Miccosukee Tribe of Indians of Florida v. United States
ORDER Denying Tribe's Motion for Disclosure and Production of Government's Confidential Informant(s)(dkc)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No . 11-MC-23107-GOLD/GOODMAN
MICCOSUKEE TRIBE OF INDIANS
OF FLORIDA ,
UNITED STATES OF AMERICA,
ORDER ON MOTION TO DISCLOSE CONFIDENTIAL INFORMANT
THIS CAUSE is before the Undersigned upon [ECF No . 37] the District
Court's order of reference of [ECF No . 36] the Miccosukee Tribe 's Motion for
Disclosure and Production of Government's Confidential Informant(s) .
Court has reviewed the motion and [ECF 40] the Government's Response.
addition , the Court held [ECF No . 45] a lengthy hearing on May 1, 2012 and
reviewed [ECF Nos . 46-48] post-hearing submissions by the Tribe and the
For the reasons outlined below, the Court denies the Tribe 's motion to
compel the Government to disclose all reports and information about the
confidential informant and its associated, alternate request for the Court to
conduct an in camera review of the reports.
Introduction and Background
This case concerns the Tribe's challenge to summonses issued as part of
the Government's investigation into whether the Tribe is liable for failing to
withhold from and report distributions to its members for the 2010 tax year. The
District Court previously rejected
petitions to quash
summonses issued in connection with an investigation into the 2006 through
2009 tax years. Specifically, in Miccosukee Tribe of Indians v. United States, No.
10-23507-CV, 2011 WL 3300164 (S .D. Fla. Aug . 2, 2011), the Honorable Alan
S. Gold granted the Government's motion to deny petitions to quash.
prior case, the Tribe made, among other arguments, the same one it raises here
and which forms the basis of its effort to obtain discovery about the confidential
informant: that the Internal Revenue Service did not have a proper purpose to
investigate the Tribe for tax violations . Judge Gold found that this argument was
"not persuasive." Id. at *17 .
In the current case, the District Court imposed [ECF 17] a December 16,
2011 deadline for motions seeking discovery and , if discovery were permitted , a
February 3, 2012 discovery completion deadline . Based on this ruling, the Tribe
filed [ECF 19] a motion for discovery and an evidentiary hearing. The Tribe did
not mention any need to obtain discovery regarding the confidential informant in
The District Court referred the discovery motion to me [ECF 20] and, after
a hearing, I entered an order [ECF 28] permitting the Tribe to take a limited
purpose, one-hour telephone deposition of the Internal Revenue Service officer
who obtained the summonses. The order limited the deposition to three specific
issues the Tribe pinpointed in its motion for discovery: (1) the breadth of the
summonses, (2) the basis for Agent Furnas ' conclusion that the designated
statutes apply to the Tribe "and thus provide the IRS with an alleged purpose to
issue the summonses challenged in this case," and (3) the reasons for Agent
Furnas' imposition of steep penalties to members.
During Agent Furnas' telephone deposition, the Tribe asked him a few
questions about the information provided by the informant and its connection to
the summonses issued for the investigations.
Agent Furnas provided the
following information in response :
a. The information from the informant was the reason he decided initially
to do an audit. [EeF 31-1, p. 23] .
b. He did not advise the Tribe's counsel at the time that the information
received from the informant was the basis for the audit. [EeF 31-1, p.
c. While the initial investigation into tax years 2000 through 2005 was
prompted by the informant's information , the IRS expanded its
examination to the current years based upon the results from the
earlier years' investigations . [EeF 31-1, pp . 32 -33]
d. The new summonses for tax year 2010 were based on the information
developed during the examination, not because of any new information
received from a confidential source. [EeF 31-1, p. 33] .
e. Government counsel instructed Agent Furnas not to testify whether a
confidential source is still providing information regarding the Tribe to
the Internal Revenue Service. [EeF 31-1, p. 33-34].
After the telephone deposition , the District Court held an evidentiary
hearing and ordered the parties to submit proposed findings of fact and
conclusions of law. [ECF 34] . The Tribe submitted its proposed findings [ECF
35] and then , approximately two weeks later, filed the instant motion concerning
the confidential informant.
The Parties' Positions
At bottom , the Tribe contends that Agent Furnas conceded that some of
the information received from the confidential informant was not entirely accurate
and that it needs to learn the informant's identity to assist it in supporting its
position that the IRS has an improper purpose for conducting an investigation
into the 2010 tax year.
The Government contends that the motion should be denied because the
Tribe never mentioned a need to obtain information about the informant in its
original motion for discovery filed in December of 2011.
Government brands the motion as untimely because discovery motions were due
by February 3, 2012 and the Tribe filed it on March 23, 2012 -- after the
evidentiary hearing and after the Government submitted its brief.
Government also challenges the motion on the merits, arguing that the Tribe has
no legal right to obtain the informant's identity in a summons enforcement
proceeding and that Judge Gold has already ruled as much .
At the May 1, 2012 hearing before the Undersigned , the Tribe's counsel
addressed the Government's timeliness argument.
The Tribe's counsel
explained that he first learned the informant was not completely credible at the
February 24, 2012 evidentiary hearing before Judge Gold.
