United States Court of Appeals

For the First Circuit

No. 14-2003
UNITED STATES OF AMERICA,
Petitioner, Appellee,
v.
ZHONG H. CHEN,
Respondent, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]

Before
Lynch, Circuit Judge,
Souter,* Associate Justice,
and Stahl, Circuit Judge.

William J. Lovett, with whom Melissa S. Baldwin and Collora

LLP were on brief, for appellant.
Alexander P. Robbins, Attorney, Tax Division, Department of
Justice, with whom Robert J. Branman, Attorney, Tax Division,
Department of Justice, Caroline D. Ciraolo, Acting Assistant
Attorney General, Diana L. Erbsen, Deputy Assistant Attorney
General, Gilbert S. Rothenberg, Robert W. Metzler, Attorneys, Tax
Division, Department of Justice, and Carmen M. Ortiz, United States
Attorney, were on brief, for appellee.

Hon. David H. Souter, Associate Justice (Ret.) of the

Supreme Court of the United States, sitting by designation.

February 29, 2016

LYNCH, Circuit Judge.

Tensions between taxpayers and

the Internal Revenue Service ("IRS") over forced disclosure of

foreign bank account information implicate both statutory and
constitutional rights.

Taxpayers have Fifth Amendment rights not

to be forced to incriminate themselves by the compelled act of

production.

But where the documents are required to be kept under

the regulatory scheme of the Bank Secrecy Act ("BSA" or "the Act"),
see Currency and Foreign Transactions Reporting Act, Pub. L. No.
91-508, tit. II, 84 Stat. 1118 (1970) (codified as amended at 31
U.S.C. 5311 et seq.), the question arises whether the Required
Records Doctrine under the Fifth Amendment trumps those Fifth
Amendment rights.

The Supreme Court has not directly answered

this question.
We now join the unanimous view of the circuit courts
that have faced the question, all of which hold that the taxpayer
must comply with an IRS summons for documents he or she is required
to keep under the Act, where the IRS is investigating civilly the
failure to pay taxes and the matter has not been referred for
criminal prosecution.

And so we affirm the district court's

enforcement of the summons as to documents required to be kept

under the BSA.

See United States v. Chen, 952 F. Supp. 2d 321,

333 (D. Mass. 2013).

As to enforcement of the summons for

documents not subject to the BSA, we vacate and remand to the

district court for further explanation.

- 3 -

I.
As part of an investigation into the 2008 tax liability
of Zhong H. Chen and his wife, Chu H. Ng, the IRS served a summons
on Chen on September 12, 2011, requiring him to appear for an
interview

with

an

IRS

revenue

financial and banking records.

agent

and

to

produce

various

Chen appeared for the interview,

but he refused to answer any questions -- invoking the Fifth

Amendment -- and did not provide the requested documents.
31,

2012,

the

government

filed

in

the

Massachusetts

On May
federal

district court a petition to enforce the portion of the summons

seeking the production of documents.

In support of its petition,

the government submitted an affidavit executed by an IRS revenue

agent stating that "[i]t is necessary to obtain the records sought
by the Summons in order to determine the federal tax liabilities
of Chu H. Ng and Zhong H. Chen for the taxable period ending
December 31, 2008."

Importantly, it also stated that "[t]here is

no 'Justice Department referral[]' . . . in effect with respect to

Chu H. Ng and Zhong H. Chen for the year under examination."1

In

This statement meant that the taxpayers were not then

referred for criminal prosecution by the Department of Justice.
"A Justice Department referral is in effect with respect to any
person if -- (i) the Secretary has recommended to the Attorney
General a grand jury investigation of, or the criminal prosecution
of, such person for any offense connected with the administration
or enforcement of the internal revenue laws, or (ii) any request
is made under section 6103(h)(3)(B) for the disclosure of any
return or return information (within the meaning of section
6103(b)) relating to such person." 26 U.S.C. 7602(d)(2)(A).

- 4 -

response, Chen asserted a Fifth Amendment claim of privilege, not

over the documents themselves, but over his compelled act of
producing the documents.
391,

410

(1976)

See Fisher v. United States, 425 U.S.

