The United States Court of Appeals for the Ninth Circuit ruled Monday that moving emails from an inbox to deleted items is not sufficient to establish Obstruction of Justice under 18 U.S.C. § 1519. In reaching this conclusion, the Court found the “concealment” must be proven by more than the fact that the defendant took a step that merely inconvenienced a reasonable investigator; there must be some likelihood that the item will not be found.
Andrew Katakis (Katakis) was charged with obstruction of justice for deleting incriminating emails that tied him to a conspiracy to rig bids at real estate foreclosure auctions. 18 U.S.C. § 1519 is violated if an individual “alters, destroys, mutilates, conceals, covers up, falsifies or makes a false entry in any record, document or tangible object with the intent to impede, obstruct or influence the investigation.” § 1519 was enacted to prohibit, in particular, corporate document-shredding to hide evidence of financial wrong doing.
The case arose from an investigation by federal authorities into a scheme to rig bids in 2008 and 2009. On Sept. 1, 2010, Katakis was informed by his bank that federal investigators had subpoenaed his bank records. Two days later, Katakis purchased a program called DriveScrubber and installed the program on several computers used by Katakis and his business partner, and alleged co-conspirator, Steve Swanger (Swanger). DriveScrubber was designed to wipe hard drives clean of all information and may be used to overwrite all the information on a hard drive’s unallocated or “free” space. The DriveScrubber program deleted various incriminating emails and in one instance, Swanger testified that Katakis manually deleted several emails from one computer. Investigators later found ten incriminating emails in the “deleted items” folder on Swanger’s computer although none of the emails could be found on the other computers or email server.
A jury in the Northern District of California convicted Katakis but the trial judge entered a judgment of acquittal after the trial. The United States appealed. In upholding the acquittal, and after reviewing the evidence in the light most favorable to the prosecution, the Court found that no rational jury could say that Katakis destroyed or concealed evidence. The unanimous panel determined that the only issue for the Court was whether the government carried its burden to show actual destruction or concealment. Because the government had failed to charge Katakis with attempted obstruction in the indictment, the government was required to prove that Katakis actually destroyed or concealed electronic records or documents.
In reaching this conclusion, the panel focused on whether Katakis had “double deleted” the emails, deleting the email from Outlook and then deleting the email a second time from the trash bin on the computer. The panel rejected the government’s argument that simply removing an item from its ordinary place of storage, and making it more difficult to find, was sufficient to violate the law. The Court further recognized that placing the email in the deleted item folder was not like putting it in a trash can. On Katakis’ computer, an email placed in the deleted items folders remained in the folder unless the user took further action to delete the file.
The Court found that the evidence of Katakis’ intent was overwhelming but the government’s attempts to prove that he actually performed the acts which he was accused were “incredibly weak.” In reaching this conclusion, the Court found that removing an email from one file folder and placing it in another was not sufficient to actually conceal it. In a § 1519 prosecution, the government must show “actual obstruction.” The Court also recognized that § 1519 was drafted to prevent corporate document-shredding and that the digital context threatens to expand § 1519, and its 20 year penalty, well beyond its intended reach. This decision may have broad implications across a variety of cases where prosecutors seek to apply laws designed for the destruction of physical objects to their digital counterparts.
