1 00:00:03,200 --> 00:00:07,960 Speaker 1: This is Bloomberg Law with June Brussel from Bloomberg Radio. 2 00:00:09,119 --> 00:00:14,400 Speaker 1: They are costing taxpayers billions of dollars and the values 3 00:00:14,440 --> 00:00:18,520 Speaker 1: that they're claiming are completely not to be honest. You know, 4 00:00:18,600 --> 00:00:22,960 Speaker 1: these people are buying into these syndications for eight million, 5 00:00:23,360 --> 00:00:27,120 Speaker 1: for example, and you know a month later they're claiming 6 00:00:27,160 --> 00:00:30,840 Speaker 1: deductions forty five millions for the same property that they 7 00:00:30,840 --> 00:00:35,040 Speaker 1: brought into for eight million. It's conceivable that somebody discovered 8 00:00:35,040 --> 00:00:37,319 Speaker 1: a gold mine on the property after they paid eight 9 00:00:37,320 --> 00:00:40,600 Speaker 1: million for it, but I doubt seriously that's the case 10 00:00:40,680 --> 00:00:44,320 Speaker 1: in any of these. So it's a huge stam on 11 00:00:44,360 --> 00:00:49,199 Speaker 1: the taxpayer. Attorney Tim Lindstrom is talking about syndicated conservation 12 00:00:49,320 --> 00:00:52,559 Speaker 1: easements at tax break the i r S hates and 13 00:00:52,640 --> 00:00:55,800 Speaker 1: it's cracking down on. For example, you can imagine that 14 00:00:55,880 --> 00:00:59,680 Speaker 1: for wealthy people, the land deals may have seemed like 15 00:00:59,680 --> 00:01:02,960 Speaker 1: the your thing. For every one dollar they invested in 16 00:01:03,080 --> 00:01:06,760 Speaker 1: partnerships that promised to preserve green space, they got four 17 00:01:06,800 --> 00:01:10,840 Speaker 1: dollars or more in charitable deductions to cut their tax bills. 18 00:01:10,840 --> 00:01:13,920 Speaker 1: But prosecutors say those deals cheated the government out of 19 00:01:13,920 --> 00:01:18,640 Speaker 1: two hundred fifty million dollars by inflating valuations. Lindstrom has 20 00:01:18,680 --> 00:01:23,200 Speaker 1: prepared hundreds of conservation easements for individual taxpayers, but he 21 00:01:23,319 --> 00:01:27,360 Speaker 1: steers clients away from the syndicated deals. I guess the 22 00:01:27,480 --> 00:01:30,759 Speaker 1: first time I got called was a few years ago, 23 00:01:31,040 --> 00:01:34,000 Speaker 1: and it was an investment broker and he wanted to 24 00:01:34,040 --> 00:01:36,080 Speaker 1: know what I thought, and he provided me with a 25 00:01:36,120 --> 00:01:40,440 Speaker 1: documentation which violated a confidentiality agreement he had made with 26 00:01:40,560 --> 00:01:43,160 Speaker 1: the people who are promoting this. But I looked at 27 00:01:43,200 --> 00:01:45,839 Speaker 1: it and I wrote It's called page letter that basically said, 28 00:01:45,920 --> 00:01:48,040 Speaker 1: don't do this. This is too good to be true. 29 00:01:48,480 --> 00:01:53,440 Speaker 1: People are relying on values that have no credibility, and 30 00:01:53,600 --> 00:01:56,960 Speaker 1: if they're audited, they're gonna not only have to cough 31 00:01:57,080 --> 00:02:00,400 Speaker 1: up what they saved in taxes, but penally in interest. 32 00:02:01,080 --> 00:02:03,840 Speaker 1: So since then, I've had three or four other people 33 00:02:03,960 --> 00:02:07,000 Speaker 1: call IS recently IS in the past six months, and 34 00:02:07,040 --> 00:02:10,720 Speaker 1: they said, well, I've read about these syndications and I've 35 00:02:10,760 --> 00:02:14,320 Speaker 1: got a big tax lability this year, and I understand 36 00:02:14,400 --> 00:02:16,600 Speaker 1: you know about syndications, and i'd like you to help me. 37 00:02:16,720 --> 00:02:19,480 Speaker 1: And I said, well, I'll help you by telling you 38 00:02:19,520 --> 00:02:22,240 Speaker 1: don't do it. If you are ordered it, you are 39 00:02:22,280 --> 00:02:25,360 Speaker 1: going to be very unhappy. And I can't give you 40 00:02:25,400 --> 00:02:27,880 Speaker 1: advice based on the likelihood that you'll be ordered it. 41 00:02:27,960 --> 00:02:29,679 Speaker 1: You just have to assume that the i R S 42 00:02:29,760 --> 00:02:32,320 Speaker 1: going to look at this, and if they do, you're 43 00:02:32,320 --> 00:02:35,000 Speaker 1: gonna lose a lot of money. Does it seem like 44 00:02:35,040 --> 00:02:38,800 Speaker 1: the investors know what they're getting into. Well, it's hard 45 00:02:38,840 --> 00:02:41,440 Speaker 1: to know what the investors know. I think a lot 46 00:02:41,480 --> 00:02:43,240 Speaker 1: of them, you know, they want to make a buck 47 00:02:43,400 --> 00:02:47,080 Speaker 1: and here's an investment advisor telling you, hey, you know, 48 00:02:47,280 --> 00:02:49,760 Speaker 1: put up a hundred thousand and you'll save two hundred 49 00:02:49,760 --> 00:02:53,320 Speaker 1: thousand dollars in income taxes. And they don't know anymore 50 00:02:53,400 --> 00:02:56,960 Speaker 1: about it than that they get these ppms, these private 51 00:02:56,960 --> 00:03:00,160 Speaker 1: placement memos that are three or forty pages, will long 52 00:03:00,200 --> 00:03:03,560 Speaker 1: that they're not reading those things. All they're doing is saying, 53 00:03:03,760 --> 00:03:06,400 Speaker 1: this is a good deal. How can I possibly resist this? 54 00:03:06,800 --> 00:03:09,519 Speaker 1: The people who should take the blame aren't the investors. 