# Petition for Writ of Certiorari — Chuang v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1749%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1990 - **Citation:** 498 U.S. 824 ## Text Fs a) Supreme Court, US. 9=203] A) RTL ED No. . JUM 27 1990 ENEEEE SEAL OL, UR. C! ERY IN THE Supreme Court of the United States OCTOBER TERM, 1989 a KUANG HSUNG J. CHUANG, Petitioner, Va UNITED STATES OF AMERICA, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ROBERT S. LITT WILLIAMS & CONNOLLY 839 Seventeenth Street, N.W. Washington, D.C. 20006 (202) 331-5000 Counsel of Record for Petitioner | Kuang Hsung J. Chuang WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 o / QUESTIONS PRESENTED Petitioner’s conviction was based largely upon evidence obtained, directly or indirectly, from two warrantless searches. The first was a week-long examination of the records of Golden Pacific National Bank (“Golden Pa- cific’), which petitioner controlled, by agents of the Of- fice of the Comptroller of the Currency (“OCC”). The second was a search of petitioner’s law office by agents of the Federal Deposit Insurance Corporation (“FDIC’’), which had been appointed receiver of Golden Pacific after the OCC closed the bank. Petitioner moved tu suppress evidence derived from both searches. The District Court denied both motions and admitted the evidence; the Court of Appeals affirmed. The questions presented are: (1) Whether the president and majority stockholder of a bank, who dominated its activities and demonstrated a desire to keep certain bank records private, has stand- ing to challenge a search of those records. (2) Whether 12 U.S.C. § 481, which authorizes war- rantless searches of national banks by agents of the OCC without any limitations on time, scope or manner of exe- cution, is constitutional. (3) Whether government agents with statutory au- thority for the warrantless search of a business can search other premises without probable cause to believe that the business is being conducted from the premises searched. (i) il PARTIES TO THE PROCEEDING The parties to the proceeding below are identified in the caption. TABLE OF CONTENTS Page pe ES Se 5 g ) cn iv ick mms cbdguuisesinbicnaebibibies 1 I ss cenncccsnasvnesavenennessccucnnssisnersces Peer enRes 2 CONSTITUTIONAL AND STATUTORY PROVI- a naasnnoxucuantsiinwesseanssesuenans = 2 URI IT EIS GC AMRUIID concn cccnncnnsncncececnsoscccesesccans 3 EE oe ee 3 ee ee UIP RIIN ARN ncn ccnnececcncneccncncennnns 4 C. The Searches ......... Gaenkain AL EASA EYL SLE TSI 6 Ne oc. sesnasnopameunscebennasnes 8 ga 8 _ 10 REASONS FOR GRANTING THE WRIT ............... Poe 12 I. PETITIONER’S STANDING TO CHALLENGE en oi eneisaambonetonnne 12 Il. THE CONSTITUTIONALITY OF 12 U.S.C. Neen ne eee acl sea cemlenahiben 17 Ill. THE SEARCH OF PETITIONER’S LAW EL pr i a 22 IS ao lhe a 24 (iii) iv TABLE OF AUTHORITIES CASES Page Arizona v. Hicks, 480 U.S. 321 (1987) ..................... 23, 24 Camara v. Municipal Court, 387 U.S. 523 (1967) .... 18 Donovan v. Dewey, 452 U.S. 594 (1981) -....000..... 18 Florida v. Wells, 110 S.Ct. 1632 (1990) -......0.00.00. 21 Horton v. California, 58 U.S.L.W. 4694 (U.S. June es I Since enaricbaicceeennne ciara needa ee cea. 21 Illinois v. Krull, 480 U.S. 340 (1987) .........2220200002... 11 Katz v. United States, 389 U.S. 347 (1967) ............. 21 Mancusi v. DeForte, 392 U.S. 364 (1968) ............... 12 Marshall v. Barlow’s, Inc., 486 U.S. 307 (1978) ..18, 19, 20 Maryland v. Buie, 110 S.Ct. 1093 (1990) ........ ate 24 Maryland v. Garrison, 480 U.S. 79 (1987) ............... 22 Mincey v. Arizona, 437 U.S. 385 (1978) —...0000.0.... 21 Minnesota v. Olson, 110 S.Ct. 1684 (1990) ............. 15 New York v. Burger, 482 U.S. 691 (1987) -........ 7, passim O’Connor v. Ortega, 480 U.S. 709 (1987) ................. 12, 14 See v. City of Seattle, 387 U.S. 541 (1967) -............ 18 Sibron v. New York, 392 U.S. 40 (1968) ........0........ 23 United States v. Biswell, 406 U.S. 311 (1972)........ 19 United States v. Brien, 617 F.2d 299 (1st Cir.), cert. denied, 446 U.S. 919 (1980) .......0000 0. 10, 18, 16 United States v. Cerri, 753 F.2d 61 (7th Cir.), cert. denied, 472 U.S. 1017 (1985) -......02..20222. 22 United States v. Chuang, 696 F. Supp. 910 (S.D. N.Y. 1988), aff’d, 897 F.2d 646 (2d Cir. 1990)... 1 United States v. Chuang, 897 F.2d 646 (2d Cir. SID xccushtécrctipasicicouncsedetiveidbninskeeedinnnimaniamaatta Rectciaats 1 United States v. Gordon, 655 F.2d 478 (2d Cir. MII cist scaisin beans utseibondsvasiedacabstagencedeeasenesbealeaeiiaaleaihicahdaibadaate 8 United States v. Horowitz, 806 F.2d 1222 (4th + SS” ERENCE Renae ORNL SADA Ly on Poe Cea 16 United States v. Leary, 846 F.2d 592 (10th Cir. ENTERS SSMS tLe BIN SON MRE Un 18, 14, 15 United States v. Lefkowitz, 464 F. Supp. 227 (C.D. Cal. 1979), aff'd, 618 F.2d 1313 (9th Cir.), cert. denied, 449 U.S. 824 (1980) .......00000.. cece 16 United States v. Lefkowitz, 618 F.2d 1313 (9th Cir. 1980), cert. denied, 449 U.S. 824 (1980)...... 16 v TABLE OF AUTHORITIES—Continued Page United States v. Moscatiello, 771 F.2d 589 (1st Cir. 1985), vacated on other grounds sub nom. Carter v. United States, 476 U.S. 1138, on re- mand, 803 F.2d 20 (1st Cir. 1986), vacated on other grounds sub nom. Murray v. United States, Pgs Ye Ot ee ereeeunios ene 16 United States v. Ross, 456 U.S. 798 (1982) ............. 21 United States v. United States District Court, 407 neon el DRE AUER DAN 19 STATUTES AND REGULATIONS SOC Brae 1D heiress 5 15 C.F.R. § 387.13(f) (1) (1987) (now 15 C.F.R. Ee SDD asanntncinneniccnssshcanmnsiinnstaninnaieetnananaanian 14 17 C.F.R. § 32.7(e) ........... PN LONE Ss LM Ff privacy in the bank’s documents is that the documents were seized from the office of petitioner’s co-defendant, rather than from petitioner’s own office. This reliance upon the identity of the person whose office was searched igncres the fact that more than one person can have a reasonable expectation of privacy in a particular place, and is analogous to the position urged by the state in Minnesota v. Olson, 110 S.Ct. 1684 (1990). In Olson the state contended that an overnight guest did not have standing to challenge the search of the home in which he was staying. This Court rejected the state’s argument. It noted that even though “the guest has a host who has ultimate control of the house,” the guest may still have a legitimate expectation of privacy in the prem- ises. Jd. at 1689-90. Similarly, a court cannot deny standing to a person to challenge the search of business 18 The Tenth Circuit in Leary discussed the fallacy of relying upon the reduced expectation of privacy in regulated industries to deprive a defendant of standing to chailenge an administrative inspection law. As the court noted, while that reduced expectation of privacy “may justify a statutory authorization of warrantless inspections or searches,” and may affect the level of probable cause required to obtain a warrant, it does not deprive a defendant of the right to challenge the statute. 846 F.2d at 597 n.6. 16 premises simply Yecause the premises are someone else’s private office; it must canvass all the circumstances to determine whether she has a legitimate expectation of privacy in the premises searched.'* The Court of Ap- peals’ failure to do so in this case therefore conflicted with the decisions of this Court, as well as those of the Tenth and First Circuits noted above. In addition, the Ninth Circuit has affirmed a district court decision squarely rejecting the argument that a defendant has standing to challenge the search only of his own office. United States v. Lefkowitz, 618 F.2d 1313, 1316 n2 (9th Cir. 1980), affg 464 F. Supp. 227, 230-31 (C.D.Cal. 1979), cert. denied, 449 U.S. 824 (1980). ~The decision of the Court of Appeals denying peti- tioner standing to challenge the OCC’s warrantiess search of Golden Pacific National Bank thus conflicted with important Fourth Amendment principles, with the decisions of this Court, and with the decisions of other Courts of Appeals. It has obvious importance for the 14 Analysis of the factors relied upon by other courts in determin- ing whether a defendant has standing to challenge the search of corporate premises, see, e.g., United States v. Horowitz, 806 F.2d 1222, 1225 (4th Cir. 1986); United States v. Moscatiello, 771 F.2d 589, 601 (1st Cir. 1985), vacated on other grounds sub nom. Carter v. United States, 476 U.S. 1138, on remand, 803 F.2d 20 (1st Cir. 1986), vacated on other grounds sub nom, Murray v. United States, 480 U.S. 916 (1988); United States v. Brien, 617 F.2d at 305-06: United States v. Lefkowitz, 464 F. Supp. 227, 230-31 (C.D.Cal. 1979), aff'd, 618 F.2d 1313 (9th Cir.), cert. denied, 449 U.S. 824 (1980), demonstrates that petitioner has standing. Petitioner had a signifi- cant proprietary interest in Golden Pacific: he or his family owned almost half o¥ the bank’s stock. Tr. 7857. More importantly, the record demonstrates significant operational control by petitioner over the bank and all of its premises. F.¢., Tr. 431-32, 491-95, 2053, 3057. As the government argued, petitioner “did have his fingers in every area of the bank.” Tr. 7939. The records were kept in non- public areas of the bank, and petitioner was present during the search. Thus, the extent of petitioner’s control over Golden Pacific and its records—-in particular the records of the non-negotiable cer- tificate program—gave him standing to challenge this search. 17 growing field of prosecutions of financial institutions; if followed by other courts, it would effectively preclude Fourth Amendment challenges to the validity of 12 U.S.C. § 481, as well as other administrative inspection statutes. It merits the attention of, and correction by, this Court. II. THE CONSTITUTIONALITY OF 12 U.S.C, § 481 The district court upheld the validity of 12 U.S.C. § 481, the statute which empowers the OCC to inspect bank records without a warrant and pursuant to which the OCC conducted its week-long search of the records of Golden Pacific.” In so doing, the court decided an important question of federal law that has not been, but should be, decided by this Court, and did so in a manner that is inconsistent with controlling precedent. That the constitutionality of Section 481 presents an important question of law cannot be disputed. Allega- tions of fraud in the banking industry are detailed al- most daily in the newspapers; calls for vigorous prosecu- tion of banking executives abound from legislators and the public at large. Congress has recently increased the penalties for frauds affecting financial institutions and has directed the Justice Department to increase its pros- ecution of such offenses. Financial Institutions Reform, Recovery, and Enforcement Act of 1989, P.L. 101-73, 103 Stat. 1838, $§ 961-68.'