Third-party PNC Bank will not have to produce complete or redacted documents in a fraud case the Federal Trade Commission filed against debt relief business owner Jeremy Lee Marcus and others.
The Southern District of Florida sided with PNC, despite an appointed receiver’s attempt to have the bank produce documents.
“The court agrees with the receiver that the district court held that [t]he privilege extends to [suspicious activity reports or SAR] but not to underlying documents,” Judge Jared M. Strauss wrote. “The receiver, however, misconstrues the meaning of ‘underlying documents.’”
Judge Strauss said each of the documents in question clearly state if a SAR was filed. Because of this, PNC papers are under the SAR privilege completely.
Because the dispute of non-public Office of Comptroller of the Currency details isn’t at a concern in this case, the court ruled that an OCC Letter, which stated that PNC should provide the documents and noted the SAR redacted, isn’t related to the receiver’s request for redacted form from PNC.
“It is hereby ordered that the receiver’s request to compel PNC to produce whole or redacted versions of the documents listed on the privilege log is denied,” wrote Judge Strauss.
The FTC and the State of Florida took legal action against the defendants, alleging they conducted “a massive scheme to offer [victims] phony debt relief services, including fake loans,” according to the opinion. A permanent injunctive relief was put in place against the defendants, a receiver was retained to help the victims recover assets. The receiver subsequently gave PNC a subpoena for documents amid their investigation. That’s when a disagreement over what was considered privileged came about.
A district court ordered PNC to give the receiver a privilege log via the Bank Secrecy Act, but PNC allegedly withheld documents, causing the receiver to file the motion with hopes of getting the court to order it to produce it.