Opinion ID: 157748
Heading Depth: 3
Heading Rank: 3

Heading: The First Federal Business Warrant

Text: 57 Finally, Le challenges the first federal business warrant, issued June 27 and executed July 2, on the grounds that the magistrate did not have probable cause to issue the warrant, 6 that the warrant was insufficiently particular, and that the executing officers exceeded the scope of the warrant.
58 The affidavit underlying the first federal business warrant is the same affidavit used to procure the blood and hair warrant and, in many ways, is similar to the affidavit underlying the state warrant. The affidavit contains information obtained by TPD Officer Comstock, and states that Comstock interviewed one Jay Riseling, a former employee of Cadre Supplies, Inc. 7 Riseling informed Comstock that his duties at Cadre Supplies, Inc. included maintenance of the business's firearms transaction records, and that while so employed he had made numerous false and fictitious entries which were made in order to conceal the identity of the persons supplying and/or receiving the firearms from authorities and/or to avoid having to pay the applicable federal firearms taxes. Appellant's App. at 58. Riseling also asserted that he had seen Le in possession of considerable amounts of methamphetamine, cocaine, and marijuana, and had purchased such drugs from Le on numerous occasions in the past couple of years. Id. at 57. Riseling told Comstock that Le purchased cocaine in increments of 10 to 30 kilograms, and that Le appeared to be heavily addicted to prescription pain medication as well as cocaine and methamphetamine, which he usually ingests by injection on a daily basis. Id. 59 The affidavit also relates Comstock's efforts to corroborate Riseling's account, including Comstock's discovery of methamphetamine residue in Le's trash. According to the affidavit, federal ATF agents also attempted to confirm Riseling's account by searching national ATF licensing records and ascertaining that Le, doing business as Cadre Supplies, Inc., is a federally licensed firearms dealer, and is additionally, specifically licensed to deal in machine guns and silencers. Id. at 58. The affidavit concluded by stating that federal agents believed, based on the information contained therein, that evidence of false and/or fictitious entries may be obtained from the required firearms transaction records, tangible or intangible, for Le's business. Id. Based on the affidavit, a U.S. Magistrate Judge issued a warrant authorizing a search for the firearms transaction records of Cadre Supplies, Inc. 60 We think this affidavit contains sufficient indicia of probable cause to meet the totality of the circumstances test enunciated in Gates. First, many of Riseling's statements, such as his admissions that he purchased drugs from Le and that he intentionally falsified federal firearms records, are against his penal interest, a factor we have considered indicative of reliability. See Sturmoski, 971 F.2d at 457. Second, this affidavit contains more information about the informant than the state warrant's affidavit does. Here, the magistrate is told the informant's name and that the informant worked for Le, and is told in detail what kinds of duties the informant performed for Le while in his employ. This kind of information sets forth the basis for the informant's knowledge, and would have satisfied one of the prongs of the old Aguilar-Spinelli test. See Aguilar v. Texas, 378 U.S. 108, 114, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964) (stating that the magistrate must be informed of some of the underlying circumstances from which the informant concluded that the narcotics were where he claimed they were). In Gates, the Supreme Court made clear that such basis of knowledge information is highly relevant in determining the value of an informant's account. Gates, 462 U.S. at 230, 103 S.Ct. 2317. Finally, officers were able to corroborate significant details contained in Riseling's account. Comstock discovered drug residue in Le's trash, and federal agents confirmed, through a check of a national database, that Le, doing business as Cadre Supplies, Inc., was a federally licensed firearms dealer who was licensed to deal in machine guns and silencers and therefore had access to heavy weapons. 61 In sum, the totality of the circumstances contained in this affidavit afforded the magistrate a substantial basis for concluding that probable cause existed. Id. at 238-39, 103 S.Ct. 2317 (citations and alteration omitted).
