Petition — Wuagneux v. United States

82-1687

‘

NO. 1 ALEXANDER L. STEVA

on

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1982

GEORGE WUAGNEUX,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

LEONARD A. SANDS, Esquire

Counsel of Record

JAY R. MOSKOWITZ, Esquire

SANDS & MOSKOWITZ, P.A.

Suite 501

200 S.E. First Street

Miami, Florida 33131

(305) 371-6777

Counsel for Petitioner

QUESTIONS PRESENTED FOR REVIEW

1. Whether an unattached

probable cause affidavit or the

specialized knowledge of executing

agents can cure a search warrant which

Standing alone fails to meet the

particularity standards of the Fourth

Amendment?

2. Whether the manner of

execution of a search warrant is

constitutionally over-broad when

specialized knowledge and discretion

of the officers and not the teachings

of the warrant guided what was seized?

win

LIST OF INTERESTED PERSONS

The only persons having an

interest in the outcome of this case

are the Petitioner, his family, and the

United States of America.

QUESTIONS PRESENTED FOR REVIEW....

LIST OF INTERESTED PERSONS...

TABLE OF CONTENTS

TABLE OF CONTENTS......eeeeee05

TABLE OF AUTHORITIES..........-.,

OPINION BELOW... .cccccccccccces

JURISDICTION... .cccccccscccvece

CONSTITUTIONAL PROVISIONS

REPT se heer eeeceeeetsnense

STATEMENT OF THE CASE.......

COURSE OF PROCEEDINGS.........

STATEMENT OF NECESSARY FACTS..

REASONS FOR GRANTING THE WRIT.....

I.

Neither An Unattached

Probable Cause Affidavit

Nor The Specialized

Knowledge Of The Executing

Agents Can Cure A Search

Warrant Which Fails To

Meet The Particularity

Standards Of The Fourth

I a 6 ode 66.66 60s 6b 008 e2

-iii-

iii

10

II. The Manner Of Execution

Of The Warrant Was Over-

Broad When Specialized

Knowledge And Discretion

Of The Officers And Not

The Teachings Of The

Warrant Guided What Was

WIN G5. 605-0 4a 668 66d Beek one

CONCLUSION... ccccccccscccccs .

CERTICICATE OF SERVICE.......

APPENDIX... cccccccccccsccccees

Eleventh Circuit Opinion.

Denial of Re-Hearing.....

Transcript of District

COULE OGPENSOR sos veces

-iv-

coccce 29

TABLE OF AUTHORITIES

Andresen v. Maryland,

427 U.S. 463,

96 S.Ct. 2737 (1976)...10, 16,

Application of Lafayette Academy,

610 F.2d 1

(list Cir. 1979) -cccececs 16, 18,

Boyd v. United States,

116 U.S. 616,

6 S.Ct. 524 (1886)... ..cccecee

Coolidge v. New Hampshire,

403 U.S. 443,

91 S.Ct. 2022 et yh ee “eevee

In the Matter of Property

Belonging to Talk of the

Town Bookstore,

644 F.2d 1317

(Sth Cir. LOCA) wccccccnsees 19,

Lo-Ji Sales, Inc. v. New York,

442 U.S. 319,

99 S.Ct. 2319 (1979)... eee

Marron v. United States,

275 U.S. 192, 10,

48 S.Ct. 74 (1927).......-. 15,

Moore v. United States

461 F.2d 1236

cE. CEs. Brel bx 0s thee ka aan

Stanford v. Texas,

379 U.S. 476,

B85 S.Ct. 506 (1965) ..cccccceces

-V-

20,

19,

21

27

14,

25

20

10

Steele v. United States,

267 U.S. 498,

) Ge ie ae ee Ee Gh} ere ee Prey f

United States v. Cook,

657 F.2d 730

Sth Cif. T9SLo wcccece ee eet ee ee eee 11

United States v. Haydel,

649 F.2d 1152 (5th Cir. 1981),

corrected,664 F.2d 84

(Sth Cir. 1981),cert. den., 19,23

__U..S. Pe ae & ~ h S ) Pee 24,25

United States v. Heldt,

668 F.2d 1238 (D.C.Cir. 1981),

cert. den., U.S. P

ob ge. Re) > error a iT eee 28

United States v. Johnson,

690 F.2d 60

Coe CA8, BPO aPccstccvéschkhsae S8¢ 18, 20

United States v. Johnson,

541 F.2d 1311

Sree CAe ss -BOFSS cbse eesccecs 19, 20, 21

United States v. Klein,

565 F.2d 183

(ist Cir. 1977) .cccccccccccoses were e

United States v. Marti,

421 F.2d 1263

(2d Cir. 1970),cert. den., 16,18

404 U.S. GAT. cccccveccceccccees .20,21

United States v. Wuagneux,

683 F.2d 1343

CLEGH Cis. 19SZ).vccov. een eeens passim

-vi-

Weeks v. United States,

232 U.S. 383,

36 6. Cbs. SER TIDES) kc ivocccsvcveccal

Other Authorities:

United States Constitution,

Fourth Amendment.......... 3, 8, 10,42

18 USC §664.....cceeee oeedeesocecrseees 4

18 USC §1014...ccccccccccces SebGuseepes 4

18 USC $1341. .cccccsece Ccbspececeueeses 4

18 UBC $1343. cccccccsecccesesecces occeed

18 UBC $1962. .ccccccccccccccsccscscccecs 4

26 USC §7206(1).....+06- oevees senece oc 04

28 USC §1254(1) .. cc cceccccee errr reese

-Vii-

NO.

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1982

GEORGE WUAGNEUX,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

Petitioner, GEORGE WUAGNEUX,

respectfully prays that a Writ of

Certiorari issue to review the judgment,

opinion, and order of the United States

Court of Appeals for the Eleventh

Circuit entered in this proceeding on

August 23, 1982.

OPINIONS BELOW

The opinion of the Court of

Appeals is reproduced in the Appendix

attached hereto and is reported as

United States v. Wuagneux, 683 F.2d

1343 (llth Cir. 1982). A petition for

re-hearing and/or suggestion for re-

hearing en banc was rejected on January

14, 1983, and is included in the

Appendix. A copy of the transcript of

the district court's oral order denying

suppression is also contained in the

Appendix.

JURISDICTION

Jurisdiction of this Court is

invoked under 28 U.S.C. §1254(1). The

judgment from which review is sought

was rendered August 23, 1983. An order

denying re-hearing was entered January

14, 1983. On March 11, 1983, Justice

~

into question.

The Petitioner, GEORGE

WUAGNEUX, was the owner of Sage

Corporation, a general construction

company, which during the early 1970's

was the largest employer of union help

in South Florida. The Sage offices

were located on the top floor of 1250

East Hallandale Beach Boulevard,

Hallandale, Florida.

In 1977, Department of Justice

Attorney Martin Steinberg and Internal

Revenue Service (IRS) Special Agent

Vincent O'Dea, as part of a joint IRS -

Department of Justice investigation of

one Seymour Gopman, drafted an aff Jjavit

seeking a warrant authorizing the search

of the offices of Sage for records they

believed to be relevant to the Gopman

investigation.

-

On August 3, 1977, the

affidavit was presented to a United

States Magistrate who issued the warrant

authorizing the search of sage .2/ The

affidavit was thereupon sealed.

That afternoon, Agent O'Dea

held a meeting with ten (10) to twelve

(12) agents totally unfamiliar with the

Gopman investigation or Sage Corporation -

"warm bodies" - and briefed them on the

search that was soon to commence. At

that time, O'Dea told the agents of the

investigation leading up to the search

and supplied them with a list of names

of various Sage entities. O'Dea told

the agents to review the documents

located in their assigned areas, pull out

2/ Footnote 5 of the opinion of the

Eleventh Circuit (United States v.

Wuagneux, 683 F.2d 1343, 1350 (llth Cir.

1982))sets out the warrant in detail.

(Appendix p.A-25).

~

those they thought relevant and leave

them for O'Dea or Steinberg to decide

whether to seize. At the search site,

this is precisely what occurred. The

search took two days to complete.

Somewhere between 50,000-100,000

documents were seized.

The Petitioner filed a lengthy

motion to suppress which contained a

multi -pronged attack on the warrant and

manner of execution of the search at the

offices of Sage Corporation. He

contended inter alia:

l. The warrant was a general

one failing to meet the

Fourth Amendment's require-

ment of particularity; and

2. The manner of execution of

the search was impermissibly

overbroad.

Following evidentiary hearings,

the District Court denied the motion to

suppress in all respects.

afe

The case then proceeded on to

trial and convictions as set out supra

resulted. Those convictions were affirmed

(United States v. Wuagneux, 683 F.2d

1343 (llth Cir. 1982)) and a petition for

re-hearing was denied on January 14,

1983.

REASONS FOR GRANTING THE WRIT

I. NEITHER AN UNATTACHED

PROBABLE CAUSE AFFIDAVIT

NOR THE SPECIALIZED

KNOWLEDGE OF THE

EXECUTING AGENTS CAN

CURE A SEARCH WARRANT

WHICH FAILS TO MEET

THE PARTICULARITY

STANDARD OF THE FOURTH

AMENDMENT.

