United States v. Korf (In re Sealed Search Warrant & Application for a Warrant by Tel. or Other Reliable Elec. Means)

11 F.4th 1235

IN RE: SEALED SEARCH WARRANT AND APPLICATION FOR A WARRANT BY TELEPHONE OR OTHER RELIABLE ELECTRONIC MEANS.

United States of America, Plaintiff - Appellee,

v.Mordechai Korf, Uriel Laber, Chaim Shochet, Optima International, LLC, Optima Ventures, LLC, Optima Management Group, LLC, Optima Acquisitions, LLC, Niagara LaSalle Corporation, Optima Group, Georgian American Alloys, Inc., CC Metals and Alloys, LLC, Felman Productions, LLC, Felman Trading, Inc., Felman Trading Americas, Inc., Georgian American Alloys Sarl, Georgian American Alloys Management, LLC, Optima Fixed Income, LLC, Optima Hospitality, LLC, Optima 777, LLC, Optima 925, LLC, Optima 925 II, LLC, Optima 1300, LLC, Optima 1375, LLC, Optima 1375 II, LLC, Optima 55 Public Square, LLC, Optima 7171, LLC, Optima 500, LLC, Optima CBD Investments, LLC, CBD 500, LLC, Movants - Appellants.

No. 20-14223

United States Court of Appeals, Eleventh Circuit.

August 30, 2021

Shai Bronshtein, U.S. Department of Justice, Asset Forfeiture and Money Laundering Section, WASHINGTON, DC, Emily M. Smachetti, U.S. Attorney's Office, U.S. Attorney Service - Southern District of Florida, U.S. Attorney Service-SFL, MIAMI, FL, for Plaintiff-Appellee.

Howard M. Srebnick, Robert T. Dunlap, Benjamin Samuel Waxman, Black Srebnick Kornspan & Stumpf, PA, Miami, FL, Marc E. Kasowitz, Sarmad M. Khojasteh, Joshua Paul, Mark P. Ressler, Ronald R. Rossi, Kasowitz Benson Torres, LLP, New York, NY, for Movants-Appellants CBD 500, LLC, CC Metals and Alloys, LLC, Felman Productions, LLC, Felman Productions, LLC, Felman Trading Americas, Inc., Felman Trading, Inc., Georgian American Alloys Management, LLC, Georgian American Alloys Sarl, Georgian American Alloys, Inc., Mordechai Korf, Niagara LaSalle Corporation, Optima 1300, LLC, Optima 1375 II, LLC, Optima 1375, LLC, Optima Ventures, LLC, Optima Management Group, LLC, Optima Acquisitions, LLC, Optima Group, Optima Fixed Income, LLC, Optima Hospitality, LLC, Optima 777, LLC, Optima 925, LLC, Optima 925 II, LLC, Optima 55 Public Square, LLC, Optima 7171, LLC, Optima 500, LLC, Optima CBD Investments, LLC.

Howard M. Srebnick, Benjamin Samuel Waxman, Black Srebnick Kornspan & Stumpf, PA, Scott Alan Srebnick, Scott A. Srebnick, PA, Miami, FL, Marc E. Kasowitz, Sarmad M. Khojasteh, Joshua Paul, Mark P. Ressler, Ronald R. Rossi, Kasowitz Benson Torres, LLP, New York, NY, for Movant-Appellant Uriel Laber.

Howard M. Srebnick, Benjamin Samuel Waxman, Black Srebnick Kornspan & Stumpf, PA, Miami, FL, Marc E. Kasowitz, Sarmad M. Khojasteh, Joshua Paul, Mark P. Ressler, Kasowitz Benson Torres, LLP, New York, NY, for Movant-Appellant Chaim Shochet.

Howard M. Srebnick, Robert T. Dunlap, Benjamin Samuel Waxman, Black Srebnick Kornspan & Stumpf, PA, Miami, FL, Marc E. Kasowitz, Sarmad M. Khojasteh, Joshua Paul, Mark P. Ressler, Kasowitz Benson Torres, LLP, New York, NY, for Movant-Appellant Optima International, LLC.

Before MARTIN, ROSENBAUM and LUCK, Circuit Judges.

PER CURIAM:

This case requires us to consider whether the use of a government filter team to review seized materials that are claimed to be privileged necessarily violates the privilege holder's rights. Here, the government obtained and executed a search warrant at a suite of offices where the Optima Family Businesses were located. Among the materials seized were items from the office of an in-house attorney. The Optima Family Businesses and their owners, managers and controllers (collectively, the "Intervenors") assert attorney-client and work-product privilege over at least some of these documents.

They filed a motion under Rule 41(g), Fed. R. Crim. P., to obtain injunctive relief prohibiting the United States's filter team—which included attorneys and staff who were not involved in the criminal investigation of the Optima Family Companies and the individual owners, managers, and controllers—from reviewing any potentially privileged documents unless either the Intervenors agree or the court, after conducting its own privilege review, orders disclosure.

