# Petition for Writ of Certiorari — Abboud v. United States (No. 06-348)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2006

## Text

pe meee ee YUU, U.®.
aN e
: ILED

06-348 SEP 7- 2006
No. OFFICE OF THE CLERK

Hn the
Supreme Court of the Anited States

MICHEL ABBOUD,

Petitioner,
7.

UNITED STATES OF AMERICA,
Respondent.

On Petition for a Writ of Certiorari to the United
States Court of Appeals for the Sixth Circust

PETITION FOR WRIT OF CERTIORARI

James R. WILLIS, Eso.
Oulo Rec. 0032463
Counsel of Record
THe 113 Sr. Craik BurLpina, N.E.
Suire 530
CLEVELAND, OH 44114-1214
(216) 523-1100
(216) 737-7412 Fax

Counsel for Petitioner

Becker Gallagher Legal Publishing, Inc. 800.890.5001

i
QUESTIONS PRESENTED FOR REVIEW

I

WHETHER A REVIEWING COURT, CAN DESPITE
NUMEROUS FLAWS IT DETECTED IN THE SEARCH
WARRANT AFFIDAVIT AND THE WARRANT ITSELF,
NONETHELESS ON THE BASIS OF SEVERAL AD HOC
RESULT-ORIENTED REASONING PATTERNS,
APPROVE AND VALIDATE THE GENERAL
EXPLORATORY SEARCHED THAT WERE
ACTUALLY MADE OF CERTAIN HOMES AND
PREMISES?

Il

WHERE THE “MOTION TO-SUPPRESS” RAISES
FACTUAL ALLEGATIONS RELATIVE TO CONTENT
OF THE SEARCH WARRANT AFFIDAVIT, THE
SEARCH WARRANT ITSELF AND THE
UNREASONABLE INTENSITY OF THE SEARCH; AS
WELL AS, THE WHOLESALE SEIZURES MADE, CAN
THE TRIAL COURT DENY AN EVIDENTIARY
HEARING - -ESPECIALLY WHEN ONE IS EXPRESSLY
REQUESTED?

iil

WAS DUE PROCESS DENIED THE ACCUSED WHEN
THE COURT REFUSED TO EXPRESSLY LIMIT
CERTAIN EVIDENCE, WHICH, IF ADMISSIBLE AT
ALL, WAS NOT ADMISSIBLE AS SUBSTANTIVE
PROOF - - AS IT WAS?

IV

GIVEN THE APPELLATE COURT DETERMINED
COUNSEL FOR THE GOVERNMENT WAS GUILTY OF
MISCONDUCT IN CONNECTION WITH A VICIOUS,
VERY PERSONAL, ARGUMENT DIRECTED AT THE
APPELLANT (AN ARAB-AMERICAN IN THE POST 9-
11 WORLD), CAN THE COURT IN THE POST 9-11
WORLD MAKE THE ARBITRARY DETERMINATION
THAT SUCH CONDUCT WAS NOT FLAGRANT AND
REFUSE TO REVERSE THE CONVICTION?

V

GIVEN THE PETITIONER AND HIS CO-DEFENDANT
WERE GIVEN UNLIMITED ACCESS TO THE FUNDS
CENTRALIZED IN THE BANK FRAUD CHARGES,
CAN IT BE SAiD UNDER THE PECULIAR FACTS
HERE, THE FUNDS WERE }) ".EGALLY “KITED,”
WHICH MADE FOR THE BA®® FRAUD CHARGES
THE PETITIONER WAS CONVICTED OF?

i,

GIVEN THE ABSENCE OF ANY PROOF THOSE
ACCUSED HEREIN SOUGHT TO DEFRAUD OR
OTHERWISE CHEAT THE BANKS, FROM WHOM
THE GOVERNMENT CHARGED THEY STOLE
CREDIT (ACTUALLY REPAID BEFORE THOSE
CHARGES WERE BROUGHT), CAN IT
NONETHELESS BE SAID THEY WERE GUILTY OF
“BANK FRAUD” IN VIOLATION OF 18 U.S.C., §1344?

iil
Vil

WHETHER THE EVIDENCE PRODUCED AGAINST
THIS PETITIONER WAS SUFFICIENT TO SUPPORT A
FINDING OF GUILT BEYOND A REASONABLE
DOUBT.

iV

TABLE OF CONTENTS

PAGE
Questions Presented For Review ..............eeee. i
re re errr re viii
UE cc vecary ceneeeeke dene éieesouueus 1

Statement Of The Grounds On Which The Jurisdiction Of

Pee ee I 5 ox ooh hoc oe Seka eaenes 1
Constitutional And Statutory Provisions ............ 1
Statement Of The Case and Facts ............eee0. 2
Arguments Relied On For Allowance Of Writ ....... 6

Argument No. I:

WHERE THE REVIEWING COURT MAKES
APT DETERMINATIONS, DESPITE GLOWING
ENDORSEMENTS BY THE AFFIANT, THE
MAGISTRATE AND THE DISTRICT JUDGE,
THAT THE AFFIDAVIT FOR THE SEARCH
WARRANT AND THE WARRANT ITSELF
WERE SERIOUSLY FLAWED, CAN THE
COURT NONETHELESS IN THE WAKE OF
SEVERAL AD HOC, RESULT ORIENTED
REASONING PATTERNS APPROVE AND
VALIDATE THE GENERAL AND
EXPLORATORY SEARCHES THAT WERE IN
FACE CO SEE civ ctecscewesenctientes 7

Argument No. II:

WHERE IN A MOTION TO SUPPRESS A
DEFENDANT RAISES FACTUAL
ALLEGATIONS THAT ARE SUFFICIENTLY
DEFINITE, SPECIFIC AND DETAILED TO
ENABLE THE COURT TO CONCLUDE THERE
ARE MATERIAL ISSUES OF FACT GOING TO
THE FACIAL SUFFICIENCY OF THE
AFFIDAVIT AND THE VALIDITY OF THE
SEARCHES AND SEIZURES MADE, AN
EVIDENTIARY HEARING MUST BE HELD... 16

Argument No. ITI:

DUE PROCESS IS VIOLATED WHEN
EVIDENCE OF OTHER CRIMES, WRONGS,
AND ACTS ARE ADMITTED AS SUBSTANTIVE
PES Sc eee ned ereredecnenecectcoentacene 17

Argument IV:

GIVEN COUNSEL FOR THE GOVERNMENT
WAS FULLY AWARE THAT CERTAIN
EVIDENCE WAS NOT PROPERLY ADMITTED
AS SUBSTANTIVE PROOF, COUNSEL’S HEAVY
RELIANCE IN HER SUMMATION ON THIS
EVIDENCE AS “SUBSTANTIVE PROOF” AND
AS “CHARACTER EVIDENCE” WAS DEEMED
MISCONDUCT, THE COURT’S OPINION THAT
COUNSEL’S ACTIONS WERE NOT FLAGRANT
CANNOT SURVIVE MEANING SCRUTINY. ... 20

Vi

Argument V:

GIVEN THE PETITIONER, AND HIS CO-
DEFENDANT, WERE GRANTED UNLIMITED
ACCESS TO THE FUNDS CENTRALIZED IN
THE BANK FRAUD CHARGES INVOLVING
ONE BANK (NCB),AND THIS IN THE WAKE OF
THE ZERO BALANCE ACCOUNTS SYSTEM
SET UP BY THE BANK ITSELF: CAN IT BE
SAID THAT THE CHECKS WRITTEN ON
THESE PARTICULAR ACCOUNTS WERE
KITED, i.e., THE BANK WAS “TRICKED” INTO
EXTENDING THE CREDIT INVOLVED IN THIS
AUTHORIZED USE OF THESE PARTICULAR

DANE FPUNEMS. ccccceseceve eave vndeneemnbaye

Argument VI:

IN THE ABSENCE OF PROOF OF INTENT TO
DEFRAUD, OR OTHERWISE “CHEAT” THE
BANKS INVOLVED, A VERDICT FINDING THE
ACCUSED GUILTY OF “BANK FRAUD” IS NOT
SUPPORTED BY SUFFICIENT EVIDENCE. ..

