Opinion ID: 566084
Heading Depth: 3
Heading Rank: 4

Heading: The Penalty Amounts

Text: 23 The petitioners also contend the Board's assessment of civil money penalties constitutes an abuse of discretion because the amount exceeds what is necessary to force compliance. The FDI Act identifies factors the agency must take into account in determining the amount of any civil money penalty, including: (1) the financial resources of the person charged, (2) the presence of good faith, (3) the gravity of the violation, (4) the history of violations, and (5) other matters as justice requires. 12 U.S.C. Sec. 1818(i)(2)(ii); see also 12 C.F.R. Sec. 263.25 (1991). 24 Here, the ALJ found the violations were intentional and displayed lack of good faith. Not only did the petitioners fail to cooperate with the Board early in the process, but they also proffered incomplete and unrealistic plans motivated by their desire to avoid individual, out-of-pocket expenses. The ALJ also found the violations extended over a long period of time and constituted unsafe and unsound practices in breach of the petitioners' fiduciary duties. The petitioners' failure to comply with the restitution orders harmed the holding companies--ultimately causing the demise of EVCO and SSBC--while personally benefiting the petitioners. 25 Against these factors, the ALJ weighed the petitioners' financial resources, concluding the petitioners' assertions of negative net worth were not supported by evidence. The ALJ did take into account the petitioners' financial setbacks by recommending amounts considerably reduced from the initial assessments. We cannot say the Board abused its discretion in imposing these penalties.B. Double Jeopardy 26 The petitioners contend the imposition of civil money penalties constitutes double jeopardy because they already have been subjected to criminal punishment for the same conduct and the penalties are punitive in nature. We review de novo claims alleging constitutional abuse by an agency. 5 U.S.C. Sec. 706(2)(E); see also Sewak v. INS, 900 F.2d 667, 671 (3d Cir.1990) (judicial review of due process violation by agency is plenary). 27 The double jeopardy clause of the Constitution protects against multiple punishments for the same offense. United States v. Halper, 490 U.S. 435, 440, 109 S.Ct. 1892, 1897, 104 L.Ed.2d 487 (1989). In determining whether the same offense is involved, the test to be applied to determine whether there are two offenses or only one is whether each provision requires proof of an additional fact which the other does not. Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct. 180, 182, 76 L.Ed. 306 (1932). If the same offense results in criminal punishment and civil money penalties, multiple punishments exist for purposes of double jeopardy where a civil penalty [is] so extreme and so divorced from the Government's damages and expenses as to constitute punishment. Halper, 490 U.S. at 442, 109 S.Ct. at 1898. 28 Here, criminal punishment was imposed for conspiracy, wire fraud, willful misapplication of funds of a federally insured financial institution, false entries with intent to defraud, false statements in loan applications, and false statements to a government agency that occurred from October 1982 until June 1985. Civil money penalties were imposed for noncompliance with terms of the four C & D orders, including: (1) failing to submit timely plans to the Reserve Bank, (2) increasing EVCO debt, (3) paying insider expenses in excess of $3,000, and (4) failing to submit quarterly compliance reports detailing C & D compliance actions. Violation of the C & Ds took place from August 1985 until sometime in 1986. 29 Proof of violation of the terms of the C & Ds does not involve proof of the same facts involved in proving the criminal violations because violation of the C & Ds implicates different conduct at different times. Therefore, criminal punishment and civil money penalties were not imposed for the same offense. Because the same conduct was not involved, we do not reach the second prong of the petitioners' argument regarding the allegedly punitive nature of the penalties. C. Petitioners' Right to Testify 30 Daniel Burke and Davis contend the ALJ violated due process by denying their right to testify and assert a fifth amendment privilege. The fifth amendment's self incrimination clause involves two distinct rights: a criminal defendant's right not to take the stand at his own trial and the privilege of any witness in a governmental proceeding not to answer specific, potentially