Court Opinion

ID: 1087597
Source: CourtListenerOpinion
Date Created: 2013-10-30 00:06:24.711706+00
Date Added: 2024-06-11T12:52:10.519535
License: Public Domain

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    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                               DIVISION II

STATE OF WASHINGTON,                                                       No. 43170 -0 -II

                                  Respondent,

       V.

TERRY EUGENE GAINES,                                               UNPUBLISHED OPINION

       QuiNN- BRINTNALL, P. J. —             A jury convicted Terry E. Gaines of multiple counts of first

degree trafficking in stolen property and money laundering for selling stolen sticks of Xerox
brand ink   on   eBay.   Gaines appeals, arguing that ( 1) there was not probable cause to support the

search warrant and ( 2) there was insufficient evidence to support the jury' s verdicts finding him_

guilty of first degree trafficking in stolen property and money laundering because the State did
not prove he knew the ink sticks were stolen. Both of Gaines' s arguments fail, and we affirm.

                                                     FACTS

       In early 2008, Keith Cutri, the manager of the North American Brand Protection Group at
Xerox, began      investigating   reports    of employees   stealing Xerox    printer   ink.    As part of the

investigation, Cutri     compiled a   list   of " high volume sellers on   eBay that   are   selling       well   below
No. 43170 -0 -II

the normally         expected price."              5 Report   of   Proceedings ( RP)          at   200.   Gaines was identified as

one of      the   sellers on   Cutri'   s   list   of "targets."    5 RP   at   200.    Cutri monitored Gaines' s eBay sales

from 2008 through 2009 and found Gaines continued to consistently sell large amounts of ink at

well   below        retail   prices.        During his investigation, Cutri performed three covert buys from

Gaines.

            After performing the covert buys, Cutri contacted Detective Scott Shafner of the Tacoma

Police Department to file                   a   complaint.         Cutri requested that Shafner follow up with the

investigation and determine whether there was a reason to believe that Gaines. was selling stolen

ink.   Shafner confirmed Gaines' s identity and address, then went to speak to Gaines at his home.

Gaines voluntarily told Shafner that he was selling ink on eBay and showed Shafner three bins
full   of   ink.    Shafner asked Gaines where he got the ink from and Gaines told Shafner he thought

he   got "   it from    an online auction site            like Craigslist" but     could not         specifically   remember.       6 RP

at   341.    When Shafner pointed out that Craigslist was not an auction site, Gaines stated he got it

from an online seller called " angeleyes" but he could not give Shafner any additional information

about where he got the ink. 6 RP at 341.

             After the initial contact with Gaines, Detective Shafner obtained a search warrant for

Gaines'      s    house.     Shafner    seized      the ink that Gaines had            at   his house.     Shafner also executed a

search warrant for Gaines' s eBay and Paypal records, as well as search warrants for Gaines' s

financial         records.    Shafner       also obtained a second search warrant                    for Gaines'    s   house.   In total,

 Shafner         obtained and executed              13   search warrants related            to the Gaines investigation.          Gaines

was arrested on January 28, 2010.

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No. 43170 -0 -II

            The State charged Gaines with 8 counts of money laundering and 34 counts of first

degree trafficking in        stolen      property.     Gaines filed a motion to suppress evidence, arguing that

the first    search warrant was not supported                by   probable cause.      The trial court denied Gaines' s

motion.      Gaines   also   filed   a   Knapstadl motion which the trial court also denied.