° These prosecutions will of necessity rely upon the fruits of warrantless inspections of the records of financial institutions, as did the prose- cution of petitioner. Such inspections are made not only 15 As noted supra, p. 10, the Court of Appeals did not specifically address the constitutional validity of Section 481 because of its ruling on the standing issue. 16 Just recently, in fact, President Bush announced plans for a new task force to ensure aggressive prosecution of crimes against financial institutions. “Bush Promising Quicker Pursuit In Savings Cases,” The New York Times (June 23, 1990) at 1. 18 by the OCC pursuant to the authority purportedly granted by 12 U.S.C. § 481, but by other regulatory agencies as well.’’ The viability of these prosecutions, therefore, will depend in substantial part upon the valid- ity of statutes such as Section 481. If Section 481 is unconstitutional—-as petitioner believes this Court’s prior decisions dictate—Congress should be afforded the op- portunity to act quickly to enact a valid inspection scheme. The general standards governing the constitutional validity of administrative searches such as this one have been delineated by this Court in a series of decisions be- ginning with See v. City of Seattle, 387 U.S. 541 (1967), and Camara v. Municipal Court, 387 U.S. 523 (1967); extending through Marshall v. Barlow's, Inc., 436 U.S. 307 (1978); and most recently embodied in New York v. Burger, supra. It is clear that “the Fourth Amend- ment’s prohibition against unreasonable searches applies to administrative inspections of private commercial prop- erty,” Donovan v. Dewey, 452 U.S. 594, 598 (1981), even in a “closely regulated” industry such as banking. New York v. Burger, 482 U.S. at 699-700. Warrantless administrative inspections of private commercial prop- erty are thus permissible only if the searches are con- ducted pursuant to a statute which “provides a consti- tutionally adequate substitute for a warrant.” Donovan v. Dewey, 452 U.S. at 603; accord New York v. Burger, 482 U.S. at 703. In particular, for an administrative in- spection to be valid it must be under a statute which “perform({s] the two basic functions of a warrant: it must advise the owner of the commercial premises that the search is being made pursuant to the law and has a properly defined scope, and it must limit the discretion of the inspecting officers.” Id. (emphasis supplied). This 17 See, €.g., 12 U.S.C. §1820(b) (Federal Reserve Board); 12 U.S.C. § 1464(d)(1) (as amended by Financial Institutions Reform, Recovery, and Enforcement Act of 1989, P.L. 101-73, 103 Stat. 183, § 301) (Office of Thrift Supervision). 19 last stricture is met only if the statute delineates the “time, place, and scope” of authorized inspections. United States v. Biswell, 406 U.S. 311, 315 (1972); see New York v. Burger, 482 U.S. at 703. Without such restric- tions on the “time, place, and scope” of administrative searches, a statute would “devolve{] almost unbridled diseretion upon executive and administrative officers,” Marshall v. Barlow’s, Inc., 486 U.S. at 323—the precise vice that the Fourth Amendment was intended to elimi- nate by requiring prior judicial supervision of searches. See United States v. United States District Court, 407 U.S. 297, 315-21 (1972) .'8- Section 481 permits just the sort of unfettered admin- istrative discretion that this Court’s cases condemn. It provides no limits on “time, place, and scope” of inspec- tion, which alone provide a constitutionally adequate sub- stitute for a warrant. Rather, the statute permits the OCC to examine banks “as often as [it] shall deem nec- essary,’ and to inspect whatever records are necessary “to make a thorough examination of all the affairs of the bank.” Supra p. 2. Thus, the OCC has unbounded authority to determine the frequency, timing and scope of inspections: they can be made as often as the OCC desires, at whatever time of the day or night the OCC chooses, and may be as wide-ranging or as narrow as the OCC, in its own discretion, chooses. Even a closely regu- lated business such as banking cannot, consistent with the Fourth Amendment and this Court’s decisions, be so subject to the arbitrary whim of government agents. As 18 “(T |hose charged with... investigative and prosecutorial duty should not be the sole judges of when to utilize constitutionally sensitive means in pursuing their tasks. The historical judg- ment, which the Fourth Amendment accepts, is that unreviewed executive discretion may yield too readily to pressures to obtain incriminating evidence and overlook potential invasions of privacy and protected speech.” United States v. United States District Court, 407 U.S. 297, 317 (1972). 20 an instructive contrast, the junkyard inspection statute upheld by this Court in New York v. Burger, supra, per- mitted inspection only during regular business hours and “narrowly defined” the scope of administrative searches to specified kinds of records and vehicles. As a result, this Court held that “the statute, as a whole, places ade- quate limits upon the discretion of the inspecting officers.” 482 U.S. at 711-12 & n.21. The district court gave three justifications for per- mitting this warrantless search: (1) requiring OCC ex- aminers to obtain a warrant would be unduly burden- some; (2) “it is the obligation of the OCC to examine the bank” pursuant to the statute; and (3) statutory limitations on time, place and scope of the search were unnecessary because the OCC examiners did not act abusively. 33a. None of these rationales is relevant to the inquiry mandated by this Court’s decisions. The argument that the search was valid because the statute requires the OCC to conduct examinations is ob- viously fallacious. In each of the administrative inspec- tion cases which has come before this Court, a statute has authorized the challenged search, but the search has been upheld only if the statute passes constitutional muster. While the absence of a statute would be fatal to an ad- ministrative inspection scheme, the existence of a statute does not end the analysis but begins it. Nor is the burden of obtaining a warrant a considera- tion that this Court has deemed relevant in the context of administrative searches. Surely the burden on the Oc- cupational Safety and Health Administration to obtain warrants before conducting inspections was equivalent to that upon the OCC, yet that did not save the statute in Marshall v. Barlow’s, Inc., 4836 U.S. at 316-21. More- over, the district court undoubtedly exaggerated the bur- dens on the government of following the command of the Fourth Amendment. Administrative warrants are typi- cally obtainable with a minimum of effort, id. at 320-21, 21 and Congress always has the alternative of enacting a statute that validly confines the discretion of the OCC. But the shortest answer to the district court’s reasoning, of course, is that if the Fourth Amendment requires that a warrant be obtained, the fact that law enforcement might thereby be made less efficient is no answer. Mincey v. Arizona, 437 U.S. 385, 393 (1978). Finally, it is irrelevant that in this case the agents may not have exceeded the authority which a properly drawn warrant or statute would have provided them. This Court has recently reiterated the “cardinal prin- ciple” that “ ‘searches conducted outside the judicial proc- ess, without prior approval by judge or magistrate, are per se unreasonable under the Fourth Amendment—sub- ject only to a few specifically established and well- delineated exceptions.” Horton v. California, 58 U.S. L.W. 4694, 4696 n.4 (U.S. June 4, 1990), quoting United States v. Ross, 456 U.S. 798, 824-25 (1982); Mincey v. Arizona, 437 U.S. at 390; Katz v. United States, 389 U.S. 347, 357 (1967). In this case, the government con- tends that the administrative search exception applies. That exception depends, however, upon the existence of a regulatory statute that provides a “constitutionally ade- quate substitute for a warrant.” If the statute fails ade- quately to confine the agent’s discretion, the search is invalid even if the agent did not abuse her discretion in the particular case. New York v. Burger, 482 U.S. at 702-03."* In short, the decision upholding the constitutionality of 12 U.S.C. § 481 is an important question of federal law, likely to recur and potentially affecting numerous cases. It was wrongly decided in this case, and this Court should grant the petition for certiorari. 19 Cf. Florida v. Wells, 110 S.Ct. 1632 (1990) (inventory search permissible only if based upon “standardized criteria . . . or established routine’’). 22 Ill. THE SEARCH OF PETITIONER’S LAW OFFICE The Court of Appeals upheld the FDIC’s search of petitioner’s law office on the ground that the business of the bank was commingled with the law office. The court’s decision on this issue conflicts with that of the Seventh Circuit in United States v. Cerri, 753 F.2d 61 (7th Cir.), cert. denied, 472 U.S. 1017 (1985). The Seventh Circuit in Cerri helu that officers with authority to search a busi- ness without a warrant may not search other premises unless they have, at a minimum, probable cause to believe that the other premises are being used to conduct the business. /d. at 64.°° While the Court of Appeals in this case did not explicitly reject the probable cause require- ment,*’ the facts it relied upon clearly do not establish probable cause to believe that bank business was being conducted from the law firm. The court cited only three facts: that the law firm and the bank shared telephone lines, that there was “easy access” to the bank from the firm, and that there was no building directory listing the firm. 1lla.2?. These 20 Judge Posner’s opinion for the court of appeals in Cerri actually intimated that more than probable cause might be re- quired, but did not find it necessary to determine the precise stand- ard because the facts in that case demonstrated that the agents knew to a certainty that the defendant was conducting his firearms business from his home. 753 F.2d at 64. 21 The Court applied a “sufficient cause” standard. 