Argument VII:

WHERE, AS HERE, THE EVIDENCE IS
INSUFFICIENT TO SUPPORT THE
CONVICTION, HERE OF MONEY
LAUNDERING, THE COURT IS REQUIRED TO

REVERSE THE CONVICTION. ..............

er a a a hi ee a

22

. 24

28

Vii
Appendix

Appendix “A” - Order of The United States Court of
Appeals For The Sixth Circuit Denying Petition For
Rehearing En Banc filed June 9, 2006 .......... la

Appendix “B” - Opinion of The United States Court of
Appeals For The Sixth Circuit filed
Pe a as hee eee ee ee kaa awe ed 3a

Appendix “C” - Order of The United States District
Court For The Northern District of Ohio, Denying
Motion to Suppress, filed April 7, 2003 ....... 78a

Vili

TABLE OF AUTHORITIES
PAGE

Illinois v. Gates, 462 U.S. 213 (1983) ............. 9,12
Ornelas v. United States, 517 U.S. 690 (1969) ....... 16
Shepard y. United States, 290 U.S. 96 (1933) ........ 20
State v. Lapase, 57 N.H. 245 (1876) ........ a ee 23
United States vy. Abboud,

438 F. 3d S54 (G” Cie, TORS) nc ccsccccccces. passim
United States v. Crutchfield,

26 F. Beh 1096 CEN Cas FD occ ccccccccccccese 20
United States v. Merriweather,

76. Be GTO is ew ccetccc ccc cccccess 18
United States v. Sanders,

929 F. 28 1466 (107 Cir. 1991) 2... ccc csccccess 30
United States v. Spikes,

156 ©. Be Pre Sac eccccscccccccess 11

United States v. Stahl, 616 F. 2d 30 (2" Cir. 1980) ... 22

United States v. Stone,
954 FF F187 Ge cece ccccccsesss 26, 28

ix
RULES, STATUTES AND OTHER AUTHORITIES

ABA Standards of Criminal Justice (3d. Ed. 1993),

DD cedetéveccondusescoccssidveraveonveweseens 22
Federal Rules of Evidence, Rule 401 ............... 18
Federal Rules of Evidence, Rule 403 ............... 18
Federal Rules of Evidence, Rule 404(a) ............ 20

Federal Rules of Evidence, Rule 404(b) ... 18, 19, 20, 23

BS Unasted Beaten Ce, S5EE .ccccccccccevvcess 2, 6, 11
18 United States Code, §922(g)(1) ..............005. 2
18 United States Code, §1343 ......... ‘ieewes 2, 6, 11

18 United States Code, §1344 ............... 13, 26, 28
18 United States CG EI 6 ce eek 2
18 United States Code, §1344(2) ................... 2
18 United States Code, §1956 ........... : ccawa 2%
18 United States Code, $1957 ......ccccccccces 2, 6, 11
Be Ses Bes CORE, SI 46 6b 0 sv dncseatinest We will proceed with the following caveat: although the warrant
was not approved for the independent search of evidence for the
additional violations, it does not follow that all evidence of these
additional violations found during the search must be suppressed.
As stated, supra, an overlap exists between evidence lawfully
obtained through a search based on violation of 18 U.S.C. § 1344
and evidence of the additional- violations. We will explain the
ultimate consequences below.

- a

25a

cause has been defined as ‘reasonable grounds for belief,
supported by less than prima facie proof but more than mere
suspicion.’” United States v. Padro, 52 F.3d 120, 122-23 (6th
Cir. 1995) (quoting United States v. Bennett, 905 F.2d 931,
934 (6th Cir. 1990)). “To demonstrate probable cause to
justify the issuance of a search warrant, an affidavit must
contain facts that indicate a fair probability that evidence of a
crime will be located on the premises of the proposed
search.” United States v. Frazier, 423 F.3d 526, 531 (6th Cir.
2005) (internal quotations and citation omitted). Probable
cause is based on the totality of the circumstances; it is a
“practical, non-technical conception that deals with the factual
and practical considerations of everyday life.” Jd. (internal
quotations and citation omitted). When reviewing probable
cause, the Court may only look within the four corners of the
affidavit. /d. (citation omitted). Additionally, the Court should
give great deference to a magistrate’s determination of
probable cause. United States v. Allen, 211 F.3d 970, 973
(6th Cir. 2000) (quoting Spinelli v. United States, 393 U.S.
410, 419, 89S. Ct. 584, 21 L. Ed. 2d 637 (1969)) (en banc).

i. The Violation

Because we find that the magistrate approved the warrant
only with respect to bank fraud, we will limit our probable
cause analysis to that violation. The affidavit stated more than
sufficient probable cause for the charge of bank fraud in
1999. The FBI conducted a check kiting analysis for a three-
month period in 1999. The analysis revealed that during the
three months, Defendants made $300 million in deposits to
their various accounts, and 85% of these deposits were kited
-funds. This analysis demonstrates probable cause for check
kiting violations in 1999.

26a

On the other hand, the affidavit does not establish
probable cause for bank fraud via check kiting in subsequent
years.° The affidavit lists the following evidence:

(1) In 2000, Metropolitan Bank filed a Suspicious Activity
Report (“SAR”) concerning Defendants’ accounts.

(2) In March 2001, Curschman noted suspicious activity with
respect to Defendants’ accounts.

(3) In July 2001, a security officer at FirstMerit Bank became
suspicious of activity in Michel Abboud’s account.

(4) In January 2002, Curschman discovered Michel Abboud
was using a bank account in violation of previously
established guidelines. ,

(5) In April 2002, PVF filed a SAR concerning Defendants’
accounts.

(6) In May 2002, Merchant Express Money Order
(“MEMO”) severed its relationship with Defendant Elie
Abboud, and MEMO incurred a loss.

Even when considered cumulatively, the above-referenced
evidence does not meet the threshold of probable cause. Most
of the evidence recites a third party’s suspicion of criminal
activity on Defendants’ part. This evidence by its nature does

° We recognize’. the indictment only charged the defendants with
bank fraud with respect to the three-month period in 1999. This
fact, however, is irrelevant as to whether the affidavit stated
probable cause for seizure of evidence of bank fraud outside of this
period.

27a

not rise above mere suspicion insufficient to sustain a finding
of probable cause.

ii. Nexus with the Location Searched

The probable cause inquiry of whether an individual
committed a crime is related but distinct from the probable
cause inquiry for a search warrant. Blakeney, 942 F.2d at
1025. “To demonstrate probable cause to justify the issuance
of a search warrant, an affidavit must contain facts that
indicate a fair probability that evidence of a crime will be
located on the premises of the proposed search.” Frazier, 423
F.3d ai 531. Defendant’s argument that there was no nexus
between the locations searched, his home and his businesses,
and the evidence sought is w.thout merit. One does not need
Supreme Court precedent to support the simple fact that
records of illegal business activity are usually kept at either a
business location or at the defendant’s home. Likewise,
personal financial records are also usually stored at a person’s
home or place of business.

Defendant's claim that these were conclusory statements
based on the affiant’s “meager experience” misses the mark;
the affiant is a seasoned FBI Special Agent whose primary
concentration is in financial crimes. Certainly his insight as to
the probable location of the evidence of the crimes in this case
cannot be denigrated as “pathetic averments,” as Defendant
so states. (Michel Abboud Def.’s Br. 14.) Quite the contrary,
the magistrate correctly relied on the affiant’s experience in
his assessment of the probable location of the evidence.

c. Staleness

The probable cause required for a search warrant “‘is
concerned with facts relating to a presently existing

28a

condition.’” United States v. Spikes, 158 F.3d 913, 923 (6th
Cir. 1998) (quoting W. LaFave, Search and Seizure § 3.7 at
338 (3d ed. 1996)). “Thus, the critical question is whether the
information contained in the affidavit, when presented to the
. . . Judge, established that there was a fair probability that
fevidence] would still be found at [the location of the
search}.” /d. In other words, a warrant is stale if the probable
cause, while sufficient at some point in the past, is now
insufficient as to evidence at a specific location.

The staleness inquiry is tailored to the specific
circumstances in each case. Id. (citing Sgro v. United States,
287 U.S. 206, 210-11, 53 S. Ct. 138, 77 L. Ed. 260 (1932)).
“[T}he length of time between the events listed in the affidavit
and the application for the warrant; while clearly salient, is
not controlling.” /d. It is possible that even if a substantial
amount of time had elapsed between “a defendant’s last

~ reported criminal activity” and the issuance of the warrant,
the warrant had not become stale. /d.

This Court has outlined several factors to consider when
analyzing staleness:

(1) “the character of the crime (chance encounter in the night
or regenerating conspiracy?)”

(2) “the criminal (nomadic or entrenched?)”

(3) “the thing to be seized (perishable and easily transferrable
or of enduring utility to its holder?)”

(4) “the place to be searched (mere criminal forum of
convenience or secure operational base?).”

29a

Id. (quoting Andresen v. State, 24 Md. App. 128, 331 A.2d
78, 106 (Md. Ct. Spec. App. 1975)).

As explained above, the affidavit set forth sufficient
probable cause with respect to bank fraud in 1999 but not
with respect to any subsequent year. The question then
becomes whether this probable cause had become stale, as the
magistrate issued the warrant in 2002. By applying the factors
listed above, we find that the probable cause was not stale
when the magistrate issued the warrant.

i. The Character of the Crime

The bank fraud alleged in the affidavit was not a one-time
occurrence but was rather a systematic transfer of funds
between accounts held by Defendants. According to the FBI
analysis for the period of June 1, 1999 to August 31, 1999,
Defendant Michel Abboud alone was the signer of 1,276
checks involved in the check kite, with a total value of about
$ 89 million.

The Court has found that “[e]vidence of ongoing criminal
activity will generally defeat a claim of staleness.” United
States v. Greene, 250 F.3d 471, 481 (6th Cir. 2001). In
Greene, the magistrate issued a search warrant on January 8,
1999. Id. at 475. The search warrant was based on
information supplied by an informant, who had last purchased
narcotics at the defendant’s house in February 1997; however,
he had purchased narcotics at least twelve times at the
defendant’s house. /d. at 476. The Court found that the
continuous and ongoing nature of the illegal activity was a
sufficient answer to the defendant’s claim of staleness. /d. at
481.