55 00:03:10,040 --> 00:03:13,160 Speaker 1: If the promoters they absolutely know what they're doing. Joining 56 00:03:13,160 --> 00:03:16,520 Speaker 1: me now is Bloomberg Legal reporter David Vorriakis, who's been 57 00:03:16,560 --> 00:03:19,639 Speaker 1: looking into the I R S crackdown. So David explained 58 00:03:19,680 --> 00:03:26,320 Speaker 1: what a syndicated conservation easement is. Syndicated conservation easements are 59 00:03:26,440 --> 00:03:32,679 Speaker 1: an investment vehicle that are supposed to encourage land conservation, 60 00:03:32,960 --> 00:03:36,720 Speaker 1: and they're encouraged in the tax code by a law 61 00:03:36,840 --> 00:03:41,080 Speaker 1: that Congress path forty years ago and they've been refining 62 00:03:41,080 --> 00:03:45,400 Speaker 1: the regulations ever since. But essentially, their pools of investors 63 00:03:45,400 --> 00:03:52,080 Speaker 1: that get together and by interest in partnerships typically that 64 00:03:52,360 --> 00:03:57,400 Speaker 1: then by land and give easement on undeveloped land to 65 00:03:57,720 --> 00:04:01,680 Speaker 1: land trusts or government agencies. And this is a way 66 00:04:01,760 --> 00:04:06,680 Speaker 1: to encourage land conservation. There's tens of millions of acres 67 00:04:06,720 --> 00:04:12,480 Speaker 1: around the country that have been saved through conservation easement. Now, 68 00:04:12,600 --> 00:04:16,480 Speaker 1: the vast majority of conservation easements are done by individuals 69 00:04:16,600 --> 00:04:20,560 Speaker 1: or families. The variations that we're talking about is syndicated 70 00:04:20,600 --> 00:04:24,360 Speaker 1: conservation easements in which investors get together and they get 71 00:04:24,520 --> 00:04:28,320 Speaker 1: special treatment under the law that they can then take 72 00:04:28,640 --> 00:04:33,960 Speaker 1: the charitable deduction on their tax form and they can 73 00:04:34,160 --> 00:04:37,200 Speaker 1: write that off on their taxes. Tell us about the 74 00:04:37,200 --> 00:04:40,880 Speaker 1: I R S crackdown on these deals. What the I 75 00:04:41,120 --> 00:04:46,039 Speaker 1: R S has been investigating is abuses in the syndicated 76 00:04:46,120 --> 00:04:50,599 Speaker 1: conservation easement industry, in which the I R S has 77 00:04:50,640 --> 00:04:57,040 Speaker 1: concluded that many of the syndicates are essentially tax shelters 78 00:04:57,080 --> 00:05:01,880 Speaker 1: in which they are offering tax for as without any 79 00:05:02,279 --> 00:05:06,200 Speaker 1: substance behind them. And what the I R S is 80 00:05:06,240 --> 00:05:09,640 Speaker 1: now doing and has been doing for about three years, 81 00:05:09,720 --> 00:05:14,720 Speaker 1: and they're really quickening the pace now is they're conducting 82 00:05:15,040 --> 00:05:20,039 Speaker 1: civil audits of promoters of the syndicated conservation easements, and 83 00:05:20,040 --> 00:05:25,320 Speaker 1: they're also conducting criminal investigations and they are now grand 84 00:05:25,360 --> 00:05:29,400 Speaker 1: juries in Atlanta, St. Louis and Charlotte weighing charges against 85 00:05:29,480 --> 00:05:32,599 Speaker 1: organizers around the United States. The i R S as 86 00:05:32,640 --> 00:05:36,479 Speaker 1: the appraisals of the property are grossly inflated, explain that 87 00:05:36,600 --> 00:05:42,000 Speaker 1: core issue, the heart of the dispute between investors and 88 00:05:42,640 --> 00:05:45,599 Speaker 1: the I R S is the way that the land 89 00:05:45,880 --> 00:05:49,960 Speaker 1: is valued. Essentially, what the government is saying is that 90 00:05:50,000 --> 00:05:55,120 Speaker 1: the promoters of the syndicated conservation eatments are offering lands 91 00:05:55,200 --> 00:05:59,760 Speaker 1: that's overvalued, and that is what's cheating the I R 92 00:05:59,880 --> 00:06:04,280 Speaker 1: S us. The deduction that taxpayers get is the difference 93 00:06:04,400 --> 00:06:08,200 Speaker 1: between the value of the land if it's left undeveloped 94 00:06:08,240 --> 00:06:12,760 Speaker 1: and placed in an easement at bars development, and the 95 00:06:12,880 --> 00:06:15,360 Speaker 1: value of the land if it were developed to its 96 00:06:15,440 --> 00:06:19,279 Speaker 1: highest and best use. So a parcel may be worth 97 00:06:19,440 --> 00:06:24,360 Speaker 1: ten million dollars if it's undeveloped and sixty million dollars 98 00:06:24,400 --> 00:06:27,600 Speaker 1: if it's developed to its highest invest use. The different 99 00:06:27,760 --> 00:06:32,919 Speaker 1: fifty million dollars is the charitable deduction that investors can take. 100 00:06:34,200 --> 00:06:37,400 Speaker 1: Tell us about these two brothers from an Atlanta, A 101 00:06:37,480 --> 00:06:41,960 Speaker 1: County firm who pleaded guilty. There were two brothers, Corey 102 00:06:42,120 --> 00:06:45,159 Speaker 1: and Stein A G. There forty two and thirty eight, 103 00:06:45,440 --> 00:06:48,920 Speaker 1: and they worked for an accounting firm and they were 104 00:06:49,040 --> 00:06:53,479 Speaker 1: part of an organization that we reported was run by 105 00:06:53,560 --> 00:06:58,719 Speaker 1: a promoter and accountant named Jack Fisher, and they would 106 00:06:58,920 --> 00:07:03,120 Speaker 1: organize groups of wealthy investors to put money into the 107 00:07:03,279 --> 00:07:08,760 Speaker 1: syndicates that would donate conservation easements to land trusts. And 108 00:07:09,080 --> 00:07:13,160 Speaker 1: the I R S position is that the appraisals that 109 00:07:13,200 --> 00:07:16,320 Speaker 1: are on properties that are given away through these conservation 110 00:07:16,320 --> 00:07:21,960 Speaker 1: amusements are grossly inflated, and that's where the fraud starts. 