The case involved Michael and Kimberley Tew, who filed false invoices for nonexistent vendors while Michael worked as CFO at National Air Cargo, a government contractor in Chapter 11 bankruptcy. The scheme, conducted with inside accomplice Jonathan Yioulos, drained more than $5 million from National's accounts over approximately two years before federal law enforcement intervened.
Writing for the court, Circuit Judge Federico found the Apple warrant 'insufficiently particularized in violation of the Fourth Amendment' because it swept too broadly across Kimberley's cloud data, emails, texts, photos and location information based on 'extremely broad' conspiracy statutes without sufficient guardrails. But the court held 'the Government has shown the good faith exception to the warrant requirement applies' since executing agents reasonably relied on a warrant signed by a neutral magistrate judge.
Both defendants had sought severance of their joint trial after mounting antagonistic defenses that blamed each other for the conspiracy. The district court denied their motions after Kimberley's attorney opened by stating 'This case is about a scheme concocted and executed by Michael Tew and Jon Yioulos' while Michael's defense painted Kimberley as manipulative and controlling.
The ruling provides new guidance for law enforcement seeking warrants for cloud-based accounts, an area where the court noted 'there is still little precedential authority.' Both defendants received sentences of more than four years in prison and were ordered to pay millions in restitution.