30a

Likewise, in this case, the affidavit stated that Defendant
Michel Abboud engaged in bank fraud numerous times during
a three-month period in 1999. While the affidavit did not list
sufficient probable cause for any time after 1999, so as to
establish a continuous criminal enterprise from 1999 to the
issuance of the warrant in 2002, this Court’s jurisprudence
suggests that ongoing criminal activity at a given time may be
sufficient to defeat a claim of staleness. See id. at 481; see
also United States v. Canan, 48 F.3d 954, 959 (6th Cir.
1995) (finding ongoing activity at the defendant’s house four
years prior to the issuance of the search warrant was sufficient
to defeat a claim of staleness).

ii. The Criminal

The affidavit supported the fact that Defendant was
entrenched. Defendant owned multiple convenience stores in
the Cleveland area. Defendant owned a home in the area.
There was no indication that Defendant moved from place to
place, so as to decrease the probability of finding evidence at
a given location.

iii. The Thing to be Seized

The search warrant sought almost exclusively business and
personal financial records from Defendant. This Court has
found that old business records could reasonably be expected
to be found at the defendant’s home or place of business.
United States v. McManus, 719 F.2d 1395, 1400-01 (6th Cir.
1983). In McManus, the magistrate issued a search warrant on
January 7, 1985 in comnection with tax violations for the
years 1977, 1978, and 1979. In finding that the warrant was
not stale, the Court stated, “It certainly would be reasonable
for a magistrate to conclude that on January 7, 1980,
defendant’s business records for the years 1977, 1978, and

3la

1979 would be found at either his place of business or his
residence. . . . ‘[Business records] are . . . the sort which
could be reasonably expected to be kept there for long periods
of time.’” Id. at 1401 (quoting United States v. Freeman, 685
F.2d 942, 952 (Sth Cir. 1982)).

This Court has found that business records are a type of
evidence that defy claims of staleness. See United States v.
Word, 806 F.2d 658, 662 (6th Cir. 1986); United States v.
Brownderville, 1999 U.S. App. LEXIS 18343, No. 98-1374,
1999 WL 618067, at *4 (6th Cir. Aug. 2, 1999); see also
United States v. Singh, 390 F.3d 168, 182 (2d Cir. 2004);
United States v. Farmer, 370 F.3d 435, 439-40 (4th Cir.
2004); United States v. Ninety-Two Thousand Four Hundred
Twenty-Two Dollars and Fifty-Seven Cents, 307 F.3d 137,
148 (3d Cir. 2002).

We agree that in this case, the magistrate was correct in
believing that business and financial records with respect to
1999 would still be at Defendant’s home or businesses in
2002. As the Third Circuit viewed the situation, “where the
items to be seized are created for the purpose of preservation,
as are business records, the passage of time is . . . less
significant.” /d.

iv. The Place to be Searched

The affidavit requested the search of Defendant’s home
and businesses. The bank fraud alleged centered around
Defendant’s check cashing transactions conducted at these
business locations. Furthermore, the affiant stated that
business records were usually kept at home. These locations
are not “mere criminal foruim!s] of convenience;” but rather,
the locations are at the heart of the criminal charge.

32a

vy. Conclusion

All factors weigh against a claim of staleness. We are
especially persuaded by the fact that by nature one keeps
business and financial records for extended periods of time.
The entire point in creating such records is for preservation.
As a result, the warrant was not stale.

d. Omission of Material Facts

Defendant claims the affiant omitted material facts from
the affidavit, thus skewing the magistrate’s probable cause
calculus. We disagree.

In Franks v. Delaware, the Supreme Court created
procedural protections for a defendant who claimed that the
affidavit supporting the probable cause of a search warrant
contained intentional or reckless falsehoods. The Court stated
that it presumed the validity of the affidavit in support of the
search warrant. 438 U.S. 154, 171, 98 S. Ct. 2674, 57 L.
Ed. 2d 667 (1978). The burden is on the defendant to show
such falsehoods in the affidavit. /d. If the defendant meets this
burden, then the question becomes whether the affidavit is
sufficient to support probable cause without the falsehoous.
/d. If it is sufficient, then the warrant is valid. /d. at 171-72.
If it is insufficient, then the defendant is entitled to a hearing
concerning the probable cause in the affidavit. /d. at 172.
This Court has interpreted Franks to include omissions. Hale
v. Kart, 396 F.3d 721, 726 n.4 (6th Cir. 2005) (citing Mays
v. City of Dayton, 134 F.3d 809, 815 (6th Cir. 1998)).

Defendant claims three omissions: (1) PVF had not lost
the millions of dollars as claimed in the affidavit; (2)
Defendants’ accounts were fully collaterized; and (3) the
banks involved knew of and approved of Defendants’ actions.

33a

We agree with the government that the evidence contained
in (1) and (2) was not omitted in the affidavit. With respect to
(1), paragraphs 20-23 of the affidavit detailed transfers made
by Defendants to cover the negative balances in their checking
accounts. With respect to (2), paragraph 17 of the affidavit
stated that PVF had a positive equity position against
Defendants’ collaterized real estate and that PVF also held
$500,000 of stock belonging to Defendants.

We agree with Defendant that the affidavit did not state
that the banks involved knew of and approved of Defendant’s
actions with respect to the check kiting system. As explained,
infra, however, we disagree with Defendant’s contention that
the banks in fact approved of the check kiting scheme. As a
result, no harm occurred from this fact’s omission from the
affidavit, and Defendant was not entitled to a Franks hearing.

e. Particularity

The Fourth Amendment requires that a search warrant
“particularly describ[e] the place to be searched, and the
persons or things to be seized.” U.S. Const. amend. IV. This
requirement prevents a “‘general order to explore and
rummage through a person’s belongings.’” Blakeney, 942
F.2d at 1026 (quoting United States v. Cook, 657 F.2d 730,
733 (Sth Cir. 1981)). “The degree of specificity required
depends on the crime involved and the types of items sought.”
Id. (citing United States v. Henson, 848 F.2d 1374, 1383 (6th
Cir. 1988)).

In this case, law enforcement sought business and
financial records in connection with bank fraud. In a business
fraud case, the authorization to search for general business
records is not overbroad. United States v. Henson is
instructive in this regard. There, the defendants were charged

34a

and convicted of mail fraud and giving, or causing to give, a
false odometer statement. 848 F.2d at 1376. The defendants
were involved in a scheme of purchasing late model, high
mileage cars and then tampering with the odometers. /d. The
search warrant authorized the search for “any and all
records” in connection with the businesses utilized in the
scheme, as well as the records of the individual defendants.
Id. at 1382.

This Court upheld the validity of the warrant:

In the instant case, although the warrant uses generic
terms, [the law enforcement officer] could not have
known at the time he applied for the warrant what
precise records and files would contain information
concerning the odometer-tampering scheme. “Where
the precise identity of the goods cannot be ascertained
at the time the warrant is issued, naming only the
generic class of items will suffice.” The description in
the warrant is directed toward items likely to provide
information concerning the [defendants] involvement
in the . . . scheme and therefore did not authorize the
officers to seize more than what was reasonable under
the circumstances.

Id. at 1383 (citation omitted). In this case, the warrant was
specific in terms of the items to be seized; for example, it
listed “[l]ogs or ledgers that reflect the recording of banking
activity,” “[aJll bank statements, deposit slips, withdrawal

slips, official checks, money orders, cancelled checks, wire
transfers and other documents for any and all bank accounts,”
and other specific forms of records. (J.A. at 118-21.)
Moreover, like in Henson, the law enforcement agents in this
case could not have known the precise documents and records
Defendants utilized in the check kiting scheme. The items

35a

listed in the warrant were items “likely to provide
information” about Defendants’ check kiting scheme. A more
specific alternative did not exist to the search warrant’s list of
items to be seized.

The problem, however, is the time frame the warrant
allowed with respect to these records. The warrant authorized
search for records from January 1996 to May of 2002;
however, the warrant was valid only with respect to bank
fraud for a three-month period in 1999, see supra. The only
reference to 1996 in the affidavit is the fact that Defendants
first began a relationship with the head teller at PVF’s
Rockside branch in that year, a trivial fact. The first
documented suspicion began on June 29, 1999. The FBI
conducted a check kiting analysis for a three-month period in
1999. As stated, supra, insufficient evidence is listed in the
affidavit to support probable cause for any subsequent years.

The warrant was overbroad in this respect. “Failure to
limit broad descriptive terms by relevant dates, when such
dates are available to the police, will render a warrant
overbroad.” United States v. Ford, 184 F.3d 566, 576 (6th
Cir. 1999) (citations omitted). Here, law enforcement knew
that the evidence in support of probable cause in the affidavit
revolved only around a three-month period in 1999; the
authorization to search for evidence irrelevant to that time
frame could well be described as “rummaging.”’

’ We do not find that the search warrant was only valid for records
from June, July, and August of 1999. A degree of flexibility is
required, because evidence that dated from outside of the time
period mv be relevant to the activity within the time period. For
example, evidence of continued check kiting in September and
October in 1999 after warnings from bank officials would be
evidence of bad faith; however, evidence from 1996 or 2002 is

Se

36a

The question then becomes what relief Defendant is
entitled to from this overbroad warrant. The Court has held
that the entire warrant need not be invalidated: “Our finding
of overbreadth . . . does not require suppression of all of the
items seized pursuant to the warrant. We believe the proper
approach to this dilemma is to sever the infirm portion of the
search warrant from the remainder which passes constitutional
muster.” Blakeney, 942 F.2d at 1027. Thus, all evidence
seized irrelevant to the three-month period in 1999 should
have been suppressed, while evidence relevant to this period
should be upheld.

