IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 11-20750

IN RE: GRAND JURY SUBPOENA

Appeal from the United States District Court

for the Southern District of Texas

Before DAVIS, DENNIS, and HAYNES, Circuit Judges.

DENNIS, Circuit Judge:

This appeal arises from a grand-jury investigation in which the target of

the investigation (the “witness”) was subpoenaed to produce any records of

foreign bank accounts he was required to keep under Treasury Department

regulations governing offshore banking. The witness informed the government

that he would not comply with the subpoena, citing his Fifth Amendment

privilege against self-incrimination, and the government moved to compel the

witness to comply. After hearing argument, the district court denied the

government’s motion, and the government subsequently appealed.

This appeal requires us to address the Required Records Doctrine, under

which the government may require that certain records be kept and later

United States Court of Appeals

Fifth Circuit

F I L E D

September 21, 2012

Lyle W. Cayce

Clerk
No. 11-20750

2

produced without implicating the privilege against self-incrimination. Two of

our sister circuits have held that the doctrine applies to subpoenas identical to

the one at issue and that, therefore, the subpoenas’ targets must comply with

them. See In re M.H., 648 F.3d 1067, 1079 (9th Cir. 2011); In re Special Feb.

2011-1 Grand Jury Subpoena Dated Sept. 12, 2011, No. 11-3799, 2012 WL

3644842, at *5-6 (7th Cir. Aug. 27, 2012). Because we conclude that the

Required Records Doctrine applies in this case, we decline the witness’s

invitation to create a circuit split and accordingly REVERSE the district court’s

denial of the government’s motion to compel the witness to comply with the

subpoena.

BACKGROUND

I.

The witness in this case is the target of a grand-jury investigation in the

Southern District of Texas seeking to determine whether he used secret Swiss

bank accounts to evade his federal income taxes. In February 2009, following

an investigation into its cross-border banking business, the Swiss investment

bank UBS AG (“UBS”) entered into a deferred-prosecution agreement with the

Justice Department under which UBS (1) admitted to conspiring to defraud the

U.S. government by helping U.S.taxpayers commit tax evasion and (2) provided

the account records of approximately 250 of these taxpayers, including the

witness.

Based on the records obtained from UBS,the government determined that

the witness, through an offshore nominee entity, established an account with

UBS in 2005. A grand-jury investigation subsequently uncovered other offshore

entities the witness controlled. On February 25, 2011, the grand jury issued a

subpoena to the witness for any foreign-account records he was required to keep

under Treasury Department regulations governing offshore banking. See 31
No. 11-20750

1 Since the subpoena was issued, 31 C.F.R. § 103.32 has been transferred to 31 C.F.R.

§ 1010.420.

3

U.S.C. § 5314; 31 C.F.R. § 1010.420. The subpoena requires the witness to

produce, for the years 2005 to 2008,

[a]ny and all records required to be maintained pursuant to 31

C.F.R. § 103.32 relating to foreign financial accounts that [the

witness] had/[has] a financial interest in, or signature authority

over, including records reflecting the name in which each such

account is maintained, the number or other designation of such

account, the name and address of the foreign bank or other person

with whom such account is maintained, the type of such account,

and the maximum value of each such account during each specified

year.1

The subpoena then states that “[s]uch accounts include, but are not necessarily

limited to, the accounts of the following entities” and lists six entities that the

witness allegedly controls.

On March 16, 2011, the witness informed the government, through

counsel, that he would not comply with the subpoena, citing the Fifth

Amendment. The witness argues that requiring him to produce the records

sought would compel him to (1) admit the existence of the account, (2) admit his

control over it, and (3) authenticate the records. Alternatively, the witness

argues, assuming he has a foreign bank account but failed to comply with the

record-keeping requirements of the Bank Secrecy Act (“BSA” or “the Act”),

compelling him to produce these records would force him to admit to a violation

of the Act’s record-keeping provisions.

The government moved the district court to compel the witness to comply

with the subpoena. The district court heard argument and subsequently denied

the government’s motion, which the government now appeals.

II.
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4

The Currency andForeignTransactions Reporting Act of 1970, Pub. L. 91-

508, 84 Stat. 1118 (1970) (codified as amended at 31 U.S.C. §§ 5311-25) (the

BSA), regulates offshore banking and contains a number of record-keeping and

inspection provisions. Its purpose is “to require certain reports or records where

they have a high degree of usefulness in criminal, tax, or regulatory

investigations or proceedings.” 31 U.S.C. § 5311. Section 241(a) of the Act

instructs the Treasury Secretary to require U.S. citizens, residents, and

institutions to “keep records and file reports” regarding foreign financial

transactions and relationships. Id. § 5314. Accordingly, the Treasury Secretary

implemented regulations that require (1) U.S. citizens and residents to disclose

their foreign bank accounts, see 31 C.F.R. § 1010.350, and (2)thatthe records for

such accounts “be retained by each person having a financial interest in or

signature or other authority over any such account” for at least five years and

be kept “available for inspection as authorized by law,” id. § 1010.420. These

record-keeping regulations were in effect at all times relevant to this case.