(describing

compelled

act

of

production

privilege); see also In re Grand Jury Subpoena (Mr. S.), 662 F.3d
65, 7273 (1st Cir. 2011).
The district court granted, in part, the government's
petition to enforce the summons on July 3, 2013.
Supp. 2d at 334.

See Chen, 952 F.

It granted the petition "insofar as it relates

to those documents implicated by the recordkeeping requirements of

the Bank Secrecy Act" because it concluded that those documents
fall within the scope of the Required Records Doctrine.
333.

On

September

11,

2014,

after

reviewing

in

Id. at

camera

the

documents not covered by the BSA's recordkeeping provision, as

well as an in camera argumentative submission in support of Chen's
privilege claim, the district court issued a brief order directing
Chen, without explanation, also to produce the documents not
covered by the BSA.

This appeal followed.2

II.

Our

holding

requires

an

understanding

of

the

Bank

Secrecy Act and its purposes.

We need not address the contempt issue raised in Chen's

original brief because that issue has since been disposed of. See
Judgment, United States v. Chen, No. 14-2339 (1st Cir. Nov. 2,
2015).

- 5 -

The BSA was first enacted in 1970.

Its preamble states

its four purposes as follows: "to require certain reports or

records where they have a high degree of usefulness in criminal,
tax, or regulatory investigations or proceedings, or in the conduct
of

intelligence

activities,

including

analysis, to protect against international terrorism."3

31 U.S.C.

5311.

or

counterintelligence

Enforcement of criminal laws is a direct purpose, but not

the sole purpose.

The Act requires individuals engaged in foreign banking
to maintain certain records:
[T]he Secretary of the Treasury shall require
a resident or citizen of the United States or
a person in, and doing business in, the United
States, to keep records, file reports, or keep
records and file reports, when the resident,
citizen, or person makes a transaction or
maintains a relation for any person with a
foreign financial agency.
Id. 5314(a).
The

Secretary

of

the

Treasury

has

promulgated

regulations specifying reporting and recordkeeping requirements.

The reporting requirement provides:
Each United States person having a financial
interest in, or signature or other authority
over, a bank, securities, or other financial
account in a foreign country shall report such
3

The phrase "or in the conduct of intelligence or

counterintelligence activities, including analysis, to protect
against international terrorism" was added in 2001 by the USA
PATRIOT Act, Pub. L. No. 107-56, 358(a), 115 Stat. 272, 326
(2001).

- 6 -

relationship to the Commissioner of Internal

Revenue
for
each
year
in
which
such
relationship exists and shall provide such
information as shall be specified in a
reporting form prescribed under 31 U.S.C. 5314
to be filed by such persons.
31 C.F.R. 1010.350(a).

Those individuals who are subject to the

1010.350 reporting requirement are also subject to recordkeeping

requirements:
Records of accounts required by 1010.350 to
be reported to the Commissioner of Internal
Revenue shall be retained by each person
having a financial interest in or signature or
other authority over any such account. Such
records shall contain [1] the name in which
each such account is maintained, [2] the
number or other designation of such account,
[3] the name and address of the foreign bank
or other person with whom such account is
maintained, [4] the type of such account, and
[5] the maximum value of each such account
during the reporting period.
Such records
shall be retained for a period of 5 years and
shall be kept at all times available for
inspection as authorized by law.
Id. 1010.420.

This recordkeeping regulation is at the heart of

this appeal.
Congress, when it adopted the BSA, was deeply concerned
about the proliferation of white-collar criminals using secret
foreign bank accounts, and Congress emphasized the benefits that
the reporting and recordkeeping requirements of the BSA would have
for criminal investigations.

The Senate Committee on Banking and

Currency noted that "[t]estimony before the committee and other

evidence indicates that secret foreign bank accounts have been put

- 7 -

to a number of illegal purposes."

(1970).

S. Rep. No. 91-1139, at 3

It stated that "[t]he purpose of the bill is to provide

law enforcement authorities with greater evidence of financial

transactions in order to reduce the incidence of white-collar
crime."

Id. at 1; see id. at 14, 89; H.R. Rep. No. 91-975, at

10, 1213, 1920 (1970), reprinted in 1970 U.S.C.C.A.N. 4394, 4395,

439798, 4404.

