Opinion
01 CR. 245 (JSM)
January 11, 2002
Jonathan Etra, U.S. Attorney's Office for the Southern District of N.Y., New York, NY., for Government.
Daniel P. O'Brien, Neconset, New York, Robert Koppleman and David Breitbart, New York, NY., Richard M. Jasper, Jr. New York, NY., and Robert Y Altchiler, New York, NY., Ellyn Bank, New York, NY., and William Aronwald, White Plains, NY., James Daniel Neville, Smithtown, NY., and Robert Sinsheimer, Boston, MA., Edward D. Wilford New York, NY., and Peter Bongiorno, Garden City, NY., Donald Duboulay, New York, NY., and Howard L. Jacobs, New York, NY., for Defendants.
MEMORANDUM OPINION ORDER
Defendants Gampero and Cannizzaro have made a motion, joined in by other defendants, to suppress evidence seized pursuant to search warrants authorizing the search of three separate premises where the defendants conducted allegedly fraudulent transactions involving the purchase of property and its resale at inflated prices based on fraudulent appraisals and other false representations.
The principal arguments raised by the defendants are: 1) the warrants did not adequately limit the items to be seized and were, in effect, general warrants; 2) the affidavit supporting the search warrants did not establish probable cause; and 3) the affidavit in support of the warrant was tainted by fraud.
While there is no question that the warrants in this case were very broad in authorizing the seizure of "all" documents of the types specified in the warrant, the Second Circuit has held:
When the criminal activity pervades that entire business, seizure of all records of the business is appropriate, and broad language used in warrants will not offend the particularity requirements.United States Postal Serv. v. C.E.C. Serv., 869 F.2d 184, 187 (2d Cir. 1989) (citing National City Trading Corp. v. United States, 635 F.2d 1020, 1024-25, 1026-27 (2d Cir. 1980)).
Here, the warrant adequately established probable cause to believe that the defendants were conducting a business permeated by fraud in the premises to be searched and that all of the business records to be found at those premises could provide evidence of criminal activity.
To the extent that defendants claim that personal items beyond the scope of the warrant were seized, that issue can be considered if the Government offers any such item at trial. It is well settled that "the remedy with respect to any items exceeding the scope of the warrant [is not] invalidation of the search but suppression of those items." U.S. v. Dunloy, 584 F.2d 6, 11 n. 4 (2d Cir. 1978). See also U.S. v. Matias, 836 F.2d 744, 747 (2d Cir. 1988); U.S. v. Artieri, 491 F.2d 440, 445-46 (2d Cir. 1974).
The defendants' argument that the affidavit in support of the warrant failed to establish probable cause is without merit. In Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317 (1983), the Supreme Court abandoned any formalistic approach to determining the existence of probable cause and held:
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, including the "veracity" and "basis of knowledge" of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place. And the duty of a reviewing court is simply to ensure that the magistrate had a "substantial basis for . . . conclud[ing]" that probable cause existed.Gates, 463 U.S. at 238-239 (quoting Jones v. United States, 362 U.S. 257, 271, 80 S.Ct. 725, 736 (1960)).
Here, the affidavit in support of the warrant indicated that an informant who had first hand knowledge of the defendants' fraudulent scheme had described the workings of the scheme to the affiant and that the informant had been corroborated in material respects by another confidential informant. This was a more than sufficient basis on which to conclude that a search warrant should issue.
The defendants' argument that the evidence seized should be suppressed because there were false statements in the supporting affidavit must be judged pursuant to the standards set forth by the Supreme Court in Franks v. Delaware, 438 U.S. 154, 171-72, 98 S.Ct. 2674, 2684-85 (1978). According to the Court:
There is, of course, a presumption of validity with respect to the affidavit supporting the search warrant. To mandate an evidentiary hearing, the challenger's attack must be more than conclusory and must be supported by more than a mere desire to cross-examine. 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 accompanied by a statement of supporting reasons. Affidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained. Allegations of negligence or innocent mistake are insufficient. The deliberate falsity or reckless disregard whose impeachment is permitted today is only that of the affiant, not of any nongovernmental informant. Finally, if these requirements are met, and if, when material that is the subject of the alleged falsity or reckless disregard is set to one side, there remains sufficient content in the warrant affidavit to support a finding of probable cause, no hearing is required.Id.
The defendants attack on the affidavit fails to meet the requirements of Franks in several respects. First the defendants have failed to meet the requirement that "[a]ffidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained." While defendants have attached certain of the seized documents to their moving papers, they provide no affidavit authenticating these documents or supporting their contention concerning the way these documents were used by them. While some of these documents do demonstrate that the informant was wrong in his identification of the entity that prepared the fraudulent appraisal of the building that the defendants purchased and then sold at a substantial profit, they offer no evidence that casts serious doubt on the informant's assertion that the resale of this property at a substantial profit was based on fraudulent documents and misrepresentations by the defendants.
Even if one were to conclude that the statements of the informant were false in the respects alleged by the defendants there is no basis to conclude that the affiant was aware that anything in the affidavit was false or was reckless in failing to conclude that statements in the affidavit were false.
Finally, even if the specific items cited by the defendants were knowingly false, there remains in the affidavit more than substantial probable cause to support the issuance of the warrant. The confidential informant reported that the defendants were engaged in an elaborate and ongoing scheme to obtain mortgages through the use of fraudulent appraisals and other false documents and representations. Even conceding that the specifics of the example used by the informant were wrong, there were still repeated statements that the defendants had used various fraudulent means to obtain mortgages to which they were not entitled.
The Court has considered all of the defendants' remaining arguments and found them to be without merit.
For the foregoing reasons, the defendants' motions to suppress the evidence seized pursuant to the search warrants issued in this case are denied.
SO ORDERED.