The warrant in this case failed

to meet the Fourth Amendment requirement

of particularity. In speaking of the

particularity requirement, this Court

has said:

"The requirement that warrants

shall particularly describe the things to

be seized makes general searches under

them impossible and prevents the seizure

of one thing under a warrant describing

another. As to what is to be taken,

nothing is left to the discretion of the

officer executing the warrant.” Marron

v. United States, 5 U.S. 192, 196, 48

Ss. Ct. 74, 76 (1927) [emphasis added].

See also Andresen v. Maryland, 427 U.S.

463, 480, 96 S.Ct. 2737, 2748 (1976);

Stanford v. Texas, 379 U.S. 476, 485, 85

S.Ct. 506, 512 (1965); Weeks v. United

States, 232 U.S. 383, 389-391, 34 S.Ct.

341, 343 (1914).

«itn

This requirement was derived

from Colonial America's aversion to

writs of assistance and general warrants

which placed broad discretionary authority

with British custom officials to search

anywhere for smuggled goods and seize

anything they pleased. United States v.

Klein, 565 F.2d 183, 186 (lst Cir. 1977).

See also Boyd v. United States, 116 U.S.

616, 623-625, 6 S.Ct. 524 (1886). The

particularity standard dictates that the

language of the warrant be sufficiently

definite to enable the searcher with the

warrant to reasonably ascertain and

identify that which is authorized to be

seized. Steele v. United States, 267

U.S. 498, 503-504, 45 S.Ct. 414 (1925);

United States v. Cook, 657 F.2d 730

(Sth Cir. 1981). See also Coolidge v.

New Hampshire, 403 U.S. 443, 467, 91 S.Ct.

2022, 2038 (1971); United States v. Johnson,

elle

690 F.2d 60, 64 (3d Cir, 1982).

With regard to the instant

warrant ,>/ the petitioner submits that it

clearly fails to meet the particularity

standard. The warrant lists eleven (11)

categories of items to be seized. A

review of those categories immediately

reveals their general and open-ended

nature. The most glaring example involves

item number one which authorizes the

seizure of receipts and disbursement of

kickback funds.

The question must

immediately come to mind to one examin-

ing that item = what are kickback funds?

Absolutely no guidance is given the

officer executing the warrant. Unless

3/ Set out at footnote 5 of the

Opinion below [United States v. Wuagneux

683 F.2d 1343, 1380 (lith Cir. 1982).

page A-25 of the Appendix.

-12-

he happens to find a file labeled

"Kickback Funds", a highly improbable

occurrence, he has no way of knowing

what to search for. He is left totally

to his own discretion as to what to take,

a clear violation of this Court's

dictates. See i.e. Marron v. United

States, supra. +/

In executing this warrant,

it was not the words contained within

its four corners that guided the officers

for they were too general. It was the

specialized knowledge of the lead agent

and the Government attorney, a clear

violation of the dictates of Marron v.

United States, supra.

4/ Similar arguments can be made for

most of the other eleven categories,

i.e., Item 2 - who are"other union

officials?"

-13-

The Eleventh Circuit, while

acknowledging that failure to adequately

enforce the particularity requirement

would undermine the warrant requirement

itself, noted that in “white collar"

crime investigations some leeway should

be given because of the complex "paper

puzzle" nature of the case. United States

v. Wuagneux, 683 F.2d at 1348-1349.

Even if this is so, the warrant must

provide sufficient guidelines and

limitations for the officers for the

particularity requirement to have any

meaning. United States v. Wuagneux,

Supra at 1359 fn. #4.

The Eleventh Circuit noted in

Wuagneux that the statement in Marron

"as to what is to be taken, nothing is

left to the discretion of the officer

executing the warrant", 275 U.S. 192,

196, 48 S.Ct 74, 76 (1927) should not

@14-

be taken literally as then "no search

would be possible". United States v.

Wuagneux, 683 F.2d at 1349, fn. #4.

With that premise as a backdrop, the

Circuit went on to find categories 2

through 11 to be without fault. 683

F.2d at 1350. The Petitioner submits

that while some discretion may be

appropriate, particulariy in "white-

collar" type investigations, the type

of specialized knowledge needed here to

put "meat on the bones" of the skeletal

warrant is violative of the Fourth

Amendment. The specialized knowledge of

O'Dea and Steinberg (the lead agent

and Government attorney) as to what to

seize and what to leave behind is no

substitute for the Fourth Amendment's

particularity requirement. The language

of Marron though written some fifty-five

(55) years ago is not dead. In fact,

-15-

even in the more recent decision of

Andresen v. Maryland, 427 U.S. 463,

96 S.Ct. 2737 (1976), a case in which

this Court noted that some relaxation

of the requirements in "paper" cases may

be in order, this Court reaffirmed the

Marron language that "nothing [shall be]

left to the discretion of the officer

executing the warrant." 427 U.S. at

480, 96 S.Ct. at 2748. The action of

O'Dea and Steinberg is an impermissible

act of discretion even if they tried to

limit the items seized. Application

of LaFayette Academy, 610 F.2d 1 (lst

Cir. 1979); United States v. Marti, 421

F.2d 1263 (2nd Cir. 1970), cert. den.,

404 U.S. 947 [good faith of officer no

substitute for particularity].

The Eleventh Circuit's attempt

to allow specialized unrecorded know-

ledge of the agent to particularize a

~16=<

which incorporates the affidavit therein.

United States v. Johnson, 690 F.2d 60,

64 (3d Cir. 1982); In the Matter of

Property Belonging to Talk of the Town

Bookstore, supra at 1319; Application of

LaFayette Academy, supra at 4; United

States v. Johnson, 541 F.2d at 1315.

See also Moore v. United States, 461 F.2d

1236, 1238 (D.C. Cir. 1972).

The requirement of particularity

in a warrant serves a two-fold purpose.

On the one hand, it limits the discretion

of the executing officer as to what to

seize and, on the other, it gives notice

to the person subject to the search (by

means of his being given a copy of the

warrant) as to what the officers are

entitled to seize. United States v. Marti,

421 F.2d 1263, 1268 (2nd Cir. 1970), cert.

den., 404 U.S. 947. When the affidavit

-20-

is incorporated by reference in the

warrant, physically accompanies it to

the search site, and is left along with

a copy of the warrant with the person

subject to the search, then the purposes

of particularity are served by the

combined effect of the warrant and

affidavit, the affidavit becoming, in

essence, a part of the warrant. In the

Matter of Property Belonging to Talk of

the Town Bookstore, supra at 1319;

Application of LaFayette Academy, supra

at 5; United States v. Johnson, 541 F.2d

at 1315; United States v. Marti, supra

at 1268.

In the instant case, neither

one of the two requirements for use of

the affidavit to cure particularity

problems was met. First, the warrant

=2l-

does not use suitable words incorporating

the affidavit. Second, the affidavit

was not attached to the warrant, did not

accompany it to the search site and was

not provided to the Defendant or any of

his representatives. In fact, the

affidavit was sealed at the time of

execution of the warrant. Thus, the

affidavit should not be used to cure any

particularity defect in the warrant. To

do so would be to broaden the discretion

of the officers and limit the ability

of the searched party to insure that the

officers were staying within the bounds

of the Fourth Amendment.

In the instant case, the

Eleventh Circuit after acknowledging

that the warrant could not stand alone

as to the category relating to Kickback

@22@

Funds, allowed for reference to the

affidavit citing to United States v.

Haydel, 649 F.2d 1152 (Sth Cir. 1981),

corrected, 664 F.2d 84 (5th Cir. 1981),

cert. den., U.S. » 202 8.Ct. ivai.

The Petitioner submits that the Court

below has misread Haydel which is

clearly in line with the prevailing

trend that the affidavit cannot be used

unless attached to the warrant and, left

with the searched party.

In Haydel, the Fifth Circuit

found that the affidavit in that case

appears in the record each time that

the warrant appears and presumably had

Haydel asked to see the warrant at the

search site he would have also been

shown the affidavit. The Court held

that since the defendant has the burden

of proof in a motion to suppress, it

=33-

would not infer a contrary conclusion.

649 F.2d at 1157.

In the case at bar, the

contrary was Clearly established. The

Petitioner clearly established that the

affidavit was not attached to the

warrant. After presentation to the

magistrate, it was promptly sealed.

Neither GEORGE WUAGNEUX nor his

representative could have or would

have been shown the affidavit. It was

certainly not left with the warrant at

the search site. It was not until a

considerable time after the search that

the Petitioner was able to obtain a copy

of the affidavit.£/

&/ The Eleventh Circuit's comment that

the Petitioner eventually obtained a copy

of the affidavit as he filed a motion

to suppress (683 F.2d at 1351 fn. 6)

misses the mark and does not address the

problem of his knowing at the time of

the search the scope of the agents'

authority.

=24-

Thus, the special circumstances presumed

in Haydel were not present here.

The Eleventh Circuit is strik-

ing out on new ground in this case,

regarding both the expansive reading of

Marron v. United States, 275 U.S. 192,

48 S.Ct. 74 (1927) and the use of an

unattached and unincorporated affidavit

to cure particularity problems in a

warrant, contrary to the prevailing

authority in all other circuits. These

issues are ripe for review by this

Court.

Il. THE MANNER OF EXECUTION

OF THE WARRANT WAS

OVER=-BROAD WHEN

SPECIALIZED KNOWLEDGE

AND DISCRETION OF THE

OFFICERS AND NOT THE

TEACHINGS OF THE

WARRANT GUIDED WHAT WAS

TAKEN.