Defendant’s problem, however, is that he was only
charged with and convicted of bank fraud for the three-month
period in 1999. As a result, Defendant cannot show prejudice
from the overbreadth of the warrant. The properly seized
evidence, along with the government’s evidence from other
sources, proved beyond a reasonable doubt that Defendant
had committed bank fraud for the three-month period in 1999.
Of most significance, Defendant never denied committing the
acts that constituted the bank fraud; his defense was that the
bank officials allowed the acts in question and that his actions
ws “e in good faith. See infra. This defense was not negated
by the introduction of the illegally seized evidence, but
instead was negated only by the testimony of the bank
officials. As a result, the introduction of evidence seized
pursuant to the overbroad portion of the warrant was harmless
error.

Clearly irrelevant.

37a

f. Reexamination of the Motion to Suppress

Defendant urges this Court to reexamine the district
court’s decision on the motion to suppress. His argument is
based on his perceived inconsistency between the affidavit and
the affiant’s testimony at trial, and testimony at trial that
contradicted the affidavit.

We disagree with Defendant that the affiant’s testimony at
trial contradicted the affidavit. In his testimony, the affiant
expressly affirmed what he stated in the affidavit; he testified
that when hé spoke to the magistrate, he stated that he
believed or concluded that certain bank officials intentionally
withheld information, and that one bank official devised a
scheme to recoup the losses of Defendants’ scheme without
informing the FBI of any losses. The affiant later testified that
charges were not brought against these bank officials.

The cogency of Defendant’s argument is somewhat
suspect; Defendant seems to be asserting that because charges
were not brought against the bank officials, the affiant was
less than forthright in his statements to the magistrate that the
bank officials were withholding information from the FBI. If
this is the case, then Defendant’s argument fails; the fact that
the bank officials were not prosecuted does not necessarily
mean that the affiant lied to the magistrate when he stated that
he suspected dishonesty on the part of the bank officials. In
fact, Defendant’s own cross-examination insinuated that these
charges were not brought because of the bank officials’
cooperation with Defendant’s prosecution, not because the
charges were baseless.

Defendant then relies on the trial testimony of Keith
Swaney, an officer at PVF, where Swaney stated that he
disagreed with the affiant’s statement in the affidavit that the

38a

bank officials intentionally withheld information from the
FBI. Again, Defendant stems to argue that the affiant lied to
the magistrate. As explained above, to obtain a Franks
hearing, Defendant has the burden to prove the falsehoods
made in the affidavit. The mere fact that a bank official
disagreed with the affidavit is insufficient to meet this burden.

g. Evidentiary Hearing

Defendant challenges the district court’s refusal to hold an
evidentiary hearing in connection with the motion to suppress.
The district court based its decision on the fact that
Defendant’s arguments were “entirely legal in nature,” and
thus did not require a hearing.

The district court’s decision was correct. An evidentiary
hearing is required “only if the motion is sufficiently definite,
specific, detailed, and non-conjectural to enable the court to
conclude that contested issues of fact going to the validity of
the search are in question.” United States v. Downs, 1999
U.S. App. LEXIS 835, No. 96-3862, 1999 WL 130786, at *3
(6th Cir. Jan. 19, 1999) (citing United States v. Unimex, Inc..,
991 F.2d 546, 551 (9th Cir. 1993)) (emphasis supplied).

In his brief in support of his motion to suppress,
Defendant for the most part did not contest factual issues; he
contested the legal conclusions drawn by the magistrate from
the facts. Under subpoint I, Defendant argued that the facts
were insufficient to support probable cause; this contests a
legal conclusion. Under subpoint II, Defendant argued that
the affidavit omitted material information; however, as
explained, supra, this argument was simply incorrect and did
not require an evidentiary hearing. Under subpoint III,
Defendant argued that the probable cause was stale; this too
was a Challenge to a legal conclusion. Under subpoints IV, V,

39a

and VI, Defendant argued that the warrant was overbroad,
another legal challenge. Defendant did not contest any facts,
nor did he offer previously unheard facts. Simply put,
Defendant did not agree with the magistrate’s legal decision
based on the facts. This type of disagreement is not resolved
through an evidentiary hearing. As a result, the district court
did not err in its decision not to grant an evidentiary hearing.

h. Good Faith Execution of a Search Warrant

Even if a search warrant is defective, the Court will not
suppress evidence seized pursuant to such warrant if the
seizure was based on reasonable, good faith reliance on the
warrant. United States v. Frazier, 423 F.3d 526, 533 (6th Cir.
2005) (citing United States v. Leon, 468 U.S. 897, 905, 104
S. Ct. 3405, 82 L. Ed. 2d 677 (1984)). The Supreme Court
explained the mechanics of the good faith exception:

[O]ur good-faith inquiry is confined to the objectively
ascertainable question whether a reasonably well
trained officer would have known that the search was
illegal despite the magistrate’s authorization. In
making this determination, all of the circumstances--
including whether the warrant application had
previously been rejected by a different magistrate--
may be considered.

Leon, 468 U.S. at 922-23 n.23. The rationale behind the
exception is that the exclusionary rule is meant to deter
unlawful police conduct. See supra. This policy of deterrence

is not served by the exclusion of evidence seized in good faith
by the police. Leon, 468 U.S. at 918-19.

On the other hand the good faith exception does not apply
in the following specific circumstances: “1) the supporting

40a

affidavit contained knowing or reckless falsity; 2) the issuing
magistrate wholly abandoned his or her judicial role; 3) the
affidavit is ‘so lacking in probable cause as to render official
belief in its existence entirely unreasonable;’ or 4) where the
officer’s reliance on the warrant was neither in good faith nor
objectively reasonable.” Frazier, 423 F.3d at 533 (quoting
Leon, 468 U.S. at 923).

With respect to the additional violations contained in the
affidavit but not on the face of the warrant, a police officer
could not reasonably rely on the affidavit to validate a search
for evidence of these additional violations. The natural
reading of the face of the warrant was that the affidavit was
incorporated only for the purpose of establishing probable
cause for bank fraud. Moreover, the warrant was unclear as
to whether the magistrate did indeed find probable cause for
these additional violations. Law enforcement may not take
advantage of the warrant’s equivocal posture to illegally seize
evidence.

With respect to bank fraud in any year besides 1999, the
affidavit’s lack of probable cause was obvious to the
reasonably trained officer. The affidavit only listed suspicions
of check kiting in these other years.

i. Prejudice

The ultimate question then becomes what harm Defendant
has suffered from the iilegality of the warrant. The record is
less than clear as to what evidence seized through the warrant
was actually used at Defendant’s trial. See Blakeney, 942
F.2d 1001, 1027 (hiking that the defendant did not suffer
prejudice when the evidence illegally seized was not
introduced at trial). For purposes of this analysis, we will
presume the widest use of the illegal evidence.

4la

As stated earlier, the warrant was only valid with respect
to bank fraud, and only bank fraud in 1999. This means that
evidence with respect to the year 2000 should have been
suppressed, possibly implicating Defendant’s conviction for
violation of 26 U.S.C. § 7203, failure to file an income tax
return in 2000. Unfortunately for Defendant, he stipulated to
the fact that he did in fact make the threshold amount
~ triggering the requirement to file a tax return. His only
defense was lack of intent, which was negated by the
government without use of any evidence seized via the
overbroad search warrant. See infra. As a result, the
admission of any of this illegal evidence would have been
harmless error with respect to Defendant’s conviction for this
charge.

Also, with respect to Defendant’s conviction for violation
of 26 U.S.C. § 7206, filing a false income tax return in 1999,
the conviction rested on two forms of evidence: (1) evidence
of a failure to report gambling income, and (2) evidence of a
failure to report income from his businesses. The evidence
listed in (1) was not seized pursuant to the warrant, and the
evidence seized in (2) could properly be characterized as
evidence of bank fraud legally obtained under the warrant.

The evidence seized with respect to the 1999 bank fraud
charges was valid; therefore, the Court affirms these
convictions. Furthermore, the evidence for the 1999 money
laundering charges completely overlapped with the evidence
for the 1999 bank fraud charges. The evidence of transfers in
the amount of $ 10,000 or more for the relevant period show
both the “bleeding” of the check kite, which is relevant
evidence to the charges of bank fraud, and money laundering
in violation of 18 U.S.C. § 1957. Because the jury only
considered legally obtained evidence with respect to money
laundering, the convictions stand. Likewise, the evidence of

42a .

bank fraud and conspiracy to commit money laundering
completely overlap, and this conviction stands.

C. WHETHER THE DISTRICT COURT ERRED IN
GRANTING THE GOVERNMENT’S MOTION IN
LIMINE THAT PREVENTED DEFENDANTS FROM
PRESENTING EVIDENCE OF SELECTIVE
PROSECUTION

1. Preservation of the Issue

Federal Rule of Criminal Procedure 12(b){1) requires that
“[dJefenses and objections based on defects in the institution
of the prosecution” must be raised by a pretrial motion. Rule
12(f) states that failure to make such a pretrial motion resuits
in waiver of the defense or objection; however, the Court
may grant relief from the waiver for cause. Fed. R. Crim. P.

12(f).

