## Facts

- Pirouz Sedaghaty helped lead an Oregon chapter of a foreign-based charitable organization.
- The prosecution centered on the organization’s tax-year-2000 filings and alleged that roughly $150,000 raised in the United States was sent abroad and concealed on the charity’s IRS Form 990.
- Sedaghaty was charged with conspiracy to defraud the United States by impeding the IRS and with filing a false return for a charitable organization.
- At trial, the government introduced substantial terrorism-related evidence to explain motive and context; Sedaghaty contended the trial became unfairly dominated by inflammatory themes unrelated to the tax counts.
- The case involved classified information. The government sought to withhold it under the Classified Information Procedures Act (CIPA) and proposed an unclassified substitution.
- The defense argued (1) the substitution distorted the classified material by stressing inculpatory points and minimizing exculpatory aspects, (2) the government failed to timely disclose that a key witness received an FBI payment, and (3) agents exceeded the scope of a warrant during a computer search of the charity’s offices.
- Sedaghaty was convicted on both counts and sentenced to 33 months; the sentencing court stated there was no proof directly linking him to terrorism.

## Issues

1. Whether the CIPA-approved unclassified substitution provided substantially the same ability to present a defense as the classified information.
2. Whether the government violated Brady/Giglio by failing to timely disclose an FBI payment to an important witness, and whether the nondisclosure was prejudicial.
3. Whether the execution of the computer search exceeded the warrant’s scope in violation of the Fourth Amendment, warranting relief.
4. Whether the admission and emphasis of terrorism-related evidence created unfair prejudice under evidentiary rules and denied a fair trial.
5. Whether cumulative error required vacatur and a new trial.

## Decision

- The Ninth Circuit vacated the convictions and sentence and remanded for a new trial.
- The court held the CIPA substitution was inadequate because its presentation impaired the defense’s ability to use exculpatory aspects of the classified information effectively.
- The court found a Brady/Giglio violation based on the untimely disclosure of an FBI payment to a witness, limiting effective impeachment.
- The court concluded the government exceeded the scope of the computer-search warrant in certain respects, creating a Fourth Amendment problem.
- Considering these errors together, and the prejudicial tenor created by extensive terrorism-related evidence, the court determined confidence in the verdict was undermined.

## Legal Principles

- Under CIPA, a substitution for classified information must provide the defendant substantially the same ability to make the defense as disclosure of the classified material; a substitution that distorts exculpatory content can be reversible error.
- Brady and Giglio require timely disclosure of material impeachment evidence, including witness benefits or payments that bear on bias or motive; delayed disclosure can be prejudicial, especially when combined with other trial errors.
- The Fourth Amendment requires that digital searches comply with a warrant’s particularity and scope; searching or seizing data beyond authorized categories can taint resulting evidence.
- Evidence offered to show motive or context may be excluded when its unfair prejudice substantially outweighs its probative value, particularly where inflammatory themes risk shifting the jury’s focus from the charged offenses.
- Cumulative error warrants reversal when multiple trial errors, taken together, render the proceedings fundamentally unfair or undermine confidence in the verdict.

## Conclusion

The Ninth Circuit ordered a new trial after finding that an inadequate CIPA substitution, a Brady/Giglio nondisclosure concerning a witness payment, and an overbroad computer search—considered cumulatively and against the backdrop of highly prejudicial terrorism-related proof—prevented a fair adjudication of the tax-fraud charges.


United States v. Sedaghaty, 728 F.3d 885 (9th Cir. 2013)