11a. 22 The Court of Appeals also mentioned the fact that the law firm was petitioner’s only office in the building. Ila. However, nothing in the record suggested that the FDIC was aware of this at the time it determined to search the law firm. Compare 3/9/88 Tr. 173 (FDIC official refers only to access to firm from bank and intercon- nected telephone lines as basis for search). Nor did the district court find that the FDIC knew of, or relied upon, this fact. 20a. Obviously, probable cause must be tested by what was known to the agents at the time of the search, not by what they subsequently learned. Maryland v. Garrison, 480 U.S. 79, 85 (1987) (“[Wle must judge the constitutionality of [officers’] conduct in light of the information available to them at the time they acted.’’). 23 facts, however, do not come close to establishing “prob- able cause” to believe that petitioner was conducting bank business from the law firm; they do no more than establish the existence of some relationship be- tween the two entities. Cf. Sibron v. New York, 392 U.S. 40, 62-63 (1968) (probable cause not established by mere association between defendant and drug ad- dicts). Innumerable law firms throughout the country represent banks and many of them doubtless have offices in the same building as the bank they represent.” To hold each of these firms subject to search if the bank went into receivership would be drastic indeed; in this case the FDIC agents prevented the other lawyers in the firm from conducting their business during the days that the search was in progress, and refused to allow them to remove law firm files until the files were re- viewed. 3/9/88 Tr. 99, 104-09. And nothing in the facts cited by the Court of Appeals established anything more than the existence of a close attorney-client rela- tionship between the bank and the law firm. Nor can it be claimed that the search could be con- ducted upon a lesser standard than probable cause to believe that the law firm was subject to search as part of the bank. Arizona v. Hicks, 480 U.S. 321 (1987), compels this conclusion. In Hicks this Court ruled that items observed in plain view during a valid search could not be seized unless there was probable cause to believe that the items in question were evidence of a crime cr contraband.** “Dispensing with the need for a warrant is worlds apart from permitting a lesser standard of cause for the seizure than a warrant would require, 23 Indeed, many large New York City law firms have offices in the same buildings as the banks they represent. Obviously, the same Fourth Amendment rules should protect Chuang and Associates and a large firm such Milbank, Tweed, Hadley & McCloy. 24The Court made clear that the same reasoning applied to searches as to seizures. 480 U.S. at 327-28. 24 i.e., the standard of probable cause.” 480 U.S. at 327 (emphasis in original).”* Similarly here, the FDIC’s authority to search bank premises without a warrant did not confer upon it unlimited power to search any- where it wanted on the pretext that the premises were part of the bank; unless the FDIC had probable cause to believe the premises were subject to search as part of the bank, the search was improper. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted, ROBERT S. LITT WILLIAMS & CONNOLLY 839 Seventeenth Street, N.W. Washington, D.C. 20006 (202) 331-5000 Counsel of Record for Petitioner Kuang Hsung J. Chuang Dated: June 27, 1990 25 No exigent circumstances or compelling government necessity existed to justify a search based upon less than probable cause. Cf. Maryland v. Buie, 110 S.Ct. 1093 (1990). a ol APPENDIX la APPENDIX UNITED STATES COURT OF APPEALS SECOND CIRCUIT No. 692, Dockets 89-1309, 89-1406 UNITED STATES OF AMERICA, Appellee, , A KUANG HsuNG J. CHUANG, a/k/a “JOSEPH CHUANG”, Appellant. Argued Feb. 7, 1990 Decided Feb. 28, 1990 Herve Gouraige, Asst. U.S. Atty., New York City (Otto G. Obermaier, U.S. Atty., Martin Klotz, and Kerri M. Bartlett, Asst. U.S. Attys., on the brief) for appeliee US. Robert S. Litt, Washington, D.C. (Bruce S. Oliver, Elena Kagan, and Williams & Connolly, Washington, D.C., on che brief) for appellant Kuang Hsung J. Chuang. Before TIMBERS, NEWMAN and ALTIMARI, Cir- cuit Judges. TIMBERS, Circuit Judge: Appellant Kuang Hsung J. Chuang appeals from a judgment of conviction entered August 1, 1989, in the Southern District of New York, Miriam Goldman Cedar- 2a baum, District Judge, upon a jury verdict on twenty-two counts, including misapplication of bank funds, making false statements to bank regulatory officials, other sub- stantive counts, and conspiracy. The district court de- nied Chuang’s pretrial motions to suppress evidence ob- tained from warrantless searches of his bank and law offices. On appeal, we find that the chief claim of error raised by Chuang is that the district court erred in denying his suppression motions. Other claims of error have been raised and considered. For the reasons which follow, we affirm the judgment of conviction. I. We shall summarize only those facts and prior pro- ceedings believed necessary to an understanding of the issues raised on appeal. Chuang was the chairman, president and chief ex- ecutive officer of the Golden Pacific National Bank (“GPNB”). On June 17, 1985, after receiving informa- tion from an informant about certain activities at GPNB, the Office of the Comptroller of the Currency (“OCC”) began a warrantless examination, pursuant to 12 U.S.C. § 481 (1988), of bank records pertaining to the sale of a bank product known as “non-negotiable cer- tificates.”” GPNB received no prior notice of this exami- nation. At about 1 P.M. on June 17, three bank examiners from the OCC entered GPNB in Manhattan and went to Chuang’s office on the third floor of the six-story bank building. They produced an administrative subpoena and requested Chuang to provide documents related to the non-negotiable certificate program. In response to their request, Chuang instructed Theresa Shieh, a_ vice- president and cashier at GPNB, to produce the requested documents. It is undisputed that virtually all the docu- 3a ments reviewed by OCC examiners came from Shieh’s office located on the fourth floor of the bank building; that no documents came from Chuang’s office; that these documents were bank documents, not personal documents belonging to Shieh or Chuang; and that virtually all of the documents were given to the OCC upon request. As a result of this examination, which lasted until June 21, the OCC examiners concluded that the sale of the non-negotiable certificates was fraudulent, and that Chuang had misrepresented to regulatory officials facts concerning the certificates and the use of bank funds derived from the sale of those certificates. They dis- covered that several hundred non-negotiable certificate customers had approximately $17 million in claims against GPNB. Not satisfied with the evidence concern- ing the assets underlying those liabilities, the OCC de- clined Chuang’s request to liquidate the assets. The OCC determined that GPNB was insolvent and, on June 21, 1985, appointed the Federal Deposit Insurance Corpora- tien (“FDIC”) as its receiver. The FDIC secured the bank building on the evening of Friday, June 21. The next day, it began the extensive process of examining bank documents and calculating assets and liabilities. A law firm, Chuang & Associates, owned by Chuang, was located on the third floor of the bank building. As part of its examination of GPNB, the FDIC searched the third floor offices of Chuang and his secretary where they performed both bank and law firm work. On May 19, 1987, Chuang was indicted, together with Shieh, in a 48-count indictment. Prior to triai, defend- ants moved to dismiss the indictment on various grounds, including duplicity and failure to state an offense. They also moved to suppress the evidence obtained by the OCC during its warrantless examination of GPNB and evi- dence obtained by the FDIC during its warrantless ex- 4a amination of the offices of Chuang and his secretary. The district court denied these motions. Prior to trial, two superseding indictments were re- turned and several counts were severed. At the close of the government’s case, several counts were dismissed by the district court. The case was submitted to the jury on twenty-two counts. Count One charged Chuang and Shieh with conspiring to defraud the United States, to misapply bank funds, and to make false statements to bank regulatory officials and agencies, in violation of 18 U.S.C. § 371 (1988). Counts Two through Eleven charged both defendants with making false statements and concealing bank deposits from bank regulatory agen- cies, in violation of 18 U.S.C. § 1001 (1988). Counts Twelve through Fourteen charged both defendants with making false statements to bank regulatory officials and agencies, in violation of 18 U.S.C. § 1001. Counts Fifteen through Twenty charged both defendants with misappli- cation of bank funds, in violation of 18 U.S.C. § 656 (1988). Count Twenty-One charged Chuang with con- spiracy to cover up illegal campaign contributions made with bank funds, in violation of 18 U.S.C. § 371. Count Twenty-Two charged both defendants with wire fraud, in violation of 18 U.S.C. § 1343 (1988). The essence of the government’s case was that defend- ants defrauded bank customers by selling ordinary cer- tificates of deposit called “non-negotiable certificates” ; that they diverted the funds received to personal busi- nesses without informing the customers or GPNB’s board of directors and without insuring the funds with the FDIC; and that they misrepresented the facts regarding the non-negotiable certificate program to bank regulatory officials. The jury trial began on September 26, 1988 and con- cluded on January 18, 1989, when the jury returned guilty verdicts against both defendants on all 22 counts. On June 1, 1989, the district court sentenced Chuang to 5a concurrent five year terms of imprisonment on all counts. On August 1, 1989, the court ordered Chuang to comply fully with all the terms of a settlement agreement with the FDIC and to make restitution of $200,000. This appeal by Chuang followed. II. Chuang’s chief claim of error centers upon two discreet searches made respectively by the OCC and the FDIC. We turn first to the propriety of the district court’s order denying the motion to suppress documents obtained by the OCC’s warrantless search. In his motion to suppress bank documents obtainea by the OCC during its June 1985 examination of GPNB pursuant to 12 U.S.C. § 481 (1988), Chuang asserted that the examination violated the Fourth Amendment. Specifically, he claimed that § 481, which authorizes war- rantless examinations of national banks, is unconstitu- tional on the ground that it does not provide “a constitu- tionally adequate substitute for a warrant”, as required by the Supreme Court in New York