UNITED STATES OF AMERICA v. KHALID AHMED SATARY CRIMINAL ACTION NO. 19-00197 United States District Court, E.D. Louisiana Filed November 24, 2020 Roby, Karen Wells, United States Magistrate Judge ORDER Before the Court is Defendant Khalid Satary's Motion to Compel Discovery Pursuant To Fed. R. Crim. P. 16 and Brady and Giglio (Rec. doc. 52) filed by defendant Satary challenging several aspects of the discovery produced by the United States. The undersigned has previously addressed all other issues except the alleged violation of the grand jury secrecy rule which is addressed by this order. Rec. docs. 85, 89 and 133. The motion is opposed. Rec. doc. 67. The Court ordered additional briefing on this issue. Rec. doc. 89; see also Rec. doc. 91 (United States's supplemental memorandum), Rec. doc. 95 (Defendant Satary's supplemental memorandum). The United States filed a reply to the supplemental briefing. Rec. doc. 101. I. Background Khalid Satary is charged alone with a series of counts related to a scheme to defraud the Medicare program including conspiracy to commit money laundering. The Government alleges that, beginning in January 2017, through a web of companies he purportedly controlled, Mr. Satary obtained reimbursement for cancer genomic testing (“CGx testing”) that was medically unnecessary. Satary Indictment (Rec. doc. 1) at ¶¶ 21-22, 39-44. Allegedly, Mr. Satary and his web of companies improperly received $134 million from the Medicare program. Id. at ¶ 40. This is a complex matter as can be gleaned from a reading of the indictment itself. The charges identify four separate companies, all uncharged and allegedly controlled by Mr. Satary, that were a part of the charged scheme. Id. at ¶¶ 31-34. There are other genetic testing fraud cases not involving Satary that are pending in the Southern District of Florida, the Middle District of Louisiana, the Western District of Pennsylvania and the Northern District of Texas. As a result of this massive investigation, the Government obtained a large amount of evidence. Satary filed the subject motion challenging the substance, form, and timing of the production by the United States. One of the topics raised during the hearing is the contention by Satary that the Government has bundled together multiple CGx cases wherein the defendants and/or their companies have nothing to do with one another. Rec. doc. 52-1. Mr. Satary has received sensitive financial and other information pertaining to defendants he has nothing to do with, and they, in turn, have received sensitive financial and other information related to Mr. Satary, his family and companies purportedly associated with him. Id. Satary contends that the Government improperly disclosed his information to other defendants. Id. Satary contends that there is simply no justification for the Government to “willy nilly” share his sensitive financial information with other defendants, especially those who have nothing to do with the conduct he is accused of participating in. Id. Mr. Satary contends that he is unaware of the Government having undertaken any relevance, privilege, or privacy analysis prior to making these wholesale disclosures such that there is no justification for it and the information should be clawed back from all of these unrelated defendants. The Government position has evolved over time. Initially, the Government stated that there is no legal basis for Defendant's request requiring it to “claw back” material the Government is required to produce to a limited number of defendants in related cases. Second, the Government points out that each the other defendants were subject to a protective order limiting their use and dissemination of the material. Rec. doc. 67. Third, the Government contends that (1) financial records are not “sensitive” information and (2) Satary has no privacy interest in the financial records because he is not the account holder for many of the accounts he requests be clawed back. Rec. doc. 89 (requesting claw back of records of accounts in the name of Alpha Medical Consulting, Performance Laboratories, and Jordan Satary). Fourth, the documents Defendant seeks to have clawed back are financial records that the Government obtained from various banks pursuant to grand jury subpoena and for which Satary has no privacy interest in financial records held at a bank relying on United States v. Miller, 425 U.S. 435, 440-442 (1976) (Supreme Court holding that there is no “expectation of privacy” in the contents of original checks and deposit slips in the possession of a bank as these records are bank's business records and not the customer's private papers). In its supplemental memo, the Government, in an attempt to refine its argument, alleges that the bank records existed separate and apart from the grand jury and are therefore are “not matters occurring before a grand jury” such that they are not subject to the secrecy provisions of Federal Rule of Criminal Procedure 6(e). Id. The Government also contends that even if the records were matters occurring before the grand jury that it had the authority to disclose the materials to another government attorney “for use in performing that attorney's duty” without court authorization relying on Impounded, 277 F.3d 407 (3d Cir. 2002). The Government contends that the U.S. Attorneys in this case where therefore authorized to produce the bank records, including Satary's bank records, to defendants in six other matters involving six indicted individuals each of whom is intimately interconnected with Satary, an unindicted co-conspirator. Rec. doc. 91. The Government further contends that the bank records were either “material to preparing the defense” of the indicted defendants in the other cases” or “the government intends to use them against those defendants in its case in chief.” Id. Consequently, the Government suggests that the records would be either subject to production either pursuant to Brady v. Maryland 373 U.S. 83 (1963) and Giglio v. United States, 405 U.S. 150 (1972). The Government argues