Vacation spoiled by legal police interrogation in white collar fraud case

File this case under "Total Bummer." The defendant and her husband were loading the car early in the morning and about to start their vacation when the police came to the house with a search warrant in connection with an insurance fraud scheme allegedly committed by the defendant, who owned a physical therapy business. The vacation obviously did not happen as planned, and defendant was arrested.

The case is United States v. Faux, decided on July 8. When 10-15 agents entered the house, they told defendant she was not going anywhere. Really, the law does not give a damn about anyone's vacation. During the two-hour interview, the armed officers took defendant's cell phone and she and her husband were not free to move around the house. No one read her any Miranda warnings, but no one told her she was under arrest, either. In granting the motion to suppress the fruits of the interrogation, the district court said, in part, "'[i]t is impossible to believe that Faux voluntarily chose to answer questions for two hours rather than choosing to go on a vacation with relatives.' This inference was reinforced for the district court by the seizure of her cell phone, which left her with 'no means to tell the others traveling that the vacation had been interrupted.'”

The Court of Appeals (Jacobs, Hall and Restani [visiting]) says defendant's rights were not violated, and the criminal charge is reinstated. If defendant was in "custody" as the law defines it, then her statements must be suppressed and cannot be used against her. "In determining whether a suspect was in custody, a court
looks at all the surrounding circumstances. The relevant inquiry is 'how a reasonable man in the suspect’s position would have understood his situation.' The test for determining custody is an objective inquiry that asks (1) 'whether a reasonable person would have thought he was free to leave the police encounter at issue' and (2) whether 'a reasonable person would have understood his freedom of action to have been curtailed to a degree associated with formal arrest.'”

Defendant was not in custody, the Court of Appeals says. Although the questioning took place at defendant's home and she was not really free to go anywhere, and even though many agents were in the house (on a paperwork fraud scheme and not murder) and they followed her as she went to the bathroom and her bedroom, "A reasonable person would understand that being accompanied in one’s home by agents who are legally present to execute a search warrant is a sensible precaution and that (absent other hallmarks of custody) freedom of action is not being curtailed to a degree associated with formal arrest. Although she was not permitted to go from room to room without being accompanied, she was not “completely at the mercy of the police.” While she was not told she was free to leave, she was also not told she was under arrest. The Circuit also says it does not matter that defendants had to cancel their vacation in order to remain at the house during the search. Instead, she was questioned in familiar surroundings, her home, and no one pulled a weapon on her or handcuffed her. In the end, no Miranda warnings were necessary, and her incriminating statements can be used against her.