v. Burger, 482 U.S. 691, 703 (1987). Observing that none of the documents inspected by the OCC was obtained from Chuang’s office, the district court ruled that Chuang lacked standing to challenge the OCC’s examination of GPNB. Chuang as- serts that the district court erred in this determination. He renews on appeal his claim that § 481 is unconstitu- tional. We need not address the merits of this constitu- tional challenge since we agree with the district court that Chuang has not established a legitimate expectation of privacy in the bank documents examined by the OCC. In reviewing the district court’s determination that Chuang lacked standing, we are mindful that the Su- preme Court has dispensed with the notion of standing as being theoretically distinct from the substantive mer- its of a Fourth Amendment claim. Rakas v. Illinois, 439 U.S. 128, 133, 140 (1978). In Rakas, the Court con- 6a cluded that “the better analysis forthrightly focuses on the extent of a particular defendant’s rights under the Fourth Amendment, rather than on any theoreticaily separate, but invariably intertwined concept of stand- ing.” Id. at 139. Put another way, the proper inquiry turns on whether “the disputed search and seizure has infringed an interest of the defendant which the Fourth Amendment was designed to protect.” Jd. at 140. With Rakas in mind, we focus on whether defendant has established a legitimate expectation of privacy in the area searched. United States v. Rahme, 813 F.2d 31, 34 (2 Cir. 1987) ; United States v. Smith, 621 F.2d 483, 486 (2 Cir. 1980), cert. denied, 449 U.S. 1086 (1981); United States v. Brien, 617 F.2d 299, 305 (1 Cir.), cert. denied, 446 U.S. 919 (1980). This threshold question involves two separate inquiries: first, Chuang must dem- onstrate a subjective expectation of privacy in a searched place or item; and second, his expectation must be one that society accepts as reasonable. United States v. Pau- lino, 850 F.2d 93, 97 (2 Cir. 1988), cert. denied, 109 S.Ct. 1967 (1989). It is well-settled that a corporate officer or employee in certain circumstances may assert a reasonable expec- tation of privacy in his corporate office, and may have standing with respect to searches of corporate premises and records. See, e.g., United States v. Leary, 846 F.2d 592, 595-96 (10 Cir. 1988); United States v. Brien, supra, 617 F.2d at 305-06; United States v. Lefkowitz, 464 F.Supp. 227, 230-31 (C.D. Cal. 1979), aff'd, 618 F.2d 1313 (9 Cir.), cert. denied, 449 U.S. 824 (1980); see also Mancusi v. DeForte, 392 U.S. 364, 369 (1968) (“one has standing to object to a search of his office, as well as of his home”). The question whether a corporate officer has a reasonable expectaticn of privacy to challenge a search of business premises focuses principally on whether he has made a sufficient showing of a possessory or proprietary interest in the area searched. E.g., United States v. Brien, supra, 617 F.2d at 305-06; United States Ta v. Lefkowitz, supra, 464 F.Supp. at 230-31. Moreover, he must demonstrate a sufficient “nexus between the area searched and [his own] work space.” United States v. Britt, 508 F.2d 1052, 1056 (5 Cir.), cert. denied, 423 U.S. 825 (1975). The presence of these factors necessar- ily must be determined on a case-by-case basis. Cf. O’Connor v. Ortega, 480 U.S. 709, 718 (1987) (“Given the great variety of work environments in the public sec- tor, the question of whether an employee has a reason- able expectation of privacy must be addressed on a case- by-case basis.’’). Chuang asserts that, as a corporate officer of the bank, he established a sufficient expectation of privacy in the bank premises to dispute the legality of OCC’s examina- tion. He claims that he had a significant proprietary in- terest in the bank, since he or his family owned almost half of all outstanding bank stock at the time the bank was closed. He also claims that he exercised significant operational control over the bank and all of its premises, and that the areas searched were non-public areas ever which ultimate control rested in his hands. Further, he points out that he was present during OCC’s examination of the bank. In view of the context in which OCC con- ducted its search, however, we hold that these factors were insufficient to establish a cognizable Fourth Amend- ment claim. We observe that the bulk of the bank documents pro- duced for the OCC were obtained from the office of another officer of the bank, Theresa Shieh. Her office was located on the fourth floor of the bank building. None of the documents came from Chuang’s office on the third floor. Chuang failed to demonstrate a sufficient nexus between the areas from which the documents were obtained and his own office. Moreover, all of the docu- ments examined were bank documents subject to periodic examinations by the OCC, which has a statutory duty under § 481 to examine the affairs of every national bank 8a at least twice a year. 12 C.F.R. § 4.11 (1989). Under these circumstances, we are not convinced that Chuang demonstrated even a subjective desire to keep the bank documents private. Moreover, even assuming Chuang demonstrated a sub- jective expectation of privacy, we cannot conclude that that expectation is one society considers reasonable. The Supreme Court has held that the “expectation [of pri- vacy] is particularly attenuated in commercial property employed in ‘closely regulated’ industries.” New York v. Burger, supra, 482 U.S. at 700; see also O’Connor »v. Ortega, supra, 480 U.S. at 717 (‘“[p]ublic employees’ expectations of privacy in their offices, desks, and file cabinets, like similar expectations of employees in the privace sector, may be reduced by virtue of .. . legiti- mate regulation”). Indeed, the Court has held that “T'elertain industries have such a history of government oversight that no reasonable expectation of privacy ... could exist for a proprietor over the stock of such an enterprise.” Marshall v. Barlow’s, Inc., 436 U.S. 307, 313 (1978) (emphasis added) (citing Katz v. United States, 389 U.S. 347, 351-52 (1967)); see also O’Connor v. Ortega, supra, 480 U.S. at 718 (“some government offices may be so open to fellow employees or the pub- lic that no expectation of privacy is reasonable’) (em- phasis added). In view of the pervasive nature of federal regulation of the banking industry, Chuang, as an officer of the bank, knew that bank documents, whether kept in his office or another office, were subject to periodic examina- tion by the OCC. The existence of a regulatory scheme necessarily reduces a bank officer’s expectation of privacy in his corporate office. New York v. Burger, supra, 482 U.S. at 700; O’Connor v. Ortega, supra, 480 U.S. at 717. That privacy interest is attenuated to the point where any warrantless examination of his office pursuant to a regulatory scheme may be reasonable within the meaning 9a of the Fourth Amendment. New York v. Burger, supra, 482 U.S. at 702. This is not to say that Chuang had no legitimate expectation of privacy in his own office so as to deprive him of standing to challenge a search of that office. He still could reasonably expect that no one other than fellow employees and business or personal invitees would enter his office, and that nothing would be removed from his desk or file cabinets without his permission. Mancusi v. Forte, supra, 392 U.S. at 369. The bank documents examined by the OCC, however, were obtained from areas of the bank other than Chuang’s office. Virtually all of them came from Shieh’s office. In view of the heavily regulated nature of the banking industry, we decline to accept Chuang’s asser- tion that he had standing to challenge the legality of the examination of those documents. The fact that Chuang, as an officer of a national bank, knew those documents were subject to periodic examination by the OCC, coupled with the fact that they were found in areas other than Chuang’s office, lead us to conclude that Chuang’s Fourth Amendment rights were not infringed by the OCC ex- amination. We do not suggest that, since banking is a heavily regulated industry, no bank officer ever can have a rea- sonable expectation of privacy in bank doc.ments, and therefore that no bank officer ever can challenge success- fully an examination of the bank pursuant to § 481. Under the circumstances of the instant case, however, where the heavily regulated nature of the banking indus- try diminished a bank officer’s expectation of privacy in bank documents, and where those documents were ob- tained from areas of the bank other than the officer’s own office, we decline to accept any privacy interest as objectively reasonable. We hold that Chuang cannot successfully challenge the legality of OCC’s examination of GPNB because he has not demonstrated a sufficient privacy interest in bank 10a documents, not found in his office, that he knew were routinely subject to OCC examination. IIT. This brings us to the propriety of the district court’s order denying the motion to suppress documents obtained by the FDIC’s June 1985 warrantless search of the of- fices of Chuang and his secretary. United States v. Chuang, 696 F.Supp. 910 (S.D.N.Y. 1988). Although the FDIC did not obtain a search warrant or seek court approval of any kind, Chuang does not chal- lenge the authority of the FDIC, as a properly appointed receiver of GPNB pursuant to 12 U.S.C. § 1821(d) (1988), to examine the bank itself without a warrant. He asserts, however, that his office and that of his sec- retary were part of his law firm, Chuang & Associates, and that the FDIC’s search of those “independent law offices” went beyond any lawful authority of a receiver. We disagree. The district court found that, based on the physical lay-out of GPNB and its close relationship to the law firm, the offices of Chuang and his secretary were “an important part of the Bank”, where not only law firm business but also banking business was conducted. 