Tribe's counsel contended Agent Furnas testified that the informant's allegation
that the tribe used armored Brinks-type trucks to distribute cash directly to tribal
members was not true. The Tribe argued that it acted relatively promptly after
learning this information by filings its motion to disclose the informant's identity
approximately one month later.
Following the May 1, 2012 hearing, however, the Tribe submitted a notice
clarifying its position [ECF 46].
In particular, the Tribe candidly acknowledged
that it mistakenly alleged that Agent Furnas admitted at the February 24, 2012
evidentiary hearing that some of the informant's information was inaccurate. The
Tribe now says, "Agent Furnas did in fact make a statement in which he admitted
that the allegations made by the Confidential Informant were not accurate" -
that it happened at the agent's January 12, 2011 deposition, more than a year
The notice [ECF 46] does not explain why this mistake was made or why
the Tribe waited more than a year after first learning about what it describes as
Agent Furnas' admission (that some of the informant's information was "not
accurate") to file the instant motion. This omission is significant given that the
motion is purportedly premised on this very point.
For its part, the Government contended during the May 1, 2012 hearing
that any inaccuracies in the informant's information amount to, at best, a minor
The Government explained that its investigation confirmed that
cash was, in fact, distributed to Tribe members, but that the cash may not have
been ultimately distributed to members by armored trucks.
Government explained, the money was transferred from the armored trucks to
SUVs, which, in turn, drove around with a tribal police escort and cashed checks
written from the Tribe to individual Tribe members . The Government also argued
that Judge Gold already concluded that the specifics surrounding the particular
method of cash delivery to Tribe members were insufficient to support the
conclusion that the Government lacked a permissible purpose to issue the
summonses as part of its investigation into the 2010 tax year.
In that earlier case involving summons for the years 2000 to 2005,
Miccosukee Tribe of Indians v. United States , 10-23507-CV, 2011 WL 3300164
(S .D. Fla . Aug. 2, 2011), Judge Gold made the following findings:
a. "Regarding the armored car allegations, Agent Furnas determined that
the Tribe distributed cash to tribal members, the armored car went to
the reservation as far as the casino and Agent Furnas eventually
learned that from there it was taken in SUVs with armed police escorts
to the reservation and distributed to tribal members." Id. at *16 , ~ 73.
b. "According to Agent Furnas , the Tribe transported large amounts of
currency to the reservation, wherein tribal members would line up ,
receive checks, cash their checks on the spot and walk away with
cash." Id. at 17, ~ 79.
c. "As a result of Agent Furnas ' examination of the prior years, he found
that allegations that the Tribe used armored vehicles to deliver up to
$10 million in cash from its gambling operations to hundreds of Tribe
members four times a year were materially true." Id. at *18,
d. "Though the focus of the IRS investigation is not whether cash arrived
in armored vehicles or some other method, Agent Furnas confirmed
that the examination that arose from these allegations is continuing ."
Id. at *18, ~ 94 .
e. "Insofar as there were allegations regarding the armored cars, Agent
allegations was true." Id. at 19-20,
Given that the stated ground for the motion is a development which the
Tribe learned about in January 2011 and that Judge Gold previously ordered that
discovery must be completed by February 3, 2012, the Tribe's March 23, 2012
motion is untimely and could be denied on that ground alone .
Court prefers to rule on the merits and, recognizing the long and relatively
complicated procedural history in this case and the related, prior litigation, the
Court will exercise its discretion and not deny the motion as untimely. Instead,
the Court will address the merits.
The Tribe's stated reason for seeking the informant's identity is not
persuasive. The Tribe argues that some of the informant's information was not
completely accurate and that this misinformation might demonstrate that the
Government lacks a permissible purpose to issue the summonses .
First, the Court is not at all convinced that the informant's misinformation
would somehow demonstrate the Government lacked a permissible purpose to
conduct its investigation and issue the summonses. To be sure, the argument
might make sense if the Government relied exclusively on the informant's
information to justify issuing the summonses and knew before doing so that the
information was incorrect. But that is not the situation here. The agent did not
learn of the inaccuracy (modest as it might be) until after the investigation began
and after he confirmed the gist of the information.
Moreover, the informant's
information is not the catalyst for this investigation into the 2010 tax year.
Rather, it is the results of the prior investigation into earlier tax years -- results
which confirmed the main theme of the informant's allegations -- that prompted
the expansion of the investigation and the new summonses currently being
Second, the inaccuracy in the informant's information is, at best, minor
and does not alter the primary allegation that cash-filled vehicles were used to
distribute cash to Tribe members on the reservation.
Third, it appears as though Judge Gold has twice issued rulings which
reject or undermine the Tribe's argument.
Specifically, during the evidentiary
hearing in the earlier case, Judge Gold sustained the Government's objection to
a question to Agent Furnas from Tribe counsel, asking him to identify the
In sustaining the objection, Judge Gold observed the fundamental
distinction between the need to discover an informant's identity to adequately
defend a criminal prosecution as opposed to the need in a civil summons
enforcement scenario, where "a summons to investigate can be merely on
suspicion that the law is being violated or even just because the IRS wants to
assure that it is not being violated." [ECF 40, pg. 4 (quoting Feb. 17, 2011
evidentiary hearing transcript)]. And, concerning the second prior ruling, Judge
Gold found that the informant's information was "materially true." In other words,
Judge Gold has already rejected the argument that the allegations were
significantly false or incorrect.
