17 F.3d 397 (9th Cir. 1993), 87-5164, U.S. v. Hays
| Citation | 17 F.3d 397 |
| Docket Number | 87-5164 and 87-5166 to 87-5168. |
| Date | 10 December 1993 |
| Parties | UNITED STATES of America Plaintiff-Appellee, v. Carol Ann HAYS, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Mark Christopher MENG, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Charles H. MENG, Jr., Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Marcel JORDAN, Defendant-Appell |
| Court | U.S. Court of Appeals — Ninth Circuit |
Page 397
Editorial Note:
This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted Nov. 2, 1993.
Appeal from the United States District Court for the Central District of California, No. CR-86-0335-JSL-3, No. CR-86-0335-JSL-1, No. CR-86-0335-JSL-4, No. CR-86-0335-JSP-2; J. Spencer Letts, District Judge, Presiding.
C.D.Cal. [Appeal after remand from, 895 F.2d 512]
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
Before: BROWNING, BEEZER, and TROTT, Circuit Judges
MEMORANDUM [*]
Mark Meng, Charles Meng, Marcel Jordan and Carol Ann Hays appeal their convictions and Mark Meng, Jordan and Hays appeal their sentences for mail fraud in violation of 18 U.S.C. § 1341, equity skimming in violation of 12 U.S.C. § 1709-2 and aiding and abetting in violation of 18 U.S.C. § 2. We affirm in part and vacate and remand in part.
I. MARK MENG'S CHARLES MENG'S AND JORDAN'S CLAIMS
A. Search of Suma's Offices
1. Particularity of Warrant
We reject Appellants' argument that the warrant was impermissibly broad. The affidavit and attached supporting documents contained a description of the rent-collection scheme proved at trial and included 1) testimony by several sellers about Mark Meng's and Jordan's misrepresentations, 2) documentation that Suma acquired over 300 properties from 1982-1985 and that many of these properties were lost to foreclosure and 3) information on rents collected from Suma-acquired properties as early as 1982, when Suma was first incorporated. There was no indication Suma was involved in any other business activities during its three-year existence. U.S. v. Falon, 959 F.2d 1143, 1147 (1st Cir.1992) (broad warrant proper where "affidavit showed repeated episodes of fraudulent conduct and no indications of legitimate business."). There was sufficient evidence to believe Suma's business was "permeated with fraud," and a warrant authorizing the seizure of virtually all its business records was justified. Williams v. Kunze, 806 F.2d 594, 598 (9th Cir.1986).
We also reject the argument that the warrant did not sufficiently limit the discretion of executing officers by specifically describing the types of documents to be seized. Warrants similar to the one here are routinely upheld as long as they are supported by probable cause. See, e.g., U.S. v. Hernandez-Escarsega, 886 F.2d 1560, 1567 (9th Cir.1989); U.S. v. Sawyer, 799 F.2d 1494, 1508 n. 15 (11th Cir.1986); U.S. v. Brien, 617 F.2d 299, 306 (1st Cir.1980).
2. Scope of Search
The rule recognized in U.S. v. Chen, 979 F.2d 714, 717 (9th Cir.1992), that even if a warrant is valid, all documents seized may be suppressed if the police "flagrantly disregarded" the warrant's terms, is not applicable here. The district court found most of the documents were covered by the warrant and the officers "were motivated by considerations of practicality rather than by a desire to engage in indiscriminate 'fishing.' " Chen, 979 F.2d at 717 (citations and internal quotations omitted. See also U.S. v. Tamura, 694 F.2d 591, 597 (9th Cir.1982). This finding is not clearly erroneous. Although the officers seized some items clearly outside the warrant's scope, Appellants do not suggest the police exceeded the "scope of the warrant in theplaces searched," Waller v. Georgia, 467 U.S. 39, 44 n. 3 (1984) (emphasis added); used the warrant as a pretext to search for evidence of unrelated crimes, U.S. v. Rettig, 589 F.2d 418, 423 (9th Cir.1978); or tried to use items outside the warrant's scope against the defendants at trial. U.S. v. Henson, 848 F.2d 1374, 1383 (6th Cir.1988). The district court properly suppressed only items not covered by the warrant.
B. Search of Charles Meng's Apartment
1. Probable Cause
We reject Charles Meng's argument that the warrant authorizing the search of his apartment was not supported by probable cause. The affidavit and supporting documents established Meng 1) was Suma's "Vice President of Finance" and was involved in the fraudulent scheme, 2) took Suma records home in the past and 3) shared with Mark Meng a safe deposit box containing a large amount of cash. They also established that immediately after the search of Suma's business offices, Mark Meng and an "unidentified man" were seen loading papers from the safe deposit box into a "small blue car" and that Charles Meng owned a small, blue Mercedes. Considering the "type of crime, the nature of the items sought, the suspect's opportunity for concealment and normal inferences" about where such evidence might be hidden under the circumstances, U.S. v. Jackson, 756 F.2d 703, 705 (9th Cir.1985), there was a fair probability that some of the documents called for by the warrant might be in Meng's apartment.
