Agents entered the PDS offices and ordered all employees to move into a conference room. They remained there while other agents began searching the premises. Agents received several important documents and statements from PDS employees that were interviewed while waiting for the search to end. Earlier that same morning, two agents went to Webb's house where they waited to intercept him as he went to work. After Webb was met, the agents asked him if they could interview him, which he agreed to. During the interview, Webb willingly admitted to having been inflating the invoices for approximately five years. He also estimated that PDS had inflated the invoices by 10 to 15 percent each year. He claimed that this was equivalent to $100,000 to $200,000 per year for five years. .
Ultimately, Webb's statements and documents received during the search warrant executed were used during trial. However, statements received from employees were not introduced at trial. At the close of the trial, the jury found Webb and PDS guilty of two counts of highway project fraud. Webb was sentenced to two year in prison, two years of supervised release and joint restitution with PDS of $435,038.33. In addition, PDS was placed on one-year probation and fined $522,045.29.
On March 2, 2001, PDS and Webb appealed the district court's decision and it was heard by the United States Court of Appeals for the Fourth Circuit. The appeal was founded on the premise of five major points.
1. The appellants felt that the district court erred in not excluding all evidence found during the search because agents wrongfully detained and interviewed employees.
2. The appellants felt that the district court erred in denying their motion to suppress evidence without holding an evidentiary hearing first.
3. The appellants felt that the district court erred in not excluding Webb's statements during his interview because he was not informed of his right not to incriminate himself.