            At trial, Cutri     and      Detective Shafner testified to the facts             above.   The State also

introduced       evidence    about       how Gaines      obtained      the   ink.   Gaines' s daughter, Alexis Gaines,

testified that Tom Long, a Xerox employee, was a close friend of Gaines and that Gaines got the

ink from       Long. Gaines' s son, Devon Gaines, also testified that Long was close friends with

Gaines and that Gaines got the ink from Long. Brenda Diettrich dated Gaines for approximately

a year and a half during the time he was selling ink on eBay. Diettrich testified that at one time

Gaines told her that the ink was stored in a barn in Portland and he went to pick it up when he

needed more or        he bought it        off line or
                                              -         through on -line auctions.       Gaines also told her that Long

got    the ink   by   dumpster       diving    at   Xerox.   Long was employed by Xerox and had access to the

type of ink Gaines           was     selling    on   eBay.    Kelly Timmins, a product operations manager for

Xerox, testified that ink would be allowed off the production campus in very limited situations

 and   in   small quantities.        Gaines testified that he got the ink from Long, and he admitted that he

 lied to Shafner when Shafner asked him where he got the ink.

            The State' s forensic accountant, William Omatis, reviewed the records from Gaines' s

 eBay    and   Paypal   accounts, and         his financial   records.       Omatis determined that from June 8, 2005

 to May 1, 2009, the total of Gaines' s eBay and non -eBay ink sales was approximately $320,000.

 1
     State v. Knapstad, 107 Wash. 2d 346, 729 P.2d 48 ( 1986).
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No. 43170 -0 -II

Omatis    also   identified $ 563,            193. 40 of ink sales to a group of people in Yorba Linda, California.

Omatis identified        significant cash withdrawals                     from Gaines'     s   Paypal   and   checking   accounts.   He

also   identified large            mortgage          payments,        home remodeling             costs,    and extensive financial

investments.      In addition, Omatis was able to identify significant payments to or purchases made

on behalf of Long.

          The jury found Gaines guilty of all charges. The jury also found that the major economic

offense     aggravating factor                applied   to    all    charges.       The trial court sentenced Gaines to an

exceptional       sentence         of    108    months       total    confinement.         The trial court also imposed legal

financial   obligations           including $ 1. 8 million dollars restitution to Xerox. Gaines timely appeals.

                                                                 ANALYSIS

SEARCH WARRANT

          A.           WRITTEN FINDINGS

          Gaines argues that the trial court' s ruling should be reversed because the trial court failed

to issue    written     findings         of   fact   and conclusions           of   law.   Gaines relies on State v. Head, 136
Wash. 2d 619, 622, 964 P.2d 1187 ( 1998),                          for the proposition that an oral ruling has no binding

 effect unless     the trial       court   has issued        a   corresponding        written order.       But Head was addressing

 the   requirements          of   CrR 6. 1( d)       which applies          to bench trials,      not   suppression      hearings.   136

 Wn.2d     at   622;   see also         CrR 6. 1.     Suppression hearings are governed by CrR 3. 6, and under the

 plain language of CrR 3. 6, written findings of fact and conclusions of law were not required

 because the trial court did not conduct an evidentiary hearing.

           CrR 3. 6 sets out the procedures the court is required to follow in a suppression hearing:

                        a)    Pleadings.             Motions         to   suppress     physical,     oral     or identification
           evidence other than motion pursuant to rule 3. 5, shall be in writing supported by
           an affidavit or document setting forth the facts the moving party anticipates will

                                                                           M
No. 43170 -0 -II

         be elicited at a hearing and a memorandum of authorities in support of the motion.
         Opposing counsel may be ordered to serve and file a memorandum of authorities
         in    opposition   to the   motion.       The court shall determine whether an evidentiary
         hearing   is    required   based   upon   the moving      papers.   If the court determines that no

         evidentiary hearing is required, the court shall enter a written order setting forth
         its reasons.
                     Hearing. If an evidentiary hearing is conducted, at its conclusion the
                    b)
         court shall enter written findings of fact and conclusions of law.

Here, the trial court issued a ruling stating that no evidentiary hearing was necessary because the

challenge to the search warrant was based on a challenge to the probable cause affidavit and,

therefore, the trial court could decide the issue on the pleadings, warrant, and probable cause

statement alone. The trial court' s ruling also set forth, in detail, the reasons for denying Gaines' s

motion to suppress evidence.