Nonetheless, rooting out criminal activity was not

Congress's only interest, and the justifications for the BSA's

reporting and recordkeeping requirements extend far beyond the
criminal context. Merely looking at the text of the statute proves
that its purposes are diverse.

The text itself points to the

utility of the required records in the tax, regulatory, and

counterterrorism contexts.

See 31 U.S.C. 5311.

And to the

extent one looks at legislative history, it confirms this view.

The

Supreme

Court,

in

reviewing

series

of

constitutional challenges to the BSA, stated that while "concern

for the enforcement of the criminal law was undoubtedly prominent
in the minds of the legislators who considered the Act," "Congress
seems to have been equally concerned with civil liability which
might go undetected by reason of transactions of the type required
to be recorded or reported."
416 U.S. 21, 7677 (1974).

California Bankers Ass'n v. Shultz,

Indeed, the Court emphasized that "the

fact that a legislative enactment manifests a concern for the

- 8 -

enforcement of the criminal law does not cast any generalized pall
of constitutional suspicion over it."
The

BSA

manifestly

has

Id. at 77.4
non-criminal

purposes.

properly functioning system of foreign commerce cannot operate

without reporting and recordkeeping of the kind mandated by the
BSA

and

its

implementing

regulations.

As

the

House

Report

explains:
The debilitating effects of the use of
. . . secret institutions [in foreign
jurisdictions] on Americans and the American
economy are vast. It has been estimated that
hundreds of millions in tax revenues have been
lost.
Unwarranted and unwanted credit is
being pumped into our markets.
There have
been some cases of corporation directors,
officers and employees who, through deceit and
violation of law, enriched themselves or
endangered the financial soundness of their
companies
to
the
detriment
of
their
stockholders. . . .
One of the most damaging effects of an
American's use of secret foreign financial
facilities is its undermining of the fairness
of our tax laws.
Secret foreign financial
facilities, particularly in Switzerland, are
available only to the wealthy. . . . [I]t is
grossly unfair to leave the secret foreign
bank account open as a convenient avenue of
tax evasion.

While the plaintiffs in Shultz had brought a Fifth

Amendment self-incrimination challenge to the foreign reporting
requirements in the BSA, the Court did not reach the merits of the
issue and dismissed their claims as premature. See Shultz, 416
U.S. at 7175.

- 9 -

H.R. Rep. No. 91-975, at 1213, reprinted in 1970 U.S.C.C.A.N. at

439798.5
To that end, information collected pursuant to the BSA's
reporting and recordkeeping requirements is shared with other
agencies, "including the Office of the Comptroller of the Currency,
the Consumer Financial Protection Bureau, the Federal Reserve
Board, the Federal Deposit Insurance Corporation, the National
Credit

Union

Supervision."

Administration,

and

the

Office

of

Thrift

United States v. Under Seal, 737 F.3d 330, 335 (4th

Cir. 2013); see 31 U.S.C. 5319 (requiring the Secretary of the

Treasury

to

"make

information

in

report

filed

under

this

subchapter available to an agency, including any State financial

institutions supervisory agency, United States intelligence agency
or self-regulatory organization registered with the Securities and
Exchange Commission or the Commodity Futures Trading Commission,
upon request of the head of the agency or organization"); 31 C.F.R.
1010.950.
Congress was keenly aware that it cannot "abridge or
challenge the right of any country to follow its own banking

The House Report also notes that while the reporting and
recordkeeping requirements help "aid duly constituted authorities
in lawful investigations," they also "facilitate the supervision
of
financial
institutions
properly
subject
to
Federal
supervision," and "provide for the collection of statistics
necessary for the formulation of monetary and economic policy."
H.R. Rep. No. 91-975, at 20, reprinted in 1970 U.S.C.C.A.N. at
4405.

- 10 -

practices," and that it "cannot legitimately expect its laws to be

given extraterritorial application when they conflict with the
laws of another country."