that, contrary to the Defendant's suggestion, it was not required to get authority from the Court before producing the records in the other cancer genome cases, and that the U.S. Attorneys in this district do not seek the court's authorization before producing records to other indicted defendants in separately pending cases. Rec. doc. 91, p. 3. Additionally, the Government contends that grand jury testimony is regularly disclosed without court permission pursuant to Brady v. Maryland, 373 U.S. 83, 83 (1963) and Jencks v. United States, 353 U.S. 657 (1957). II. Bank Statements: The Right to Financial Privacy Act and Federal Rule of Criminal Procedure 6 (e) The most distinctive feature of a federal grand jury is that its work is conducted in secret whether it involves the testimony of witnesses or the review of documentary evidence. The general rule of secrecy of grand jury proceedings is codified in Rule 6(e) of the Federal Rules of Criminal Procedure. While the rule of secrecy is by no means absolute, courts considering requests for grand jury information still operate in a world where non-disclosure is the norm. When a violation of Rule 6(e) is alleged, the court must first decide whether the moving party has presented a prima facie case of such misconduct. See, e.g., In re Sealed Case No. 98–3077, 151 F.3d at 1067–69; In re Grand Jury Investigation, 610 F.2d 202, 214–20 (5th Cir. 1980) (“Lance”). If so, “the burden shifts to the government to ‘attempt to explain its actions’ in a show cause hearing.” In re Sealed Case No. 98–3077, 151 F.3d at 1068 (quoting Barry v. United States, 865 F.2d 1317, 1325 (D.C. Cir. 1989)). Therefore, the immediate question is whether the defendant has presented a prima facie case of a violation of Rule 6(e) where the government disclosed the corporate and personal account of defendant Satary and the defendant's spouse's account to defendants in five other cancer gnome cases in other districts. The first issue is whether bank records obtained by grand jury subpoena pursuant to Fed. Rule Crim. R. 6(e) are protected by the Right to Financial Privacy Act of 1978, 12. U.S.C. 35 § 3401 et. seq., limiting the Government's use of Satary's, the corporations’, and Satary's wife's bank records. Prior to passage of the RFPA, bank customers were not informed that their personal financial records were being turned over to a government authority and could not challenge government access to the records. For example, in United States v. Miller, as relied upon by the Government, the Supreme Court held that because financial records are maintained by a financial institution, the records belong to the institution rather than the customer. According to the Court in Miller, the customer had no protectable legal interest in the bank's records and could not limit the Government's access to those records. However, the Right to Financial Privacy Act was enacted in response to Miller ruling. Now, a financial right to privacy does exist. RFPA curbs the unfettered access to those records by only government authorities, while protecting the government's interest in obtaining disclosure of records relevant to a legitimate law enforcement investigation or financial supervisory activity. Therefore, contrary to the Government's suggestion, a customer has a protectable interest in their financial records as defined by the act. Generally, a customer has the right to notice and the authority is required to certify compliance. However, the notice and certification requirements do not apply where the information is subject to a subpoena issued in conjunction with proceedings before a grand jury. Moreover, corporations and partnerships of six or more individuals are not considered customers for purposes of the act. The RFPA further requires that all grand jury subpoenas to financial institutions be returned and actually presented to the grand jury unless the volume of those records makes this impractical; in that case, the grand jury only needs to be provided with a description of the contents of those records. 12 U.S.C. § 3420(a)(1). Further, financial records must be separately maintained as sealed records of the grand jury, unless used in the prosecution of a federal criminal case. 12 U.S.C. § 342O(a)(4). Therefore, it is clear financial records have some protections under the RFPA. Having determined that there is are limited protections under the RFPA, the next question is whether bank statements returned and presented pursuant to a grand jury subpoena are per se matters occurring before the grand jury. III. Return and Presentments: Matters Occurring Before the Grand Jury Satary contends that because the Government acquired the Bank Records via the grand jury process, it returned and actually presented the records to the grand jury for the purpose of considering whether to issue an indictment. Rec. doc. 95. Satary contends because bank records contain account holder identifier, transactional information, and amounts their presentment constituted “specific evidence presented” and in turn, were “matters occurring before the grand jury.” Id. According to Satary, the bank records may tend to reveal what transpired before the grand jury implicating grand jury secrecy by the disclosures. Id. Finally, Satary also broadly argues that the disclosures included several entities who were never investigated and/or not charged. The Government contends that the bank statements themselves do not disclose anything about what occurred before a grand jury and are, therefore, not “matters occurring before a grand jury.” Rec. doc. 91. It further contends that because the records were not “matters occurring before a grand jury,” they were not subject to the secrecy provisions and disclosure to other prosecutors or defendants was permissible without court authorization. Id. Second, the Government contends that even if the bank records were matters occurring before the grand jury, Rule 6(e)(3)(A)(i) allows a government attorney to disclose grand jury materials to another government attorney “for