DISCUSSION

Because the BSA’s record-keeping requirement is “essentially regulatory,”

the records sought are of a kind “customarily kept” by account holders such as

the witness, and the records have assumed “public aspects,” we conclude thatthe

Required Records Doctrine applies and requires the witness to comply with the

subpoena.

I.

“We review a district court’s decision granting a motion to quash or modify

a subpoena for abuse of discretion.” In re Grand Jury Proceedings, 115 F.3d

1240, 1243 (5th Cir. 1997). Although this is a deferential standard, the district

court abuses its discretion if its ruling is based on an erroneous view of the law.

In re MBS Mgmt. Servs., Inc., No. 11-35053, 2012 WL 3125167, at *1 (5th Cir.

Aug. 2, 2012).
No. 11-20750

5

II.

The Fifth Amendment to the United States Constitution provides that

“[n]o person . . . shall be compelled in any criminal case to be a witness against

himself.” U.S. CONST. amend. V. The Supreme Court has held that the privilege

against self-incrimination bars the government from “compelling a person to give

‘testimony’ that incriminates him.” Fisher v. United States, 425 U.S. 391, 409

(1976). Because “the privilege protects a person only against being incriminated

by his own compelled testimonial communications,” the Court determined that

it does not shield production of private papers voluntarily prepared or prepared

by a third party. Id. at 409-10.

Although one could reason that “[w]here documents are required to be kept

and then produced, they are arguably compelled,” In re M.H., 648 F.3d at 1071,

the Supreme Court has held that the privilege against self-incrimination does

not bar the government from imposing record-keeping and inspection

requirements as part of a valid regulatory scheme, see Shapiro, 335 U.S. at 32-

33. In Shapiro, the Court explained that Congress may impose record-keeping

and inspection requirements as a condition of engaging in an activity that is

within its power to regulate. Id. at 33. In that case, “the Supreme Court

required a wholesaler of fruit and produce to turn over certain records he was

obliged to keep and maintain for examination pursuant to the Emergency Price

Control Act, which applied in part to records ‘customarily kept.’” In re M.H., 648

F.3d at 1072. The Supreme Court explained that this Required Records Doctrine

“applies not only to public documents in public offices, but also to records

required by law to be kept in order that there may be suitable information of

transactions which are the appropriate subjects of governmental regulation, and

the enforcement of restrictions validly established.” Shapiro, 335 U.S. at 17.

That being said, the Required Records Doctrine does not empower the

government to command every citizen to keep a diary of their crimes under the
No. 11-20750

6

guise of regulation. See id. at 71 (Jackson, J., dissenting). Rather, any recordkeeping or inspection requirement under Shapiro must be directed at “an

essentially non-criminal and regulatory area of inquiry,” Marchetti v. United

States, 390 U.S. 39, 57 (1968) (internal quotation marks omitted), and may not

be “directed almost exclusively to individuals inherently suspect of criminal

activities,” Grosso v. United States, 390 U.S. 62, 68 (1968) (holding that the

Required Records Doctrine does not permit the government to require record

keeping of “wagering activities” as part of a “wagering excise tax” when

gambling was generally illegal). Thus, the government may not make an end

run on the Fifth Amendment and require criminals to self-report their offenses.

However, “[t]he hypothetical case in which every individual is required to

maintain a record of everything he does that interests the government is remote

from the case of the individual who enters upon a regulated activity knowing

that the maintenance of extensive records available for inspection by the

regulatory agency is one of the conditions of engaging in the activity.” Smith v.

Richert, 35 F.3d 300, 303 (7th Cir. 1994). Thus, the Required Records Doctrine

permits “the government . . . [to] have the means, over an assertion of the Fifth

Amendment [privilege against self-incrimination], to inspect the records it

requires an individual to keep as a condition of voluntarily participating in [a]

regulated activity.” In re Special Grand Jury Subpoena, 2012 WL 3644842, at

*5.

III.

