532 F.2d 1305 (9th Cir. 1976), 75-2207, United States v. Goldstein
| Citation | 532 F.2d 1305 |
| Party Name | UNITED STATES of America, Plaintiff-Appellee, v. Carol Ann GOLDSTEIN, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Toby ROBERTS, Defendant-Appellant. |
| Case Date | March 25, 1976 |
| Court | United States Courts of Appeals, U.S. Court of Appeals — Ninth Circuit |
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Edward M. Genson (argued), Chicago, Ill, George R. Milman (argued), Beverly Hills, Cal., for defendants-appellants.
Richard E. Plymale, Asst. U. S. Atty. (argued), Los Angeles, Cal., for plaintiff-appellee.
OPINION
Before CHAMBERS and KOELSCH, Circuit Judges, and JAMESON, [*] District Judge.
JAMESON, Senior District Judge:
In a non-jury trial appellants were convicted of conspiracy, in violation of 18 U.S.C. § 371, and fraud by wire in violation of 18 U.S.C. § 1343, through the use of an electronic device which enabled them to re-route long distance telephone calls and avoid being billed for the services. 1 We affirm.
BACKGROUND
Telephone Company Investigation
Walter P. Schmidt is a special agent for General Telephone Company with substantial training in electronics. Since the mid 1960s he has worked with the company's security department in the investigation of electronic toll fraud. A common method of perpetrating such fraud is through the use by subscribers of signal generators known as "blue boxes", which emit the multifrequency tones used to activate long distance lines. The caller uses the device by calling a toll free number, known also as an 800 or WATS (Wide Area Telephone Service) number, and then generating the required tones to place the long distance call. As far as the billing system is concerned, the call is coming from the WATS number. In March, 1974 Schmidt was going over the computer print-outs of 800 number calls in order to detect any number dialed an excessive number of times, a common indication of "blue box" usage. Schmidt observed that one number had been dialed 160 times and that another had been dialed 94 times. These calls resulted in over 30 hours of long distance conversation. Schmidt found that all of the calls had been placed from a rotary phone system listed in the
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name of Roberts' business associate and installed in an apartment used by appellant Roberts as a business office.
This indication of blue box usage led Schmidt to place a device called a peg-count meter on Roberts' telephone line. The meter is a cumulative counter which detects and counts the number of 2600 hertz (a universal measurement) tones transmitted over the line. The peg-count meter is useful in blue-box investigations because regular telephones are not equipped to generate 2600 hertz tones, while "blue boxes" duplicate the switching tones that are used between long distance offices. The signal transmitted by the blue box to the long distance trunk-lines is a preliminary step in making the fraudulent call.
The meter was installed from April 4 to May 6, 1974 and indicated that 105 2600 hertz tones had been sent over the line during the period. Relatively certain that a blue box was being used on Roberts' line, Schmidt took the final step in his investigation by attaching a fraud documentation device to the line. This device detects the fraudulent call, prints out the day and time of the call, the originating number and the number called, and automatically records the first 90 seconds of the call. The device was installed on May 6 and removed on May 17 during which time 16 fraudulent phone calls were recorded.
F.B.I. Investigation
Agent Schmidt turned over the results of his investigation to the Federal Bureau of Investigation through an "investigative summary", describing the investigative procedure, listing the number of fraudulent calls detected, and giving the name of the subscriber in whose name the suspected telephone was listed. The report was referred to the United States Attorney, who issued a grand jury subpoena requiring Schmidt to produce the records, tapes, and documents resulting from the investigation. Upon examining these records, an F.B.I. agent prepared an affidavit for a warrant to search the apartment from which the fraudulent calls were suspected to be originating. On July 25, 1974 a search warrant was issued by the United States magistrate to search the premises.
The warrant was executed on July 30. The apartment turned out to be the offices of a travel agency operated by appellant Roberts in which Goldstein worked as his secretary. When the agents entered the premises they told Goldstein and others inside not to move. Immediately thereafter Goldstein was observed placing an object in her desk drawer. The apartment was searched, and the "blue box", disguised as a calculator, was found on Goldstein's desk. An accessory to the blue box, identified as the object Goldstein was observed hiding, was found in the desk drawer.