Related to the issue of lack of

particularity and the general nature of

=25-

the warrant, the manner of execution of

the warrant by the agents involved in

the search of the Sage offices on

August 3-4, 1977, was impermissibly

overbroad.

Ten to twelve agents who had

no previous involvement with the Gopman

investigation - the so-called warm

bodies - were assigned areas to search.

During the course of the two-day search,

Agent O'Dea and Strike Force Attorney

Steinberg would walk from room to room

examining the records and deciding what

to take and what to leave behind.

This procedure was needed due to the

specialized knowledge of O'Dea and

Steinberg which made them think that

certain items fit within the warrant

parameters and resulted in the seizure

of the various items that were ultimately

used at trial. The fact that those

officers controlled what was taken and

not the warrant itself was impermissible.

Lo-Ji Sales, Inc. v. New York, 442 U.S.

319, 99 S.Ct. 2319 (1979); Andresen v.

Maryland, 427 U.S. 463, 96 S.Ct. 2737

(1976).

Numerous documents were

seized that were outside the scope of

the warrant, such seizure directly and

specifically authorized by O'Dea or

Steinberg. For example, though Agent

O'Dea had no knowledge that money he

believed was going into Sage (as set

forth in the affidavit) went into any of

its subsidiaries, he gave the members

of the search team a list of Sage subsi-

diaries. The agents then proceeded to

«27

numerous files of Sage subsidiaries,

all on instruction of O'Dea - not based

upon the command of the warrant or even

the affidavit both of which name no

subsidiaries whatsoever. Such seizures

guided by the directives of the super-

visors at the search scene and not the

warrant itself was improper. While,

under the logic of United States v.

Heldt, 668 F.2d 1238 (D.C. Cir. 1981)

cert. den., U.S. , 202 6.Ct. 197i,

{cited with approval in the court below,

683 F.2d at 1352-1353] the supervising

agents may guide less knowledgable agents

in their search, their discretion cannot

broaden the search beyond the warrant's

parameters.

Such an approach, broadening

this Court's teachings that the officers

=28-

are to minimize the intrusion, (Andresen

v. Maryland, 427 U.S. 463, 482, n. ll,

96 S.Ct. 2737, 2749 n. 11 (1976)),

requires review.

CONCLUSION

For the above stated reasons,

awrit of certiorari should issue to

review the judgment and opinion of the

United States Court of Appeals for the

Eleventh Circuit.

Respectfully submitted,

tas (4 -doylirs

us, Esquire

SANDS & MOSKOWITZ, P.A.

Suite 501

200 S.E. First Street

Miami, Florida 33131

(305) 371-6777

Counsel for Petitioner

-29-

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this

14th day of April, 1983, three copies of

the Petition for Writ of Certiorari

were delivered by mail to the Solicitor

General, Department of Justice,

Washington, D.C. 20530 and to Robert J.

Erickson, Esq., Appellate Section,

Criminal Division, United States Depart-

ment of Justice, P.O. Box 899, Ben

Franklin Station, Washington, D.C. 20044.

wr. 4 bad

LEONARD A. SANDS, ESQ.

J

-30-

district court erred in denying his

motion to suppress evidence seized ina

search of his offices; whether venue was

improper as to Count 9, bank fraud;

whether hearsay evidence was improperly

admitted; and whether the evidence was

sufficient as to each count. We affirm.

Because of the variety of

issues raised, we will provide only a

brief background at the outset and add

facts as relevant to the discussion of

a particular issue. Appellant was the

chief executive officer and controlling

shareholder of Sage Corporation, a

general construction company head-

quartered in Hallandale, Florida.

During the early and mid-1970's, Sage

and its subsidiaries were engaged in

the construction of a number of

condominium and office building projects

oAaodo

in South Florida. Sage's former office

administrator testified that before the

corporation encountered financial

difficulty during the years 1974-75,

the corporation had employed several

hundred persons exclusive of sub-

contractors and construction personnel.

Sage Corporation attracted

the attention of a Department of

Justice Organized Crime Strike Force

in the course of its investigations

in South Florida. In particular, the

investigation of two individuals,

Bernard Rubin and Seymour Gopman, re-

vealed connections between these

individuals and Sage Corporation that

led the Justice Department to believe

appellant had engaged in a series of

fraudulent and illegal schemes to

obtain financial assistance for Sage.

-A-5-

The government eventually charged

appellant with defrauding two union

pension funds, an annuity fund, a real

estate investment trust, the Florida

Department of Insurance, and a commercial

bank; in addition, the government

charged that appellant had failed to

adequately report various sources of

income, both legitimate and illegitimate.

I-MOTION TO SUPPRESS

Appellant contends that the

district court erred in denying his

motion to suppress evidence obtained

through a search of his offices pursuant

to a warrant. He asserts five specific

grounds of error: consent to a civil

IRS audit, which later provided some

support for the search warrant, was

ineffective because the Revenue Agent

conducting the audit did not disclose

his affiliation with an IRS Strike Force;

“A-6—

the warrant did not contain a

sufficiently particular description of

items to be seized; the execution of

the warrant was overbroad; the district

court improperly limited review of the

execution of the warrant to those items

the government intended to use at trial;

and the trial court failed to conduct

an adequate hearing into allegations

that the affidavit supporting the search

warrant contained false statements made

with reckless disregard for the truth.

A. Consent to Audit by IRS Revenue

Agent?

trevenue Agents are civil auditors.

Criminal investigators at the time of

the events in question were titled

Special Agents.

-A-7<-

On December 15, 1976, Revenue

Agent Chapman went to the offices of

Sage Corporation under instructions to

conduct a civil audit of its books and

records. Chapman met with Sage's

comptroller, Jack Shields, and

accountant, Joseph Spina. He identified

himself as an IRS Revenue Agent, dis-

played his credentials, and told Shields

and Spina that he was there to conduct a

tax audit. He did not further reveal

that he was assigned to an IRS "Strike

force group." Shields and Spina, with

the consent of appellant, agreed to

cooperate with the audit. Chapman was

given an office on the premises, and

conducted an examination until March 9,

1977, when appellant became upset because

Chapman had taken Sage records back to

IRS headquarters. Although Chapman

-A-8-

made several unsuccessful attempts to

resume the audit, his supervisor

eventually recommended no further

enforcement action (on the basis of the

information already gathered).

The IRS "strike force" group

was organized within the audit division

to handle complex and specialized

examinations, and was wholly independent

of the Department of Justice Organized

Crime Strike Force. In fact, IRS

subsequently changed the name of the

group to "Special Enforcement Group."

Although the IRS strike force fre-

quently conducted tax examinations of

suspected organized crime figures, a

relatively small percentage of the

group's cases were referred to the

Department of Justice Strike Force, or

resulted in any criminal proceedings.

-2.-9

The reason the Sage audit was

initiated was never definitively

determined in the proceedings below.

Allen Pasternak, the head of the strike

force audit group, testified that the

audit was probably instigated for one

of three reasons: substantial news-

paper coverage of Sage Corporation

(of an unspecified nature); ongoing tax

collection problems with Sage; or on-

going strike force investigation of

various transactions involving Teamster

loans, an area Sage was also involved in.

Notwithstanding this confusion, the

overwhelming weight of credible testimony

supports the district court's findings

that the audit was not initiated at the

request or suggestion of the Department

-A-10-

of Justice,” and that it was an

examination for civil purposes from its

inception through March 1977.

2 appellant suggests a contrary conclusion

from evidence that a Department of Justice

Strike Force member asked Chapman to

verify how two checks had been treated

on Sage's books. Despite this request,

the evidence is clear that Chapman's

audit was not initiated by the Justice

Department, and that Chapman was not

turning over documents from his audit to

the Justice Department. See also United

States v. Chemical Bank, 593 F.2d 451,

454-57 (2d Cir. 1979) (participation of

individual IRS agents in Justice

Department Strike Force does not convert

IRS into information gathering agency

for Justice Department).

-A-11-

Apparently, the tax fraud

counts in appellant's indictment were

not a product of Chapman's audit.

For purposes of the motion to suppress,

however, appellant argues the audit was

relevant because it enabled Chapman

to provide the Department of Justice

with sufficient information about

Sage's records to establish probable

cause for a search. Appellant argues

that the consent to audit given by

appellant and his representatives was

ineffective, citing United States v.

Tweel, 550 F.2d 297,299 (5th Cir.1977),

because of Chapman's failure to advise

of his affiliation with the IRS strike

force. Shield and Spina testified that

had this further information been

disclosed, they would have insisted

that the IRS proceed by summons, and

-A-12-

advised appellant to seek legal counsel.

While "a consent search is

unreasonable under the Fourth

Amendment if the consent was induced by

the deceit, trickery or misrepresentat-

ion of the Internal Revenue Agent,"

United States v. Tweel, 550 F.2d 297,

299 (5th Cir. 1977) (citing cases),

the circumstances of this case do not

indicate any deceit, trickery or

misrepresentation. A party alleging

ineffective consent on this ground

must show affirmative acts by the

agent that materially misrepresent the

nature of the inquiry, and the showing

must be by clear and convincing

evidence. United States v. Dawson, 486

F.2d 1326, 1329 (5th Cir. 1973);

United States v. Prudden, 424 F.2d

1021, 1032-33 (5th Cir.), cert. denied,

-A-13-

400 U.S. 831, 91 S.Ct. 62, 27 L.Ed.2d 62

(1970). See also United States v. Goss,

650 F.2d 1336, 1348-49 (Sth Cir, 1981).

Appellant concedes that no affirmative

misrepresentation was made in this

case, but insists that Chapman's silence

with respect to his group affiliation

was improper. Prudden suggests that

silence could vitiate consent ''where

there is a legal or moral duty to speak

or where an inquiry left unanswered

would be intentionally misleading."

