United States v. Dynavac, Inc.

Curtis Corn (defendant) was the sole or majority shareholder in three companies, including Dynavac, Inc. (defendant). Corn pleaded guilty to three criminal charges and agreed to waive his grand-jury secrecy rights under Federal Rule of Criminal Procedure 6(e). Corn’s attorney subsequently provided the United States with the Internal Revenue Service (IRS) special agent’s report (SAR), which contained grand-jury information. IRS agent Reginald Curtis audited Corn and his three companies and reviewed the SAR in connection with the audits. After a federal court disapproved of the IRS’s use of the SAR, the IRS removed all references to the SAR from Curtis’s workpapers and assigned the Dynavac audit to another agent, Ronald Sheresh. Sheresh did not receive the SAR or improperly communicate with anyone about the SAR. Sheresh issued summonses to Corn and Dynavac’s new owners, Donald Helmer and Morgan Wright (defendants), for Dynavac business records. Corn, Helmer, and Wright resisted the summonses, contending that they sought grand-jury information. The United States responded that the documents subject to the summonses existed before the grand jury issued its first subpoena and thus were not grand-jury material. The district court ordered enforcement of the summonses, ruling that although the disclosure of the SAR to Curtis violated Rule 6(e), the IRS cured the violation. Corn, Helmer, and Wright appealed.