111 00:07:22,440 --> 00:07:26,360 Speaker 1: The A. G. S both pleaded guilty in late December 112 00:07:26,680 --> 00:07:31,640 Speaker 1: in Asheville, North Carolina, and they're cooperating with prosecutors in 113 00:07:31,880 --> 00:07:36,760 Speaker 1: Charlotte's that have a larger investigation going. The AGS helped 114 00:07:37,080 --> 00:07:41,280 Speaker 1: this organization sign up clients and they helped with the 115 00:07:41,360 --> 00:07:45,440 Speaker 1: taxes that were owed by the clients and they are 116 00:07:45,480 --> 00:07:51,080 Speaker 1: now cooperating and against as we reported, Promoter A. He's 117 00:07:51,160 --> 00:07:55,000 Speaker 1: referred to in court documents and we identified him as 118 00:07:55,120 --> 00:08:00,200 Speaker 1: Jack Fisher within the accountant and developer who's done a 119 00:08:00,240 --> 00:08:03,160 Speaker 1: couple of dozen of these deals across the United States. 120 00:08:03,240 --> 00:08:06,000 Speaker 1: And when the I R S is investigating these deals, 121 00:08:06,040 --> 00:08:09,880 Speaker 1: what are they looking for? They are looking for what 122 00:08:10,240 --> 00:08:14,800 Speaker 1: they call badges of fraud, where there'res written materials or 123 00:08:15,160 --> 00:08:19,600 Speaker 1: promises made that are fault or omissions that should be 124 00:08:19,640 --> 00:08:23,960 Speaker 1: in the written materials. Essentially, what they argue in the 125 00:08:24,000 --> 00:08:28,400 Speaker 1: criminal case involving the A. G Brothers in Asheville is 126 00:08:28,560 --> 00:08:33,440 Speaker 1: that the game was rigged. When investors put their money 127 00:08:33,640 --> 00:08:37,440 Speaker 1: into a syndicate. The syndicate was supposed to offer them 128 00:08:37,760 --> 00:08:42,560 Speaker 1: three options. One is to develop the land, the other 129 00:08:43,040 --> 00:08:46,199 Speaker 1: was to leave it as it is, and the third 130 00:08:46,320 --> 00:08:49,840 Speaker 1: is to donate an Eastman on the land. And they're 131 00:08:49,840 --> 00:08:53,640 Speaker 1: supposed to lay out the economic benefit of each option, 132 00:08:53,920 --> 00:08:59,720 Speaker 1: and they are essentially steering everyone into the conservation easement option. 133 00:09:00,040 --> 00:09:04,720 Speaker 1: And what the investigators believe is that the appraisal of 134 00:09:04,760 --> 00:09:08,400 Speaker 1: the land that calculates what it would be worth if 135 00:09:08,400 --> 00:09:12,000 Speaker 1: it were developed, that those appraisals are inflated, So they're 136 00:09:12,000 --> 00:09:16,960 Speaker 1: looking at promises made about what the appraisals will be 137 00:09:16,960 --> 00:09:20,640 Speaker 1: before the appraisals are made. They're looking at whether the 138 00:09:20,679 --> 00:09:25,680 Speaker 1: appraisers intentionally inflated their reports. They're looking at whether the 139 00:09:25,760 --> 00:09:29,559 Speaker 1: lawyers and the accountants aided this. And in the case 140 00:09:29,679 --> 00:09:34,240 Speaker 1: of the A. G. Brothers, the ags admitted that they 141 00:09:34,280 --> 00:09:39,640 Speaker 1: backdated documents so that investors, say in the seventeen tax year, 142 00:09:40,120 --> 00:09:44,319 Speaker 1: may have signed checks and signed documents in to make 143 00:09:44,360 --> 00:09:46,360 Speaker 1: it appear that they had done all this in the 144 00:09:47,720 --> 00:09:51,760 Speaker 1: tax here, and that's generally seen as a clear indication 145 00:09:51,800 --> 00:09:56,840 Speaker 1: of fraud when there's backdated documents. Science Committee report estimates 146 00:09:56,920 --> 00:10:00,079 Speaker 1: these deals cost the government ten point six bill in 147 00:10:00,200 --> 00:10:06,200 Speaker 1: dollars and unpaid taxes between and and that the deals 148 00:10:06,200 --> 00:10:11,080 Speaker 1: have attracted wealthy doctors, lawyers, business owners, and celebrities. Do 149 00:10:11,160 --> 00:10:14,920 Speaker 1: the investors know what they're getting into? That's an excellent question. 150 00:10:15,000 --> 00:10:17,600 Speaker 1: I think that's something that the investigators are trying to 151 00:10:18,080 --> 00:10:22,199 Speaker 1: figure out. Whether they believed and that they were investing 152 00:10:22,200 --> 00:10:26,160 Speaker 1: in a legitimate opportunity to save on taxes, or whether 153 00:10:26,200 --> 00:10:30,840 Speaker 1: they knew that the deal was rigged. And essentially, what 154 00:10:31,080 --> 00:10:33,240 Speaker 1: the i r S is doing is first looking at 155 00:10:33,280 --> 00:10:37,440 Speaker 1: the promoters and then the organizers, and then they will 156 00:10:37,600 --> 00:10:41,920 Speaker 1: presumably go and audit the taxes of the investors after that. 157 00:10:42,440 --> 00:10:45,319 Speaker 1: So the i r S is first trying to determine 158 00:10:45,360 --> 00:10:49,000 Speaker 1: whether the tax benefits they received are legitimate or not, 159 00:10:49,240 --> 00:10:51,560 Speaker 1: and if they're not, you know, that could lead to 160 00:10:52,280 --> 00:10:56,680 Speaker 1: probably in most cases, forcing investors to pay back taxes 161 00:10:56,800 --> 00:10:59,800 Speaker 1: and penalties. In your story, you write that the just 162 00:11:00,200 --> 00:11:04,880 Speaker 1: Department has filed suit in Georgia to stop six organizers. 