U.S. appeals court grapples with computer seizure case

Reuters News
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Posted: Sep 30, 2015 6:38 PM

By Joseph Ax

NEW YORK (Reuters) - A U.S. appeals court on Wednesday appeared skeptical of the government's assertion that it can seize computer records as part of a criminal investigation, hold them for years and then later search them to pursue an entirely different probe.

Thirteen judges at the 2nd U.S. Circuit Court of Appeals in New York heard the case, in a rare example of "en banc" review before the entire roster of active judges. The court's last such hearing was in September 2013.

The case involves a Connecticut accountant, Stavros Ganias, whose computer records were seized in 2003 pursuant to a warrant by U.S. Army investigators probing a military contractor for overbilling.

Ganias was the contractor's accountant, and investigators made a copy of his hard drive in order to search for files related to their case.

But after locating the relevant files, the government retained its copy, which included Ganias' personal files. In 2005, investigators began to suspect Ganias was engaged in tax evasion and obtained a warrant to search the computer files again, this time for evidence against Ganias.

Ganias was found guilty of tax evasion in 2011 before a divided three-judge panel at the 2nd Circuit last year overturned his conviction, finding his Fourth Amendment rights were violated by the government's indefinite retention of his files.

The 2nd Circuit ordered en banc review even though neither party requested it, signaling that at least some judges had significant concerns about the implications.

All but one judge spoke at the hearing, with the sharpest questions aimed at Sandra Glover, a prosecutor with the U.S. Attorney's office in Connecticut.

Circuit Judge Gerald Lynch compared the computer to a filing cabinet and said the government would not be allowed to seize the entire thing but would instead have to pick out the relevant documents.

"The government gets to keep this enormous bank of data that in the pre-computer world it would never have been able to keep," Lynch said, calling it a "bonanza" of information.

But Glover said a computer was more akin to a diary, which can be seized and held as evidence even though only a few entries may be relevant. The entire computer is also needed for authentication purposes at trial, she said.

Stanley Twardy, Ganias' attorney and the former U.S. Attorney in Connecticut, said that once the government had the contractor files, it was required to discard everything else.

"There's a duty to return the non-responsive documents," he said.

(Reporting by Joseph Ax; Editing by Tom Brown)