Here, Defendants did not make a 12(b)(1) motion based
on selective prosecution before trial and thus waived the
issue. Therefore, the district court did not err in preventing
Defendants from presenting evidence of this waived defense
at trial.

2. Standard of Review

This Court reviews the district court’s evidentiary rulings
for an abuse of discretion. United States v. Taplin, 954 F.2d
1256, 1258 (6th Cir. 1992) (citation omitted).

3. Analysis

As stated above, Defendants waived the defense of
selective prosecution. Independent of the waiver, the district

43a

court’s motion in limineé was correct because the defense of
selective prosecution is a matter that is independent of a
defendant’s guilt or innocence, so it is not a matter for the
jury. As the Third Circuit stated: |

By both tradition and constitutional mandate the jury
is given the responsibility of determining guilt or
innocence according to instructions of law delivered’.
by the court. The question of discriminatory
prosecution relates not to the guilt or innocence of
appellants, but rather addresses itself to a
constitutional defect in the institution of the
prosecution.

United States v. Berrigan,482 F.2d 171, 175 (3d Cir. 1973).
Thus, a “defense” of selective prosecution is a matter for the
court, not the jury.

We wholeheartedly agree with Defendants’ argument that
cross-examination plays a vital role in the adversarial system
of our country, and the ability to show bias, motive, or
prejudice on the part of a witness is an integral part of cross-
examination. Defendants, however, seem to conflate the
concepts of witness bias and selective prosecution. Witness
bias speaks to “‘the reliability of the witness.’” Delaware v.
Van Arsdall, 475 U.S. 673, 680, 106 S. Ct. 1431, 89 L. Ed.
2d 674 (1984) (quoting Davis v. Alaska, 415 U.S. 308, 318,
94 S. Ct. 1105, 39 L. Ed. 2d 347 (1974)). When one exposes
bias, motive, or prejudice of a witness, one is calling into
question the credibility of that witness’ testimony. Selective
prosecution is a separate and distinct claim that the defendant
has been unconstitutionally selected for prosecution.

44a

Defendants made clear in the memorandum in opposition
of the motion in limine that the cross-examination sought was
to establish selective prosecution:

In fact, Defendant’s goal sought from the full cross-
examination of the witnesses is to support his defense
that, for a number of years he had conducted his
business activities with bank direction and approval
and without governmental interference or objection;
that, prior to September 11, 2001, the SAR of
November, 1999, led to no criminal prosecution; and,
that subsequent to September 11, 2001, the
Government, in violation of Defendant’s constitutional
rights, initiated the instant matter as a result of
Defendant’s ethnicity.

(J.A. at 262.) Surprisingly, Defendants fully admitted that the
purpose of the cross-examination was not to test the reliability
of the witnesses, but instead to present a defense of selective
prosecution. As stated earlier, selective prosecution is not an
issue for the jury, so the district court correctly granted the
motion in limine.

D. WHETHER THE DISTRICT COURT ERRED IN ITS
TREATMENT OF 404(b) EVIDENCE THAT
DEFENDANTS PAID EMPLOYEES “UNDER THE
TABLE” ;

1. Standard of Review

This Court reviews the district court’s legal determination
that the evidence was admissible for a legitimate purpose de
novo. United States v. Merriweather, 78 F.3d 1070, 1074 (6th
Cir. 1996) (citing United States v. Johnson, 27 F.3d 1186,
1190 (6th Cir. 1994)). The Court reviews the district court’s

45a

determination that the probative value was not substantially

outweighed by the unfairly prejudicial effect for abuse of
discretion. /d.

2. Analysis

The district court did not err when it admitted evidence
that Defendants paid employees under the table.

a. Legal Framework
Federal Rule of Evidence 404(b) states:

Evidence of other crimes, wrongs, or acts is not
admissible to prove the character of a person in order
to show action in conformity therewith. It may,
however, be admissible for other purposes, such as
proof of motive, opportunity, intent, preparation,
plan, knowledge, identity, or absence of mistake or
accident, provided that upon request by the accused,
the prosecution in a criminal case shall provide
reasonable notice in advance of trial, or during trial if
the court excuses pretrial notice on good cause shown,
of the general nature of any such evidence it intends
to introduce at trial.

Moreover, even if the “ other acts” evidence js relevant, if the
probative value is substantially outweighed by its unfair
prejudice, the district court may exclude the evidence. Fed.
R. Evid. 403.

This Court has outlined a four-step process for the
admission of Rule 404(b) evidence. First, the proponent of the
evidence must identify the specific purpose of the “other acts”
evidence. Merriweather, 78 F.3d at 1076. Second, the district

46a

court must de Only Defendant Michel Abboud was charged with filing false
income tax returns (Count 78 of the Superseding Indictment).

80a
I. FACTS

On May 13, 2002, a federal magistrate judge issued
warrants authorizing the searches of a house located at 4689
Derbyshire Drive. North Randall, Ohio (personal residence
of Michel Abboud), a Shop & Go Food Mart located at 21700
Miles Road, North Randall, Ohio, and a Cash Processing,
L.L.C. located at 4200 Rockside Road in Independence,
Ohio. The warrants issued upon the affidavit of FBI Special
Agent, David P. Morgan. The affidavit detailed Agent
Morgan’s involvement in an investigation focusing on the
banking activities of the Defendants (Motion To Suppress,
Ex. B, Search Warrant Affidavit, 4 4). The affiant asserted
his determination that Defendants had engaged in a pattern of
manufacturing false and fraudulent information which was
used to artificially inflate several bank account balances at
National City Bank (“NCB”) and Park View Federal Savings
Bank (“PVF”) (Motion To Suppress, Ex. B, § 5). Agent
Morgan referred to the pattern of conduct as an illegal check
kiting scheme.*

Based on the information set forth in the affidavit, the
magistrate issued warrants to search the above-mentioned
locations for various documents relating to financial
transactions, tax related information, as well as certain
computer and electronic media. Government ageiits executed
the search warrants and seized several documents, computer

* A check kite is a scheme in which a check is drawn on one
account in excess of the balance of actual funds in that account and
deposited in a second account; then a check drawn on the second
account is deposited in the first. See United States v. Montgomery,
980 F.2d 388 (6th Cir. 1992). Such a scheme defrauds banks into
extending credit for checks drawn on accounts with insufficient
funds.

8la

equipment, cash, checks, and one Taurus .357 Magnum
revolver.

In his Motion To Suppress, Defendant Michel Abboud
attacks Agent Morgan’s affidavit as lacking probable cause to
support the issuance of the search warrants. Alternatively, the
Defendant disputes the constitutionality of the search warrant,
asserting that it was so overly-broad and non-specific, that it
authorized a general or exploratory search forbidden by the
Fourth Amendment. Furthermore, Defendant alleges that the
agents executing the searches impermissibly seized items
outside the scope of the warrant.

Il. LAW & ANALYSIS

The Fourth Amendment to the United States Constitution
provides, inter alia, that “‘... no Warrants shall issue, but
upon probable cause, supported by Oath or affirmation, and
particularly describing the place to be searched, and the
persons or things to be seized.’” The proper test for
determining the existence (or non-existence) of probable cause
“is simply whether there is a fair probability that contraband
or evidence of a crime will be found in a particular place.’”
United States v. Murphy, 241 F.3d 447, 457 (6th Cir. 2001)
citing, United States v. Shamaeizadeh, 80 F.3d 1131, 1136
(6th Cir. 1996). “The task of the issuing magistrate is simply
to make a practical, commonsense decision whether, given all
the circumstances set forth in the affidavit before him... there
is a fair probability that contraband or evidence of a crime
will be found in a particular place.” United States v.
McManus, 719 F.2d 1395, 1400 n. 6 (6th Cir. 1983) quoting
Illinois v. Gates, 462 U.S. 213, 238 (1983). When reviewing
the propriety of a magistrate’s decision to issue a search
warrant, a district court must give great deference to the
issuing court’s discretion, which “should not be set aside

82a

unless arbitrarily exercised.” United States v. Weaver® 99
F.3d 1372, 1376 (6th Cir. 1996); see also Murphy, 241 F.3d
at 457.

A. DEFENDANTS ARGUMENTS

Defendant’s arguments for suppressing evidence seized at
the above-described locations, as well as evidence seized
pursuant to his arrest, are as follows:

- The connection between the criminal activity alleged, the
items described for seizure, and the locations to be
searched is too tenuous to support a finding of probable
cause that the items sought would be located in the places
described.

- The warrant did not describe the items to be seized with
sufficient specificity, thereby violating the constitutional
prohibition against general/exploratory searches.

- The information set forth in the affidavit was too far
removed in time from the issuance of the warrants to
support a finding of probable cause.

- Federal agents impermissibly seized items outside the
scope of the search warrant.

- The search warrant affidavit omitted material facts that
would have impacted the magistrate’s probable cause
determination.

The government challenges Defendant’s arguments and
opposes his request for a suppression hearing.° As a

> The government contends that Defendant has not submitted any
evidentiary material to contradict the sworn statements in the
affidavit, and therefory no evidentiary hearing is required
(Response To Request F » &videntiary Hearing at pp. 3-4).

83a

preliminary matter therefore, the Court must ascertain
whether Defendant Michel Abboud is entitied to an
evidentiary hearing.

