estate, and that he had not spoken to her about Vistaprint either. D. 67 at 16, 64. When the agents showed him some telephone records indicating his calls with Kevin, Chen responded that those calls were about his purchasing an apartment or condo in Lexington. D. 67 at 17, 63. Although the agents asked Chen numerous questions, they all concerned his relationship with Kevin and trading in Vistaprint. D. 67 at 44. The agents asked their questions in English and Chen responded in English and there was no indication that Chen did not understand the questions. D. 67 at 58-59.

         The initial interview lasted less than half an hour. D. 67 at 17, 56. After leaving and going to the parking lot and speaking with the case agent (who was conducting a simultaneous interview of Kevin at another location, D. 67 at 23), SA Keelan and Ryan returned to the restaurant to ask Chen some followup questions. D. 67 at 18, 66. They indicated to Chen that they had some additional questions and, this time, Chen invited them upstairs to his office. D. 67 at 18, 42. Among other things, Chen denied again having spoken with Kevin about trading in Vistaprint. D. 67 at 18. This followup meeting did not last more than five to ten minutes. D. 67 at 19. 68.

         The agents described the tone of the interviews as professional and cordial and that they did not raise their voices to Chen. D. 67 at 19, 41, 57. Other than a handshake, the agents had no physical contact with Chen. D. 67 at 19, 57. They did not obstruct his exit or otherwise prevent him from leaving or speaking with anyone. D. 67 at 20, 55. The agents did not place Chen under arrest and had no intent to arrest him that day. D. 67 at 12, 24, 54. They did not give him Miranda warnings because he was not under arrest. D. 67 at 21, 56, 75. The agents did not advise Chen that he did not have to speak with them or that he could consult with an attorney. D. 67 at 75. Although they advised him on several occasions during the interview that lying to a federal agent was a federal crime, D. 67 at 16, 34-35, 64-65, they never told Chen that he had to answer their questions. D. 67 at 12, 20, 35, 56.

         III. Discussion

         A. Miranda Warnings and ...


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