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United States v. Lindberg

United States District Court, W.D. North Carolina, Statesville Division

December 20, 2019

UNITED STATES OF AMERICA
v.
1) GREG E. LINDBERG, 2) JOHN D. GRAY, 3) JOHN V. PALERMO, JR., and 4) ROBERT CANNON HAYES. Defendants.

          Max O. Cogburn Jr. United States District Judge.

         THIS MATTER is before the Court on Defendant Greg E. Lindberg's Motion for Issuance of Rule 17(c) Subpoenas, (Doc. No. 82).

         I. BACKGROUND

         On March 18, 2019, a federal grand jury returned an Indictment, charging Defendant and his co-defendants with conspiracy to commit honest services wire fraud, in violation of 18 U.S.C. § 1349, and bribery concerning programs receiving federal funds, in violation of 18 U.S.C. § 666(a)(2). The indictment essentially alleges that Defendant, the owner of several insurance companies, conspired with others to bribe the North Carolina Insurance Commissioner in exchange for the Commissioner's agreement to remove and replace a Senior Deputy Commissioner in charge of regulating Defendant's insurance companies. The Indictment alleges the scheme was carried out during a series of meetings between the Commissioner and the defendants. The Commissioner, in cooperation with federal investigators, recorded the meetings and communications. Defendant now asks the Court to issue a subpoena directing the North Carolina Department of Insurance (“DOI”) to produce numerous internal records and communications relating to the DOI's oversight of Defendant's insurance companies. For the following reasons, Defendant's motion is denied.

         II. DISCUSSION

         Rule 17(c) of the Federal Rules of Criminal Procedure provides a process by which a court can issue subpoenas duces tecum for the production of evidence before trial. Rule 17(c), however, “is not intended to provide a means of pretrial discovery; rather, its primary purpose is simply ‘to expedite the trial by providing a time and place before trial for the inspection of subpoenaed materials.'” United States v. Richardson, 607 F.3d 357, 368 (4th Cir. 2010) (quoting United States v. Nixon, 418 U.S. 683, 689-99 (1974)). The proponent of a Rule 17 subpoena may not use a subpoena to “fish[] for evidence that might support his theory, as if he were in the discovery phase of a civil action.” Richardson, 607 F.3d at 368.

         The Supreme Court held in United States v. Nixon that a party seeking a Rule 17(c) subpoena must establish:

that the documents are evidentiary and relevant; (2) that they are not otherwise procurable reasonably in advance of trial by exercise of due diligence; (3) that the party cannot properly prepare for trial without such production and inspection in advance of trial and that the failure to obtain such inspection may tend unreasonably to delay the trial; and (4) that the application is made in good faith and is not intended as a general ‘fishing expedition.'

Nixon, 418 U.S. at 699-700 (internal footnote omitted).[1] In applying the Nixon test, “[t]he Fourth Circuit has repeatedly stressed that Rule 17(c) is not a general discovery device, and to that end, the party requesting the information must identify with specificity what is sought.” United States v. Ging-Hwang Tsoa, No. 1:13cr137, 2013 WL 5837631, at *2 (E.D. Va. Oct. 29, 2013) (internal citations omitted). That is, “a Rule 17 subpoena duces tecum cannot substitute for the limited discovery otherwise permitted in criminal cases and the hope of obtaining favorable evidence does not justify the issuance of such a subpoena.” United States v. Caro, 597 F.3d 608, 620 (4th Cir. 2010). The specificity prong of the Nixon test thus requires “more than the title of a document and conjecture as to its contents, ” United States v. Underwood, No. 0:19-CR-00420-JMC-1, 2019 WL 5078351, at *3 (D.S.C. Oct. 10, 2019), and “[Rule] 17(c) subpoena requests for ‘any and all' documents are too broad to meet the test outlined in Nixon.” United States v. Wai Lun Ng, 5:07CR24-V, 2007 WL 3046215, at *3 (W.D. N.C. Oct. 16, 2007).

Here, Defendant seeks the following categories of documents:
1. All communications, including but not limited to e-mail, instant message and text message, involving Mike Causey, Jackie Obusek and/or Michelle Osborne regarding Global Bankers Insurance Group, LLC (“GBIG”);
2. All communications, including but not limited to e-mail, instant message and text message, involving Mike Causey, Jackie Obusek and/or Michelle Osborne regarding Greg Lindberg, the Eli Global group of companies, or Raymond Martinez;
3. All records, including but not limited to e-mail communications, reports and memoranda, regarding analysis performed by Rector and Associates (“Rector”) of GBIG's investment portfolio and affiliated loans, also known as the “Rector Report(s)”;
4. All records and communications, including but not limited to e-mail communications, reports and memoranda, regarding analysis performed by Noble Consulting Services, Inc. (“Noble”) of Greg ...

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