The opinion of the court was delivered by: STANLEY S. HARRIS
Movant Singh owns and operates Professional Tax Service ("Pro-Tax"), an income tax return preparation and financial services business. The Internal Revenue Service ("IRS") began investigating Pro-Tax in June, 1993. On December 20, 1993, special agents of the IRS seized movant's business equipment and business files pursuant to search warrants issued by this Court and by the United States District Court for the Eastern District of Virginia. On January 7, 1994, after the execution of the two search warrants, a magistrate judge of this Court issued a seizure warrant authorizing the seizure of equipment seized in the search. The list of items to be seized pursuant to the seizure warrant did not include software, data files, business records, or personal records seized during the December searches.
On February 8, 1994, movant filed a Fed. R. Crim. P. 41(e) motion for return of property with this Court and requested expedited consideration on the matter. When the United States Attorney's Office agreed to allow movant access to key business records, a hearing on movant's motion was deferred indefinitely. On April 11, 1994, administrative forfeiture proceedings were initiated by the IRS against the seized property. Movant filed a Claim of Ownership and a Cost Bond with the IRS, and the forfeiture proceedings were referred to the United States Attorney's Office for the District of Columbia.
During the remaining months in 1994, movant and the United States Attorney's Office were attempting, without success, to reach a resolution as to the return of the seized property.
On January 11, 1995, movant filed a supplemental memorandum of points and authorities in support of his motion for return of property. This Court held a status hearing on January 12, 1995, and requested the government file a brief in response to movant's motion and supplemental memorandum. On January 23, 1995, the government filed a response stating that it "did not oppose the motion for return of seized property."
Movant and the government apparently did not reach a mutual understanding as to what property would be returned, however. At a status hearing on February 1, 1995, movant argued that the government had essentially conceded that all property taken in the search should be returned to movant. The Assistant United States Attorney argued that the government's agreement to return the "seized property" went only to that property listed on the seizure warrant, and did not apply to the paper documents and records seized during the December, 1993, searches but not listed on the seizure warrant. This Court ordered the return of the equipment listed on the seizure warrant and ordered the government to file a response to movant's motion with respect to the remaining items in question. On February 3, 1995, the government returned all of movant's equipment listed on the January, 1994, seizure warrant.
As of this date, no indictment or information has been returned against movant. However, movant currently is the subject of an ongoing grand jury investigation.
Movant's Motion for Return of Property
Movant has moved for return of the documents, records, and other property not yet returned, pursuant to Fed. R. Crim. P. 41(e). Rule 41(e) provides, in pertinent part:
Rule 41(e) was amended in 1989 to recognize the right of a property owner to obtain return of lawfully seized property. Rule 41(e), Advisory Committee Notes, 1989 Amendment. Before the 1989 amendment, only those persons aggrieved by an unlawful search and seizure could seek return of the seized property under Rule 41(e). Movant takes no position in his motion for return of property as to whether his property was unlawfully seized; rather, he contends that he is unduly aggrieved by the continued possession of his property by the government.
District courts have the power to entertain motions to return property seized by the government when there are no criminal proceedings pending against the movant. See Ramsden v. United States, 2 F.3d 322 (9th Cir. 1993), cert. denied, 128 L. Ed. 2d 349, 114 S. Ct. 1624 (1994); United States v. Martinson, 809 F.2d 1364, 1366-67 (9th Cir. 1987). Rule 41(e) motions filed prior to the return of an indictment or information are treated as civil equitable proceedings. In re Search of Kitty's East, 905 F.2d 1367, 1370 (10th Cir. 1990); Richey v. Smith, 515 F.2d 1239 (5th Cir. 1975). Movant has filed a preindictment Rule 41(e) motion. Because this Court is therefore ...