S. Rep. No. 91-1139, at 3.

Some

diplomatic channels exist to assist the government in obtaining

foreign bank records, such as letters rogatory or mutual legal
assistance treaties, but in the face of foreign bank secrecy laws,
these processes are lengthy, cumbersome, and far from foolproof.
See

Shultz,

416

U.S.

at

29

(noting

that

efforts

to

obtain

information from foreign banks are subject to "time consuming and

ofttimes fruitless foreign legal process" (quoting H.R. Rep. No.
91-975, at 12, reprinted in 1970 U.S.C.C.A.N. at 4397)).
Accordingly,
ameliorate

the

"Congress

difficulties

enacted

and

the

challenges

obtaining records by means of a foreign treaty."

BSA

so

as

associated

to
with

In re Grand Jury

Subpoena Dated Feb. 2, 2012, 908 F. Supp. 2d 348, 357 (E.D.N.Y.

2012), aff'd, 741 F.3d 339 (2d Cir. 2013).

It was reasonable for

Congress, faced with these obstacles, to impose reporting and

recordkeeping requirements on United States citizens and residents
engaged in foreign banking.

"[T]he United States can legitimately

require its own citizens or financial institutions to keep records

and

file

reports

on

transactions

with

foreign

financial

institutions and that is the approach taken by the bill."

No. 91-1139, at 3.

S. Rep.

The BSA's recordkeeping provision and its

implementing regulation are "central to the legislative scheme in

- 11 -

that compliance with [them] furnishes the government with the

information necessary to effective regulation."

Varitimos v.

United States, 404 F.2d 1030, 1032 n.4 (1st Cir. 1968) (emphasis
added).
III.
There is extensive discussion elsewhere in the case law
as to the evolution of the law of Fifth Amendment privilege and
why

Chen's

Fifth

articulate again.

Amendment

claim

fails,

which

we

need

not

We agree with seven of our sister circuits that

the claim fails on the grounds that BSA records are subject to the
Required Records Doctrine.

See United States v. Chabot, 793 F.3d

338 (3d Cir.), cert. denied, 136 S. Ct. 559 (2015); In re Grand
Jury Subpoena Dated Feb. 2, 2012, 741 F.3d 339 (2d Cir. 2013);
United States v. Under Seal, 737 F.3d 330 (4th Cir. 2013); In re
Grand Jury Proceedings, No. 4-10, 707 F.3d 1262 (11th Cir.), cert.
denied, 134 S. Ct. 129 (2013); In re Grand Jury Subpoena, 696 F.3d
428 (5th Cir. 2012); In re Special Feb. 2011-1 Grand Jury Subpoena
Dated Sept. 12, 2011, 691 F.3d 903 (7th Cir. 2012), cert. denied,
133 S. Ct. 2338 (2013); In re Grand Jury Investigation M.H., 648
F.3d 1067 (9th Cir. 2011), cert. denied, 133 S. Ct. 26 (2012).
The Required Records Doctrine prevents an individual
from resisting, in the name of the Fifth Amendment, the production
of

records

whose

creation

and

maintenance

is

required

as

condition of voluntarily engaging in a highly regulated activity.

- 12 -

See Baltimore City Dep't of Soc. Servs. v. Bouknight, 493 U.S.

549, 556 (1990); see also In re Special Feb. 2011-1 Grand Jury
Subpoena Dated Sept. 12, 2011, 691 F.3d at 90809.

In a nutshell,

it is commonly accepted that courts should apply the following

three-part

test

for

determining

whether

the

Required

Doctrine applies to a particular recordkeeping scheme.

Records

"[F]irst,

the purposes of the United States' inquiry must be essentially

regulatory[.]"6

Grosso v. United States, 390 U.S. 62, 6768 (1968)

(citing Shapiro v. United States, 335 U.S. 1 (1948)).

"[S]econd,

information is to be obtained by requiring the preservation of

records of a kind which the regulated party has customarily
kept[.]"

Id. at 68.

"[T]hird, the records themselves must have

assumed 'public aspects' which render them at least analogous to

public documents."

Id.; see Marchetti v. United States, 390 U.S.