163 00:11:05,360 --> 00:11:08,320 Speaker 1: Why are they filing suit to stop them? I'm trying 164 00:11:08,320 --> 00:11:12,400 Speaker 1: to understand, like why they're just not going after them criminally. Well, 165 00:11:12,400 --> 00:11:19,880 Speaker 1: there's a difference in the law. Whether someone is criminally responsible, 166 00:11:20,040 --> 00:11:23,960 Speaker 1: they have to uh know that they have a certain 167 00:11:24,200 --> 00:11:28,200 Speaker 1: legal obligation and they are willfully violating that. So that 168 00:11:28,440 --> 00:11:34,920 Speaker 1: wilful willfulness standard UM is the difference between a criminal 169 00:11:34,960 --> 00:11:39,559 Speaker 1: case and a civil case. So in the case of 170 00:11:39,600 --> 00:11:45,560 Speaker 1: these UM promoters that they've sued in Georgia essentially to 171 00:11:45,640 --> 00:11:50,319 Speaker 1: get them to stop doing it UM that they believe 172 00:11:51,320 --> 00:11:55,880 Speaker 1: that these are fraudulent conservation usement shelters which are based 173 00:11:55,880 --> 00:11:59,719 Speaker 1: on wilfully false valuations. But you know, it's sort of 174 00:11:59,720 --> 00:12:06,160 Speaker 1: a line evidentiary and legal difference whether that should be 175 00:12:06,240 --> 00:12:08,520 Speaker 1: a criminal case or a civil case. And in that 176 00:12:08,600 --> 00:12:12,400 Speaker 1: case they have made the judgments that they're going to 177 00:12:12,480 --> 00:12:16,079 Speaker 1: proceed civilly. That is a going to be a long, 178 00:12:16,160 --> 00:12:19,200 Speaker 1: hard slog of a litigation. There are many millions of 179 00:12:19,280 --> 00:12:24,080 Speaker 1: pages of documents involved, and there are quite a number 180 00:12:24,360 --> 00:12:28,600 Speaker 1: of of deals that have to be gone through, and 181 00:12:28,720 --> 00:12:33,160 Speaker 1: some investors have filed three class action lawsuits. What are 182 00:12:33,160 --> 00:12:38,280 Speaker 1: they doing over well? The investors claimed that essentially they 183 00:12:38,280 --> 00:12:42,520 Speaker 1: were duked by these promoters, and that the promoters were 184 00:12:43,080 --> 00:12:48,320 Speaker 1: so organized that they amounted to a racketeering enterprise. And 185 00:12:48,600 --> 00:12:53,680 Speaker 1: they have sort of systematically taken apart these deals and 186 00:12:53,960 --> 00:12:59,080 Speaker 1: framed them in legal complaints that say that essentially the 187 00:12:59,120 --> 00:13:04,200 Speaker 1: promoters took advantage of investors. They will need to show 188 00:13:04,640 --> 00:13:10,000 Speaker 1: in those instances that the investors didn't know that these 189 00:13:10,040 --> 00:13:14,880 Speaker 1: deals were fraudulent. And they have a law firm that 190 00:13:14,960 --> 00:13:18,480 Speaker 1: has filed three of these. They have a successful record 191 00:13:18,640 --> 00:13:22,040 Speaker 1: of securities litigation going back many years. There are other 192 00:13:22,120 --> 00:13:25,840 Speaker 1: law firms out there soliciting investors to file their own litigation. 193 00:13:26,360 --> 00:13:29,240 Speaker 1: Are the investors suing because the I R S is 194 00:13:29,280 --> 00:13:32,719 Speaker 1: looking into them, and they're trying to protect themselves. As 195 00:13:32,760 --> 00:13:35,960 Speaker 1: I understand that the litigation is based on the theory 196 00:13:36,280 --> 00:13:41,520 Speaker 1: that these people are looking at potential backpaxes and penalties 197 00:13:41,600 --> 00:13:45,200 Speaker 1: that they would not have been facing had they not 198 00:13:45,400 --> 00:13:49,760 Speaker 1: been steered wrong by a group of professionals working in concerts. 199 00:13:50,040 --> 00:13:53,840 Speaker 1: A land conservation easement that's gotten a lot of publicity 200 00:13:53,880 --> 00:13:57,160 Speaker 1: is that of former President Donald Trump in New York, 201 00:13:57,840 --> 00:14:01,079 Speaker 1: and both the Manhattan District at Journey and the New 202 00:14:01,160 --> 00:14:04,840 Speaker 1: York Attorney General are investigating it. But that's a different 203 00:14:04,840 --> 00:14:08,320 Speaker 1: situation from what we've been talking about correct in the 204 00:14:08,360 --> 00:14:11,080 Speaker 1: Trump case um with Titia James, who is a New 205 00:14:11,160 --> 00:14:14,640 Speaker 1: York Attorney General and side Vance, the Manhattan District Attorney 206 00:14:14,679 --> 00:14:19,680 Speaker 1: are both looking at a conservation easement that the Trump 207 00:14:19,840 --> 00:14:25,360 Speaker 1: organization gave in two at Trump's Seven Springs estate, which 208 00:14:25,400 --> 00:14:28,840 Speaker 1: is north of New York City. He gave a hundred 209 00:14:28,880 --> 00:14:33,400 Speaker 1: and fifty eight acres or he donated uh It's through 210 00:14:33,440 --> 00:14:38,920 Speaker 1: an easement to land Trust organization and generated a twenty 211 00:14:39,080 --> 00:14:43,680 Speaker 1: one million dollar tax break. Officials are looking at whether 212 00:14:44,360 --> 00:14:48,640 Speaker 1: the appraisals that underpinned that assessment of the value of 213 00:14:48,640 --> 00:14:52,880 Speaker 1: the easement whether those appraisals were inflated in that instance. 