United States v. Ganias

Stavros Ganias (defendant) provided tax and accounting services to James McCarthy and two of his businesses, American Boiler and International Property Management (IPM), which provided services to the Army. IPM came under investigation by the Army. Investigators obtained search warrants, including one for Ganias’s accounting office. The warrant authorized the seizure of a large volume of materials, including all computer hardware, software, and data relating to business with IPM and American Boiler. During the warrant’s execution, computers were not seized but instead copied as mirror images. These mirror images included documents not responsive to the search warrant, such as Ganias’s personal financial records. An agent assured Ganias that all irrelevant files would be purged. While the government (plaintiff) possessed these mirror images, Ganias came under investigation for tax violations. The government had never purged any of the unresponsive files, so a search warrant was obtained to review documents relating to the investigation of Ganias. The government did not review these files until after the new search warrant was obtained. This occurred over two years after the initial seizure. The government contended the files were government property. Ganias was convicted on two counts of tax evasion and appealed the district court’s denial of a motion to suppress the evidence retained by the government.