2. Omission of Material Information From the Affidavit
The district court did not err in failing to hold a Franks hearing. To obtain such a hearing, a defendant must make a substantial preliminary showing that (1) "the affiant intentionally or recklessly omitted facts required to prevent technically true statements in the affidavit from being misleading," U.S. v. Stanert, 762 F.2d 775, 781 (9th Cir.1985), and (2) "the affidavit purged of its falsities would not be sufficient to support a finding of probable cause." Id. at 780. Meng offered no evidence that the affiant omitted the additional statements in reckless disregard of whether the affidavit would be misleading. U.S. v. Crook, 936 F.2d 1012, 1014 (8th Cir.1991) ("Allegations of deliberate falsehood or reckless disregard must be accompanied by an offer of proof." (citing Franks v. Delaware, 438 U.S. 154, 171 (1978)). Although recklessness may be inferred "where the omitted information was 'clearly critical' to the probable cause determination," Rivera v. U.S., 928 F.2d 592, 604 (2d Cir.1991), the omitted statements did not justify such an inference since they did not cast doubt on Meng's propensity for storing Suma records at home. Compare Stanert, 762 F.2d at 780 (telling magistrate that suspect had been arrested for prior offense without mentioning he was never convicted indicated recklessness.).
3. Scope of Search
The search of the storage cabinets in the parking garage assigned to Meng's apartment did not exceed the scope of the warrant. A warrant to search a residence includes areas within the occupant's exclusive control. See, e.g., U.S. v. Becker, 929 F.2d 442, 446 (9th Cir.1991); U.S. v. Elliott, 893 F.2d 220, 225 (9th Cir.1990); U.S. v. Principe, 499 F.2d 1135, 1137 (1st Cir.1974). The warrant's specific description of the living area of the apartment did not "limit the scope of the search to [that area], but instead [made] the premises to be searched more readily identifiable." U.S. v. Griffin, 827 F.2d 1108, 1115 (7th Cir.1987). We are not persuaded the warrant should be read more narrowly because the space separating the living and garage areas was open to other people. 1
C. Testimony by Former Suma Employees
The testimony of the three former Suma employees as to why they resigned was admissible under Rule 401. Although the testimony was irrelevant to show intent to defraud, U.S. v. Law, 979 F.2d 977, 980 (4th Cir.1992); Feazell v. Tropicana Products, Inc. 819 F.2d 1036, 1041 (11th Cir.1987); U.S. v. Eckmann, 656 F.2d 308 (8th Cir.1981), it was relevant to show the independent element of a "scheme or artifice to defraud."
Nor should the testimony have been excluded under Rule 403. If the challenged testimony had been excluded, the employees could still have testified about their experiences at Suma, the fact that they had resigned and the circumstances under which they had done so; only their opinions about Suma would have been excluded. Since the government presented independent evidence, including Appellants' own statements, demonstrating intent to defraud, the testimony was not so prejudicial that the district court abused its discretion in admitting it. 2
D. Evidence of Failure to Return Rent Deposits
The district court did not violate Rule 404(b) by admitting evidence that Suma routinely failed to return rental deposits to its tenants. Actions that "[come] in the course of conduct with which [the defendant] was charged, and [are] probative of his consciousness that his conduct was illegal," U.S. v. Ramirez-Jiminez, 967 F.2d 1321, 1327 (9th Cir.1992), are exempt from Rule 404(b). This includes "criminal acts by a coconspirator, if committed as part of or in furtherance of the general conspiracy." U.S. v. Collins, 779 F.2d 1520, 1532 (11th Cir.1986). See also U.S. v. Lothian, 976 F.2d 1257, 1263 ("[I]f a conspiracy exists in fact [as when a scheme to defraud is shared by several], the rules of evidence are the same as where a conspiracy is charged." (citation and internal quotations omitted). The indictment charged a scheme to fraudulently obtain properties and drain them of as much economic value as possible before foreclosure. Retention of rental deposits was specifically alleged in the indictment as an act in furtherance of this scheme.
E. Jury Instructions on Intent to Defraud and Aiding and Abetting
The district court correctly instructed the jury on intent to defraud. Contrary to Appellants' assertion, under California law, giving a promissory note with no intent to honor it constitutes an "implied misrepresentation...
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