B. EVIDENTIARY HEARING

To mandate a hearing, Defendant’s attack on the veracity
of the affidavit and the propriety of the magistrate’s finding,
must be more than conclusory and need allege facts
sufficiently definite, specific, detailed, and non-conjectural to -
enable the Court to determine that he has presented a
substantial issue of material fact. Franks v. Delaware, 438
U.S. 154, 171 (1978); United States v. Coleman, 149 F.3d
674, 678 (7th Cir. 1998); United States v. Lewis, 40 F.3d
1325, 1332 (1st Cir. 1994); United States v. Pena, 961 F.2d
333, 339 (2d Cir. 1992).

Evidentiary hearings on motions to suppress are not
granted as a matter of course, but are only conducted when
the defendant alleges sufficient facts which, if proven, would
justify relief. Coleman, 149 F.3d at 678; see also Franks, 438
U.S. at 1717. When a defendant’s motion to suppress does
not sufficiently allege any evidentiary issues of fact, contains
only conclusory allegations, or is based entirely on legal
arguments, an evidentiary hearing is unnecessary. See Lewis,
40 F.3d at 1332.

Defendant bears the burden of showing that there are
disputed issues of material fact necessitating a hearing. Nechy
v. United States, 665 F.2d 775,776 (7th Cir. 1981). To meet
this burden, he must, at a minimum, substantiate his claim
through an affidavit of an individual with personal knowledge
of the relevant disputed facts. United States v. Gillette, 383
F.2d 843,848-49 (2d Cir. 1967).

84a

Defendant has not satisfied the burden of production
entitling him to an evidentiary hearing. He has not alleged
sufficiently definite, specific, detailed, and non-conjectural
facts to establish a substantial claim. No allegations made in
Defendant’s motion specifically contradict the sworn
statements set forth in the search warrant affidavit. No sworn
affidavits accompany Defendant’s motion, and apart from
general conclusions, the motion lacks any allegations
supported by evidentiary substance that give rise to material
factual issues. The arguments are entirely legal in nature, the
resolution of which, does not require a hearing. See Lewis, 40
F.3d at 1332: Coleman, 149 F.3d at 677; United States v.
Downs, 173 F.3d 430 (6th Cir. 1999) citing United States v.
One 1965 Buik, 392 F.2d 672, 678 (6th Cir. 1968).

Having found an evidentiary hearing unnecessary, the
Court must review the magistrate’s probable cause
determination to ascertain whether, given the totality of the
circumstances, the issuing court exercised its discretion
arbitrarily in issuing the challenged warrants. See Aguilar v.
Texas, 378 U.S. 108, 111 (1964); United States v. Weaver,
99 F.3d 1372, 1376 (1996). Next, the Court will address the
alleged material omissions and consider whether their
inclusion would have obviated probable cause to issue the
warrants, or whether omitting them impermissibly misguided
the issuing judicial officer. See Franks, 438 U.S. at 155-56;
United States v. Graham, 275 F.2d 782, 791 (8th Cir. 1980).

C. PROBABLE CAUSE

Compliance with the Fourth Amendment, prohibiting
unreasonable searches and seizures, requires that search
warrants issue only upon a showing of probable cause to
believe that alleged offenses have occurred, and that items
particularly described in the warrant constitute evidence 2°

85a

those offenses. The Sixth Circuit has defined probable cause
as, “reasonable grounds for belief, supported by less than
prima facie proof but more than mere suspicion.” United
States v. Padro, 52 F.3d 120, 122-23 (6th Cir. 1995) quoting
United States v. Bennett, 905 F.2d 931, 934 (6th Cir. 1990).
“The test for probable cause is simply whether ‘there is a fair
probability that contraband or evidence of a crime will be
found in a particular place.’” Padro, 52 F.3d at 123 quoting
Gates, 462 U.S. at 238.

Probable cause determinations are reviewed based on the
totality-of-the-circumstances, and employ a common sense
evaluation of the facts available to the officer at the time of
the search. Gates, 462 U.S. at 230; Padro, 52 F.3d at 123.
In adjudicating challenges to search warrants, a reviewing
court must afford great deference to the issuing judicial
officer, and a finding of probable cause will only be
overturned where the magistrate exercises his or her
discretion arbitrarily.United States v. Finch, 998 F.2d 349,
352 (6th Cir. 1993); United States v. Logan, 250 F.3d 350,
364 (6th Cir. 2001): Shamaeizadeh, 80 F.3d at 1136.

1. Commission of the Alleged Offenses

FBI Special Agent Morgan submitted to the issuing court,
a sworn affidavit detailing the results of his investigation into
Defendants’ conduct. Therein he set forth facts derived from
several sources including, but not limited to, interviews with
bank personnel and management, expert analysis of oank
account activity, Suspicious Activity Reports submitted to the
FBI by three separate banks, transaction records of 13 bank
accounts associated with the Abbouds and their businesses,

and currency transaction reports and tax returns filed with the
IRS.

86a

The search warrant affidavit provided the magistrate a
substantial basis from which to find probable cause that the
Abbouds committed Bank Fraud, Wire Fraud, Mail Fraud,
Money Laundering, Conspiracy To Defraud The United
States,° and tax crimes. Specifically, it summarized evidence
indicating that the Defendants were involved in a substantial
check kite involving 13 bank accounts at PVF and NCB. The
affidavit included evidence of $300,000,000 worth of deposits
into, and transfers between, Defendants’ accounts during a
three-month period in 1999. Special Agent Morgan indicated
to the magistrate that over 85% of those deposits were kited
funds. Noted in the affidavit is a financial analyst’s review of
the accounts’ transactional history and his conclusion that
kiting activities had taken place. The affidavit includes
statements and information obtained from bank management
that they informed the Defendants of the illegality of their
banking practices. Moreover, the affiant identified at least
three separate occasions where bank personnel communicated
their concern to the FBI regarding activity in Defendants’
accounts. Furthermore, the affidavit provided the issuing
court with tax records and information from the IRS
regarding Defendants’ failure to file tax returns and failure to
report income with respect to personal and corporate
liabilities.

The affidavit also included a summary of a PVF report
filed with the FBI in April, 2002, describing suspicious
activity in accounts controlled by the Defendants. The report
indicated that in one week in April, 2002, over $32,000 had

° The banks involved are insured depository institutions as defined
in 18 U.S.C. § 20 and pursuant to the Federal Deposit Insurance
Act. Defrauding such institutions constitutes an offense against the
United States.

87a

been deposited consisting in part of 64 money orders of the
type the Abbouds sell at their stores. The money orders were
sequential in number and all made out for the maximum
amount of $500. As per their agreement with Western Union
the Abbouds were prohibited from appropriating the money
orders they sold for personal use.

Based on the information detailed in the search warrant
affidavit, it cannot be said that the issuing court exercised its
discretion arbitrarily. The magistrate had a substantial basis,
founded on more than mere suspicion, for finding probable
cause to believe the Defendants had committed the included
offenses of Conspiracy. Wire Fraud, Bank Fraud, Money
Laundering, Conspiracy, as well as criminal tax offenses. See
Gates, 462 U.S. at 214. The affidavit submitted by Special
Agent Morgan after an intensive investigation, gave ample
probable cause to withstand challenges regarding the probable
commission of the offenses alleged.

2. Description of Items to be Seized and Places to be
Searched

In addition to the required presence of probable cause to
believe that criminal offenses have been committed, the
Constitution requires an appropriate finding of probable cause
to believe that the listed items in the warrant constitute
evidence of those offenses, and that they will likely be found
in places particularly described in the warrant. Specifically,
the Fourth Amendment mandates a sufficient nexus between
the items to be seized, the criminal conduct alleged and the
place(s) where the search is to be conducted. United States v.
Hoover, 755 F.2d 933 (6th Cir. 1985) citing United States v.
Flores, 679 F.2d 173, 175 (9th Cir. 1982).

88a

The warrant in this matter was issued to search the
personal residence of Michel Abboud and two businesses
owned and operated by the Defendants. Clearly it is
reasonable to believe that evidence of the bank and tax crimes
under investigation could be found at the businesses
associated with the bank accounts in question. Furthermore,
the issuing court did not act unreasonably in concluding that
evidence of those crimes could likely be located at Michel
Abboud’s house, where it is reasonable to believe that he
would maintain personal and business tax records, bank
transaction records, and evidence of income. Based upon the
totality of the circumstances, the magistrate properly deduced
from the circumstances, a fair probability that evidence of the
alleged offenses could be found at Michel Abboud’s home as
well as the two business locations.

Search warrants must describe items to be seized and
places to be searched with sufficient particularity in order to
withstand constitutional scrutiny under the Fourth
Amendment. Florida v. Royer, 460 U.S. 491, 499 (1983)
(“The Fourth Amendment’s prohibition against unreasonable
searches and seizures has always been interpreted to prevent
a search that is not limited to the particularly described place
to be searched, and the persons or firings to be seized...”);
United States v. Savoca, 761 F.2d 292, 296 (6th Cir. 1985).
Defendant argues that the search warrant is overly-inclusive
and fails to describe the items to be seized with sufficient
particularity, thereby authorizing a general and exploratory
search forbidden by the Fourth Amendment (Motion To
Suppress at p. 22).

The warrant identified the following items for seizure:

a. Documents relating to financial transactions for the
period January 1, 1996, to present, namely:

89a

1) Logs and/or ledgers that reflect the recording of
banking activities as they may effect any of the bank
accounts associated with Elie F. Abboud or Michel F.
Abboud.