         Under the plain language of CrR 3. 6, written findings of fact and.conclusions of law are

required only if the trial court holds an evidentiary hearing; if the trial court determines that an

evidentiary hearing is unnecessary, the trial court does not have to issue written findings of fact
or conclusions of law so long as the reasons an evidentiary hearing is not necessary are set out in

writing.      Here, the trial court' s written order sets out the reasons an evidentiary hearing is not

 necessary, therefore the trial court complied with the. requirements of CrR 3. 6 and Gaines' s
 argument that the trial court' s decision must be reversed because of the trial court' s failure to

 issue written findings of fact and conclusions of law lacks merit.

          B.        PROBABLE CAUSE

          Gaines argues that the search warrant was not based on probable cause because the

 probable      cause     statement   was    based    on "   supposition      not   facts" which did not support the

 conclusion that " Gaines must be selling ink sticks that are stolen, and that Gaines must know

 they   are stolen."     Br. of Appellant at 14, 16. Gaines' s argument implies that an officer must have

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No. 43170 -0 -II

proof that a crime has been committed in order to .obtain a search warrant, but that is not the

proper standard for determining whether a warrant was properly supported by probable cause.

The affidavit of probable cause was sufficient to support the issuance of a search warrant, and

therefore the trial court did not err by denying Gaines' s motion to suppress.

          Generally, we review the issuance of a search warrant for an abuse of discretion. State v.

Maddox, 152 Wash. 2d 499, 509, 98 P.3d 1199 ( 2004).                                  The reviewing court gives great deference

to the   probable           cause   determination          of   the     issuing   judge     or magistrate.    State v. Young, 123
Wash. 2d 173, 195, 867 P.2d 593 ( 1994).                            However, at a suppression hearing, the trial court' s

assessment of probable               cause   is   a   legal     conclusion        that   we review   de   novo.   State v. Neth, 165
Wash. 2d 177, 182, 196 P.3d 658 ( 2008).

          Probable cause for a search warrant " requires a nexus between criminal activity and the

item to be          seized and      between that item           and   the   place   to be   searched."    Neth, 165 Wn.2d at 183.

There     must        be    an   adequate    showing            of "`   circumstances going beyond suspicion and mere

personal belief that criminal acts have taken place and that evidence thereof will be found in the

 premises          to be    searched. "'   State      v.   Seagull, 95 Wash. 2d 898, 907, 632 P.2d 44 ( 1981) ( quoting

 State   v.   Patterson, 83 Wash. 2d 49, 58, 515 P.2d 496 ( 1973)). "                            General, exploratory searches are

 unreasonable,             unauthorized, and       invalid.... [            G] eneralizations do not substitute for facts and

 investigation."            State v. Thein, 138 Wash. 2d 133, 149, 977 P.2d 582 ( 1999).

              The affidavit for probable cause was based on the following facts:

              1.           The corporate security manager of Xerox contacted Detective Shafner and
                           reported that he believed Gaines was selling stolen ink sticks because he
                           was selling large quantities of ink sticks on eBay for significantly below
                           retail price.

              2.           Two other sellers of Xerox ink sticks had been arrested for selling large
                           amounts of stolen ink on eBay; Gaines was the next largest seller of the

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No. 43170 -0 -II

                       same       type   of   Xerox ink    sticks on    eBay. One of the arrests was the subject
                       of a public press release.

          3.           Gaines voluntarily allowed Shafner into his home where Shafner observed
                       approximately 500 ink              sticks   in Gaines'    s   house.    Gaines listed his home
                       address as the address associated with his eBay account.
          4.           Gaines was reluctant to explain where he got the ink sticks he was selling
                       or how much he paid for them.

Detective Shafner stated that based on the facts contained in the affidavit, he believed that

Gaines was selling ink sticks that he knew were stolen and requested a search warrant to search

Gaines' s house for ink sticks, records related to the purchase and sale of the ink, computer

records related to the purchase or sale of ink, and financial records.