39, 5657 (1968).7

We agree with the United States that it mischaracterizes

the inquiry to say it is a matter of ascertaining the hypothetical
subjective "intent" of Congress.
Instead, the focus is on the
nature of the underlying activity. See Grosso v. United States,
390 U.S. 62, 68 (1968).
7

Chen questions whether this test is relevant to an actof-production privilege claim, noting that the Required Records
Doctrine was developed before the Supreme Court recognized the
act-of-production privilege in Fisher, 425 U.S. at 410.
This
argument is foreclosed by Supreme Court precedent. In 1990, well
after both lines of doctrine had been developed, the Supreme Court
applied the Required Records Doctrine to an act-of-production
privilege claim asserted by a mother, acting as custodian of her
child pursuant to court order, who was resisting an order of a
juvenile court to produce the child. Bouknight, 493 U.S. at 551,
- 13 -

The government presents the analysis as occurring within

two distinct analytical steps.

First, the initial question is

whether the government is authorized to regulate the activity in

question, as the doctrine was originally articulated by the Supreme
Court in Shapiro.

There is no doubt that is true here.

See U.S.

Const. art. 1, 8, cl. 3 (granting Congress power "[t]o regulate

commerce with foreign nations"); Shultz, 416 U.S. at 59.

But

second, the government recognizes that the Court later narrowed

the doctrine in three criminal cases, where the government was
targeting activity that is criminal or almost always criminal.
See Haynes v. United States, 390 U.S. 85, 95100 (1968); Grosso,
390

U.S.

at

6469;

Marchetti,

390

U.S.

at

5557.

Chen

unsuccessfully tries to fit himself into the limitations set by

those cases.

The government correctly does not contend that just

because it has the power to regulate in an area that it also has

the

power

to

compel

disclosure

of

required

records.

It

acknowledges that it is not taking the position that it can simply

criminalize an act and require records to be kept, which would
indicate performance or non-performance of that criminal act, and
that the records would then be admissible over a Fifth Amendment
objection. The government also agrees that it could not by statute
regulate

an

activity

that

is

essentially

55461.

- 14 -

or

almost

entirely

criminal, mandate recordkeeping conditions on the activity, tell

the criminal to self-report, and then prosecute him for failing to
do so.

Neither situation is occurring here.

By contrast, Chen's keeping an offshore bank account is

not inherently criminal.

The focus of the Required Records

Doctrine is on "the characteristics of the activities about which

information is sought" and "the composition of the group to which
the inquiries are made." Grosso, 390 U.S. at 68. Offshore banking
clearly has inherently civil aspects, and one can comply with the
Act's recordkeeping requirement without being a criminal. In fact,
the Act covers a great many people who are not engaged in any
criminal activity.

Simply put, the Act cannot fairly be viewed as

a backdoor attempt to get at a selected group engaged in illegal

activities, through recordkeeping requirements and disclosure, for
criminal prosecution.

Compare Haynes, 390 U.S. at 9597, with

Varitimos, 404 F.2d at 103334.

To

be

sure,

Congress

contemplated

that

the

records

required to be kept under the BSA would be useful in criminal

prosecutions.
as

much.

Any fair reading of the legislative history reveals

But

"[w]hile

Congress

clearly

intended

the

Act's

disclosure requirements to be of some use in criminal proceedings,

we

regard

United

[the]

States

v.

non-prosecutorial
Dichne,

612

F.2d

interests
632,

640

as

substantial."

(2d

Cir.

1979)

(upholding, over a Fifth Amendment challenge, a requirement under

- 15 -

the BSA that individuals "report[] . . . the transportation of

over $5,000 in monetary instruments into or out of the United
States," id. at 639; see 31 U.S.C. 5316 (previously codified at
31 U.S.C. 1101) (now applicable to transportation of over $10,000
in monetary instruments)).
Chen maintains, however, that despite the Act's civil
applications, compliance with its recordkeeping provision has
"criminal implications."

That may be so for some people covered

by the Act, but "criminal implications" are not enough to render

the Required Records Doctrine inapplicable.

As Chief Justice

Burger, writing for the plurality in California v. Byers, 402 U.S.

424 (1971), explained:
An organized society imposes many burdens
on its constituents. It commands the filing
of tax returns for income; it requires
producers and distributors of consumer goods
to
file
informational
reports
on
the
manufacturing process and the content of
products, on the wages, hours, and working
conditions of employees. . . . Comparable
examples are legion.
In each of these situations there is some
possibility of prosecution -- often a very
real one -- for criminal offenses disclosed by
or deriving from the information that the law
compels a person to supply. . . . But under
our
holdings
the
mere
possibility
of
incrimination is insufficient to defeat the
strong policies in favor of a disclosure
called for by statutes like the one challenged
here.
Id. at 42728 (plurality opinion) (footnote omitted).

