On August 18, 2021, a Montgomery, Alabama banker was sentenced to three years probation and a fine of $10,000 for disclosing the existence of a grand jury subpoena to one of the bank's customers. The sentence followed the banker's guilty plea to a charge of obstruction of a criminal investigation. This criminal prosecution serves as an important reminder of a financial institution's legal obligation to maintain the confidentiality of grand jury subpoenas for customer records—and of the serious potential consequences of violating that obligation.
According to the plea agreement entered by the parties in the case, the Drug Enforcement Administration (DEA) sent the bank a federal grand jury subpoena seeking records pertaining to the accounts of one of its customers. The DEA was investigating the customer, a former physician, for money laundering in furtherance of a conspiracy to unlawfully distribute oxycodone. One of the bankers who received a copy of the subpoena sent the customer a text message stating, "I got a subpoena for your financial records." The banker also visited the customer's office and sent the customer a photo of a part of the subpoena while there. Less than a year later, the banker was charged with obstruction of a criminal investigation. After pleading guilty to this charge, the banker was sentenced to three years of probation and a $10,000 fine.
Financial institutions routinely receive grand jury subpoenas from the government, and federal law prohibits bank employees from disclosing the existence of the subpoena or any records provided pursuant to the subpoena. The criminal penalties for making such disclosures about grand jury subpoenas can be severe. Under 18 U.S.C. § 1510(b), an officer of a financial institution may face a fine and a prison term of up to five years if the officer notifies, directly or indirectly, any person of the existence or contents of a subpoena with the intent to obstruct a judicial proceeding. In addition, regardless of intent, an officer that notifies, directly or indirectly, a customer of the financial institution whose records are sought or any other person named in the subpoena may face a fine and a prison term of up to one year. As demonstrated by the prosecution discussed above, financial institutions must ensure that their employees understand and carefully follow these confidentiality requirements because law enforcement considers the disclosure of grand jury subpoenas to be a serious crime. It is also critical that financial institutions establish subpoena response processes that address the tracking of and responses to criminal, civil, and administrative subpoenas.
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