Court Proceedings
On the basis of the material produced by the Telephone Company and the evidence obtained in the search of the travel agency, Roberts and Goldstein were each charged in the indictment with one count of conspiracy to violate 18 U.S.C. § 1343, Fraud by Wire, and three substantive violations of the statute. Defendants moved under Rule 41(f), Fed.R.Crim.P., to suppress all of the evidence resulting from the telephone company's investigation and from the F.B.I. search. Following a hearing the motion to suppress was denied.
Both defendants waived their right to a trial by jury. A large part of the evidence was stipulated by counsel and consisted of testimony presented to the Grand Jury, evidence considered in the hearing on the motion to suppress, and voice exemplars and voice identification testimony from one of the F.B.I. agents assigned to the case. The testimony of several out-of-state witnesses was presented by stipulation, including testimony by one person who recalled receiving one of the fraudulent calls charged in the indictment. The district court, "after reviewing all of the evidence and giving full consideration to the evidence and all its aspects" found Goldstein guilty of all four counts and Roberts guilty of conspiracy and two substantive counts.
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ISSUES ON APPEAL
The numerous issues raised by the respective appellants in separate briefs may be summarized as follows:
(1) whether the telephone company's investigation was constitutionally and statutorily proper under federal law;
(2) whether the search warrant was issued without probable cause;
(3) whether the evidence should have been excluded because it was obtained in violation of state law;
(4) whether the admission of evidence by stipulation of counsel was a violation of the Sixth Amendment;
(5) whether the court erred in failing to require spectographic voice identification of the recorded conversations; and
(6) whether the evidence was sufficient to support the convictions.
PROPRIETY OF THE INVESTIGATION UNDER FEDERAL LAW
(a) Legislative and Judicial History
Prior to 1968, 47 U.S.C. § 605 of the Federal Communications Act was the principal federal law pertaining to the interception and disclosure of wire communications. Under § 605 close restrictions were placed on wire tapping and publishing of information obtained through wire interceptions. Despite these restrictions, however, it was held in a number of cases that § 605 did not prohibit a telephone company from monitoring its own lines to protect the integrity of its regular billing. In particular, this court recognized in Bubis v. United States, 384 F.2d 643, 648 (9 Cir. 1967), that in the enactment of § 605 Congress did not intend "to deprive communications systems of their fundamental right to take reasonable measures to protect themselves and their properties against the illegal acts of a trespasser". See also United States v. Beckley, 259 F.Supp. 567, 571 (N.D.Ga.1965). As explained in Hanna v. United States, 404 F.2d 405, 406-408 (5 Cir. 1968), other sections of the Communications Act imposed an obligation on wire service carriers to prevent theft of their services which could not be met if § 605 were held to bar carriers from conducting fraud investigations using wire taps. Under § 605, therefore, it became well established that a telephone company could monitor and disclose telecommunications on its lines to the extent "reasonably necessary" to protect its property from fraud. 2
In 1968 Congress enacted the Omnibus Crime Control and Safe Streets Act, which in Title III established detailed rules on the interception of wire communications. Although Title III, 18 U.S.C. § 2510, et seq., prohibited most electronic eavesdropping by governmental officials without prior judicial approval, an exception was made for communication common carriers. 18 U.S.C. § 2511(2)(a) provides:
"(i) It shall not be unlawful under this chapter for an operator of a switchboard, or an officer, employee, or agent of any communication common carrier, whose facilities are used in the transmission of a wire communication, to intercept, disclose, or use that communication in the normal course of his employment while engaged in any activity which is a necessary incident to the rendition of his service or to the protection of the rights or property of the carrier of such communication: Provided, That said communication common carrier shall not utilize service observing or random monitoring except for mechanical or service quality control checks."
At the same time 47 U.S.C. § 605 was amended by excepting wire interception and disclosures "authorized by chapter 119, title 18, United States Code (18 U.S.C. §§ 2510-2520)" from the disclosure limitations in § 605. Discussing the effect of these statutory changes Senate Report
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1097, 2 U.S.Code Cong. and Admin.News, p. 2182 (1968), explained:
"Paragraph (2)(a) provides that it shall not be unlawful for an operator of a switchboard or employees of a...
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