696 F.Supp. at 913. The court correctly concluded, since banking is a “closely regulated” business, that Chuang voluntarily reduced the expectation of privacy in the firm’s premises by operating his law firm out of the same offices from which he ran GPNB. 7d. (citing New York v. Burger, supra, 482 U.S. at 700). Moreover, the FDIC, as a properly appointed receiver of GPNB, had the power and duty pursuant to § 1821(d) to marshal GPNB’s assets and to wind up its affairs. As Chuang concedes, the FDIC as receiver stood in the shoes of GPNB and had authority to look through all of GPNB’s premises and papers without a warrant. See lla United States v. Gordon, 655 F.2d 478, 487 (2d Cir. 1981) (Oakes, J., concurring) (when the Superintendent of In- surance acts “by virtue of his receivership powers, [he is] in effect acting as with a warrant issued upon a showing of probable cause”). We have upheld a search of a law office with a warrant as reasonable where the law office is commingled with a business that is the legiti- mate object of the search. National City Trading Corp. v. United States, 635 F.2d 1020, 1024-26 (2 Cir. 1980). Since the area searched by the FDIC clearly functioned as a mixed-use bank and law office for Chuang, and since the FDIC as receiver may properly search GPNB with- out a warrant, we agree with the district court that the FDIC search was reasonable. We find no merit to Chuang’s assertion that the FDIC had no probable cause to believe that Chuang’s office and his secretary’s office were used for GPNB business. United States v. Cerri, 753 F.2d 61, 62-64 (7 Cir.), cert. denied, 472 U.S. 1017 (1985) (warrantless search of home is permissible based on probable cause that it was used for business purposes). The physical lay-out of the bank building, including the shared telephone lines of GPNB and the firm, the easy access to GPNB from the firm, and the absence of any building directory listing the firm, clearly suggested a commingling of space. Moreover, the office searched was Chuang’s only office in the entire bank building. These factors constituted suffi- cient cause for the FDIC to believe that there was a commingling of activities in the area searched. We hold that the district court properly denied Chuang’s motion to suppress the evidence obtained by the FDIC in its search of the offices of Chuang and his secretary. In reaching this conclusion, we are mindful of the risk posed by searches of law offices which unnec- essarily may intrude on attorney-client privileges. F.9., National City Trading Corp. v. United States, supra, 635 F.2d at 1026 (“a law office search should be executed 12a with special care’). That risk, however, was not present here since neither Chuang nor any third parties sought to suppress documents on the ground that they were privileged. United States v. Chuang, supra, 696 F.Supp. at 915. Moreover, since there was sufficient cause to be- lieve that the law offices of Chuang and his secretary were commingled with bank business, the FDIC’s search of those offices was proper. National City Trading Corp. v. United States, supra, 635 F.2d at 1026. One further matter: Chuang claims that liquor license applications, which showed that his wife owned an inter- est in two restaurants, were found during a search by the FDIC of the office of one of his law associates and were introduced improperly at trial. According to Chuang, they were integral to the government’s proof as to the bank misapplication counts. The government maintains that those applications were obtained from the New York State Liquor Control Authority (‘Liquor Authority”), rather than from Chuang’s law offices. In- deed, it asserts that no files containing liquor license documents were found during the FDIC search. At trial, liquor license applications submitted to the Liquor Au- thority were introduced. The district court accepted the government’s claim that the actual documents offered were obtained from the Liquor Authority. Since the gov- ernment denies that the source of those liquor license applications was derived from the FDIC search, and de- nies that any copies of those documents were found dur- ing that search, we decline to disturb the district court’s determination, absent any evidence to support Chuang’s claim. IV. Chuang raises numerous other claims of error, con- tending that: (1) the court erred in denying his motion to sever the campaign contribution count; (2) the court erred in denying his motion to suppress the false state- ment counts on the ground of duplicity; (3) the govern- 13a ment failed to plead and prove bank misapplication; (4) the evidence was legally insufficient to establish wire fraud; (5) the court improperly admitted hearsay evi- dence; (6) the court improperly instructed the jury on the definition of bank “deposits”; and (7) he was improp- erly sentenced. We have considered carefully these contentions and hold that none has merit. V. To summarize: We hold that the district court properly denied Chuang’s motion to suppress the evidence obtained from the OCC’s examination of GPNB. We also hold that the court properly denied Chuang’s motion to suppress evi- dence obtained from the FDIC’s search of his office and that of his secretary. We have considered carefully Chuang’s other claims of error and find that none has merit. Affirmed. 14a UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT At a stated term of the United States Court of Appeals for the Second Circuit, held at the United States Court- house, in the City of New York, on the twenty-ninth day of March, one thousand nine hundred and ninety. Docket Number 89-1309 KUANG HsuNG J. CHUANG, Defendant-A ppellant, V. UNITED STATES OF AMERICA, Appellee. [Filed Mar. 29, 1990] A petition for rehearing containing a suggestion that the action be reheard in banc having been filed herein by defendant-appellant, KUANG HSUNG J. CHUANG Upon consideration by the panel that heard the ap- peal, it is Ordered that said petition for rehearing is DENIED. It is further noted that the suggestion for rehearing in bane has been transmitted to the judges of the court in regular active service and to any other judge that heard the appeal and that no such judge has requested that a vote be taken thereon. /s/ Elaine B. Goldsmith ELAINE B. GOLDSMITH Clerk 15a UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT At a stated Term of the United States Court of Appeals for the Second Circuit, held at the United States Court- house in the City of New York, on the twenty-eighth day of February one thousand nine hundred and ninety. Present: Hon. WILLIAM H. TIMBERS Hon. JON O. NEWMAN Hon. FRANK X. ALTIMARI Circuit Judges, Docket No. 89-1309, -1406 UNITED STATES OF AMERICA, Appellee, V. KUANG HsuNG J. CHUANG, a/k/a “JOSEPH CHUANG”, Appellant. [Filed Feb. 28, 1990] Appeal from the United States District Court for the Southern District of New York. This cause came on te be heard on the transcript of record from the United States District Court for the Southern District of New York and was argued by coun- sel. ON CONSIDERATION WHEREOPF, it is now hereby ordered, adjudged and decreed that the judgment of said District Court be and it hereby is affirmed in accordance with the opinion of this court. 16a ELAINE B. GOLDSMITH Clerk by: /s/ Edward J. Guardaro EDWARD J. GUARDARO Deputy Clerk Issue as mandate: April 5, 1990 17a UNITED STATES DISTRICT COURT S.D. NEW YORK No. SS 87 Cr. 440 (MGC) UNITED STATES OF AMERICA Vv. KuANG HsuNnG J. CHUANG, a/k/a “JOSEPH CHUANG,” a/k/a “Dr. CHUANG,” and THERESA SHIEH, a/k/a “JING JAI SHIEH,” Defendants. Sept. 20, 1988 Rudolph W. Giuliani, U.S. Atty., S.D.N.Y., New York City by Herve Gouraige, Asst. U.S. Atty., for U.S. Orans, Elsen & Lupert, New York City by Leslie A. Lupert, Clement J. Colucci, ITI, for defendant Chuang. Fischetti & Pomerantz, New York City by Mark F. Pomerantz, Warren L. Feldman, for defendant Shieh. OPINION CEDARBAUM, District Judge. Defendant Chuang has moved pursuant to Fed. R. Crim. P. 12(b) (3) to suppress the evidence resulting from a warrantless search of his office! This search of 1 Defendant Shieh’s office, located on a different floor of the build- ing in which both defendants worked, is not at issue on this motion. Nor does she have “standing” to move to suppress the evidence taken from Chuang’s office, since she had no expectation of privacy in his office. 18a the offices of the president of a bank and his secretary was performed by the receiver of the bank. The offices were also used by the bank president to run a law firm that was located inside the bank building. For the rea- sons discussed below, defendant’s motion to suppress is denied. BACKGROUND Defendant Joseph Chuang was the chairman, president and chief executive officer of the Golden Pacific National Bank (“Bank”). On June 21, 1985, as a result of an examination by the Office of the Comptroller of the Cur- rency, the Bank was closed and the Federal Deposit In- surance Corporation (FDIC) was appointed receiver. This suppression motion stems from the FDIC’s search of the offices of Chuang and his secretary, which were also used by Chuang to run a law firm. An evidentiary hearing was held on certain aspects of this motion on March 9, 1988. In addition, a number of affidavits have been filed. The law firm, Chuang & Associates, was a sole propri- etorship owned by Chuang. The law firm was located on the third floor of the Bank building in the Chinatown sec- tion of Manhattan. The rest of at least the first four floors of the building was occupied exclusively by the Bank. Chuang and his secretary had their offices, in which they performed both Bank and law firm work, on the third floor, where a Bank telecommunications room was also located. The rest of the third floor served as office space for the law firm. Chuang’s third-floor office was the only office he used as operating head of the Bank. Chuang & Associates consisted of Chuang himself, three other attorneys, and a paralegal or law clerk. The firm was listed in the telephone directory and in the Martin- dale-Hubbell law firm directory, and advertised in Chinese-language publications. The Bank was a major client of Chuang & Associates, but the firm had a number 19a of other clients as well, and the Government concedes that it had an existence separate from the Bank. Transcript of Evidentiary Hearing (“Tr.”) at 74. The relationship between the firm and the Bank was an extremely close one. At the main entrance to the firm on the third floor near the elevator was a large wood sign marked “Chuang & Associates, Attorney [sic] at Law.” Chuang’s office and the firm were also accessible via an interior staircase from the Bank, which made it easy to travel between the firm and the Bank’s offices on the first, second and fourth floors. There was no sign to identify the law firm when it was entered this way. Nor was there a sign or directory at the entrance to the building, in the lobby or in the elevator identifying the law firm as an entity separate from the Bank. The law firm appar- ently shared telephone lines with the Bank. There is no evidence that there was any formal lease arrangement between the Bank and the firm in 1985. In a one-year lease in effect during the calendar year 1984 the firm subleased space on the third