62 Next, Le argues that the first federal business warrant was not sufficiently particular, because it did not articulate a specific crime and because it used rather general terms to describe the items to be seized. The affidavit did not mention a specific criminal statute that officers suspected had been violated, but it did contain Riseling's assertion that he made numerous false and fictitious entries which were made in order to conceal the identity of the persons supplying and/or receiving the firearms from authorities and/or to avoid having to pay the applicable federal firearms taxes. Appellant's App. at 58. The accompanying warrant authorized a search for [a]ny and all tangible or intangible firearms transaction records for Thao Dinh Le doing business as Cadre Supplies, Inc. and/or any and all other tangible or intangible records pertaining to firearms transactions. Id. at 56. Le asserts that this warrant does not give the executing officers a clear enough picture of the crimes under investigation, and authorizes an unduly broad search into his business records. 63 First, we are satisfied that the warrant and its accompanying affidavit adequately described the criminal activity under investigation. We have sustained a warrant which did not limit the search to any alleged violation of a particular criminal law in a case where the warrant's affidavit contained information indicating that the suspect was engaged in a marijuana trafficking operation. Harris, 903 F.2d at 774-75. This case is similar. Although the warrant itself does not specifically mention a particular criminal activity, the affidavit states that Le may have been engaged in fraudulently altering his business's federal firearms transaction records in an attempt to hide the identity of firearms purchasers from federal authorities and in an attempt to avoid paying federal firearms taxes. This description of suspected criminal activity is specific enough to give the executing officers adequate guidance, when searching the business, to be able to distinguish between items that may and may not be seized. Leary, 846 F.2d at 602. 64 Next, we address Le's contention that the first federal business warrant was not particular enough because it used general terms to describe the items to be searched for. It is true that a warrant authorizing seizure of every single business record possessed by a business may be overbroad. See Voss v. Bergsgaard, 774 F.2d 402, 405-06 (10th Cir.1985). We have even held that a warrant authorizing a search of an export business for all documents relating to the purchase, sale and illegal exportation of materials in violation of the federal export laws was overbroad, because in the context of a search of an export business the limitations in the warrant's authorization provide[d] no limitation at all. Leary, 846 F.2d at 601. However, as discussed above, we have repeatedly stated that even generally phrased warrants are valid when they are phrased  'as specific[ally] as [the] circumstances and [the] nature of the activity under investigation permit.'  Janus Industries, 48 F.3d at 1554 (citing United States v. Wicks, 995 F.2d 964, 973 (10th Cir.1993)). 65 It is difficult to imagine how the first federal business warrant could have been phrased more specifically. Cadre Supplies, Inc. is a firearms dealership which buys and sells virtually nothing but firearms, ammunition, parts, and accessories. A request to search for documentary evidence of fraudulent firearms transactions will by definition entail at least a viewing of a large portion of the documents generated by a firearms dealership. But this does not necessarily mean that the warrant is impermissibly broad. The difference between a valid warrant and an overbroad warrant lies in whether the government could have phrased the warrant more specifically, not in whether the business is small enough to sell only one type of commodity. 66 Here, Le was suspected of continuous violations of the federal firearms laws, not simply violations relating to a particular transaction or to a particular type of weapon. Officers could not, therefore, have taken the steps we required in Leary. 846 F.2d at 604-05 (requiring that a warrant be limited, if possible, to the specific transaction under suspicion and to specific companies under suspicion). Furthermore, the warrant, by authorizing a search for documents relating to firearms transactions, did provide a meaningful limitation. The warrant did not authorize seizure of every financial document in the business, such as balance sheets and other accounting documents. Indeed, the executing officer testified at the suppression hearing that no financial documents were taken from the business. Tr. of Hearing on Motions, October 17, 1997, at 198. In any event, the mere fact that the business sells little other than firearms cannot operate to defeat the validity of the search warrant in this case. For instance, if the business were a general retailer which sold many different types of items, a warrant, premised on sufficient probable cause, authorizing a search for any and all firearms transaction records would likely be considered sufficiently limited and therefore not overbroad. A similar warrant will not be held invalid merely because the business which it authorizes agents to search is a smaller business confined to the purchase and sale of only one type of commodity. See United States v. Scherer, 523 F.2d 371, 376 (7th Cir.1975) (sustaining a search warrant for a firearms dealership which authorized seizure of both the guns and the firearms records possessed by the business). 