424 F.2d at 1032. There was no

"inquiry left unanswered" here, nor an

inquiry answered deceitfully. Cf. Tweel,

supra. There was also no duty to speak.

Although Special Agents have been in-

structed, ostensibly because of Fourth,

Fifth and Sixth Amendment concerns, to

provide Miranda-like warnings in certain

~A-14-

B. Particularity of Search Warrant

The Fourth Amendment requires

that warrants "particularly describ[e]

the place to be searched, and the persons

or things to be seized."' U.S. Const.

amend. IV. This requirement is aimed at

preventing "general, exploratory

rummaging in a person's belongings."

Coolidge v. New Hampshire, 403 U.S. 443,

467, 91 S.Ct. 2022,2038, 29 L.Ed.2d 564

(1971); see generally Stanford v. Texas,

379 U.S. 476, 481-85, 85 S.Ct. 506,509-

511, 13 L.Ed.2d 431 (1965) (requirement

of particular description derives from

Colonial resistance to general warrants

and writs of assistance); United States

v. Osborne, 630 F.2d 374,378 (5th Cir.

1980), cert. denied, 450 U.S. 934, 101

S.Ct. 1398, 67 L.Ed.2d 369 (1981). A

description is sufficiently particular

-A-18-

when it enables the searcher to reasonably

ascertain and identify the things

authorized to be seized. United States

v. Cook, 657 F.2d 730,733(5th Cir.1981),

citing Steele v. United States, 267 U.S.

498, 503-04, 45 S.Ct.414, 416-417, 69

L.Ed. 757(1925). Failure to adequately

enforce the particularity requirement

would undermine the warrant requirement

itself, and increase the risk of an

excessive intrusion into the areas of

personal rights protected by the Fourth

Amendment. Cf. Cook, supra, 657 F.2d at

733 ("weigh the practical necessities of

law enforcement against the likelihood

of a violation of the personal rights

of the one whose premises and possessions

are to be searched").

At the same time, the Supreme

Court has recognized that effective

-A-19-

investigation of complex white-collar

crimes may require the assembly of a

"paper puzzle'' from a large number of

seemingly innocuous pieces of individual

evidence: "The complexity of an illegal

scheme may not be used as a shield to

avoid detection when the State has

demonstrated probable cause to believe

that a crime has been committed and

probable cause to believe that evidence

of this crime is in the suspect's

possession." Andresen v. Maryland, 427

U.S. 463, 481 n.10, 96 S.Ct. 2737, 2749

n.10, 49 L.Ed.2d 627 (1976). See also

United States v. Jacob, 657 F.2d 49,52

(4th Cir. 1981) (consider complexity of

alleged fraud), cert. denied, U.S.

, 102 S.Ct. 1435, 71 L.Ed.2d 653

(1982); United States v. Abrams, 615 F.2d

541, 548 (lst Cir. 1980) (Campbell,J., con-

-A-20-

curring) (investigators in fraud cases do

not and often cannot know in advance what

precisely they will find in files). It is

universally recognized that the

particularity requirement must be applied

with a practical margin of flexibility,

depending on the type of property to be

seized, and that a description of property

will be acceptable if it is as specific as

the circumstances and nature of activity

under investigation permit. See United

States v. Lowry, 675 F.2d 593,595 (4th Cir.

1982); United States v. Timpani, 665 F.2d

1, 5 (lst Cir. 1981); United States v.

Morisse, 660 F.2d 132,136 (5th Cir. 1981);

United States v. Bright, 630 F.2d 804,812

(Sth Cir. 1980); United States v. Dennis,

625 F.2d 782,792 (8th Cir. 1980); United

States v. Burns, 624 F.2d 95, 101 (10th

Cir.), cert. denied, 449 U.S. 954,101

~A-21-

S.Ct. 361, 66 L.Ed. 2d 219 (1980);

United States v. Davis, 589 F.2d 904,906

(5th Cir.), cert. denied, 441 U.S. 950,

99 S.Ct. 2178, 60 L.Ed.2d 1055 (1979).

Accordingly, in cases such as the one

before us involving complex financial

transactions and widespread allegations

of various types of fraud, reading the

warrant with practical flexibility entails

an awareness of the difficulty of piecing

together the "paper puzzle." See also

United States v. Ventresca, 380 U.S. 102,

108, 85 S.Ct. 741, 745, 13 L.Ed.2d 684

(1965) ("A grudging or negative attitude

by reviewing courts towards warrants will

tend to discourage police officers from

submitting their evidence to a judicial

-A-22-

officer before acting.").4

“appellant places considerable emphasis

on the statement in Marron v. United

States, 275 U.3: 192, 56 3.Ct.. 74, 72

L.Ed. 231(1927), that "as to what is to

be taken, nothing is left to the

discretion of the officer executing the

warrant.” 275 U.8. eat 196, 48 8.Ct. at

76. As this court and others have ob-

served, however, if this statement were

construed as a literal command, no search

would be possible. Gurleski v. United

States, 405 F.2d 253, 257 (5th Cir. 1968),

cert. denied, 395 U.S. 981, 89 S. Ct.

2140, 23 L.Bd.2d 769 (1969); see also

United States v. Abrams, 615 F.2d 541,

550-51 (Ist Cir. 1980) (Campbell, J.

concurring) citing 2 W. LaFave, Search

& Seizure § 4.6 at 96 (1978). Instead,

our concern is whether the warrant

provides sufficient guidelines and

limitations to meet the test of particu-

larity already described above.

The affidavit in support of

the warrant before us was sworn by

Vincent O'Dea, a Special Agent with the

IRS assigned to the Justice Department

Organized Crime Strike Force. In his

affidavit, O'Dea describes how he and

other investigators tracing the activities

of Gopman and others had uncovered re-

peated mention of Sage Corporation. As

a result the government suspected, among

other things, that Sage was being used as

an intermediary to funnel kickback funds

to Gopman and others, and that an

inspection of Sage's records would reveal

how such transactions were accomplished.

The warrant accordingly calls for the

seizure of eleven categories of records

~A-24-

from the premises of Sage Corporation.”

The warrant authorized seizure of records

of the following:

(1) the receipt and dis-

bursement of kickback funds;

(2) the interest in Sage

Corporation by Seymour Gopman,

Bernard Rubin, and other labor

union officials or nominees for

these persons;

(3) records of payment to

Gopman, Rubin, or other labor union

leaders in cash, check, bond,

property, etc;

(4) loan records reflecting

the $500,000 teamster trust fund

loan and its subsequent disbursement;

(5) loan records reflecting

the $400,000 District Council Trust

Fund loan and its subsequent

disbursement;

(6) records of correspondence,

agreements, loans, or other financial

arrangements between Gopman, Rubin,

Fortune Services, union officials or

other persons or entities acting in

their behalf and Sage Corporation;

(7) records of Sage's sub-

sidiaries and any interest in them by

Gopman, Rubin, or any other labor

official or nominees or entities

acting on their behalf;

(8) records of any financial

transactions between — Corporation

and its subsidiaries and Gopman,

Rubin, or other union officials or

-A-25-

their nominees or entities acting in

their behalf;

(9) the receipt by Sage

Corporation and disbursement of funds

from Ace Services, Fortune Services,

Seymour Gopman or his law firm;

(10) records of any financial

transactions between labor union trust

funds and Sage Corporation or its

subsidiaries, which are evidence of

violations of 26 U.S.C. 7201, 7203

and 7206(1), 18 U.S.C. 664, 18 U.S.C.

1954, 1962, and 29 U.S.C. 501; and

(11) property that constitutes

evidence of the above-enumerated

offenses, fruits of the crimes named-

above and property which is or has

been used to commit the crimes

enumerated herein.

-~A-26-

Appellant criticizes nearly

every category, contending that the

descriptions give insufficient guidance

on how to distinguish the records

authorized to be seized and therefore

that the warrant leaves an unacceptable

amount of discretion to the searching

officers.

At the outset, we find

categories 2 through 11 unobjectionable

under the principles just reviewed. These

categories call for seizure of records

relating to specific companies, persons

and financial transactions, as those

records relate to specific crimes. The

type of record is described wherever

possible, for example, "loan records,"

"correspondence" and "agreements."

Appellant does not contend that seizure of

documents fitting these descriptions would

-A-27-

not be supported by the probable cause

established by Agent O'Dea's affidavit.

We conclude that categories 2 through 11

are drawn as narrowly as could be expect-

ed, given the state of the Justice

Department's knowledge as to what they

might find and the nature and extent of

criminal activities under investigation,

and that the descriptions were sufficient

to enable the agents to reasonably as-

certain and identify the records to be

seized. Cf. United States v. Timpani,

665 F.2d 1, 5 (lst Cir. 1981); United

States v. Morisse, 660 F.2d 132, 136

(Sth Cir. 1981); James v. United States,

416 F.2d 467, 473 (5th Cir. 1969), cert.

denied, 397 U.S. 907, 90 S.Ct. 902, 25

L.Ed.2d 87 (1970) .