In Grosso, the Supreme Court identified three “premises” of the Required

Records Doctrine: “[F]irst, the purposes of the United States’ inquiry must be

essentially regulatory; second, information is to be obtained by requiring the

preservation of records of a kind which the regulated party has customarily kept;

and third, the records themselves must have assumed ‘public aspects’ which

render them at least analogous to public documents.” 390 U.S. at 67-68. These
No. 11-20750

2 See In re M.H., 648 F.3d at 1072; In re Grand Jury Subpoena, 21 F.3d 226, 228 (8th

Cir. 1994); United States v. Lehman, 887 F.2d 1328, 1333 (7th Cir. 1989); In re Grand Jury

Subpoena Duces Tecum Served upon Underhill, 781 F.2d 64, 67 (6th Cir. 1986); In re Doe, 711

F.2d 1187, 1191 (2d Cir. 1983); United States v. Webb, 398 F.2d 553, 556 (4th Cir. 1968).

7

three premises—(1) “essentially regulatory”; (2) “customarily kept”; and (3)

“public aspects”—have been recognized by half of the twelve courts of appeals

(excluding the Federal Circuit).2 Although the Fifth Circuit has applied the first

and third prongs of the Required Records Doctrine, see, e.g., In re Grand Jury

Proceedings, 601 F.2d 162, 167-71 (5th Cir. 1979), it has not applied the second

prong, and so the government argues that the customarily kept prong is not

required for the Required Records Doctrine to apply. However, “[e]ven if we

assume, for purposes of decision, that all three prongs of the test set forth in

Grosso apply, we conclude that all three requirements are met in this case.” In

re M.H., 648 F.3d at 1073.

A.

The witness argues that the text of the BSA and its legislative history

indicate thatthe record-keeping requirements imposed on foreign bank accounts

are meant to aid law enforcement and that therefore the Act is not “essentially

regulatory.” Implicit in the witness’s argument is that because the BSA lists

first among its purposes the gathering of information that has a “high degree of

usefulness in criminal . . . investigations,” 31 U.S.C. § 5311, the Act’s chief

purpose is to fight crime.

Notwithstanding his own argument, the witness acknowledges that the

BSA has more than one purpose. And that a statute relates to criminal law in

addition to regulatory matters does not strip the statute of its status as

“essentially regulatory.” See Cal. Bankers Ass’n v. Shultz, 416 U.S. 21, 76 (1974)

(“[T]hat a legislative enactment manifests a concern for the enforcement of the

criminal law does not cast any generalized pall of constitutional suspicion over

it.”); In re M.H., 648 F.3d at 1074 (“[T]hat Congress aimed to use the BSA as a
No. 11-20750

8

tool to combat certain criminal activity is insufficient to render the BSA

essentially criminal as opposed to essentially regulatory.”). 

Furthermore, although one purpose of the BSA was to help ferret out

criminal activity, the Act requires records to be kept “where they have a high

degree of usefulness in criminal, tax, or regulatory investigations.” 31 U.S.C. §

5311 (emphasis added). Elaborating on the non-criminal purposes of the BSA,

the House Report acknowledges that the Acts’s record-keeping and reporting

requirements “aid duly constituted authorities in lawful investigations” but also

underscores that the requirements “facilitate the supervision of financial

institutions properly subject to federal supervision” and “provide for the

collection of statistics necessary for the formulation of monetary and economic

policy.” H.R. Rep. 91-975 (1970), reprinted in 1970 U.S.C.C.A.N. 4394, 4405.

Consequently, the Treasury Department shares the information it collects

pursuant to the Act’s requirements with other agencies—including the Office of

the Comptroller ofthe Currency,the Consumer FinancialProtection Bureau, the

Federal Reserve Board, the Federal Deposit Insurance Corporation, the National

Credit Union Administration, and the Office of Thrift Supervision—none of

which are empowered to bring criminal prosecutions. See 31 U.S.C. § 5319; 31

C.F.R. § 1010.950(a)-(b). Furthermore, the Supreme Court has noted, in

discussing “the recordkeeping and reporting requirements of the [BSA],” that

Congress “seems to have been equally concerned with civil liability which might

go undetected by reason of the transactions of the type required to be recorded

or reported.” Shultz, 416 U.S. at 76.

The district court’s application ofthe “essentially regulatory” requirement

was therefore erroneous. The district court ruled that the BSA’s record-keeping

requirements fail under Marchetti and Grosso because the “regulatory

justifications” for the requirement “are but smoke and mirrors for [the

government’s] real concern: crime.” However, even ignoring the non-criminal
No. 11-20750

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purposes of the BSA, the question is not whether Congress was subjectively

concerned about crime when enacting the Act’s record-keeping provisions, but

rather whether these requirements apply exclusively or almost exclusively to

people engaged in criminal activity. See Marchetti, 390 U.S. at 57. 