          Here, Detective Shafner                 referenced       facts beyond      mere     suspicion    and   belief. He noted

that other people who sold large quantities of Xerox ink on eBay for significantly less than the

retail price         had been selling          stolen   ink.     This pattern supports the belief that Gaines was also

selling   stolen       ink.    Shafner also noted that there had been a public press release stating that one

of the other large sellers of ink had been arrested for selling stolen ink, that Gaines could not say

how he         got   the   ink,   and    he   could not    say   whether or      how   much    he   paid   for the ink. These are

 specific      facts that     support     the belief that Gaines knew the ink               was stolen.      Finally, Shafner had

 seen large amounts of ink sticks in Gaines' s house and his home address was the address

 associated with           his eBay      account.       Therefore, Shafner had reason to believe that Gaines' s house

 would contain evidence that the ink was stolen and that there would be records establishing

 Gaines was selling the stolen ink.

            Shafner' s affidavit relied on specific facts that supported both his belief that Gaines was

 engaged in criminal activity, specifically trafficking in stolen property, and that evidence of that

 criminal                     would      be found in Gaines'        s   house.   Seagull, 95 Wn.2d          at   907.   Accordingly,
                activity

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No. 43170 -0 -II

probable cause supported the issuance of the search warrant and the trial court did not err by

denying Gaines' s motion to suppress evidence.

SUFFICIENCY OF THE EVIDENCE

         Gaines argues that there is not sufficient evidence to support the jury' s finding that he

knew the ink      sticks were stolen   property.      Therefore, he argues that the State failed to prove an

essential element of first degree trafficking in stolen property; if there is insufficient evidence to

support the jury' s verdict for first degree trafficking in stolen property. And he argues that there

is insufficient evidence to support the jury' s verdict for money laundering because an essential

element of money laundering is that the defendant knew that the financial transaction involved
proceeds from first degree trafficking in stolen property.

         Evidence is sufficient if, when viewed in the light most favorable to the jury' s verdict, it

permits any rational trier of fact to find the essential elements of the crime beyond a reasonable
doubt. State      v.   Salinas, 119 Wash. 2d 192, 201, 829 P.2d 1068 ( 1992). "            A claim of insufficiency

admits the truth of the State' s evidence and all inferences that reasonably can be drawn

therefrom."       Salinas, 119 Wn. 2d   at   201.    Circumstantial and direct evidence are equally reliable.

State   v.   Delmarter, 94 Wash. 2d 634, 638, 618 P.2d 99 ( 1980).                   Our role is not to reweigh the

 evidence or substitute our judgment for that of the jury. State v. Green, 94 Wash. 2d 216, 221, 616
P.2d 628 ( 1980).      Instead, because the jurors observed the witnesses testify first hand, we defer

 to the jury' s resolution of conflicting testimony, evaluation of witness credibility, and decisions
                                             the                  weight   to be    given   the   evidence.   State v.
 regarding the      persuasiveness    and           appropriate

 Walton, 64 Wash. App. 410, 415- 16, 824 P.2d 533, review denied, 119 Wash. 2d 1011 ( 1992).
             The essential elements of first degree trafficking in stolen property are ( 1) the defendant

 trafficked in stolen property, ( 2) the defendant acted with the knowledge that the property had
No. 43170 -0 -II

been   stolen, and (   3) the   acts occurred      in Washington. RCW 9A. 82. 050. The essential elements

of           laundering     are (   1)   the defendant        conducted   a   financial transaction, ( 2) the financial
     money

transaction    involved the     proceeds of       the   crime of     first degree trafficking in     stolen   property, ( 3)

the defendant knew the property was proceeds of first degree trafficking in stolen property, and

 4) the acts occurred in Washington. RCW 9A.83. 020.