2) All bank statements, deposit slips, withdrawal slips,
official checks, money orders, cancelled checks, wire
transfers and other documents for any and all bank
accounts, including all funds and deposits such as
certificates of deposit and money market accounts,
stock accounts, and other investments for the above
mentioned businesses. —

3) Financial records revealing any banking activity
formally distributed from a financial institution related
to the above mentioned businesses or persons.

4) Financial records revealing distributions, receipts,
investments or purchases related to the above
mentioned businesses or persons.

5) Real estate purchases or sales involving the above
mentioned businesses or individuals.

b. Documents related to tax-related information from
January 1, 1996, to present, namely:

1) Copies of all tax returns prepared on behalf of the
above mentioned businesses and individuals.

2) General journal, cash receipts journals, cash
disbursements journals, and sales journals for the
above mentioned businesses.

3) Records of income and expenditures for the above
mentioned businesses.

4) All workpapers, schedules, notes or other materials
used in preparing any tax return.

5) General ledgers and subsidiary ledgers which
include notes receivable, accounts receivable,
accounts payable, notes payable and closing ledgers.

~

90a

6) Deeds, mortgages and titles to real and/or personal
property, including those in nominee names.

7) Stock certificates, brokerage account statements,
and similar documentation of transactions of such
assets and other items evidencing the obtaining,
secreting, transfer, concealment and/or expenditure of
funds.

8) Records of loans (given or received), refinancing,
disbursements, repayments, collections, lettcrs of
credit and related documents. -

c. Other documentation, namely:

1) Written notes of conversations held from January 1,
1996 to present between the above mentioned
individuals and businesses.

2) Notes relating to the operation of the above
mentioned businesses, banking activities, movement of
financial assets and business associates.

3) Documentation of Elie Abboud’s or Michel
Abboud’s financial assets used to pfocure loans and/or
credit.

4) Lists of employees for the above mentioned
businesses.

5) Keys for safety deposit boxes and any
documentation indicating the existence of safety
deposit boxes, ‘ eir location and the name that they
are under.

6) Keys, receipts and/or documents concerning mini-
warehouses or storage units, mail drops and answering
services.

7) Photographs of named individuals as well as their
associates and their property.

8) Local and long distance telephone bills.

9) Telephone and/or address books, Rolodexes and
any papers containing the names and telephone

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numbers or electronic devices capable of storing

names and telephone numbers.
10) Calendars listing appointments and/or dates related to the
business activity of the named individuals, their associates and
their businesses.

11) Correspondence discussing any of _ the

aforementioned items or activities.

d. Computer or electronic media including:
KK

e. Any currency in excess of $10,000.

The degree of specificity required in the description of
items to be seized in a search warrant is flexible, and varies
depending on the offenses involved and the nature of the
objects sought. United States v. Henson, 848 F.2d 1374, 1383
(6th Cir. 1988). “Thus a description is valid if it is as specific
as the circumstances of the activity under investigation
permit.” /d. quoting United States v. Blum, 753 F.2d 999,
1001 (1ith Cir. 1985). The nature of the alleged criminal
enterprise here involves numerous transactions implicating at
least 13 bank accounts associated with several businesses over
an extended period of time, and fraudulent failure to report
income generated from these businesses as well as personal
enterprises. The warrant seeks seizure of items likely to
constitute evidence of Bank, Mail and Wire Fraud, Money
Laundering, Conspiracy To Defraud The United States, and
evidence of income. The warrant affidavit adequately
describes items likely to demonstrate fraudulent bank
transactions and information on account activity as well as
evidence of income. The description of items to be seized in
the search warrant is reasonably specific considering the
circumstances of the conduct under investigation.

92a

The particularity requirement imposed by the Fourth
Amendment serves purpose, in part, to limit the discretion
employed by agents conducting a search regarding items that
are subject to seizure and those immune therefrom. Andresen
v. Maryland, 427 U.S. 463, 480 (1976); United States v.
Blakeney, 942 F.2d 1001, 1026 (stating that warrant must
enable a searcher to reasonably ascertain and identify the
things which are authorized to be seized). Once a category of
documents has been adequately described however, no
constitutional violation ensues when searching officers
exercise minimal judgment regarding ciassification of an item.
Logan, 250 F.3d at 365; United States v. Blair, 214 F.3d
690, 697 (6th Cir. 2000).

The fact that the warrant in question authorizes seizure of
a large volume of documents is not determinative with respect
to its constitutionality. The complexity of an illegal scheme,
and the fact that evidence thereof may include a substantial
amount of documents, will not protect it from detection.
Andresen, 427 U.S. at 481 n.1 0; United States v. Bentley,
825 F.2d 1104, 1110 (7th Cir. 1987). The check kiting
scheme here involved, is complex and sophisticated, and
involves several bank transactions often occurring on a daily
basis. The description of particular categories and the
exhaustive specification of documents subject to each
classification helped to limit the agents” discretion in this
case. See Savoca, 761 F.2d at 298-99. (“Because the warrant
in this case was inclusive, it did not leave room for...
discretion.”) Due-to the nature of the offenses suspected,
there was probable cause to seize the breadth of items listed
in the warrant, which authorized seizure of no more than was
reasonable.

When, as here, probable cause has been established that
a taxpayer has fraudulently failed to report income, any and

93a

all records related to the taxpayer’s income and expenses are
subject to seizure. McManus, 719 F.2d at 1398 (stating that
agents may seek business [or personal] records which would
indicate the tax liability of the defendant.)’ Special Agent
Morgan demonstrated that the Abbouds owned and operated
businesses that according to IRS records, had avoided tax
liabilities. Furthermore, such data indicated that Michel
Abboud had avoided personal tax obligations. It follows then,
that the agents were justified in seizing any and all
documentation relating to the generation of income with
regards to the Defendants’ personal and business affairs for
the relevant time periods. Accordingly, the collection of
customers’ checks and cash in excess of $10,000 was also
proper seizure of evidence of income.

3. Staleness of Warrant

The Defendant argues that the information in the affidavit
is stale because it details fraudulent banking activities
occurring in 1999 as support for the issuance of search
warrants in 2002 (Motion To Suppress at pp. 19-20).°

” McManus upheld a search warrant issued in a tax investigation
authorizing seizure of “[a]ny and all business and financial records
to show income received...” 719 F.2d at 1397.

® Defendant’s argument is premised upon the fact that the cover
page of the search warrant lists only the crime of bank fraud for
which Michel Abboud was arrested in 1999. Defendant claims
therefore, that the warrant only authorized seizure of items relating
to the circumstances surrounding the 1999 arrest. However, the
cover of the search warrant expressly incorporates by reference the
search warrant affidavit, which contains nine statutes/criminal
offenses. Technical deficiencies in a search warrant will not permit
exclusion of items seized. United States v. Hornick, 815 F.2d 1156,

94a

However, the affidavit, expressly incorporated by reference
on the cover of the warrant, sets forth evidence of tax crimes
up to the date of the search, as well as more recent bank fraud
and mail and wire fraud violations. Evidence of ongoing
criminal activity will generally defeat a claim of staleness.
United States v. Greene, 250 F.3d 471, 481 (6th Cir. 2001)
citing United States v. Canan, 48 F.3d 954, 958 (6th Cir.
1995) (noting that although conduct in affidavit was four
years old, evidence of ongoing nature defeated staleness). The
search warrant affidavit describes fraudulent banking
activities up to April, 2002, and includes evidence of tax
crimes up to the date of the search. Accordingly, Defendant’s
staleness argument is without merit and probable cause
existed to seize items in 2002 as evidence of the offenses
described in the warrant occurring between 1996 and 2002.

4. Scope of the Warrant

Finally, Defendant argues that agents executing the
searches impermissibly seized items outside the scope of the
warrant (Motion To Suppress at p. 39). Having already
concluded that the warrant issued upon probable cause, and
specifically identified items likely to constitute evidence of the
relevant crimes, it is noted that, “absent flagrant action
[disregard for [a] warrant]..., the items covered by [a]
warrant will be admissible.” United States v. Lambert, 771
F.2d 83, 93 (6th Cir. 1985), cert. denied, 474 U.S. 1034
(1985) citing Waller v. Georgia, 467 U.S. 39 (1984).
Defendant does not include allegations in big motion that the
officers executing the warrants demonstrated a flagrant
disregard as to the directives contained therein.

1158 (7th Cir. 1987) (interpreting United States v. Leon, 468 U.S.
897 (1984)).

95a

A valid warrant is not transformed into a general one
where seizures are motivated by practicality rather than by a
desire to engage in indiscriminate “fishing.” United States v.
Tamura, 694 F.2d 591, 597 (9th Cir. 1982). Considering the
amount of documents and items detailed in the warrant,
agents could not have been expected to sift through each and
every document. Furthermore, “[a] search does not become
invalid merely because some items not covered by the warrant
are seized.” Henson, 848 F.2d at 1383 citing Lambert, 771
F.2d at 93. Even if some items were seized without
authorization of the search warrant, such seizure was a
function of practicality and not flagrant disregard. Defendant
has not made a substantial showing that the warrants served
as a pretext for indiscriminate searches in an effort to uncover
unspecified criminal activity, or that the searching officers
flagrantly disregarded the warrant with regards to items to be
seized. Accordingly, invalidation of the warrant on the
ground that agents impermissibly seized items outside the
warrant’s description or that a general seizure was authorized,
is unpersuasive.