The district court held a hearing on the Intervenors’ motion and imposed a modified filter protocol but denied the Intervenors’ request to prohibit anyone from the government from reviewing potentially privileged documents unless the Intervenors agree or the court orders disclosure. The Intervenors now appeal that denial. After careful consideration and with the benefit of oral argument, we now affirm the district court's order denying the Intervenors’ motion to enjoin the use of a filter team. We agree with the district court that the Intervenors have not showed a substantial likelihood of success on their argument that government filter teams per se violate privilege holders’ rights.

I.

The Northern District of Ohio was conducting a criminal investigation into money laundering, conspiracy to money launder, and wire fraud. As it followed its leads, it decided it needed to search a suite of offices in Miami, Florida. So the Federal Bureau of Investigation ("FBI") applied for a search warrant in the Southern District of Florida.

A. The Search Warrant and Filter Team Protocol

On July 31, 2020, a magistrate judge in the Southern District of Florida issued that search warrant to be executed at the Miami offices of some of the entities that comprise the Optima Family Companies. The offices that were the subject of the warrant were located in a business suite.

The warrant identified the items to be seized, including records of and concerning Ukrainian nationals Ihor Kolomoisky and Gennadiy Bogolyubov and American citizens Mordechai Korf, Uriel Laber, and Chaim Schochet. Korf, Laber, and Schochet allegedly own, control, or manage the more than thirty entities that fall under the name "Optima" and have offices in the Miami suite that was the subject of the warrant.

Among the documents sought concerning the five individuals were "all documents for Ihor Kolomoisky, Gennadiy Bogolyubov, Mordechai Korf, Uriel Laber, and Chaim Schochet," from "2008 to the present," including "[r]ecords of receipt of income," "[r]ecords of all accounts and transactions at financial institutions," "[r]ecords of loans and financing transactions," and "all communications between [these persons] and any employee or agent of [any of the entities, persons, or properties of the Optima Family Companies and Subsidiaries and other entities and properties identified in Attachment B.3 to the warrant¹ ]. " The warrant also authorized seizure of "all emails sent to or from any of the above-referenced Optima-family companies, [and entities, persons, or properties] outlined in Attachment B.3." Besides the seizure of paper records, the warrant authorized seizure, imaging, or copying of all computers or other electronic storage media that might contain the evidence described in the warrant.

If the government identified seized communications that were to or from an attorney during the seizure, the warrant outlined a protocol that would be followed concerning the handling of those materials. That protocol required the following:

Filter for Privileged Materials: If the government identifies seized communications to/from an attorney, the investigative team will discontinue review until a filter team of government attorneys and agents is established. The filter team will have no previous or future involvement in the investigation of this matter. The filter team will review all seized communications and segregate communications to/from attorneys, which may or may not be subject to attorney-client privilege. At no time will the filter team advise the investigative team of the substance of any of the communications to/from attorneys. The filter team then will provide all communications that do not involve an attorney to the investigative team and the investigative team may resume its review. If the filter team decides that any of the communications to/from attorneys are not actually privileged (e.g., the communication includes a third party or the crime-fraud exception applies), the filter team must obtain a court order before providing these attorney communications to the investigative team.

(the "Original Filter-Team Protocol").

Federal law enforcement agents executed the search warrant on August 4, 2020. As part of that process, agents seized various documents and equipment, including internal servers containing electronic documents and correspondence. Inhouse lawyers and paralegals worked (or had worked) in the business suite for the Optima Family Companies and other affiliated individuals, and for Korf, Laber, and Schochet. And the seized documents contained some items that were allegedly privileged.

B. Motion to Intervene and Motion for Injunctive Relief

Following the seizure, Korf, Laber, Schochet and various Optima Family Companies and Subsidiaries (whom we have previously described as the Intervenors) filed a motion to intervene in the search-warrant proceedings in the United States District Court for the Southern District of Florida. The motion advised that the electronic data the government had seized when it executed the warrant contained privileged documents. Contemporaneously with the motion to intervene, the parties filed a document entitled Motion for Preliminary Injunction to Prohibit Law Enforcement Review of Seized Materials Until an Appropriate Procedure for Review of Privileged Items is Established ("Motion for Injunctive Relief").

Asserting that the execution of the search warrant was the functional equivalent of a law-office search, the Motion for Injunctive Relief primarily challenged the use of the filter team to review privileged documents. The Intervenors objected to the protocol's limited provision of judicial review for potentially privileged documents since review was available only if a communication was clearly sent "to/from attorneys." In the Intervenors’ view, this exception for judicial review was inadequate because (1) the substance of the privileged information would...