- 16 -

This is not unusual.

In fact, courts have relied on the

Required Records Doctrine to uphold recordkeeping schemes imposed

in a variety of contexts where disclosure carries a very real
chance of "criminal implications."
securities regulation context.

One prime example is in the

See SEC v. Fehn, 97 F.3d 1276,

129193 (9th Cir. 1996) (noting that "[a]lthough disclosure might

have revealed past criminal violations in this case, the disclosure
requirement

does

not,

in

general,

mandate

revelation

of

'inherently illegal activity,'" id. at 1293 (quoting Bouknight,

493 U.S. at 557)); United States v. Stirling, 571 F.2d 708, 727
28 (2d Cir. 1978) (rejecting a similar Fifth Amendment selfincrimination claim against a securities disclosure requirement).
Other areas include the shipment and sale of firearms,
see United States v. Flores, 753 F.2d 1499, 150004 (9th Cir. 1985)
(en banc); United States v. Resnick, 488 F.2d 1165, 1168 (5th Cir.
1974) (noting that "the challenged laws sub judice [were] not
directed at a highly selective group inherently suspect of criminal
acts"); Varitimos, 404 F.2d at 103334; the transportation of
articles into the United States, see United States v. RiosGonzalez, 450 F.2d 1213, 121617 (2d Cir. 1971) (noting that "the
requirement that all articles be declared and the necessity of
such a declaration shows that the appellant, and those in a similar
position, were not singled out as a select group 'inherently
suspect of criminal activities,'" id. at 1217 (quoting Albertson

- 17 -

v. Subversive Activities Control Bd., 382 U.S. 70, 79 (1965)));

and the distillation and possession of alcohol, see Henderson v.
Blackwell, 436 F.2d 1081, 1082 (5th Cir. 1971) (per curiam) (citing
Brown v. United States, 401 F.2d 769 (5th Cir. 1968) (per curiam)).
In light of the limits that the government admits exist
on the reach of the Required Records Doctrine, we find under the
circumstances that the documents Chen was required to maintain by
the BSA's recordkeeping requirements are properly subject to the
Required Records Doctrine, and that Chen cannot assert a Fifth
Amendment claim of privilege to resist their production.
IV.
Of course, obtaining enforcement of a summons starts
with the government bearing the burden of making a prima facie
showing as required by United States v. Powell, 379 U.S. 48, 57
58 (1964).8

"The IRS need only make a 'minimal' showing.

An

affidavit of the investigating agent that the Powell requirements

are

satisfied

is

sufficient

to

make

the

prima

facie

case."

Sugarloaf Funding, LLC v. U.S. Dep't of the Treasury, 584 F.3d

To obtain enforcement of a summons, "[t]he IRS must first

make a prima facie showing '[1] that the investigation will be
conducted pursuant to a legitimate purpose, [2] that the inquiry
may be relevant to the purpose, [3] that the information sought is
not already within the Commissioner's possession, and [4] that the
administrative steps required by the Code have been followed.'"
Sugarloaf Funding, LLC v. U.S. Dep't of the Treasury, 584 F.3d
340, 345 (1st Cir. 2009) (alterations in original) (quoting Powell,
379 U.S. at 5758).
- 18 -

340, 345 (1st Cir. 2009) (citation omitted).

Additionally, the

IRS may not issue a summons "with respect to any person if a

Justice Department referral is in effect with respect to such
person."

26 U.S.C. 7602(d)(1).

The government here submitted

an affidavit executed by the IRS revenue agent stating that the

summons was issued for the purpose of determining the 2008 tax
liability of Chen and Ng, and that the IRS had not referred Chen
or Ng to the Department of Justice for criminal prosecution.

The

agent acknowledged that the government had some documents pointing

to the existence of Chen's foreign bank accounts, but not enough
documents to know whether there was underpayment of taxes.
We reject Chen's argument that the government has not
proven that he is in possession of offshore banking records, or
that he even engages in offshore banking.