floor from the Bank at a below-market rate. The Bank also paid the salaries of all secretaries at the firm. In exchange, the firm charged the Bank lower rates than it charged other clients. The FDIC secured the Bank building on the evening of Friday, June 21, 1985. The following day, a Saturday, large numbers of FDIC employees entered the building to begin the extensive process of examining bank docu- ments and calculating assets and liabilities. Ellen Stuart, an FDIC attorney who was responsible for assessing pending legal matters involving the Bank, testified that she entered the law firm offices on June 22 through the interior stairway. She said that she never saw the “Chuang & Associates” sign that day. Edward G. Miller, an attorney working at Chuang & Associates, testified that when he arrived for work on Monday, June 24, he informed the FDIC that Chuang & Associates was a law firm separate from the Bank. Al- 20a though Stuart testified that the FDIC took note of the attorneys’ claims, and later those of the Bank’s lawyers, that Chuang & Associates was a separate law firm, she was skeptical of the claims at the time because of the shared telephone lines, the easy access to the Bank and the absence of any building directory listing the firm. Chuang & Associates kept its law firm files in the of- fice of Chuang’s secretary, as well as in other offices and secretarial and open areas on the third floor. Chuang and the Government agree that Chuang’s office and that of his secretary were searched by the FDIC during the week of June 24, and this motion only addresses evidence ob- tained as a result of the search of those offices. Defend- ants and the Government are looking into the question of whether any of the Government’s evidence stems from a search of other areas of the law firm. Therefore, I do not now address the suppression motion insofar as it con- cerns areas of the law firm other than the offices of Chuang and his secretary. DISCUSSION In searching the premises of the Bank, the FDIC did not obtain a search warrant or seek court approval of any kind. Rather, it acted pursuant to its statutory duty to marshal the assets of the Bank and to wind up the Bank’s affairs. 12 U.S.C. § 1821(d). Chuang contends that the FDIC’s search of his office and that of his secre- tary violated the Fourth Amendment because the FDIC was on notice by Monday, June 24 that the offices were part of a law firm. He argues that a warrantless search of a law firm—even if the law firm is intermingled with another entity that can legitimately be searched without a warrant—violates the Fourth Amendument.* The Gov- 2In his memorandum in support of the suppression motion, Chuang briefly argues that suppression is required because of the Government’s alleged failure promptly to prepare an inventory of all the documents seized from the law firm. Memorandum in Support ~ 1 a RM NOD At NS 2la ernment, in response, contends that under these circum- stances no warrant was required. It is well established that, “except in certain carefully defined classes of cases, a search of private property with- out proper consent is ‘unreasonable’ unless it has been authorized by a valid search warrant.” G.M. Leasing Corp. v. United States, 429 U.S. 338, 352-53, 97 S.Ct. 619, 628-29, 50 L.Ed.2d 530 (1977), quoting Camara v. Municipal Court, 387 U.S. 528, 528-29, 87 S.Ct. 1727, 1730-31, 18 L.Ed.2d 930 (1967); see New Jersey v. T.L.O., 469 U.S. 325, 351, 105 S.Ct. 733, 747, 83 L.Ed.2d 720 (1985) (Blackmun, J., concurring in the judgment). It has been noted that searches of documents present spe- cial dangers of intrusions upon privacy, Andresen v. Maryland, 427 U.S. 468, 482 n. 11, 96 S.Ct. 2737, 2749 n. 11, 49 L.Ed.2d 627 (1976) (upholding search, with warrant, of law office), and that “a law office search should be executed with special care to avoid unnecessary intrusion on attorney-client communications.” National City Trading Corp. v. United States, 635 F.2d 1020, 1026 (2d Cir. 1980); see 2 W. LaFave, Search and Seizure: A Treatise on the Fourth Amendment § 4.1(g) (2d ed. 1987). There is nothing to suggest that any such special care was taken by the FDIC in searching the offices of Chuang and his secretary. Nor has the Governiient argued that the urgency of searching these offices was so yreat that obtaining a warrant would have been impractical. Never- theless, two factors suggest that the search was not un- reasonable, in violation of the Fourth Amendment, de- spite the absence of a warrant. First, the offices of Chuang and his secretary, in addition to being part of the law firm, were also an important part of the Bank. of Defendants’ Motion for Suppression at 19-20. However, the evi- dence concerning this legal contention has not been developed, and defendants did not mention it in their letter to the Court dated May 2, 1988 listing the legal questions to be decided. 22a Bank business in addition to law firm business was car- ried on there. The exception of privacy in commercial property is “particularly attenuated” where the property is used in “closely regulated” businesses, New York v. Burger, U.S. , 107 S.Ct. 2636, 2642, 96 L.Ed.2d 601 (1987), such as national banks.* Thus, by operating his law firm out of the same offices from which he ran the Bank, Chuang voluntarily reduced the expectation of privacy in the firm’s premises that he might have enjoyed had the firm been located elsewhere. Second, it is not disputed that, as in United States v. Gordon, 655 F.2d 478 (2d Cir. 1981), a case involving a receiver for an insurance business, the FDIC as a re- ceiver standing in the shoes of the Bank had authority to look through all of the Bank’s premises and papers with- out a warrant. Chuang makes no claim that such a search, which was carried out for business purposes, vio- lated his privacy interests in his office. See O’Connor v. Ortega, 480 U.S. 709, 107 S.Ct. 1492, 94 L.Ed.2d 714 (1987) (work-related searches of employees’ offices, desks and files are judged by reasonableness standard and are not presumptively invalid without a warrant). He con- tends only that, even if the FDIC had authority to search Bank premises and documents, it had no authority to search Bank premises that it had been told were also used as part of a law firm.* But since the FDIC as receiver had authority to inspect Bank property, and the offices of Chuang and his secretary were Bank property used in running the Bank, the force of Chuang’s argument con- cerning the unreasonableness of searching those offices is diminished. See National City Trading, 635 F.2d at 1024 (where space used by business subject to search is also 3 In another suppression motion in this case, defendants have not contested that banking is a closely regulated industry. 4 A somewhat analogous question was left unresolved in Gordon for failure to develop an adequate factual record in the district court. 655 F.2d at 484. en th | 23a used by law office, space is properly subject to search for books and papers of the business). Faced with these circumstances, Chuang argues that any warrantless search of a law office—even under the facts of this case—is per se unreasonable absent exigent circumstances. His argument is based almost entirely on National City Trading. In that case, the Second Circuit upheld a search, executed with a warrant, of the offices of a commodity fraud “boiler-room” operation that was run out of a lawyer’s suite of offices. As in this case, the space used by the law office and the boiler-room operation was “commingled.” 635 F.2d at 1024. The Second Cir- cuit held the search not unreasonable, noting that war- rants may be issued to search law offices upon a proper showing of cause and emphasizing the commingling of the activities of the boiler-room operation and of the law Office. Id. at 1025-26. However, the Court did stress that a law office search “should be executed with special care.” Id. at 1026. The Court pointed with approval to the “self-regulatory care” exercised by the Government in planning and executing the search. Jd. An FBI agent and an Assistant United States Attorney had explained to the searching agents the need to avoid any disruption of the law practice or any seizure of documents unre- lated to the boiler-room operation. Closed file cabinets in the lawyer’s office had not been examined. The lawyer’s office had not been searched until the lawyer was present. A legal file concerning the boiler-room operation had been taken but had been sealed without having been in- spected. And, of course, a search warrant had been ob- tained. Chuang urges that where such measures are not taken, or at least where no warrant is procured, a law office search cannot be upheld. The Fourth Amendment prohibition against “unreasonable searches” does not lend itself to per se rules. But, in any event, such a rule does not apply in this case. 24a In Gordon, the New York State Superintendent of In- surance was appointed receiver by a state court judge after an insurance busines had been abandoned and the Superintendent had met the statutory requirement of showing that property would be removed from the state, or would be lost, injured or destroyed. 655 F.2d at 483- 84. As receiver, the Superintendent had the statutory power, inter alia, “to take and hold real and persona! property.” Jd. at 483 n. 2. Similarly, in this case the FDIC was appointed receiver pursuant to statute after the Office of the Comptroller of the Currency had made a determination that the Bank was insolvent. 12 U.S.C. $$ 191, 1821(c). As receiver, the FDIC had the power and the duty to marshal the Bank’s assets and to wind up its affairs. 12 U.S.C. § 1821(d); Federal Deposit In- surance Corp. v. Hatmaker, 756 F.2d 34, 36 n. 2 (6th Cir.1985). In his coneurring opinion in Gordon, Judge Oakes wrote that the Superintendent was, “when acting by virtue of his receivership powers, in effect acting as with a warrant issued upon a showing of probable cause.” 655 F.2d at 487 (Oakes, J., concurring). Read- ing Judge Oakes’s concurrence in Gordon together with National City Trading suggests that the search at issue here was permissible. If a warrantless search by a re- ceiver is equivalent to a search with a warrant, and if a search of a law office with a warrant is permissible where the law office is commingled with a business that is the legitimate object of the search, then the warrantless search of a law office by a receiver is permissible where the law office is commingled with the business for which the receiver has been appointed. The primary danger that courts and commentators have seen in law office searches lies in the disclosure to the Government of documents that are covered by the attorney-client and the attorney work-product privileges.