The only potentially

troubling category is No. 1, records of

-~A-28-

cf. In re Sealed Affidavits to Search

Warrants, 600 F.2d 1256 (9th Cir. 1979),

the record indicates that the affidavit

was made available to appellant for use

in preparing the motion to suppress. In

the ordinary case it is preferable that

the person whose premises are to be

searched be informed of the searching

agents’ authority at the time of the

search; however this was done so far as

practicable in this case, and appellant

was provided with all the relevant

information at a reasonable time

thereafter. We conclude the affidavit

may be used to explain an ambiguity in

the terms of the warrant.

-A-32-

The affidavit states that the Strike

Force investigation of Seymour Gopman

led agents to believe that Gopman had

received approximately $700,000 over a

three-year period, representing kick-

backs for arranging a contract between

the South Florida Laborers’ Union

District Council, and Consultants &

Administrators, Inc. of Chicago and its

subsidiaries. This kickback scheme

allegedly funneled money through Sage

Corporation to two sham corporations set

up by Gopman: Fortune Services, Inc.,

and Ace Services, Inc. Thus, category l

of the warrant is properly construed as

referring to a very specific, detailed

kickback scheme and, so construed,

satisfies the particularity requirement of

the Fourth Amendment.

-A-33-

C. Execution of the Search Warrant

Appellant contends that even

if the warrant itself was sufficiently

limited, the Strike Force converted the

search into a "general exploratory

rummaging'' in the course of executing

the warrant. On the morning of August 3,

1977, Agent O'Dea held a briefing for the

ten to twelve agents assigned to the

search. O'Dea explained the progress of

the investigation and reviewed the warrant

and affidavit. The agents were given an

opportunity to read the warrant and

affidavit. . The search party then moved

over to the premises of Sage Corporation,

where agents were assigned to search

specific areas. Searching began that

afternoon and continued through the next

day, August 4. If an agent found a docu-

-A-34-

ment he believed fell within the

authorization of the warrant, he removed

the document and placed it in a box.

If the document was part of a file, or

was a page in a book or binder, the

whole file or volume was removed.

Agent O'Dea and Strike Force attorney

Steinberg circulated throughout the

premises during the search and re-

viewed the documents being removed.

If either O'Dea or Steinberg thought a

particular document did not meet the

criteria of the warrant, the document

was returned to the file. Between

50,000 and 100,000 individual documents

were seized, representing one to two

per cent of the records on the premises.

Appellant's principal com-

plaint is that the search involved an

impermissible exercise of discretion on

-A-35-

the part of the searching agents, and

that the search was actually controlled

by the special individual knowledge of

O'Dea and Steinberg (rather than the

guidelines supplied by the warrant).

Cf. Lo-Ji Sales, Inc. v. New York,

442 U.S. 319, 325, 99 S.Ct. 2319, 2323,

60 L.Ed.2d 920 (1979) (scope of search

cannot be left entirely to discretion of

agents conducting the search). We believe

the search was reasonable under the

circumstances.

As the District of Columbia

Circuit recently observed, the magnitude

of a search is insufficient, by itself,

to establish a constitutional violation;

rather, the relevant inquiry is whether

the search and seizures were reasonable

under all the circumstances. United

States v. Heldt, 668 F.2d 1238, 1254

-~A-36-

(D.C.Cir.1981), cert. denied,

= s , 102 §8.Ct. 1971, 72 L.Ed. 2d

440 (1982); see also United States v.

Edwards, 577 F.2d 883, 894 (5th Cir.)

(en banc) (thoroughness not necessarily

equated with unreasonableness), cert.

denied, 439 U.S. 968, 99 S.Ct. 458, 58

L.Ed.2d 427 (1978). While the

permissible scope of a search is gov-

erned by the terms of the warrant, Walter

v. United States, 447 U.S. 649, 656, 100

S.Ct. 2395, 2401, 65 L.Ed.2d 410 (1980),

by the same token a search may be as

extensive as reasonably required to

locate the items described in the warrant.

See, e.g., United States v. Diecidue,

603 F.2d 535, 560-61(5th Cir. 1979),

cert. denied, 445 U.S. 946, 100 S. Ct.

1345, 63 L.Ed.2d 781 (1980); see also

Dalia v. United States, 441 U.S. 238,

-A-37-

*

257, 99 S.Ct. 1682, 1693, 60 L.Ed. 2d

177 (1979) ("it is generally left to the

discretion of the executing officers to

determine the details of how best to

proceed with the performance of a search

authorized by warrant"). Many of the

same considerations that determined the

sufficiency of the warrant's particular

description of things to be seized also

affect the reasonableness of the search

itself; given the complexity of the

crimes under investigation and the fact

that they would be detected primarily if

not exclusively through analysis and

synthesis of a large number of documents,

a rather extensive search could reasonably

be expected.

A complaint similar to

appellant's was raised in United States

v. Heldt, 668 F.2d 1238 (D.C.Cir.1981),

-A-38-

cert. denied, U.S. ,L02 §.Ct.

1971, 72 L.Ed. 2d 440 (1982). In Heldt,

a search was initially assigned fifty

agents but once the search was under

way, supervising agents decided an

additional fifty agents would be

required. Although the original fifty

had been briefed in advance on the

particulars of the search, the fifty

newcomers were not briefed. Noting the

need for adequate preparation in such

large-scale searches. the court stated:

In conducting a search of

this complexity and magnitude the agents

should be familiar with the general

nature of the crimes that are charged

and the list of items they are /authorized

to seize, either through reading of the

warrant or through adequate instructions

or supervision from those ei,

-A-39- :

/

/

Id. at 1261-62. The court found that

"most of the agents conducting the

search were provided with as much

preparation and information as was

reasonable under the circumstances to

enable them to carry out the warrant’s

complicated terms."' Id. As to the

remainder, who were neither briefed nor

had opportunity to review the warrant

and affidavit, their presence did not

invalidate the search: the search team

leaders were available for frequent

consultation; copies of the warrant and

affidavit were on the premises for their

use; and the new agents were teamed up

with the agents who had been previously

briefed. Most relevant for our purposes

was the "final measure" of having the

leaders of the search review the docu-

ments identified by the agents before

-A-40-

making a final determination on whether

to seize them. Id. The court concluded

that on this basis the search as a whole

was reasonable.

We find the analysis in Heldt

persuasive. In fact, the search under

consideration here was less extensive

and involved less risk of overbreadth;

all the agents were adequately briefed

and supervised in this case. The "final

measure" used in the Heldt search,

moreover, emphasizes that such a double-

check procedure, as O'Dea and Steinberg

performed, is not necessarily a sign of

excessive discretion; in this case as in

Heldt, this practice indicates an attempt

by the "responsible officials. . . to

assure that[the search is] conducted in a

manner that minimizes unwarranted intru-

-A-41-

sions into privacy.'

427 U.S. 463, 482 n.11, 96 S.Ct. 2737,

2749 n.11, 49 L.Ed.2d 627 (1976).

Andresen v. Maryland,

It was also reasonable for the

agents to remove intact files, books and

folders when a particular document within

the file was identified as falling within

the scope of the warrant. See United

States v. Beusch, 596 F.2d 871(9th Cir.

1979). To require otherwise "would

substantially increase the time required

to conduct the search, thereby ag-

gravating the intrusiveness of the search."

Id. at 876-77. Also, Agent O'Dea

testified that whole files were kept

intact so that the agents could identify

where individual documents came from and

where they belonged if, as was occasion-

ally the case, the document was ordered

returned to the files after review by

-A-42-

government's case in chief were outside

the scope of the warrant, suggesting

that the search was so over-broad that

all the fruits of the search should have

been suppressed. Total suppression may be

appropriate where the executing officer's

conduct exceeds any reasonable interpre-

tation of the warrant's provisions. See,

e.g., United States v. Rettig, 589 F.2d

418, 423 (9th Cir. 1978). Courts have

consistently held, however, that absent a

"flagrant disregard" of the terms of the

warrant, the seizure of items outside

the scope of a warrant will not affect

admissibility of items properly

seized. United States v. Heldt, 668 F. 2d

1238, 1259-60 (D.C.Cir. 1981) (collecting

cases), cert. denied, 0.3. , 102

S.Ct. 1971, 72 L.Ed.2d 440 (1982); United

-~A-46-

States v. Cook, 657 F.2d 730 n.5 (5th

Cir. 1981); United States v. Mendoza,

473 F.2d 692,696 (Sth Cir. 1972); Brooks

v. United States, 416 F.2d 1044, 1050

(5th Cir. 1969), cert. denied, 400 U.S.

840, 91 S.Ct. 81, 27 L.Ed.2d 75 (1970).

Cf.Andresen v. Maryland, 427 U.S. 463,

482 n.11, 96 S.Ct. 2737, 2749 n.11, 49

L.Ed.2d 627 (1976). In our previous

discussion we held that the execution of

the warrant in this case was within

constitutional parameters; specifically,

the search was performed in a manner

intended to minimize the intrusiveness

of the search under the circumstances.

Thus we see no grounds that would have

justified the total suppression of fruits

of the search, even assuming that a number

of documents seized but not introduced were

-A-47-

outside the scope of the warrant. y

7

We note also that it is readily under-

standable why a large number of documents

seized might not have been used in the

government's case in chief against

appellant, considering that the

primary object of the search was to

gather evidence in the investigation of

Gopman and others.

