United States v. Stringer - 535 F.3d 929 (9th Cir. 2008)

Rule:

The United States Supreme Court holds that the government may conduct parallel civil and criminal investigations without violating the due process clause, so long as it does not act in bad faith. The Supreme Court suggests that the government may act in bad faith if it brings a civil action solely for the purpose of obtaining evidence in a criminal prosecution and does not advise the defendant of the planned use of evidence in a criminal proceeding. The Supreme Court thus distinguishes a United States v. Kordel investigation from bad faith cases where the government has brought a civil action solely to obtain evidence for its criminal prosecution or has failed to advise the defendant in its civil proceeding that it contemplates his criminal prosecution; or any other special circumstances might suggest the unconstitutionality or even the impropriety of this criminal prosecution.

Facts:

Defendants were investigated by the SEC on alleged civil securities fraud. The SEC coordinated its investigation with the United States Attorney's Office (USAO) as authorized under 15 U.S.C.S. §§ 77t(b) and 78u(d). The SEC provided defendants with Form 1662 that advised them of their Fifth Amendment rights and that any information could be used by the SEC or any other agency. The district court held that the government had engaged in deceitful conduct, in violation of defendants' due process rights, by simultaneously pursuing civil and criminal investigations of defendants' alleged falsification of the financial records of their high-tech camera sales company.

Issue:

May the government conduct parallel civil and criminal investigations without violating the due process clause?

Answer:

Yes

Conclusion:

The appellate court found that the government's conduct did not amount to a constitutional violation under either the Fourth or Fifth Amendments. There was nothing improper about the government undertaking simultaneous criminal and civil investigations, and nothing in the government's actual conduct of those investigations amounted to deceit or an affirmative misrepresentation that justified the rare sanction of dismissal of criminal charges or suppression of evidence received in the course of the investigations.