214 00:14:53,240 --> 00:14:56,200 Speaker 1: They're just looking at Trump and the Trump organization. There's 215 00:14:56,240 --> 00:15:00,360 Speaker 1: not a syndicative investors like the I R S is 216 00:15:00,600 --> 00:15:03,600 Speaker 1: examining around the country. Thanks so much for being on 217 00:15:03,600 --> 00:15:08,080 Speaker 1: the Bloomberg Law Show, David. That's David Vorriakis, Bloomberg Legal Reporter. 218 00:15:09,560 --> 00:15:12,240 Speaker 1: The Supreme Court will hear arguments later this month over 219 00:15:12,280 --> 00:15:15,400 Speaker 1: the scope of police power against the backdrop of the 220 00:15:15,400 --> 00:15:18,880 Speaker 1: trial of the former Minneapolis police officer Derek Chauvin and 221 00:15:18,960 --> 00:15:21,600 Speaker 1: the death of George Floyd, a depth that touched off 222 00:15:21,720 --> 00:15:26,800 Speaker 1: national protests and calls for racial justice. On March Knniglia 223 00:15:26,920 --> 00:15:30,560 Speaker 1: the stromp the justices will review limits on warrantless home 224 00:15:30,640 --> 00:15:34,840 Speaker 1: searches and seizures. Joining me is Jordan Reuben, Bloomberg Law reporter. 225 00:15:35,240 --> 00:15:37,640 Speaker 1: Jordan tell us about the facts in this case before 226 00:15:37,640 --> 00:15:40,680 Speaker 1: the court. So, this case stems from what an appeals 227 00:15:40,680 --> 00:15:45,960 Speaker 1: court called marital discord. At the Knniglia home in Rhode Island, 228 00:15:46,440 --> 00:15:49,080 Speaker 1: there was an incident where there's an argument between a 229 00:15:49,160 --> 00:15:52,440 Speaker 1: husband and wife. The husband threw a gun on the table, 230 00:15:52,520 --> 00:15:55,080 Speaker 1: said something along the lines of putting me out of 231 00:15:55,120 --> 00:15:58,400 Speaker 1: my misery. He left the home, came back, she left 232 00:15:58,440 --> 00:16:01,480 Speaker 1: the home stated a motel for the night. The next morning, 233 00:16:01,600 --> 00:16:04,200 Speaker 1: she was having trouble getting in touch with him, and 234 00:16:04,240 --> 00:16:07,360 Speaker 1: so she reached out to the police, who wound up 235 00:16:07,640 --> 00:16:10,400 Speaker 1: going to the home and checking on the husband, and 236 00:16:10,520 --> 00:16:13,320 Speaker 1: they wound up convincing him to go to a hospital 237 00:16:13,360 --> 00:16:17,240 Speaker 1: for psychiatric evaluation. And they took guns that he had 238 00:16:17,280 --> 00:16:20,560 Speaker 1: in the home, and they wound up giving them back. 239 00:16:20,680 --> 00:16:23,840 Speaker 1: But what happened is the husband wound up suing the 240 00:16:23,920 --> 00:16:28,800 Speaker 1: police and government officials for this warrantless search and seizure. 241 00:16:29,400 --> 00:16:33,400 Speaker 1: The police entered the home at the invitation of the wife, 242 00:16:33,720 --> 00:16:36,760 Speaker 1: and they didn't break down a door or anything, Okay, 243 00:16:36,880 --> 00:16:41,680 Speaker 1: So the entry was justified according to the appeals court, 244 00:16:41,720 --> 00:16:44,640 Speaker 1: who wound up siding with the government here under what's 245 00:16:44,640 --> 00:16:48,920 Speaker 1: called the community caretaking doctrine under the Fourth Amendment. Generally, 246 00:16:49,040 --> 00:16:52,320 Speaker 1: we know that to enter a home under the Fourth Amendment, 247 00:16:52,360 --> 00:16:56,040 Speaker 1: police need a warrant or some exception to the warrant requirement. 248 00:16:56,320 --> 00:17:00,040 Speaker 1: And this caretaking doctrine in the past had applied in 249 00:17:00,080 --> 00:17:04,879 Speaker 1: the automobile context to allow warrantless searches. They are not 250 00:17:05,000 --> 00:17:08,840 Speaker 1: for criminal investigation reasons, but for what are called community 251 00:17:08,880 --> 00:17:11,960 Speaker 1: caretaking reasons. And so in this case, what we have 252 00:17:12,400 --> 00:17:16,120 Speaker 1: is the extension of that doctrine from the automobile context 253 00:17:16,240 --> 00:17:19,919 Speaker 1: into the home context for situations like a potential suicide 254 00:17:20,000 --> 00:17:23,320 Speaker 1: or some situations like that. And the question now at 255 00:17:23,359 --> 00:17:26,359 Speaker 1: the Supreme Court is whether that doctrine does in fact 256 00:17:26,600 --> 00:17:30,480 Speaker 1: extend into the home. Has this come up before other 257 00:17:30,560 --> 00:17:34,760 Speaker 1: lower courts besides the ones that decided this case, So, 258 00:17:34,840 --> 00:17:37,080 Speaker 1: as often happens in cases that wind up going to 259 00:17:37,119 --> 00:17:40,359 Speaker 1: the Supreme Court, there is a