The Tribe cites Roviaro v. United States , 353 U.S. 53 (1957) to support its
motion to compel the Government to disclose the informant's identity.
Roviaro arose in the context of a criminal prosecution and several of its core
underpinnings do not directly fit a situation where a party is merely attempting to
quash subpoenas in a civil investigation where no liability or penalty has yet to be
imposed. For example, unlike in Roviaro, there is no concern here over whether
disclosure of the informant's identity might be helpful to the defense of a
criminally accused or is essential to a fair determination of a lawsuit. Id. at 60-61 .
Similarly, the Roviaro Court explained that the decision whether to order
disclosure must strike the "proper balance" and "depend[s] on the particular
circumstances of each case," including the "crime charged, the possible
defenses . .. and other relevant factors." Id. at 62 . This analysis seems facially
inapplicable to a civil summons issued as part of an ongoing investigation where
the Government has neither leveled any charges or penalties nor reached any
conclusions regarding tax law compliance .
Recognizing that this is not a criminal case, the Tribe cited one case in the
civil context: Suarez v. United States, 582 F.2d 1007 (5th Cir. 1978).
involved two taxpayers who filed a civil action demanding refund of the wagering
occupational tax and a portion of the wagering excise tax assessed against them
for accepting lottery wagers.
The district court in Suarez denied a motion to
compel discovery of the confidential informant's identity or, alternatively, to
conduct an in camera proceeding .
On appeal, the taxpayers argued that
disclosure was essential to a fair determination of their tax liability. But this case
is not helpful to the Tribe, because the Eleventh Circuit affirmed the district court
and held that neither disclosure nor an in camera proceeding is required under
Roviaro and its progeny where the informant is akin to a tipster who simply
observed and reported the actions of others.
l\Jevertheless, the Tribe attempts to distinguish Suarez by arguing [ECF
No. 36, p. 9] that "unlike the diligent police work in Suarez, the IRS investigation
in the case at bar was entirely based on one false, unsupported allegation ." In
fact, this one brief sentence is incorrect in three separate ways :
First, the principal allegation in this case was not false . Instead , only one
detail was incorrect.
That does not make the entire allegation false , which is
what the Tribe seems to be arguing. Second , the allegation is not unsupported .
Rather, as Agent Furnas testified, his investigation corroborated the primary
allegation and confirmed that the allegation was materially correct. And third, the
investigation in this case for the 2010 tax year was based on information
developed by Agent Furnas through his investigations of other years.
incorrect information prompted the past investigations and is therefore, at best,
only an indirect cause of the 2010 tax year summonses.
In addition, the Government called the Court's attention to another federal
a strikingly similar scenario that supports the
Government's argument against disclosure. In Pickel v. United States, 746 F.2d.
176, 181-82 (3d Cir. 1984), husband and wife taxpayers filed a motion to quash
two summonses issued by the IRS in a tax fraud investigation and, as part of that
motion, demanded to learn the identity of a government informant. The district
court in that case quashed the summonses because the government refused to
reveal the informant's identity. The Third Circuit reversed because it disagreed
that the government's refusal to identify the informant justified the order.
The appellate court began its discussion by noting that the government
has the right to withhold the identity of a witness in non-criminal proceedings, as
well as in criminal investigations and prosecutions . The court then pointed out
that "while it is by no means clear that the respondent in an administrative
summons proceeding has the same right as a defendant in a criminal case to
override the privilege so as to insure his right to a fair trial, we so assume for
purposes of this case."
Id. at 181, n.4 .1
It then underscored the applicable
framework for analyzing the challenge : (1) the individual seeking disclosure has
the burden of establishing the significance of the informant's information, and (2)
mere speculation as to the usefulness of the informant's testimony is insufficient
to justify disclosure of the informant's identity. It also noted that the taxpayers
The Undersigned is using that same assumption here.
could seek to suppress any improperly acquired evidence in a criminal
proceeding if they demonstrate that the IRS improperly used its summons power.
A review of the Tribe 's motion under the Pickel framework indicates that
the Tribe is not entitled to relief. Given the minor inaccuracy at issue , the Tribe
has failed to carry its burden of demonstrating the significance of any additional
information the Tribe may gain after learning the informant's identity . The Tribe
is essentially speculating that learning the informant's identity will lead to
significant information concerning its claim that the government lacks a legitimate
purpose for its 2010 tax year investigation . This is insufficient to overcome the
The Tribe has not met its burden to show that disclosure of the informant's
identity is required or that the Court should conduct an in camera examination of
the memorandum summarizing the informant's information.
The motion is therefore denied .
DONE and ORDERED , in Chambers , in Miami , Florida, this })
of May, 2012.
ATES MAGISTRATE JUDGE
Copies furnished to:
The Honorable Alan S. Gold
All counsel of record
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