® 5 Where a law firm represents criminal defendants, the Sixth Amendment right to counsel may also be implicated by a law office Vr eet Meee Ben Bis 25a See, e.g., Klitzman, Klitzman and Gallagher v. Krut, 744 F.2d 955, 960-61 (8rd Cir. 1984) (finding unconstitu- tionally overbroad a warrant authorizing a search of a law firm) ; O’Connor v. Johnson, 287 N.W.2d 400 (Minn. 1979) (en banc) (establishing per se rule that searches of law offices are impermissible where the attorney is not suspected of a crime and there is no threat that docu- ments sought will be destroyed) ; Bloom, The Law Office Search: An Emerging Problem and Some Suggested So- lutions, 69 Georgetown L.J. 1, 12-23 (1980). In National City Trading, addressing an argument that the warrant was insufficiently particular because it authorized seizure of privileged documents, the Second Circuit stated that “Tt]o the extent that the files obtained here were privi- leged, the remedy is suppression and return of the docu- ments in question, not invalidation of the search.” 635 F.2d at 1026 (citations omitted). By the same logic, the fact that a search involved privileged documents does not render the entire search unreasonable, at least where there was good reason to believe that documents that could legitimately be searched would be found. Neither Chuang nor any third parties have sought to suppress individual documents seized by the FDIC on the ground that they are privileged. Finally, the Government relies on United States v. Cerri, 753 F.2d 61 (7th Cir.), cert. denied, 472 US. 1017, 105 S.Ct. 3479, 87 L.Ed.2d 614 (1985). In Cerri, the defendant was selling firearms from his home, al- though the home was not the place of business from which he was licensed to sell. Acting pursuant to a stat- ute permitting inspection of the business premises of federally-licensed firearms dealers, federal agents entered the defendant’s house without a warrant and seized his guns and business records. The Seventh Circuit upheld search. See, e.g., O'Connor v. Johnson, 287 N.W.2d 400, 404 (Minn. 1979) (en banc). There is no evidence in the record that Chuang & Associates represented criminal defendants. 26a the search. It held first that a firearms dealer could not evade the warrantless inspections provided for by the statute simply by moving to an address different from the one on his license. 753 F.2d at 63. That the search was of a home did not alter that conclusion, despite the fact that a warrantless search of a home absent exigent circumstances generally constitutes a per se violation of the Fourth Amendment, see United States v. Karo, 468 U.S. 705, 714-15, 104 S.Ct. 3296, 3302-03, 82 L.Ed.2d 530 (1984), because a home used as a place of business occupies the same status for Fourth Amendment pur- poses as does any other place of business. 753 F.2d at 64, citing Lewis v. United States, 385 U.S. 206, 211, 87 S.Ct. 424, 427, 17 L.Ed.2d 312 (1966). National City Trading noted that, for Fourth Amendment purposes, “there is nothing more sacred about a law office used for business purposes . . . than there is about the premises of a newspaper.” 635 F.2d at 1025. Similarly, there is nothing more sacred about a law office used for business purposes than there is about a home used for business purposes. That a home may be searched under these cir- cumstances without a warrant suggests the same con- clusion about a law office. Defendants have also moved to suppress certain rec- ords because of alleged violations of the Right to Finan- cial Privacy Act, 12 U.S.C. §§ 3401-3422. I need not decide whether any violation of the Act took place, be- cause even if it did, suppression is not a remedy au- thorized by the Act, 12 U.S.C. § 3417, or appropriately imposed in the exercise of the Court’s supervisory pow- ers. United States v. Kington, 801 F.2d 733, 737 & n.1 (5th Cir. 1986), cert. denied, —— U.S. ——, 107 S.Ct. 1888, 95 L.Ed.2d 495 (1987); United States v. Frazin, 780 F.2d 1461, 1466 (9th Cir.), cert. denied, 479 U.S. 844, 107 S.Ct. 158, 93 L.Ed.2d 98 (1986); Uiited States v. Whitty, 688 F.Supp. 48 (D.Me. 1988); United States v. Lee, 667 F.Supp. 1404, 1419 (D.Colo. 1987). ws rn i avi Fal 27a CONCLUSION Defendants’ motion to suppress evidence obtained as a result of the FDIC’s search of the offices of defendant Chuang and his secretary is denied. SO ORDERED. 28a [Excerpted Transcript of Record from the United States District Court for the Southern District of New York] * * * * [88] THE COURT: All right. Well, I would still like to hold a hearing on the issue of consent in any event. But in view of the way in which this has happened, I think I’m going to have to reach the issue that was— that accompanies it and which may turn out to be unnec- essary, if I find that there was, in fact, consent. I still have considerable difficulty with this objection belonging to anyone but Ms. Shieh. if, as the Supreme Court has repeatedly held, we are speaking of an inter- est in a place—excuse me, an expectation of privacy in a place, if we are speaking of an expectation of privacy in Ms. Shieh’s own separate office, it seems to me that she [89] may have some expectation of privacy in that place under the cases. In view of the fact that there is no question that the records that she was asked to produce and did produce, were clearly subject to examination by the OCC, and that the OCC had a statutory obligation under Section 481 of Title 12 of the United States code, to examine the affairs of every national bank at least twice a year, it seems to me that the records that were produced by Ms. Shieh from her office were clearly bank records that were subject to examination by, and indeed that it was the duty of the controller of the currency, to have those records examined by a bank examiner on a periodic basis. So that if one were viewing the issue from the vantage point of Ms. Shieh’s expectation of privacy in those par- ticular records, as distinguished from her office, it might be said that she did not have a reasonable expectation of privacy in those records as distinguished from her expectation of privacy in her own office. But since, and these are what we used to call standing questions that I am now addressing, what we used to 29a call standing, what we now speak of in terms of expecta- tion of privacy, the cases do hold that there—that an employee with a private office, that is an office of her own, has sufficient expectation of some kind of privacy in that place [90] to give her standing with respect to a true search of her office. This case is a little bit of a hybrid because it’s not a true search of her office, it is a request for documents which are clearly bank documents that happen to be located in Ms. Shieh’s office at the time. MR. POMERANTZ: I would use the word demand. THE COURT: Very well. Very well. I’ve not yet reached the actual facts on that. And I thing we prob- ably should hold a hearing on that aspect. Because for the moment, I am treating it as something resembling a search, in more traditional terms, even though this is not really exactly a search. And whether it should be treated as—like a search is open to question. But in any event, what the—what Ms. Shieh is argu- ing here is that this very old and well-established obliga- tory obligation of the controlier of the currency, to ex- amine the affairs of every national bank at least twice a year, should be subjected to the requirement of a war- rant in every case. MR. POMERANTZ: I’m not sure. I know your Honor pressed me on this when we were last before the court, and I’ve given it some thought, I am not sure that it is our position—that our position is as your Honor just stated it. I believe— [91] THE COURT: Are you not attacking the statute on it’s face? MR. POMERANTZ: We are, your Honor, to the fol- lowing extent, to the extent that the government urges that the statute provides an authority for conduct that may be treated as a search, we believe the statute is un- constitutional on its face. If all that happened here was the examiners came and said we would like to see these documents and the docu- 30a ments were then produced, I’m not sure we would have the same issue. THE COURT: What else happened here? Then I’m puzzled, that’s precisely what happened here. MR. POMERANTZ: I think we can show your Honor that what happened here is that the OCC came in to the bank, cabinets were physically sealed, Ms. Shieh’s movements were restricted to some extent, and that there is a line that may be drawn between the conduct of— I’m not abandoning—notwithstanding an argument that the statute is unconstitutional in toto as your Honor has stated it. But I want to reserve in affect, the fallhack position that at the very least the way that this examination was conducted makes this examination akin to a physical search, and that under those circumstances the statute provides no constitutional authority for such a [92] search. THE COURT: Well, then, I have difficulty with what facts you’re relying on. It seems to me that this bank was examined on a reg- ular basis, to Ms. Shieh’s own knowledge, and in—with Ms. Shieh’s participation, many times in accordance with the statutory obligation of the controller of the currency. It was clearly forseeable, and all of the officers of the bank and the bank itself had notice that the OCC was required to make periodic examinations, and indeed did make periodic examinations of these very books and records. MR. POMERANTZ: I don’t disagree with that. THE COURT: I did not understand that there were any particular facts that were being highlighted here, other than the fact that these particular records came from Ms. Shieh’s office. MR. POMERANTZ: No. I’ve articulated in my letter to the court, the one immediately preceding the Sep- tember 23 letter, a number of other facts which I think are relevant. The fact that OCC examiners—-I, for in- ete ree oe 3la stance, stayed in the bank we contend, before and after normal business hours. The fact that there were certain areas of the bank that were, and certain cabinets that were physically sealed with red tape. THE COURT: What has that got to do with the [93] search of Ms. Shieh’s office, which is all that I’m address- ing? We're only addressing the documents that were taken from Ms. Shieh’s office because those are the only documents as to which she had an expectation of privacy. MR. POMERANTZ: I don’t want the record to indi- cate that we’ve abandoned any claim that Dr. Chuang has a similar expecta.ion for the reasons indicated in the letter. THE COURT: We'll get to that separately. That’s a more recent issue. Whether Dr. Chuang has some ex- pectation of privacy. But it was—with respect to Ms. Shieh’s expectation of privacy, which is what I understood was being raised only with respect to records taken from her—given by her from her own office, it is only with respect to that search in quotes that I considered the—whether it was unreasonable for the OCC to carry out its regular stat- utory obligation to examine the books and records of this national bank. And I go back to what I understood was the defend- ant’s position, that every examination of the books and records of the national bank carried out under its pe- riodic obligation to do so by the OCC requires a search warrant. MR. POMERANTZ: It is because I understood your {94} Honor to be troubled by such a sweeping notion that I have attempted to suggest to the court a lim- iting combination of facts. And the distinction I’m try- ing te draw is this, in previous examinations the OCC first of all gave advance notice when it would be at the bank and what records were required. In those instances the examiners were put into a conference room and records were shuttled in and out to the examiners. 