-A-48-

No prejudice to appellant resulted from

this aspect of the district court's able

handling of the suppression motion.

E. Allegations of Inaccuracies in Affidavit

Appellant's final argument in

support of his motion to suppress is that

Agent O'Dea's affidavit contained false

statements made intentionally or with

reckless disregard for their truth. This

claim is governed by Franks v. Delaware,

438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d

667 (1978). In summary form, appellant's

complaints were as follows: O'Dea relied

on information gained from a non-

governmental informant, Daniel Milano,

although this individual in fact had

little first-hand knowledge of the events

in question and had a poor reputation for

veracity; O'Dea characterized certain

transactions as illegal without adequate

-A-49-

investigation and despite contrary

evidence within his control; and in

general O'Dea made unsubstantiated

allegations with reckless disregard for

their truth or falsity.

The district court expressed

serious doubt whether the allegations,

together with affidavits offered by

appellant, were sufficient to meet

the initial burden required by Franks

before a hearing is required®

SF ranks provides as follows:

There must be allegations of deliberate

falsehood or of reckless disregard for

the truth, and those allegations must be

accompanied by an offer of proof. They

should point out specifically the portion

of the warrant affidavit that is claimed

to be false; and they should be accompan-

ied by a statement of supporting reasons

..-Finally, if these requirements are met,

and if, when material that is the subject

of the alleged falsity or reckless dis-

a. is set to one side, there remains

sufficient content in the warrant affidavit

to support a finding of probable cause, no

hearing is required.

438 U.S. at 171-72, 98 S.Ct. at 2684-2685.

-A-50-

Nevertheless, the court proceeded to

allow testimony on this issue. The court

initially set aside two hours for the

Franks issue, but later announced that

the hearing would continue the remainder

of the day if necessary. At the hearing,

appellant's counsel examined Agent O'Dea

at length. Appellant also called a

certified public accountant, in an attempt

to show that Fortune Services and Ace

Services were not ‘'sham" corporations as

described in O'Dea's affidavit, and Agent

Mierow, who had participated in the Gopman

investigation. After this testimony,

appellant's counsel indicated that he

had one further witness, a Mr. Wallace,who

he had been unable to locate. The district

court ordered a recess until the following

morning to allow Mr. Wallace to appear.

In response, appellant's counsel stated

-A-51-

"that should conclude our presentation of

evidence."' Wallace did not appear the

following morning and consideration of

the Franks issue was concluded. Appellant

unsuccessfully urged the court to allow

further time in order to procure the

testimony of Milano, who was under the

supervision of the federal witness

protection program, and Seymour Gopman,

who was by that time incarcerated in a

federal prison.

In its ruling on the motion to

suppress, the district court stated that

in retrospect he believed appellant had

failed to meet the preliminary Franks

showing mandating a hearing, but that

even after a "full evidentiary hearing

and review of testimony taken before the

magistrate,'’ the appellant had completely

failed to establish that O'Dea either

-~A-52-

intentionally falsified his affidavit

or made any statements with reckless

disregard for their truth. In addition,

the court found that the affidavit con-

tained sufficient allegations to support

probable cause even if the disputed

language was deleted.

Because the court allowed ap-

pellant to present evidence on this

issue, we will not consider whether

appellant's allegations and offer of proof

were sufficient to require a hearing under

Franks. See United States v. Martin,

615 F.2d 318, 328 (5th Cir. 1980). Based

on the evidence introduced, the district

court's conclusion that no intentional

or reckless falsity occurred is certainly

not clearly erroneous; indeed this

conclusion is supported by the entire

record. At most, appellant's presentation

-A-53-

raised a suggestion that O'Dea

negligently failed to analyze all the

available data before drawing his con-

clusions, or that he was simply mistaken

as to the significance of various

transactions. Even if proven, however,

such "[a]llegations of negligence or

innocent mistake are insufficient."

Franks, supra, 438 U.S. at 171, 98 S.Ct.

at 2684. See also United States v.

Astroff, 578 F.2d 133, 136 (5th Cir.1978)

(en banc); cf. United States v. Young

Buffalo, 591 F.2d 506, 511 (9th Cir.)

(no intentional misstatement involved

in attempt to "synthesize" results of

complex investigation into cogent

affidavit), cert. denied, 441 U.S. 950,

99 S.Ct. 2178, 60 L.Ed 2d 1055(1979).

Appellant argues that the

hearing was rendered inadequate by the

-A-54-

district court's failure to allow more

time so that he could seek testimony from

Milano and Gopman. We disagree. A

district court may limit the number of

defense witnesses without depriving a

defendant of due process, particularly

when there is no offer of proof as to

the proposed witness' testimony and its

materiality, or when the testimony would

be cumulative or irrelevant. Fast v.

Wainwright, 439 F.2d 1162, 1164 (Sth Cir.

1971); see also United States v. Henry,

560 F. 2d 963, 965 (9th Cir. 1977);

United States v. Haynes, 554 F.2d 231,

234 (Sth Cir. 1977) (citing Federal Rule

of Evidence 403) .?

Ice, McCray v. Illinois, 386 U.S.300,

312-14, .Ct. 1056, 1062-1064, 18

L.Ed.2d 62 (1967) (government's failure

to identify or produce informer during

preliminary hearing not violation of

-A-55-

due process of Sixth Amendment). We

are also mindful that while due process

requires a "hearing appropriate to the

nature of the case..., the process due

at a suppression hearing may be less

demanding and elaborate than the

protections accorded the defendant at

the trial itself."" United States v.

Raddatz, 447 U.S. 667, 677, 679, 100

S.Ct. 2406, 2414, 65 L.Ed2d 424 (1980).

~A-56-

would have been in part cumulative, in

part conclusory, and would have

contributed very little to the issue of

whether Agent O'Dea made any intentional

or reckless statements in his affidavit.

It is apparent that neither witness

would have provided relevant evidence in

aid of the Franks claim; accordingly, no

significant prejudice could possibly have

resulted from the termination of the

hearing without their testimony.

II VENUE

Count 9 of the indictment

charged appellant with submitting false

and fraudulent statements to a FDIC-

insured bank in Chicago, in violation of

18 U.S.C. § 1014 (1976). Appellant contends

that the appropriate venue for this offense

was the Northern District of Illinois,

where the bank was located, and accordingly

-A-60-

Count 9 should have been dismissed for

improper venue. The district court

denied appellant's motion to dismiss

Count 9, without prejudice to a renewal

of the motion at trial.

A violation of section 1014 is

indictable either in the district where

the false statement is prepared and

mailed, or where the statement is received.

See United States v. Zwego, 657 F.2d 248,

251 (10th Cir. 1981), cert. denied,

o.3. fee 8.0. 2275; Ti

L.Ed .2d 460 (1982); United States v.

Ruehrup, 333 F.2d 641(7th Cir.), cert.

denied, 379 U.S. 903, 85 §.Ct. 194, 13

L.Ed.2d 177 (1964). This is the general

rule of venue under the various false

statement and false claim statutes.

See, e.g., United States v. Blecker, 657

F.2d 629, 632 (4th Cir. 1981) (18 U.S.C.

§287), cert. denied, U.S. ,102

-A-61-

§.Ct. 1016, 71 L.Ed.2d 304 (1982);

United States v. Herberman, 583 F.2d 222,

226-27 (Sth Cir. 1978)(18 U.S.C. § 1001).

In addition, the government need only

establish proper venue by a preponderance

of the evidence, not by proof beyond a

reasonable doubt. See United States v.

Rivamonte, 666 F.2d 515, 517 (llth Cir.

1982); United States v. White, 611 F.2d

531, 534-35(5th Cir.) cert. denied, 446

U.S. 992, 100 S.Ct. 2978, 64 L.Ed.2d 849

(1980). As we said in Rivamonte, "evidence

of venue need not be direct; when

circumstantial evidence as a whole reason-

ably supports the inference that the crime

was committed in the trial district, the

government's burden is satisfied.'"' 666

F.2d at 517 (cites omitted).

There is no dispute that the

documents underlying Count 9 were prepared

in the Southern District of Florida. At

-A-62-

trial, however, appellant tried to show

that it was probable the documents were

not mailed, but were hand-carried by

appellant and presented to the bank in

Chicago. No witness could recall exactly

whether the documents were mailed or hand-

carried. Assuming that preparation and

execution alone would be insufficient and

that mailing from Florida was also required,

we believe there is sufficient evidence,

under the standard just reviewed, to

conclude the documents were mailed.

Sage's office administrator, Hays, who

authored and signed the cover letter in

the package of documents, testified it was

probable, from normal practice, that the

documents were mailed. The bank officer

who acknowledged receipt on behalf of the

bank president indicated that it was his

responsibility to open the president's

mail, although in person presentations

were not unheard of, and the loan officer

-A-63-

on the Sage account did not recall seeing

appellant in Chicago around this time.

Finally, the cover letter was dated

April 20, 1977, and receipt was acknowled-

ged April 25, 1977. Cf. De Rosier v.

United States, 218 F.2d 420, 423,(5th Cir.)