Affording the decision of the issuing judicial officer
appropriate deference, the Court finds that the probable cause
determination was made pursuant to reliable information and
with the requisite level of discretion. There is no basis to find
that the magistrate judge was not “neutral and detached” in
the exercise of her judicial duties. Based upon the “totality-
of-the-circumstances test” set forth in /llinois v. Gates, 462

96a

U.S. 213,’ the Court finds that the magistrate issuing the
challenged warrants, “had a substantial basis for concluding
that probable cause existed.” and reasonably determined that
there was a fair probability that evidence of the crimes in
question could be found in the places described in the
warrant.

D. MATERIAL OMISSIONS

Defendant argues that the following facts/statements were
omitted from the search warrant affidavit in a willful attempt
to misguide the issuing court, and that had these statements
been included, no probable cause could be discerned from the
affiant’s affidavit (Motion To Suppress at pp. 16-19).
Defendant identifies the following omissions as amounting to
material misstatements:

- No statement that the Defendants had discharged
their obligation to PVF, while attempting to make it
appear as though PVF had lost a substantial amount of
money.

- No statement that the Defendants’ outstanding
obligation to NCB was only $30,000 plus interest.

- No statement that the Defendants were given instant
credit that was fully collateralized, that all overdrafts
were fully covered and that the banking procedures
described in the affidavit were approved by the banks

” “The task of the issuing magistrate is simply to make a practical,
common-sense decision whether, given all the circumstances set
forth in the affidavit before him, there is a fair probability that
contraband or evidence of a crime will be found in a particular
place.” Gates, 462 U.S. at 214.

97a

who profited greatly from their respective
relationships with the Defendants.

Defendant’s argument challenging the non-inclusion of
material facts is premised upon Franks v. Delaware, 438 U.S.
154 (1978) governing the constitutional effect of material
misstatements in a search warrant affidavit.

Franks directs application of a two-part test: (1) whether
the defendant has proven by a preponderance of the evidence
that the affidavit contains deliberately or recklessly false
statements’’ and (2) whether the affidavit, without the false
statements, provides the requisite probable cause to sustain
the warrant. United States v. Charles, 138 F.3d 257, 263 (6th
Cir. 1998) (citing Franks, 438 U.S. at 171-72).

Pursuant to Franks, an omission may impermissibly
influence a magistrate if it rises to the level of a deliberate
misrepresentation or reckless falsehood. A fact or statement
omitted from a search warrant affidavit only amounts to a
misrepresentation however, if it casts doubt upon the
existence of probable cause. United States v. Dennis, 625
F.2d 782, 791 (8th Cir. 1980). The guiding approach is to
include the omitted statements and/or facts and determine
whether the affidavit, inclusive with the omissions, supports
a finding of probable cause. See Franks, 438 U.S. at 155-56;
United States v. Graham, 275 F.3d 490, 506 (6th Cir. 2001).

'° For the purposes of the instant motion, the deliberately/recklessly
fale> statements referred to are the omissions that, according to the
Defendant, inclusion of which, would belie a probable cause
finding.

98a

Before applying Franks and its progeny, it is noted that
the government rejects Defendant’s arguments that the
allegedly omitted information was in fact absent from the
affidavit. Specifically, the government indicates that in
paragraph 23 of the search warrant affidavit, the affiant
apprizes the issuing court of the fact that Elie Abboud
transferred over $2,000,000 into an account at PVF to cover
the negative balance. Furthermore, in paragraph 46, Agent
Morgan included the fact that the Abbouds had made partial
restitution to NCB and that the outstanding balance was
$200,000.’ Finally, with reference to Defendant’s claim that
the affidavit failed to disclose the fact that the banks were
fully collateralized, the government cites paragraph 17,
stating that PVF had a positive equity position against the
Abbouds.

The information allegedly excluded from the search
warrant affidavit may be present according to the
government’s recitation of specific affidavit entries. An
evaluation under Franks and subsequent precedent however,
makes such a determination unnecessary.

To meet the first prong of the test delineated under
Franks, Defendant must make a substantial showing that the
alleged omissions were excluded from the search warrant
affidavit with a deliberate or reckless intent to deceive the
magistrate. “Franks protects against omissions that are
designed to mislead, or that are made in reckless disregard of
whether they would mislead, the magistrate.” Simmons v.
Poe, 47 F.3d 1370, 1384 (4th Cir. 1995). Mere negligence

'' Defendant claims that the outstanding balance owed to NCB is
$30,000 plus interest, but offers no evidentiary support for this
figure.

. 99a

by the affiant does not constitute reckless disregard for the
truth. United States v. A Residence Located at 218 Third
Street, 805 F.2d 256, 258 (7th Cir. 1986). Rather, in the case
of omissions, a defendant “must offer direct evidence of the
affiant’s state of mind or inferential evidence that the affiant
had obvious reasons for omitting facts in order to prove
deliberate falsehood or reckless disregard.” United States v.
McNeese, 901 F.2d 585, 594 (7th Cir. 1990) Residence
Located at 218 Third Street, 805 F.2d at 259.

Defendant’s inability to set forth any direct evidence of
Agent Morgan’s state of mind and/or intent with regard to the
alleged omissions, disallows a finding that the omissions were
made with reckless disregard or deliberate intent to deceive
the issuing court. Furthermore, considering the disclosures in
the affidavit referenced by the government, Defendant has not
made clear any inference that the affiant had a perfidious
motive for excluding the allegedly omitted information. As a
result, the affidavit cannot be considered to contain
deliberately or recklessly false statements in satisfaction of
prong one of the controlling test in Franks. Accordingly, no
omission from the affidavit potentially interfered with the
magistrate’s discretion or cast doubt upon the existence of
probable cause.

Even if the exact statements as recited by the Defendant
are incorporated into the search warrant affidavit, probable
cause remains. Following the governing approach concerning
omissions, and in accordance with Franks, inclusion of the
alleged omissions regarding reimbursement to the banks and
the extent to- which the banks were secured regarding
Defendants’ account balances and loans, fails to cast doubt
upon the determination of probable cause to velieve the
Defendants engaged in Bank Fraud, Wire Fraud, Mail Fraud.
Conspiracy, and tax evasion. The conduct of the banks and

100a

their status regarding equity positions is irrelevant to the
offenses alleged as against the Defendants in the warrant.
Furthermore, a reviewing court must use caution when
considering the impact of allegedly material omissions.

“While omissions may not be per se immune from

_ inquiry, the affirmative inclusion of false information
in an affidavit is more likely to present a question of
impermissible official conduct than a failure to include
a matter that might be construed as exculpatory. This
latter situation potentially opens officers to endless
conjecture about investigative leads, fragments of
information, or other matter that might, if included,
have redounded to defendant’s benefit. The potential
for endless rounds of Franks hearings to contest
facially sufficient warrants is readily apparent.”
United States v. Martin, 920 F.2d 393, 398 (6th Cir.
1990).

The affidavit gave clear and sufficient detail of the activity
engaged in by the Defendants relating to the crimes charged.
It described abnormally frequent bank transactions between 13
accounts controlled by the Defendants, resulting in the
transfer of over $300 million in one three-month period.
Furthermore, the affidavit detailed Defendants’ failure to file
and report personal and business tax returns and incomes, and
included accounts of Defendants’ conduct that gave probable
cause to believe they were engaging in fraudulent banking
practices, Defendant is unable to prove, by a preponderance
of the evidence, that the alleged omissions amounted to
deliberate misrepresentations or reckless falsehoods.
Furthermore, regardless of the lack of such a showing, the
search warrant affidavit, read with the alleged omissions, still
provides probable cause to sustain the warrant. Finally, it is
questionable as to whether the allegedly omitted information

10la

was even absent from the affidavit. Defendant has not
satisfied the test announced in Franks, and the alleged
omissions from the affidavit cast no doubt upon the
magistrate’s probable cause determination."

E. CONCLUSION

Defendant has tailed to show that the magistrate judge
issued the search warrants in question arbitrarily and without
exercising the appropriate discretion. Based on the totality of
the circumstances, the search warrants issued upon a showing
of provable cause as to the commission of the offenses in
question, and the affidavit, together with the warrant itself,
provided the requisite connection between the criminal
conduct, the items to be seized, and the places to be searched.
Furthermore, the alleged omissions from the search warrant
affidavit do not rise to the level of material misrepresentations
or deliberate falsehoods so to cast doubt upon the magistrate’s
probable cause determination. Finally, no evidentiary hearing
is necessary and the Court has hereby addressed all
Defendant’s legal arguments for suppression.

For the foregoing reasons, Defendant’s Motion To
Suppress And For The Return Of Illegally Seized Property is
DENIED.

'2 No evidentiary hearing regarding the alleged omissions is
required. To warrant a hearing under Franks v. Delaware, a
defendant must make a substantial preliminary showing that the
affiant’s statements were deliberately false or demonstrated a
reckless disregard for the truth. Furthermore, a District Court may
deny an evidentiary hearing if, after including the omitted
staternents, the Court finds probable cause to issue the search
warrant. Franks, 438 U.S. at 155-56.

IT IS SO ORDERED.

/s/

UNITED STATES DISTRICT JUDGE

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1441%3A1. Public record. Not legal advice.