         A person acts knowingly or with knowledge when

                     i) he or she is aware of a fact, facts, or circumstances or result described
         by a statute defining an offense; or
                  ii) he or she has information which would lead a reasonable person in the
         same situation to believe that facts exist which facts are described by a statute
         defining an offense.

RCW 9A. 08. 01 0( b).       And the jury was instructed that.

                   a] person knows or acts knowingly or with knowledge with respect to a
         fact, circumstance or result when he or she is aware of that fact, circumstance or
         result.     It is not necessary that the person know that the fact, circumstance or
         result is defined by law as being unlawful or an element of a crime.
                  If a person has information that would lead a reasonable person in the
         same situation to believe that a fact exists, the jury is permitted but not required to
         find that he or she acted with knowledge of that fact.
                     When acting knowingly is required to establish an element of a crime, the
         element is also established if a person acts intentionally.

 Clerk' s Papers at 2768.

         Possession of stolen property alone is not sufficient to prove the defendant knew the

 property was stolen. State v. Scoby, 117 Wash. 2d 55, 61 -62, 810 P.2d 1358, 815 P.2d 1362 ( 1991).
 However, possession of stolen property with slight corroborating evidence of knowledge can be

 sufficient.    Scoby,    117 Wn.2d        at   61 - 62. "[    T] he giving of a false explanation or one that is

 improbable     or   is difficult to verify in     addition    to the   possession   is   sufficient."   State v. Ladely, 82
Wash. 2d 172, 175 -76, 509 P.2d 658 ( 1973) (                  citing State v. Beck, 4 Wash. App. 306, 480 P.2d 803

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No. 43170 -0 -II

 1971); State      v.   Hatch, 4 Wn.         App.   691, 483 P.2d 864 ( 1971); State v. Douglas, 71 Wash. 2d 303,

428 P.2d 535 ( 1967)).

        Here, the State presented sufficient evidence to prove that the ink was stolen because

employees from Xerox testified that Long worked at the sole manufacturing plant for this type of

ink, Long worked in a division that had unregulated access to the ink, and that Long did not have
permission    to take any ink              off   the manufacturing            plant premises.     The State also presented a

                                                                that Gaines          obtained   the ink from   Long.   Although
significant amount of          testimony establishing

the State must prove more than that Gaines was in possession of stolen property, the State also

provided                         evidence of        knowledge.           Scoby,      117 Wn.2d   at   61 - 62. Detective Shafner
            corroborating

testified that Gaines lied to              him   about where        he   got   the   ink. Diettrich testified that Gaines told

her several different stories about where he got the ink including a barn in Portland, a train

wreck, and    his friend dumpster                diving.    By presenting evidence that Gaines lied about where he

got the ink and provided several improbable explanations about where he got the ink is sufficient

 corroborating evidence to support the jury' s finding that Gaines knew the ink was stolen.

Ladely,     82 Wn.2d        at    175 (     holding possession of a stolen item combined with a false or
 improbable     explanation           is   sufficient   evidence         to   prove "   guilty knowledge on the part of the

 appellant, that the [ item] in question was stolen property ").

           Gaines makes several arguments about why the State' s evidence was not sufficient to

 support the jury' s verdict. However, all of Gaines' s arguments must fail because they require us
 to second guess the jury' s decisions on credibility or substitute our judgment for that of the jury' s
 when   making      reasonable        inferences from the           evidence.        See Green, 94 Wn.2d at 221; Walton, 64

 Wn.   App.   at    415 -16.     Accordingly, there was sufficient evidence to support the jury' s verdicts
           Gaines guilty              trafficking in       stolen                    Because there was sufficient evidence to
 finding                         of                                 property.

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No. 43170 -0 -II

support the jury' s verdicts on the trafficking charges, there was sufficient evidence to support the

jury' s verdicts on the money laundering charges as well and we affirm.

        A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW

2. 06. 040, it is so ordered.

                                                   Q. INN-BRINTNALL, P. J.
We concur:

PE   O,        J.

MAXA, J.

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