(two day interval between date of letter

and receiving stamp supports inference of

mailing), cert. denied, 349 U.S. 921, 75

S.Ct. 660, 99 L.Ed. 1253 (1955). This

evidence supports a reasonable conclusion

that the documents were prepared, executed

and mailed from Florida, and accordingly

venue was proper.

III ADMISSIBILITY OF AGENT MICHALAK'S

TESTIMONY

Part of the government's case

relating to the tax evasion charges was

that appellant had failed to report as

income an ownership interest in recreational

leases from the Golden Horn Condominiums.

-A-64-

Appellant desired to bring before the jury

a statement allegedly made by appellant's

accountant, Joseph Spina, in a conversation

with another accountant, John Pitcher, to

the effect that Spina was surprised and

concerned that the interests had not been

reported because he was aware of them and

therefore he presumed that their absence

was either his fault or that of his em-

ployees. Spina was under investigation

by a grand jury in a separate proceeding,

however, and the district court had de-

termined earlier in the trial that Spina

would invoke his privilege against self-

incrimination in response to any questions

concerning his work for appellant or Sage

corporation. Accordingly, Spina was de-

clared unavailable and appellant was able

to introduce the desired statement through

the recollection of Pitcher, under Federal

Rule of Evidence 804(b) (3) (statement

-A-65-

against interest; declarant unavailable).

On rebuttal the government

placed IRS Agent Michalak on the stand.

Michalak testified that in a conversation

with Spina, Spina told him that in April

1975, before the returns in question were

filed, appellant had disavowed any interest

in the recreation leases. This testimony

was plainly admissible, as an inconsistent

statement of a declarant, to impeach Spina's

credibility under Federal Rule of Evidence

806, 19

10pule 806 provides as follows: When a

hearsay statement...has been admitted in

evidence, the credibility of the declarant

may be attacked, and if attacked may be

supported, by any evidence which would be

admissible for those purposes if declarant

had testified as a witness. Evidence of a

statement or conduct by the declarant at

any time, inconsistent with his hearsay

statement, is not subject to any require-

ment that he may have been afforded an

opportunity to deny or explain.

-A-66-

See United States v. Lawson, 608 F.2d 1129,

1130 (6th Cir. 1979), cert. denied, 444

U.S. 1091, 100 S. Ct. 1056, 62 L.Ed. 2d

779 (1980). Appellant argues, however,

that it would be unfair to apply Rule 806

to this case because the admission of the

initial hearsay statement was based on

Spina's unavailability, and this unavaila-

bility was due to the government's refusal

to extend use immunity to Spina for his

testimony. This argument completely misses

the mark. Assuming immunity had been

granted and appellant was able to use

Spina himself, presumably Michalak's

testimony concerning Spina's inconsistent

statement would still have been used to

impeach his credibility. It is difficult

to see how the government unfairly took

advantage of the decision not to offer

Spina immunity, as the appellant urges,

when the government's use of Michalak's

-A-67-

testimony was in no way reliant on whether

Spina was available or not. t+ Michalak's

testimony was properly admitted.

lle nevertheless note that the decision

whether to grant immunity to a witness is

entirely entrusted to the executive a

ae6: , United States v. Chagra, 9

eae 258-6l(5th Cir. 1982); United

ARSE: v. Thevis 665 F.2d 616, 639

(th Cir. 1982) (Unit B) petition for cert.

filed, 50 U.S.L.W. 3918 (U.S. May 10,

TO8Z) (No. 81-2073), and that in the absence

of a showing of a government misconduct

the failure to grant immunity does not

alter the "unavailability" of a witness

who asserts the privilege against self-

incrimination. See United States v. Lang,

589 F.2d 92, 95-96 (2d Cir. 1978).

-A-68-

IV SUFFICIENCY OF THE EVIDENCE

Appellant contests the suffi-

ciency of the evidence underlying his

conviction on each count. The test for

sufficiency of the evidence is whether a

reasonable jury could find the evidence

supports a conclusion of guilt beyond a

reasonable doubt. See Jackson v. Virginia,

443 U.S. 307, 319, 99 &.Ct. 2781, 2789,

61 L.Ed.2d 560 (1979); United States v.

Long, 674 F.2d 848, 853 (llth Cir. 1982);

United States v. Bulman, 667 F.2d 1374,

1377 (llth Cir. 1982); United States v.

Hewitt, 663 F.2d 1381, 1384 (llth Cir.1981).

When applying this test we view the evidence

in the light most favorable to the

government. Glasser v. United States, 315

U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed.

680 (1942). This standard of review is

equally applicable to direct or circum-

stantial evidence. See United States v.

-A-69-

Rice, 652 F.2d 521, 526 (5th Cir. 1981);

United States v. Hillburn, 625 F.2d 1177,

1180 (5th Cir. 1980). In addition,

credibility choices are solely within the

province of the jury, and we must accept

whatever choice supports the jury's verdict.

Hewitt, supra.

Under these guidelines there is

sufficient evidence to support the jury's

verdict. In general, we find that

appellant is offering the same excuses,

explanations and attacks on the credibility

of witnesses that he offered to the jury,

and that the jury was entitled to reject

these contentions. We will briefly re-

view appellant's principal complaints.

Count 7 charged appellant with

mail fraud, 18 U.S.C. §1341 (1976), under

12

the following circumstances; In Novem-

ber 1972, Teachers Insurance and Annuity

12count 1C charged the same transactions

as RICO predicate offense.

-A-70-

Association, headquartered in New York,

issued a loan commitment to Sage for

$475,000 for the Andrews Ofrice Building

project. As a condition of the loan,

appellant was required to produce

executed leases showing a required

minimut occupancy level, and original

tenant «estoppel letters, prior to the

closing date. The government charged

that appellant ascertained the building

was not adequately leased, and decided to

submit false documentation. Steven Brody,

head of Sage's commercial rental division,

testified that at appellant's direction he

prepared several packages of documents, in

August 1974 and February and March 1975,

for submission to Teachers containing

falsified leases and estoppel letters.

Appellant prepared cover letters and for-

warded the documents to Teachers' local

agent, who mailed the packages to Teachers

in New York.

-A-71-

Appellant points to evidence

that the lender's occupancy requirement

did not have to be met until March 31,

1975, and that the actual tenants of

Andrews Office Building would apparently

have signed estoppel letters if requested

to do so. Appellant also argues that

Brody's testimony was not corroborated by

one individual whom Brody said participated

in a meeting in which the false documents

were discussed. As for the latter argu-

ment, the jury has assessed Brody's

credibility and resolved conflicts in the

testimony, and we see no reason to upset

those determinations. The former argument

may demonstrate the irony of appellant's

decision to prepare false documentation,

but in no way contradicts the evidence that

such preparation occurred. Finally,

appellant argues that use of the mails was

collateral to the scheme, because the

documents were hand-delivered to and

-A-72-

initially reviewed by Teachers’ local

intermediary. It is clear, however, that

the mailing of the documents to Teachers

was anticipated and that this mailing

was an integral part of the scheme. See

United States v. Kent, 608 F.2d 542(5th

Cir. 1979), cert. denied, 446 U.S. 936,

100 S.Ct. 2153, 64 L.Ed.2d 788 (1980);

Project, White-Collar Crime: Second Annual

Survey of Law, 19 Am.Crim.L.Rev. 173, 291-92

(1981).

Regarding Count 1D, alleging a

violation of 18 U.S.C. § 1954 (1976)

(offer, acceptance or solicitation to

influence operations of employee benefit

plan), it is undisputed that appellant

transferred interests worth approximately

$83,000 to Gopman, as counsel to an

employee welfare benefit plan, in con-

sideration for Gopman's proposal that the

fund make a $500,000 loan to one of Sage's

projects. Although the Fund had not

-A-73-

previously made such loans, the loan was

approved after Gopman's detailed pre-

sentation and assurances. These facts

clearly make out a violation of section

1954.

Count 2 concerned a loan from

the Southeast Florida Laborers District

Council Pension Fund, of which appellant

received $191,654.67. The government

produced evidence that the land pledged

by appellant as collateral for this loan

was vastly overvalued and offered very

little security. Appellant contends that

the administrator of the Fund, Bernard

Rubin, was unconcerned with the security

of the loan, but had made the loan to keep

Sage Corporation afloat as a major employ-

er of union labor. In addition, appellant

points out that the maturity date of the

loan had not yet arrived at the time of

indictment. Nevertheless, counsel for

the fund testified the loan was in de-

-A-74-

fault at the time of trial. The evidence

justified the jury's conclusion that

appellant had converted the funds to his

own use. Cf. United States v. Waronek,

582 F.2d 1158, 1161 (7th Cir. 1978)

(intent to permanently deprive owner of

property not an element of embezzlement) ;

United States v. Daley, 454 F.2d 505,

510 (lst Cir. 1972) (possibility of

future recovery of funds does not preclude

criminal liability).

Counts 5 and 6 charged two

incidents of mail fraud, 18 U.S.C. § 1341

(1976), both relating to administration

of an escrow account established for

Drake Towers, a condominium project con-

structed by Sage. Under the terms of the

escrow, proceeds from the sale or lease of

condominiums would be placed in the account

and Sage would send periodic statements of

receipts and disbursements to the lender.