32a And I could understand a holding by the court that such conduct intruded upon no expectations of privacy, any reasonable expectations of privacy. And I am draw- ing a line between that type of examination and an ex- amination that was conducted in the fashion that this one was conducted. Because I think there is a line that can be drawn between those two very different types of conduct. And that while your Honor could conceivably hold that the statute authorized the former type of ex- amination, consistent with the constitution, our argu- ment would be for the reasons cited in our memorandum, under all the administrative search cases, that conduct _ of the type that occurred in this case is not constitution- ally undertaken with only this statute as its basis. THE COURT: And do I understand that what your distinction is, is that in this case the bank examiner actually entered Ms. Shieh’s office and requested docu- ments [95] there and examined documents there? MR. POMERANTZ: That’s one factor, Judge. I think in a practical sense it goes much beyond that. This was much more in the nature of a raid. I don’t want to overstate it, but in comparison— THE COURT: Are you suggesting that if there is wrongdoing suspected, is that—there should be some distinction? MR. POMERANTZ: No, I’m suggesting that if what the OCC really wants to do is search the bank, they’re either supposed to act under a valid statute or supposed to get a search warrant, which is precisely considered doing in this case and wound up not doing. THE COURT: But I have difficulty considering their other examinations, not searches, in the sense in which you are describing them. That is the mere fact that they did not sit in a conference room and rather entered Ms. Shieh’s office. While that may give her standing because she has ex- pectations of some privacy in her own office, if what they did was request records as they had always done, and examine them, I do not understand the distinction. 83a And I have great difficulty applying an absolute rule to the Fourth Amendment which speaks in terms of un- reasonable searches. I have great difficulty holding that [96] on the face of this ancient statute it is unreason- able for the bank examiners of the office of the controller of the currency, who are obligated by law at least twice a year to examine the affairs of every national bank, to go to a magistrate and get a search warrant for every such examination. I think it is unduly burdensome and I do not—I think the statute provides the probable cause that a magistrate would find because it is the obligation of the OCC to examine the bank. MR. POMERANTZ: I’m not making a_ probable cause-type argument, your Honor. THE COURT: And as to how exactly a magistrate would limit what is a search that is essentially limited to the books and records of the bank by the statute, I do not understand, that the Wang examiners have to come in during business hours of the bank is clear be- cause they do not break into the bank. Nor is there any suggestion here that anybody broke in, nor have the bank examiners ever broken in. . MR. POMERANTZ: Let me explain what my argu- ment is. I think your Honor referred to the antiquity of the statute, I think that’s precisely the problem. In constitutional terms this statute came on the books before all the law was made with respect to [97] admin- istrative search. I think if Congress set down to draft the statute now, it would articulate the kinds of safe- guards that the Supreme Court has referred to in cases such as Berger against New York. And there would be no undo burden on the OCC. The Congress could well draft a statute that would indicate to the OCC when it is supposed to go in and examine books and records, how much notice it’s supposed to give, if any, and speak with some particularity. It is because this statute, and again perhaps because it is as old as it is, simply gives the OCC carte blanche 34a to go in and do whatever it wants to inside the bank in the way of examining records that we claim it is. | am not suggesting a regime under which you—every time be- fore there is an examination of a national bank that the bank examiners and the OCC has to go running to a magistrate. My argument is that it so happens that because of the sequence here, that the statute was enacted so long before the applicable case law. What happened is that the statute under which the OCC is acting is indeed unconstitutional as applied to conduct that can be analogized to a search. It’s only a narrow group of cases your Honor could well find in which that last statement is true that the conduct is a analogus—analogous to a search. But in that category of [98] eases, however broad or however narrow it is, I am suggesting that the court should hold the statute to be unconstitutional and the remedy undoubtly would be a new statute, not a regime under which magistrates have to become involved with this. THE COURT: When I read this statute as authoriz- ing, indeed obligating the controller of the currency regu- larly to examine the books and records of every national bank, I don’t understand how that is, as you say, anala- gous or not analagous to a search. I am assuming that you are arguing that that examination is analagous to a search. MR. POMERANTZ: I don’t want to bite off more than I have to. I’m arguing that this particular examina- tion at this bank this week was a search. THE COURT: Well, you have not shown me sufficient grounds for distinguishing this particular examination in constitutional terms, in terms of reasonableness from all of the examinations that had gone before and that are required and we'll twice annually for every national bank in the country. *% * * om [8610] THE COURT: Also, I would also like to raise an entirely unrelated point, which was there was one oc- 35a casion [8611] at the beginning of the trial where I tried to put on the record, my disposition of the last suppression motion, which I had denied. And I would like to—like it to be clear that although the parties apparently did not understand that as a disposition, it was my intention at the time to make such a disposition. And perhaps what I should do as well is cite particu- larly the two Supreme Court cases that I considered most closely analogous to this case. I do not have the citations with me, but I’m sure you are all familiar both with the case involving a visit by a probation officer to—an unannounced visit by a proba- tion officer to a defendant’s home. I did consider the discussion we had on the motion with respect to documents taken from Ms. Shieh’s office as set- ting forth my view on that subject. That is, I had con- cluded that Ms. Shieh was the only one of the defendants with some privacy interest in the contents of her own space. And therefore this was a motion as to which, really, only Ms. Shieh had standing. And that her ex- pectation of privacy in that place was not reasonably an expectation that bank examiners would not examine the records of the bank which were kept in her office and which she supplied to them in response to requests. To the extent that the motion was based on an [8612] absolute requirement of a search warrant I concluded that the doctrine that a search warrant is required does not apply in a situation like the regular examination of a national bank in which there is a statutory duty on the OCC regularly to examine the records of the bank. And we are speaking now of an examination of the records of the bank. We are not speaking of private documents which Ms. Shieh happened to keep in her office. As I understand it, we are speaking only of bank rec- ords in connection with that motion. Is that correct? MR. GOURAIGE: I think that’s correct, your Honor. The only document that the defendants claimed was not a bank record was a mortgage repayment book. As your 36a Honor may recall, the government had withdrawn that document and said that that would not be offered at trial. THE COURT: All right, so that that document was not used? MR. GOURAIGE: That’s correct. THE COURT: The only documents that were used at trial were bank documents, to the extent that documents were used, that had been examined, which were normally located in Ms. Shieh’s office in the bank? MR. GOURAIGE: That’s correct. THE COURT: Very well. MR. POMERANTZ: I believe that is correct, your [8613] Honor. Of course it’s difficult, as I stand here, to think back over the months of testimony and the— THE COURT: Right. But it was my understanding that the motion was really based on the assumption that private personal documents were not at issue here, that we were speaking, and apparently that is all that has been offered, according to the government, in accordance with that understanding. And as to those documents, on the facts that were established earlier in the case, I concluded, as I tried to explain at the beginning, that a search warrant was not required, and that Ms. Shieh’s reasonable expectations of privacy were not improperly invaded, unconstitutionally invaded by the examination of bank records which happen to be kept in Ms. Shieh’s office and which in most cases she actually turned over herself in response to requests. * * * * --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1749%3A1. Public record. Not legal advice.