use in performing that attorney's duty” without court authorization. Id. Third, the Government contends that because it had the authority to transmit the grand jury records without court order to AUSAs in other districts to further their criminal law enforcement duties, it could then disclose those same records to the defendants in discovery. See Rec. doc. 91 at p. 2. The RFPA requires that financials obtained pursuant to a grand jury subpoena be returned and presented to the grand jury and, if voluminous, the records could be summarized before them. The legal definitions of “return” and “present” suggest that this is done by an officer of the court-in other words, an attorney. In the context of a grand jury proceeding, the only attorney who could return and present the material is an attorney for the government. Fed. R. Crim. P. 6(e)(1) (providing that the only persons who may be present while a grand jury is in session are the “attorneys for the government, the witness being questioned, interpreters when needed, and a court reporter or operator of a recording device”); see also Widi v. MNeil, 2013 WL 5407457 (U.S. D.C., N. Maine 2013). Where the AUSA presents a summary of the financials to the grand jury through testimony as authorized by the RFPA, but disclosed the statements as a whole to AUSAs in other districts, do the bank records disclosure themselves constitute a matter before the grand jury? Generally, “there is no per se rule against disclosure of any and all information which has reached the grand jury chambers.” Senate of Commonwealth of P.R. Dep't of Justice, 823 F.2d 574, 582 (D.C. 1987). Thus “the mere fact that information or documents have been presented to the grand jury” does not bar independent disclosure in other proceedings. Id. The only caveat is if, as in this case, the bank records by their very nature reveal “matters occurring before the grand jury.” See id. Rule 6(e) provides that, with the exception of certain specified circumstances, “matters occurring before the grand jury” are to be kept secret. The purpose behind this rule is to: 1) prevent the escape of those whose indictment may be contemplated; 2) encourage crime witnesses to speak, knowing that their identity will not be revealed to the person against whom they are testifying; 3) avoid injury to the reputation of those accused, but not indicted of crimes; 4) encourage grand jurors to investigate suspected crimes without inhibition and to engage in unrestricted deliberations. In re Grand Jury Investigation (Lance), 610 F.2d 202, 213 (5th Cir. 1980) (citations omitted). According to the Supreme Court, the rule is not contravened unless something is “disclosed,” meaning that a person “with information about the workings of the grand jury... has revealed such information to other persons who are not authorized to have access to it under the rule. United States v. John Doe, Inc. I, 481 U.S. 102, 108 (1987). The Rule does not contain a prohibition against the continued use of information by attorneys who legitimately obtained access to the information through the grand jury investigation. Id. The relevant inquiry for this Court is whether disclosure of the information requested would “tend to reveal some secret aspect of the grand jury's investigation, such matters as the identities of witnesses or jurors, the substance of testimony, the strategy or direction of the investigation, the deliberations or questions of jurors, and the like.” Id. Additionally, the disclosure of information “coincidentally before the grand jury [which can] be revealed in such a manner that its revelation would not elucidate the inner workings of the grand jury” is not prohibited. Id. In this case, the Government, in its declaration, attests that the records were available to the grand jury but not requested for viewing. The Government, instead of showing the actual documents, presented the grand jury with testimonial evidence from summaries referencing specific transactions as authorized by the RFPA due to the voluminous nature of the records. The only argument advanced by Satary is that return and presented must mean it was a matter before the grand jury. Satary suggests that because the Bank Records—which were specifically identified and selected for subpoena by the grand jury—“may tend to reveal what transpired before the grand jury.” Satary contends that his experience counsel was able to identify them as grand jury material. While Satary's counsel could identify them as grand jury material, it fails to indicate the specific information revealed by their production. It has not pointed to one such example. [W]hen testimony or data is sought for its own sake for its intrinsic value in furtherance of a lawful investigation rather than to learn what took place before the grand jury, it is not a valid defense to disclosure that the same documents had been, or were presently being, examined by a grand jury. United States v. Interstate Dress Carriers, Inc., 280 F.2d 52, 54 (2nd Cir. 1960). Therefore, in this Court's opinion, the blanket production of bank statements of Mr. Satary, his family members and companies would not reveal the inner workings of the grand jury and therefore do not constitute “matters occurring before the grand jury.” Having determined that the bank records are not matters before the grand jury, there is no prohibition against the disclosure of the records in other related matters where Satary's conduct is at issue pursuant to Rule 6(e). Satary has failed to present prima facia evidence of misconduct. IV. Conclusion Accordingly, Plaintiff Satary's request for an evidentiary hearing and contempt finding pursuant to his Motion to Compel Discovery Pursuant To Fed. R. Crim. P. 16 and Brady and Giglio (Rec. doc. 52) is DENIED. New Orleans, Louisiana, this 24th day of November 2020. Footnotes  “In the absence of a clear indication in a statute or Rule, we must always be reluctant to conclude that a breach of this secrecy has been authorized.” U.S. v. Sells Engineering, Inc., 463 U.S. 418, 425 (1983).