Here, the BSA’s record-keeping requirements do not apply exclusively to

those engaged in criminal activity. “There is nothing inherently illegal about

having or being [the] beneficiary of an offshore foreign banking account,” and

“[n]othing about having a foreign bank account on its own suggests a person is

engaged in illegal activity,” In re M.H., 648 F.3d at 1074, points that the witness

does not dispute. Because the BSA’s record-keeping requirements serve

purposes unrelated to criminal law enforcement and because the provisions do

not exclusively target people engaged in criminal activity, we conclude that the

requirements are “essentially regulatory,” satisfying the Require Records

Doctrine’s first prong.

B.

That the records sought are of a kind customarily kept is not contested.

Even if this were not the case, this prong of the Required Records Doctrine is

easily satisfied here. The records sought are of the same type that the witness

must report annually to the IRS pursuant to the IRS’s regulation of offshore

banking: the name, number, and type of account(s), the name and address of the

bank where an account is held, and the maximum value of the account during

the reporting period. See In re M.H., 648 F.3d at 1076; 31 C.F.R. §§ 1010.350,

1010.420. Furthermore, the records sought are also of the same type that a

reasonable account holder would keep in order to access his account. See In re

M.H., 648 F.3d at 1076. Accordingly, we find that the records the subpoena

seeks are of a kind “customarily kept” by the witness in satisfaction of the

Require Records Doctrine’s second prong.

C.
No. 11-20750

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Finally, we consider the witness’s arguments that the third prong of the

Required Records Doctrine is not met. In order to satisfy this prong, “the records

[sought] must have assumed ‘public aspects’ which render them at least

analogous to public documents.” Grosso, 390 U.S. at 68. Two courts of appeals

have held that “if the government’s purpose in imposing the regulatory scheme

is essentially regulatory,then it necessarily has some ‘public aspects,’” sufficient

for the Required Records Doctrine’s third prong. In re M.H., 648 F.3d at 1076

(citing Shapiro, 335 U.S. at 33-34); accord Donovan v. Mehlenbacher, 652 F.2d

228, 231 (2d Cir. 1981). 

Drawing a distinction between individuals who publicly engage in business

and those who privately open a foreign bank account, the witness argues that

“[i]ndividuals subject to the BSA’s foreign account record keeping requirements

are not licensed, are subject to no substantive restrictions, and generally have

not engaged in activities with the public or in the public sphere.” Br. for

Appellee 22. Thus, the witness contends that substantive restrictions, like those

imposed in Shapiro, were enacted in order to protect the public and that recordkeeping requirements are meant to aid in the enforcement of these substantive

restrictions. Accordingly, the “public aspects” necessary for the third prong do

not come from record-keeping requirements,the witness argues, but rather from

the underlying substantive restrictions enacted to protect the public. Because

the BSA imposes no substantive restrictions on the holding of foreign bank

accounts, the witness maintains that records of these accounts lack the “public

aspects” required for the third prong of the Required Records Doctrine.

The witness misapprehends this prong of the Required Records Doctrine.

Although the witness argues that substantive regulations designed to protect the

public from harm may imbue otherwise private documents with public aspects,

it does not follow that public aspects exist only under these circumstances.

Furthermore, adopting a rule that the legitimacy of a record-keeping
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requirement depends on Congress first enacting substantive restrictions would

lead to absurd results. “If the witness’s argument were correct, then Congress

would be prohibited from imposing the least regulatory burden necessary; it

would instead be required to supplement a reporting or recordkeeping scheme

with additional and unnecessary ‘substantive restrictions’ for the sole purpose

of upholding its record keeping and reporting requirements.” Reply Br. for

Appellant 25. Additionally, that the records sought are typically considered

private does not bar them from possessing the requisite public aspects. See In

re M.H., 648F.3d at 1077 (“[T]hatthe information soughtis traditionally private

and personal as opposed to business-related does not automatically implicate the

Fifth Amendment.”); In re Kenny, 715 F.2d at 52-54 (reasoning that subpoenaed

medical records possessed sufficient “public aspects” to satisfy the Required

Records Doctrine’s third prong).

Here,theTreasury Department shares the information it collects pursuant

to the Act’s record-keeping and reporting requirements with a number of other

agencies. That this data sharing is designed to serve an important public

purpose sufficientto imbue otherwise private foreign bank account records with

“public aspects” is not difficult to imagine. The witness “has not made a

compelling argument that the information he is being asked to provide lacks

‘public aspects’ despite its essentially regulatory nature.” In re M.H., 648 F.3d

at 1079. Accordingly, we find that the records sought have “public aspects”

sufficient to satisfy the Required Records Doctrine’s third prong.

CONCLUSION

For the foregoing reasons, we REVERSE the district court’s denial of the

government’s motion to compel the witness to comply with the subpoena.