incriminating questions. Roach v. National Transp. Safety Bd., 804 F.2d 1147, 1151 (10th Cir.1986), cert. denied, 486 U.S. 1006, 108 S.Ct. 1732, 100 L.Ed.2d 195 (1988). In an agency hearing, an individual has a privilege not to answer questions by the agency when the answers might incriminate him in any future criminal proceeding. See Lefkowitz v. Turley, 414 U.S. 70, 77, 94 S.Ct. 316, 322, 38 L.Ed.2d 274 (1973); Roach, 804 F.2d at 1151. To invoke this protection against self-incrimination in an agency hearing, a witness must take the stand, be sworn in, and assert the privilege in response to each allegedly incriminating question as it is asked. Roach, 804 F.2d at 1151; United States v. Malnik, 489 F.2d 682, 685 (5th Cir.), cert. denied, 419 U.S. 826, 95 S.Ct. 44, 42 L.Ed.2d 50 (1974). This privilege allows an individual to decline to answer specific questions but does not generally prohibit inquiries designed to elicit incriminating answers. Roach, 804 F.2d at 1151 (citing McCormick on Evidence Sec. 136 (3d ed. 1984)). 31 Daniel Burke and Davis refused to take the stand because the ALJ refused to rule their cross-examination would be limited to subjects raised in direct examination. Because the petitioners themselves chose not to testify, the fifth amendment protection against government compulsion was not implicated. The ALJ's refusal to provide a blanket protection limiting the Board's scope of inquiry did not violate the petitioners' fifth amendment rights. 32 The petitioners object to the ALJ's comment he would consider striking their testimony if they were unresponsive. An ALJ has discretion to strike testimony he considers unresponsive. 12 C.F.R. Sec. 263.6(b)(3). The petitioners cannot complain their due process rights were infringed when they decided not to testify and preserve for appeal testimony the ALJ might have ruled unresponsive. D. Ex Parte Communications 33 The petitioners contend the memorandum from the agency's legal counsel to the ALJ constituted improper ex parte communications. The APA prohibits contact relating to the merits of a formal adjudicative proceeding between an interested person outside the agency and any member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding. 5 U.S.C. Sec. 557(d)(1)(A), (B). This ex parte restriction, however, does not apply to contacts within the agency. United Steelworkers v. Marshall, 647 F.2d 1189, 1213 (D.C.Cir.1980), cert. denied, 453 U.S. 913, 101 S.Ct. 3148, 3149, 69 L.Ed.2d 997 (1981). Here, the agency's legal division issued a legal memorandum to the Board. Because this memorandum constitutes contact within the agency, the ex parte restriction in the APA does not apply. E. Right to Financial Privacy 34 Davis contends officials violated the Right to Financial Privacy Act (RFPA or Act), 12 U.S.C. Secs. 3401 et seq., 2 by obtaining documents relating to his bank transactions. RFPA prohibits government authorities from obtaining copies of, or the information contained in the financial records of any customer from a financial institution without customer authorization. 12 U.S.C. Sec. 3402. Section 3401 of the Act defines government authority as any agency or department of the United States, or any officer, employee, or agent thereof. Id. Sec. 3401(3). 35 RFPA also establishes exceptions to this protection. One exception provides: Nothing in this chapter prohibits the examination by or disclosure to any supervisory agency of financial records or information in the exercise of its supervisory, regulatory, or monetary functions with respect to a financial institution. Id. Sec. 3413(b). A second exception provides that [n]othing in this chapter prohibits any supervisory agency from exchanging examination reports or other information with another supervisory agency. Id. Sec. 3412(d). 36 For purposes of RFPA, the Board is a supervisory agency with respect to bank holding companies and their subsidiaries. Id. Sec. 3401(6)(E). The Office of the Comptroller of the Currency (OCC), the Federal Home Loan Bank (FHLB), and the Wyoming State Examiner (State Examiner) also are supervisory agencies under RFPA because they are regulators of the financial institutions involved. Id. Sec. 3401(6). Here, the Board requested information about Davis from the OCC, the FHLB, and the State Examiner. Because the Board received information regarding Davis' accounts in pursuit of the agency's supervisory responsibilities from other supervisory agencies, the information about Davis' bank transactions is exempt from the privacy protection of RFPA. 37 We AFFIRM.