At this stage, the

government does not have to prove that Chen was in possession of

documents subject to the BSA's recordkeeping requirements.
re Grand Jury Investigation M.H., 648 F.3d at 1071.

Cf. In

The IRS need

not "prove by positive evidence the existence of the records and

their possession by the summonee."

United States v. Lawn Builders

of New Eng., Inc., 856 F.2d 388, 392 (1st Cir. 1988) (per curiam).
Chen makes no serious argument that there are no such documents in
his possession or that the government otherwise has access to the
missing documents.

Chen must produce the documents.

- 19 -

V.
We also reject Chen's argument that "if the Court upholds
the District Court's order compelling Chen to produce the records,"
we

should

impose

"a

use

restriction

on

the

testimonial

communications inherent in the act of producing the records."

First, Chen did not request a use restriction in the
district court, and so the request is waived for this proceeding.
Second, the issue is hypothetical.

We have no way of knowing if

the records will even be put to prosecutorial use.

The D.C.

Circuit dealt with a similar issue in Office of Thrift Supervision,

Department of the Treasury v. Dobbs, 931 F.2d 956 (D.C. Cir. 1991).
There, the Office of Thrift Supervision ("OTS") had issued a
subpoena duces tecum against Dobbs, requiring him to produce
certain documents and appear for a deposition.

Id. at 957.

Dobbs

challenged the subpoena, but the district court granted the OTS's
petition to enforce it.
subpoena.

Id.

Id.

Dobbs then complied with the

On appeal, Dobbs argued that "[e]ven though he

[had] provided testimony to OTS, . . . [the] Court could grant

relief from the subpoena by sealing the deposition record against
future use."

Id. at 958.

The D.C. Circuit rejected his request

because "Dobbs [was] seeking [the] Court's protection from future

OTS action that may never occur."

Id.

The court cited "the well-

established rule that questions of suppression should not be

considered until the time when the Government seeks to use that

- 20 -

evidence."

Id. (quoting United States v. Kis, 658 F.2d 526, 533

(7th Cir. 1981)).

The same reasoning applies here.

VI.

Chen also appeals the district court's denial of his

claim of privilege over his act of producing personal and corporate
domestic

financial

records.

The

district

court

provided

no

explanation for why it denied Chen's claim or how it analyzed the

claim.

In its original order, the district court found that

"Chen's Fifth Amendment privilege [was] engaged," and so it ordered

"in camera review of the summonsed documents which do not fall
within the scope of the recordkeeping requirements of the Bank
Secrecy Act in order to determine, on a document-by-document basis,
whether Chen's assertion of his Fifth Amendment privilege is made
out."

Chen, 952 F. Supp. 2d at 334.

But after it reviewed the

documents that Chen provided, the district court only issued a

brief order stating: "The Court having carefully reviewed the
documents submitted in camera and revisited the arguments and
briefs heretofore filed, it concludes that there is no occasion to
reconsider any of its prior orders.

The IRS summons shall be

enforced in accordance with its terms."

We have noted before that district courts "should take
reasonable steps to ensure that the parties and the appellate
courts will be able to glimpse the foundation on which their
rulings rest," and that in some cases, "such statements are a

- 21 -

necessary precondition to intelligent appellate review."

v. Berman, 241 F.3d 65, 68 (1st Cir. 2001).

Grossman

When "faced with the

task of reviewing an inscrutable order," we may either "remand for

a fuller exposition or act, without remanding, if a reasonable
basis supporting the order is made manifest on the record." United
States v. Podolsky, 158 F.3d 12, 16 (1st Cir. 1998); see Bielunas
v. F/V Misty Dawn, Inc., 621 F.3d 72, 7778 (1st Cir. 2010).

Here,

we vacate and remand to the district court for an explanation of

its ruling.

If Chen wishes to challenge that order, he should

file a new appeal.

VII.
We affirm the district court's order compelling Chen's
production of those documents required to be kept under the Bank
Secrecy Act. As to the district court's enforcement of the summons
for documents not subject to the BSA, we vacate and remand to the
district

court

for

further

proceedings

opinion.

No costs are awarded.

- 22 -

consistent

with

this