split. Courts disagree about 260 00:17:40,440 --> 00:17:44,119 Speaker 1: whether this doctrine should apply. There's some confusion just generally 261 00:17:44,240 --> 00:17:48,720 Speaker 1: about this community caretaking doctrine because there are other Fourth 262 00:17:48,760 --> 00:17:53,560 Speaker 1: Amendment exceptions, things that will allow police to act without warrants, 263 00:17:53,600 --> 00:17:58,080 Speaker 1: something that's called exigency emergency aid. And so there's a 264 00:17:58,080 --> 00:18:01,000 Speaker 1: lot of differences of opinion in the courts, and different 265 00:18:01,080 --> 00:18:03,920 Speaker 1: lawyers have brought up different arguments, and so the Supreme 266 00:18:03,960 --> 00:18:06,679 Speaker 1: Court in this case can sort out not only just 267 00:18:06,800 --> 00:18:09,119 Speaker 1: whether this doctrine extends to the home, but just to 268 00:18:09,200 --> 00:18:13,040 Speaker 1: kind of clarify what exactly this doctrine is or isn't 269 00:18:13,040 --> 00:18:15,800 Speaker 1: in how it interacts with the rest of the Fourth 270 00:18:15,840 --> 00:18:19,399 Speaker 1: Amendment law that we have. So what Mr Canniglia is 271 00:18:19,760 --> 00:18:23,600 Speaker 1: really complaining about is that his guns were taken. That's 272 00:18:23,680 --> 00:18:26,520 Speaker 1: part of it. Yes, he wound up launching a civil 273 00:18:26,560 --> 00:18:31,160 Speaker 1: suit with multiple claims, including Second and Fourth Amendment violations, 274 00:18:31,200 --> 00:18:33,880 Speaker 1: but really the case itself at the Supreme Court has 275 00:18:33,920 --> 00:18:37,480 Speaker 1: centered on the Fourth Amendment issue. There's a couple of 276 00:18:37,520 --> 00:18:40,960 Speaker 1: aspects to that. One is the warrantless entry to the home, 277 00:18:41,119 --> 00:18:44,720 Speaker 1: the seizure of guns, the seizure of him too in 278 00:18:44,920 --> 00:18:48,760 Speaker 1: going to the hospital. So it's possible that different justices 279 00:18:48,840 --> 00:18:52,040 Speaker 1: might focus on different aspects of that. But even within 280 00:18:52,160 --> 00:18:56,480 Speaker 1: the warrantless Fourth Amendment context, there are different aspects to it, 281 00:18:56,600 --> 00:18:59,720 Speaker 1: so there multiple layers to it. But generally we're looking 282 00:18:59,760 --> 00:19:03,919 Speaker 1: at warrantless police action into the home based on this 283 00:19:04,000 --> 00:19:08,680 Speaker 1: community caretaking doctrine. How does the community caretaking doctrine work 284 00:19:08,760 --> 00:19:14,080 Speaker 1: with cars? So the case that the police and the 285 00:19:14,160 --> 00:19:17,639 Speaker 1: appeals courts that sided with them relied on is this 286 00:19:17,680 --> 00:19:21,359 Speaker 1: case from the nine seventies called Katie against Dombrowski, where 287 00:19:22,080 --> 00:19:25,000 Speaker 1: the warrantless search of a car after it was towed 288 00:19:25,200 --> 00:19:29,920 Speaker 1: was allowed based not on being part of a criminal investigation, 289 00:19:29,960 --> 00:19:32,439 Speaker 1: because other parts of the Fourth Amendment would apply, but 290 00:19:32,480 --> 00:19:36,199 Speaker 1: based on the fact that automobiles are mobile and that 291 00:19:36,280 --> 00:19:39,879 Speaker 1: there are reasons to search it where police wouldn't need 292 00:19:39,920 --> 00:19:42,560 Speaker 1: a warrant. Generally, there's this whole line of cases under 293 00:19:42,600 --> 00:19:46,919 Speaker 1: the Fourth Amendment where automobiles are treated differently, not just 294 00:19:46,960 --> 00:19:51,080 Speaker 1: in this community caretaking context. And so that's the backdrop 295 00:19:51,560 --> 00:19:55,000 Speaker 1: for this, and you have obviously Conniglia saying no, this 296 00:19:55,040 --> 00:19:57,560 Speaker 1: should be confined to the automobile context, where you have 297 00:19:57,600 --> 00:20:00,080 Speaker 1: the officers on the other side saying no. It's this 298 00:20:00,359 --> 00:20:04,600 Speaker 1: general principle of reasonableness that should also apply for police 299 00:20:04,600 --> 00:20:07,159 Speaker 1: to be able to help people in situations like this, 300 00:20:07,359 --> 00:20:11,120 Speaker 1: even though nothing bad wound up happening here, what groups 301 00:20:11,160 --> 00:20:15,879 Speaker 1: are filing omigous briefs and taking a position in the case. So, 302 00:20:16,200 --> 00:20:20,520 Speaker 1: as often happens in these cases, you have criminal defense 303 00:20:20,600 --> 00:20:24,520 Speaker 1: aligned groups that are siding with the claim going against 304 00:20:24,560 --> 00:20:29,280 Speaker 1: the government here, including Second Amendment groups too. There's this 305 00:20:29,600 --> 00:20:32,720 Speaker 1: gun issue that's sort of working in the background of 306 00:20:32,760 --> 00:20:34,760 Speaker 1: the case, and it'll be interesting to see how that 307 00:20:34,880 --> 00:20:38,439 Speaker 1: interplays at the court as well, because obviously we have 308 00:20:38,520 --> 00:20:42,040 Speaker 1: a court that is very sensitive to gun rights, and 309 00:20:42,080 --> 00:20:45,960 Speaker 1: we'll see how that interacts with the Fourth Amendment rights here, 310 00:20:46,040 --> 00:20:48,680 Speaker 1: and obviously on the police side of it, as we'll see, 311 00:20:48,800 --> 00:20:52,720 Speaker 1: we have government groups and states that are backing the 312 00:20:52,760 --> 00:20:56,399 Speaker 1: government claim here because they don't want an incurasion on 313 00:20:56,680 --> 00:20:59,480 Speaker 1: their power and be able to act without warrants when 314 00:20:59,480 --> 00:21:02,679 Speaker 1: they think it needed. The Justice has already heard a 315 00:21:02,760 --> 00:21:07,199 Speaker 1: Fourth Amendment case involving hot pursuit and whether the police 316 00:21:07,240 --> 00:21:10,760 Speaker 1: can pursue a suspect into their home for a misdemeanor. 