FBI Went Too Far in Searching N.Y. Financier's Files, Judge Says

  • Wey charged with fraud tied to reverse mergers of companies
  • U.S. judge rules government’s seizure violated Wey’s rights

U.S. prosecutors won’t be able to use thousands of documents FBI agents seized during a 2012 search of the home and office of a New York financier during his fraud trial.

Benjamin Wey. Photographer: Dale de la Rey/Bloomberg

Benjamin Wey. Photographer: Dale de la Rey/Bloomberg

Benjamin Wey, the founder of the private equity firm New York Global Group, challenged the legality of the seizures and a New York judge on Tuesday agreed Wey’s constitutional rights were violated by the overly broad search conducted by the investigators.

U.S. District Judge Alison Nathan in Manhattan criticized the government in a 92-page order saying its conduct reflects “at least, grossly negligent or reckless disregard” of the Fourth Amendment of the Constitution, which protects people against unreasonable searches.

While stopping short of dismissing the charges, the judge’s ruling tosses a significant amount of evidence the government gathered, making Wey’s prosecution that much more difficult. The judge said she recognized the gravity of her decision but noted the government didn’t call the agents as witnesses to explain the searches and declined to provide any other alternative for her to consider.

Dawn Dearden, a spokeswoman for Acting U.S. Attorney Joon Kim, and Adrienne Senatore, an FBI spokeswoman, declined to comment on Nathan’s ruling or if the government would appeal.

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Wey made a career of bringing Chinese companies onto U.S. exchanges doing so-called reverse mergers. He faces a trial in October on money laundering and securities fraud charges. 

During a January 2012 search of Wey’s Wall Street office and apartment, agents seized at least 14 terabytes of computer information and items that included family x-rays, medical prescriptions, documents tied to Wey’s divorce and even his child’s PSAT college test scores. The government kept the property for at least three years.

Wey’s lawyer, David Siegal had argued that the evidence should be suppressed and the case dismissed.

“The FBI made a clean sweep of Mr. Wey’s home and office, scooping up virtually every document and electronic device in sight,” Siegal said Wednesday in a phone interview. “The law doesn’t allow the government to seize someone’s entire electronic data and continue to sift through it indefinitely for years.”

Prosecutors claim that from 2007 to 2011 Wey used relatives in China and the U.S. to help him secretly gain control of large blocks of stock in companies that he took public through reverse mergers with U.S. shell companies. He then made tens of millions of dollars by manipulating the companies’ stock prices, according to the government.

Reverse mergers involve a closely held firm that buys a shell company already public on an exchange, allowing it to list shares without the scrutiny and cost of a public offering.

The case is U.S. v. Wey, 15-cr-0611, U.S. District Court for the Southern District of New York (Manhattan).

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