67 In the drug context, we have held that a generic warrant authorizing a search for all documents related to drug transactions may come within the Fourth Amendment's particularity requirement. See United States v. Wicks, 995 F.2d 964, 967, 973-74 (10th Cir.1993) (warrant authorized a search for currency ... books, records, receipts, notes, ledgers, and other papers relating to the transportation, ordering, sale and distribution of controlled substances); United States v. Sullivan, 919 F.2d 1403, 1424 n. 31 (10th Cir.1990) (warrant authorized a search for records, receipts, papers, instrumentalities, and documents related to an on-going suspected criminal enterprise in the trafficking of and conspiracy to distribute, controlled dangerous substances, including but not limited to, phone records and bills, utility bills and/or receipts, address books, records, photographs ..., documents and receipts of travel, diaries, all monies, receipts, records and documents which show unusual, or suspect monetary transactions); Harris, 903 F.2d at 774-75 (warrant authorized a search for travel records and receipts ... bank safe deposit records ... currency ... stocks, bonds, or other securities ... gold silver and/or jewelry ... books, records, memorandum, notes, bank records, investment records, or any other documents evidencing the obtaining, secreting, transfer, and/or concealment of assets and/or money obtained through illegal means). Indeed, courts have noted that, in some instances, searching officers must be able to examine nearly every document possessed by a suspected criminal, if only to determine whether the documents contain evidence of criminal activity. One court stated that a warrant authorizing seizure of records of criminal activity permits officers to examine many papers in a suspect's possession to determine if they are within the described category, and that allowing some latitude in this regard simply recognizes the reality that few people keep documents of their criminal transaction in a folder marked 'drug records.'  United States v. Riley, 906 F.2d 841, 845 (2d Cir.1990); see also Andresen v. Maryland, 427 U.S. 463, 482 n. 11, 96 S.Ct. 2737, 49 L.Ed.2d 627 (1976) (stating that [i]n searches for papers, it is certain that some innocuous documents will be examined, at least cursorily, in order to determine whether they are, in fact, among those papers authorized to be seized); Kitty's East v. United States (In re The Matter of the Search of Kitty's East), 905 F.2d 1367, 1374-75, 1374 n. 6 (10th Cir.1990) (sustaining a warrant to search nearly every business record on the premises of an adult entertainment establishment, distinguishing Voss and Leary, and stating that [e]vidence of conspiracy is often hidden in the day-to-day business transactions among the involved entities; therefore, it seems reasonable that the government would need to examine the documentation of these transactions to investigate a conspiracy). 68 These authorities amply demonstrate that the first federal business warrant, which authorized a search for documents relating to firearms transactions, was not unconstitutionally overbroad. The warrant gave executing officers as clear a notion as could have been expected under the circumstances what types of criminal activity were suspected, and which documents might contain evidence of those crimes. Le's argument to the contrary is without merit.
69 Next, Le argues that the federal agents who executed the first federal business warrant grossly exceeded the scope of that warrant by searching for items not named in the warrant. Le again argues that the proper remedy is a blanket suppression of all items seized pursuant to the first federal business warrant. 70 Pursuant to the first federal business warrant, agents seized miscellaneous ATF records [and] log books, phone message books, miscellaneous correspondence, [and] firearms related documents. Appellant's App. at 63. Le argues that some of the firearms transaction documents seized by the agents contained no evidence of fraud, and therefore were not covered by the warrant and were improperly seized. Le further asserts that agents improperly seized documents, such as phone message logs, which have no apparent connection to firearms transactions. Also, Le argues that agents conducted an overbroad search for other items not named in the warrant, such as weapons and firearms, which were not actually seized on July 2. 71 Le's argument that too many firearms transaction documents were seized is foreclosed by United States v. Hargus, 128 F.3d 1358 (10th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 1526, 140 L.Ed.2d 677 (1998). In that case, officers suspected that the defendant was engaged in criminally fraudulent activities, and obtained a warrant to search the defendant's business for ten specific types of records. Officers found two file cabinets full of documents, and ascertained that each drawer contained some of the documents covered by the warrant. Rather than undertake a lengthy on-site sorting procedure, officers simply seized both file cabinets in their entirety. We upheld the seizure, stating that 72 the officers' conduct did not grossly exceed the scope of the warrant. Their conduct was motivated by the impracticability of on-site sorting and the time constraints of conducting a daytime search warrant. The officers were authorized to seize ten broad categories of records, and those records were present in every drawer of both file cabinets. No item not specified in the warrant was admitted against [the defendant] at trial. Under these circumstances the officers did not grossly exceed the warrant in concluding they did not need to examine at the site every single piece of paper in both cabinets. 73 Id. at 1363. 74 Similarly, officers in this case, suspecting fraudulent firearms transactions, were authorized to search for and seize all of Cadre Supplies, Inc.'s firearms transaction records. Certainly, officers could not tell merely by looking at the face of a particular firearms document whether it involved a fraudulent transaction. In such a case, officers were surely justified in taking all the firearms transaction documents, and examining them later to ascertain which ones evidenced fraud. Their actions in seizing some documents which were later determined to be unrelated to fraudulent activity cannot be evidence of a flagrant disregard for the terms of the warrant. 75 Likewise, the agents' decisions to (1) call for an officer of the Department of Defense to determine if some of the weaponry seen in plain view was stolen, and (2) seize the phone message books are also not evidence of a flagrant disregard for the terms of the warrant. Even assuming, arguendo, that Le is correct in asserting that such decisions were beyond the scope of the warrant, a proposition that is by no means obvious, 8 the agents' actions did not constitute the type of flagrant disregard for the terms of the warrant which justified blanket suppression in Medlin, Foster, and Rettig. Le's only remedy for any excesses in the July 2 search of his business would be a remand to the district court to determine which items, if any, not mentioned in the warrant were searched and/or seized, and whether any of those items should be suppressed. Because Le was never prosecuted for the explosives seen at the business on July 2 and seized on August 4, or for any evidence found in the phone message logs, such a remand would be meaningless.