-A-75-

On the two occasions underlying Counts 5

and 6, appellant instructed his office

administrator, who was preparing the

required statements, to "forget about" or

show as void several checks written on

the Drake Towers account. The checks

were either made payable to appellant or

to 'cash''; the latter were endorsed by

appellant. As a result, the statements

received by the lender indicated a balance

substantially higher than the actual

balance in the account. Although appellant

elicited testimony that he had explained

this procedure to the administrator by

saying he would replenish the sums as soon

as anticipated funding came through, the

lender was clearly deceived as to the

administration of these funds. The lender

eventually foreclosed on the underlying

loan; apparently none of the sums reported

in the periodic accounting statements of

-A-76-

the escrow account were recovered. The

evidence supporting Counts 5 and 6 was

more than adequate.

Count 8 charged a further mail

fraud incident as follows: appellant

provided a false statement of Sage's

financial condition that was submitted to

the Florida Department of Insurance as

part of an audit of the Farmers' National

Life Insurance Company. Sage and Farmers

had engaged in various transactions, the

end result of which was to increase the

net worth of Farmers, in anticipation of

the audit. During the audit an Insurance

Department official noticed a debenture

with Sage as obligor listed as an asset

on Farmers' books. The official then

requested information on Sage, including

a financial statement. Farmers obtained

this information from Sage and mailed it

to the insurance Department. There is

-A-77-

apparently no dispute that the financial

Statement provided by Sage was not

accurate, and that the statement was part

of a scheme to deceive the insurance

authorities. Appellant argues only that

there was no evidence that he himself

provided the statement, or that he could

have forseen that it would be sent through

the mail. The president of Farmers testi-

fied, however, that he spoke with appellant

directly, asked him to supply the state-

ment, and appellant replied that he had

one he would make available to Farmers.

The president had also advised appellant

that the statement had been requested by

the Department of Insurance; the depart-

ment is located in Tallahassee and the

offices of Farmers is located in Miami.

The evidence was sufficient to support

the conclusions that appellant furnished

the statements, and that use of the mails

-A-78-

was reasonably forseeable. See United

States v. Bright, 588 F.2d 504, 510 (5th

Cir.), cert. denied, 440 U.S. 972, 99 S.Ct.

1537, 59 L.Ed.2d 789 (1979).

Count 9 charged the submission

of a false statement to the North Bank of

Chicago, Illinois, in support of a loan to

W & R Corporation, a Sage subsidiary, in

violation of 18 U.S.C. § 1014 (1976).

The financial statement for W & R sub-

mitted to the bank, dated December 31,1976,

indicated the corporation was solvent and

had had receipts and income in the pre-

ceeding eight months. The bank officer

assigned to this loan testified that he

had placed reliance on this statement.

The government introduced evidence, how-

ever, that W & R Corporation was dormant

by the end of 1976, and pointed out several

other apparent deviations from normal

-~A-79-

procedure in connection with the state-

ment. Although appellant argues the

evidence failed to show the statement

was materially false, this question was

for the jury and there is sufficient

evidence to support their conclusions.

See United States v. Greene, 578 F.2d

648, 657 (Sth Cir. 1978), cert. denied,

439 U.S. 1133, 99 S.Ct. 1056, 59 L.Ed.2d

96 (1979).

We also conclude there was

sufficient evidence that appellant under-

stated his income on his individual in-

come tax returns as charged in Counts 10

through 13. Each count charged under-

statement of income for a separate year.

The government identified three categories

of omitted income: income generated in

each year from appellant's interest in

various recreation leases from condominium

projects; $75,000 derived from appellant's

officers' loan account in 1974; and

-A-80-

$555,000 derived from a loan in 1976.

While appellant does raise a significant

question whether the $75,000 was taxable

income, and also argues the $555,000 was

not adequately described by the evidence

to determine whether it represented

economic gain to appellant, we need not

pursue these matters. The omission of

appellant's interest in the recreational

leases was adequately shown for each

year charged in the indictment; accordingly,

the convictions for understatement of

income must be affirmed.

V CONCLUSION

In summary, we have found no

reversible error in the arguments raised

by appellant. His convictions are there-

fore affirmed.

AFFIRMED.

-A-81-

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 80- 5763

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

GEORGE WUAGNEUX,

Defendant-Appellant

Appeal from the

United States District Court for the

Southern District of Florida

ON PETITION FOR REHEARING AND

SUGGESTION FOR REHEARING EN BANC

(Opinion August 23, 11 Cir., 1982)

( January 14, 1983)

Before HATCHETT and ANDERSON,

Circuit Judges,

INGRAHAM ,Senior Circuit Judge,

Fifth Circuit,sitting by

designation

-A-82-

PER CURIAM:

The Petition for Rehearing is DENIED

and no member of this panel nor Judge

in regular active service on the Court

having requested that the Court be

polled on rehearing en banc (Rule 35,

Federal Rules of Appellate Procedure;

Eleventh Circuit Rule 26), the

suggestion for Rehearing En Banc

is DENIED.

ENTERED FOR THE COURT:

/s/ Joseph W. Hatchett

United States Circuit Judge

-A-83-

[ Transcript of oral order

of District Court denying

Motion to Suppress]

THE COURT: Gentlemen, I am sorry that

I did not have time to prepare a formal

order, so I will just take what I have

dictated and read it into the record.

May I say, before we start, because we

will take it after, the defendant has

moved the Court to suppress certain

evidence pursuant to a search warrant

for the following reasons:

(A) That the evidence was seized

as a result of a ruse conducted by the

IRS agent's failure to identify himself

and the nature of his audit;

(B) That the affidavit upon which

the warrant was based contained state-

ments made with deliberately false or

made with reckless disregard for the

truth, thereby invalidating the search

Warrant;

-~A-84-

(C) That the search warrant itself

lacked sufficient particularity to

justify the seizure of all of the items

taken by the Government; and

(D) That items were illegally

seized outside the scope of the warrant.

The Court has accorded the defendant

a full evidentiary hearing on his motion

to suppress and has carefully considered

all of the evidence, and I mean all of

the evidence, taken before the Magis-

trate. I now rule that the search

Warrant at issue complied with all

constitutional requirements and properly

authorized the seizure of the items

taken. The defendant's motion to

suppress will be denied.

The Court finds that the evidence

presented was insufficient to establish

that the agent perpetrated a ruse upon

the defendant by conducting a criminal

audit instead of a civil audit. The

-A-85-

Court finds that the agent, Mr. Chapman,

was, in fact, conducting a civil audit

and therefore there was no deception

by the agent mandating suppression

under United States vs. Tweel.

(2) The defendant's challenge as

to the truth of certain statements

contained in the search warrant affi-

davit is without merit. Under the law

set forth in Franks vs. Delaware, a

defendant is permitted to challenge a

search warrant under certain conditions.

The Court feels that a defendant is

entitled to an evidentiary hearing on

the issue of the veracity of statements

contained in a search warrant affidavit

only after making a preliminary show-

ing that those statements are either

deliberately false, or made with reck-

less disregard for the truth. Therefore,

initially, defendant's allegations

must be accompanied by an offer of

-A-86-

proof pointing out specifically that

portion of the warrant affidavit that

defendant claims is false. The allega-

tions should be accompanied by a state-

ment of supporting reasons for defend-

ant's contentions. Further, even if the

defendant meets these requirements, no

hearing is required if there remains

sufficient content in the warrant

affidavit to support a finding of

probable cause.

Now, out of an abundance of caution,

the Court did not rule initially on the

validity of the defendant's preliminary

showing, but I elected to have a full

evidentiary presentation. The Court

now specifically finds that the defend-

ant has failed to make the required

Franks preliminary showing mandating an

evidentiary hearing.

Notwithstanding the Court's find-

ing that the defendant failed to make

the preliminary showing, the Court

-A-87-

further finds that the defendant has

completely failed to establish, after

a full evidentiary hearing and review

of testimony taken before the Magis-

trate, that the affiant either deliber-

ately falsified the affidavit or made

any statements in the affidavit in

reckless disregard for the truth.

In addition, careful scrutiny of

the warrant affidavit reveals that even

had all other statements challenged

by the defendant been stricken, there

still remained sufficient averments in

the affidavit to support a finding of

probable cause.

As to the third contention, the

Court has carefully reviewed the search

warrant and concludes that it met the

Fourth Amendment's requirement that it

contain a "particular description of

the things to be seized," as required

by the Supreme Court in Andresen vs.

-A-88-

Maryland.

It is clearly the law in this cir-

cuit that evidence not described in a

valid search warrant but having a nexus

with the crime under investigation, may

be seized at the same time the

described evidence is seized. That is

United States vs. Kane.

Furthermore, when an exact

description cannot be obtained, the

warrant may properly describe the

generic class of items to be seized.

That is United States vs. Davis, and it

is the finding of the Court in this

case.

The Court finds that the challenged

items were either specifically

described in the warrant or had a

sufficient nexus with the investigation

conducted by the Government to justify

the seizure.

-A-89-

Item four and the final contention

is the defendant's last point that

some of the items were illegally

seized outside the scope of the warrant

is without merit. The Court makes a

Specific finding that the items that

the Government has announced it intends

to use at trial were not seized outside

the scope of the search warrant.

Conciusion: The Court concludes by

its ruling that the search warrant was

properly issued upon a finding of

probable cause based upon Agent O'Dea's

affidavit, that the warrant contained

a sufficiently particular description

of the items seized, and that the agents

did not exceed the scope of their

authority when they conducted the

search and seizure pursuant to the

warrant. Motions are denied.

-A-90-