317 00:21:10,920 --> 00:21:13,320 Speaker 1: So this is another case that broadly relates to this 318 00:21:13,400 --> 00:21:16,840 Speaker 1: issue of what power police have to enter the home 319 00:21:16,840 --> 00:21:20,320 Speaker 1: without a warrant. This case is laying against California. The 320 00:21:20,400 --> 00:21:24,320 Speaker 1: question is whether this hot pursuit doctrine, which is as 321 00:21:24,320 --> 00:21:27,640 Speaker 1: it sounds, allows police to pursue suspects, which the court 322 00:21:27,680 --> 00:21:31,280 Speaker 1: has said is okay in the felony context, to follow 323 00:21:31,320 --> 00:21:34,760 Speaker 1: a suspect into a home. The question is whether officers 324 00:21:34,760 --> 00:21:38,800 Speaker 1: can do that when they're following a alleged committer of 325 00:21:38,880 --> 00:21:42,480 Speaker 1: a misdemeanor into the home in this case involving d 326 00:21:42,680 --> 00:21:45,560 Speaker 1: u Y And so it's another case of how does 327 00:21:45,600 --> 00:21:49,280 Speaker 1: Fourth Amendment law interact with the home and where do 328 00:21:49,359 --> 00:21:53,000 Speaker 1: the justices draw the line on what police are allowed 329 00:21:53,080 --> 00:21:56,000 Speaker 1: to do without warrants and when they need to be 330 00:21:56,080 --> 00:21:59,400 Speaker 1: justified by warrants. The Supreme Court is looking at other 331 00:21:59,520 --> 00:22:03,679 Speaker 1: cases is in the future involving police, and one involves 332 00:22:03,880 --> 00:22:09,080 Speaker 1: the ability to sue police, So tell us about that. Sure. 333 00:22:09,119 --> 00:22:11,520 Speaker 1: So this case comes from New York in the case 334 00:22:11,760 --> 00:22:16,160 Speaker 1: of Brooklyn man named Larry Thompson, and he was arrested 335 00:22:16,200 --> 00:22:21,960 Speaker 1: at home in by officers who were investigating possible child abuse. 336 00:22:22,080 --> 00:22:25,600 Speaker 1: He was jailed for two days and charged with obstructing 337 00:22:25,680 --> 00:22:31,920 Speaker 1: governmental administration and resisting arrest. The prosecution ultimately to dismissed 338 00:22:32,000 --> 00:22:35,160 Speaker 1: the case in the interests of justice, and then Thompson 339 00:22:35,200 --> 00:22:39,280 Speaker 1: wounds up suing the officers to vindicate his Fourth Amendment 340 00:22:39,359 --> 00:22:44,400 Speaker 1: rights under what's called a malicious prosecution suit now under 341 00:22:44,480 --> 00:22:47,080 Speaker 1: Supreme Court precedent, in order to be able to bring 342 00:22:47,240 --> 00:22:50,160 Speaker 1: a claim like this, a plantiff needs to show that 343 00:22:50,240 --> 00:22:53,919 Speaker 1: the criminal case terminated in their favor. Now, the issue 344 00:22:54,000 --> 00:22:57,200 Speaker 1: that the Supreme Court is taking up is what exactly 345 00:22:57,240 --> 00:23:01,280 Speaker 1: that means, because some appeals courts has said that plintiff 346 00:23:01,359 --> 00:23:03,800 Speaker 1: needs to show that the criminal case ended in a 347 00:23:03,880 --> 00:23:07,520 Speaker 1: manner not inconsistent with their innocence and some have said 348 00:23:07,840 --> 00:23:10,960 Speaker 1: that the case needs to end with affirmative indications of 349 00:23:11,000 --> 00:23:13,600 Speaker 1: their innocence. So to explain that a little bit more 350 00:23:13,680 --> 00:23:16,320 Speaker 1: by way of what happened in this case. In Thompson's case, 351 00:23:16,600 --> 00:23:19,960 Speaker 1: when the prosecution dismissed the case saying that they're doing 352 00:23:20,040 --> 00:23:23,240 Speaker 1: so in the interest of justice, they're not saying directly 353 00:23:23,840 --> 00:23:26,600 Speaker 1: anything about Thompson's innocence one way or the other. That's 354 00:23:26,640 --> 00:23:29,159 Speaker 1: different from saying if there is an acquittal or if 355 00:23:29,160 --> 00:23:33,160 Speaker 1: the conviction winds up getting overturned on appeal, and Thompson 356 00:23:33,280 --> 00:23:36,520 Speaker 1: is saying, look, I should be able to bring this 357 00:23:36,720 --> 00:23:41,680 Speaker 1: suit because it's really not consistent with how the criminal 358 00:23:41,720 --> 00:23:45,000 Speaker 1: justice system works that when a case is being dismissed 359 00:23:45,040 --> 00:23:48,560 Speaker 1: in the ordinary course, that the prosecution is saying something 360 00:23:48,600 --> 00:23:52,080 Speaker 1: affirmatively indicating innocence and not having that in the record 361 00:23:52,119 --> 00:23:55,480 Speaker 1: shouldn't bar someone from at least being able to pursue 362 00:23:55,520 --> 00:23:58,960 Speaker 1: their civil claims. So the Justice has recently agreed to 363 00:23:59,280 --> 00:24:00,960 Speaker 1: take up his case, and this will be one that 364 00:24:01,000 --> 00:24:03,560 Speaker 1: will be argued next term and the court will sort 365 00:24:03,600 --> 00:24:07,159 Speaker 1: out which standard should apply. Do you know what what 366 00:24:07,440 --> 00:24:11,760 Speaker 1: his claim of malicious prosecution was based on? Sure? And 367 00:24:11,840 --> 00:24:15,719 Speaker 1: so as often happens in these civil suits, sort of 368 00:24:15,720 --> 00:24:18,480 Speaker 1: like we were talking about in the context of the 369 00:24:18,560 --> 00:24:21,840 Speaker 1: Conniglia case as well. When someone brings a civil claim, 370 00:24:21,880 --> 00:24:24,480 Speaker 1: they want to sue for anything that they can and 371 00:24:24,600 --> 00:24:27,639 Speaker 1: this malicious prosecution claim was one of a number of 372 00:24:27,640 --> 00:24:29,600 Speaker 1: claims that he brought, and some of them actually went 373 00:24:29,680 --> 00:24:33,320 Speaker 1: to trial and Thomason lost at trial. But the bottom 374 00:24:33,359 --> 00:24:36,399 Speaker 1: line is that all the claims really stem from the 375 00:24:36,480 --> 00:24:40,560 Speaker 1: same action of the officers arresting him and then bringing 376 00:24:40,640 --> 00:24:43,320 Speaker 1: him to court where the wound up being charged. And 377 00:24:43,359 --> 00:24:46,080 Speaker 1: it's really just a matter of lawyers looking at the 378 00:24:46,119 --> 00:24:49,240 Speaker 1: situation and saying, what's every single possible claim that we 379 00:24:49,320 --> 00:24:53,240 Speaker 1: can bring, And so there might be duplicate claims essentially 380 00:24:53,560 --> 00:24:55,639 Speaker 1: that are called the same thing, but it's just a 381 00:24:55,680 --> 00:24:58,800 Speaker 1: matter of what can you sue for? And so it's 382 00:24:58,800 --> 00:25:01,480 Speaker 1: it's a little bit sames doesn't match in a way 383 00:25:01,480 --> 00:25:04,840 Speaker 1: you're talking about prosecution, but it's against police officers and 384 00:25:04,880 --> 00:25:08,800 Speaker 1: that's another interesting almost side issue to it. But that's 385 00:25:08,840 --> 00:25:11,760 Speaker 1: just what these claims are called that people use to 386 00:25:11,760 --> 00:25:15,359 Speaker 1: try and vindicate their Fourth Amendment rights. Is it surprising 387 00:25:15,400 --> 00:25:18,199 Speaker 1: that his appeal is being backed by a coalition of 388 00:25:18,280 --> 00:25:22,760 Speaker 1: fifty seven prosecutors, ex Justice Department officials and former judges. 389 00:25:23,480 --> 00:25:28,040 Speaker 1: It's definitely notable. What's interesting to me in reading their 390 00:25:28,119 --> 00:25:31,479 Speaker 1: amicust brief is they're telling the court that using this 391 00:25:31,640 --> 00:25:35,800 Speaker 1: affirmative indications of innocent standard, it just is not consistent 392 00:25:35,840 --> 00:25:38,840 Speaker 1: with how the criminal system works. When a prosecutor dismisses 393 00:25:38,840 --> 00:25:41,920 Speaker 1: the case, it often doesn't have anything to do with 394 00:25:42,080 --> 00:25:45,160 Speaker 1: the ultimate issue of guilt or innocence, or at least 395 00:25:45,200 --> 00:25:48,399 Speaker 1: prosecutors aren't going to say that there are a number 396 00:25:48,400 --> 00:25:50,720 Speaker 1: of issues why they might not go forward in a 397 00:25:50,760 --> 00:25:54,680 Speaker 1: case which doesn't deal with this heady issue of innocence, 398 00:25:54,720 --> 00:25:56,600 Speaker 1: and so they say it's just not fair and it's 399 00:25:56,640 --> 00:25:59,920 Speaker 1: just not right and doesn't make sense to require planet 400 00:26:00,200 --> 00:26:03,080 Speaker 1: to have that showing in order to bring this type 401 00:26:03,080 --> 00:26:07,080 Speaker 1: of claim. Thanks Jordan's that's Bloomberg Law reporter Jordan Rubin, 402 00:26:07,680 --> 00:26:10,040 Speaker 1: and that's it for this edition of the Bloomberg Law Show. 403 00:26:10,560 --> 00:26:12,720 Speaker 1: Remember you can always at the latest legal news on 404 00:26:12,720 --> 00:26:16,639 Speaker 1: our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, 405 00:26:16,880 --> 00:26:22,280 Speaker 1: and at www dot Bloomberg dot com Slash podcast Slash Law. 406 00:26:22,840 --> 00:26:26,320 Speaker 1: I'm June Grosso. Thanks so much for listening. Thanks David. 407 00:26:26,720 --> 00:26:30,720 Speaker 1: That's Bloomberg Legal reporter David Voreakas, and that's it for 408 00:26:30,760 --> 00:26:33,399 Speaker 1: the edition of The Bloomberg Law Show. Remember you can 409 00:26:33,400 --> 00:26:36,359 Speaker 1: always get the latest legal news on our Bloomberg Lawn podcast. 410 00:26:36,760 --> 00:26:39,520 Speaker 1: You can find them on Apple Podcasts, Spotify, and at 411 00:26:39,680 --> 00:26:44,720 Speaker 1: www dot Bloomberg dot com slash podcast Slash Law. I'm 412 00:26:44,800 --> 00:26:47,520 Speaker 1: June Grosso. Thanks so much for listening, and please get 413 00:26:47,560 --> 00:26:49,800 Speaker 1: into The Bloomberg Law Show every weeknight, n b M 414 00:26:49,880 --> 00:26:51,720 Speaker 1: Eastern right here on Bloomberg Radio.