United States v. Lefkowitz

• Decision Date: 18 January 1979
• Docket Number: No. CR78-758-RMT & CR78-717-F.,CR78-758-RMT & CR78-717-F.
• Citation: 464 F. Supp. 227
• Court: U.S. District Court — Central District of California
• Parties: UNITED STATES of America, Plaintiff, v. Albert M. LEFKOWITZ, Edward W. Babic, Defendants. UNITED STATES of America, Plaintiff, v. Patricia SULLIVAN, Defendant.

464 F. Supp. 227

UNITED STATES of America, Plaintiff, v. Albert M. LEFKOWITZ, Edward W. Babic, Defendants.

UNITED STATES of America, Plaintiff, v. Patricia SULLIVAN, Defendant.

Nos. CR78-758-RMT & CR78-717-F.

United States District Court, C. D. California.

January 18, 1979.

U. S. Atty. Andrea Sheridan Ordin, and Asst. U. S. Atty. Steven Kramer, Los Angeles, Cal., for plaintiff.

Bruce I. Hochman, Beverly Hills, Cal., for defendant Babic.

Flax & Rosenfield, Los Angeles, Cal., for defendant Lefkowitz.

OPINION

TAKASUGI, District Judge.

Defendant Albert Lefkowitz (herein "Lefkowitz"), Patricia Sullivan (herein "Sullivan"), and Edward Babic (herein "Babic") have moved this court to suppress evidence seized by Internal Revenue Service (herein "IRS") agents pursuant to a search warrant. Adjudication of this motion rests upon the sufficiency of the affidavits of Martin Laffer (herein "Laffer"), Special Agent for the Criminal Investigation Division of the IRS, in establishing probable cause to search and seize the items sought to be suppressed. Accordingly, analysis of the present motion must begin by examining the affidavits¹ of Special Agent Laffer made to the Magistrate, who issued two search warrants based solely upon the affidavits.

The affidavits state that on or about June 12, 1975, affiant served an administrative summons, under Section 7602 of the Internal Revenue Code, for the production of corporate records of Savon Rent-a-Car, Inc.; Savings Rent-a-Car, Inc.; Best Rate Rent-a-Car, Inc.; N/U Rent-a-Car, Inc.; Value Rent-a-Car, Inc.; Rent-a-Bug, Inc.; Barnhart-Morrow Consolidated, Inc.; National United Industries, Inc.; and National United Leasing, Inc., on defendant Lefkowitz, president of said corporations, and Martin Fisher, controller of said corporations. On June 23, 1975, in response to the summons, Lefkowitz, Martin Fisher, and defendant Babic, as attorney for Lefkowitz and Martin Fisher, appeared at the IRS office without any of the summoned records. Babic informed the affiant that "many of the records summoned did not exist, had been destroyed or could not be located," but offered to provide any existing records at a later date.

On July 14, 1975, Babic and Martin Fisher met with affiant and IRS agent Lindholm at their corporate offices (9171 Wilshire Blvd., Suite 335, Beverly Hills), at which time some corporate records, including journals, minute books, and other documents, which had been requested in the June 12, 1975 summons, were provided.

On November 7 and 10, 1975, the affiant received information from a confidential informant, whose identity was revealed to this court through an in camera lodging as Helen Lefkowitz, defendant Lefkowitz's wife.² The informant was married to Lefkowitz on August 24, 1952, separated in July or August, 1975, and divorced in 1977. Sullivan, who was/is secretary of some of the corporations, began living with Lefkowitz in September, 1975, prior to the time affiant received information from Helen Lefkowitz.

Helen Lefkowitz worked at the corporate offices. The information provided by her related to: (1) the re-creation, omissions, and alterations of the 1973 cash receipts and cash disbursement journal, which were provided to the IRS on July 14, 1975, and (2) the relocation of summoned corporate records. Some of the corporate records were removed from the corporate offices prior to the July 14, 1975 meeting with the IRS and were returned to said offices after that meeting. During this meeting, said records were located in another office on the same floor as that of the corporate offices. Additionally, she provided information that other records were packed in boxes and moved from the corporate offices to Sullivan's apartment, and later (in September 1975) from Sullivan's apartment to Lefkowitz's residence.

In addition to Helen Lefkowitz's information, the affidavits included information provided by Marc Nestico (herein "Nestico"). Through an interview with Nestico, a past employee of National United Industries, Inc., affiant learned that Nestico had removed boxes containing corporate records from Sullivan's apartment to Lefkowitz's home pursuant to the directions of Lefkowitz. Nestico further informed the affiant that "Albert Lefkowitz told him that the boxes were important and, Nestico, was not to tell anyone about them."

Pursuant to the information stated above, along with other information provided in the affidavits, the Magistrate issued two search warrants: one to search the corporate offices and the other to search Lefkowitz's residence. At no time, however, was the identity of the informant revealed to the Magistrate.

Both warrants were then executed. Agent Laffer was with the team searching the corporate offices and agent Lindholm headed the team searching Lefkowitz's residence.

The search of the corporate offices revealed a number of records that were mentioned in the summons, but not the search warrant. Lefkowitz's permission was obtained to microfilm said records. A phone call was then received from the IRS team searching the Lefkowitz residence. The call relayed information to the effect that certain records were found at the residence including: (1) some that were covered in the summons but not in the warrant, and (2) others that were not covered by either the summons or warrant. When Lefkowitz was asked for permission to microfilm records described in (2), Lefkowitz first decided to call Babic.

Over the phone, Babic gave no objection to microfilming the records called for in the summons, but told IRS agent McManigal to prepare a list of records described in (2) and issue a summons for their production. Among the items not described in the warrant or summons found during the search was an allegedly authentic 1973 cash receipt and cash disbursement journal of N/U Rent-a-Car, Inc.

Lefkowitz was served with a summons for production of records at the close of the search of his residence. On December 1, 1975, Lefkowitz and Babic appeared at the IRS office and delivered the summoned records under protest.

I STANDING

Before reaching the legality of the search and the substantive issues raised, the threshold question of standing must first be addressed. The government contends that the defendants lack standing to suppress the evidence seized at the corporate offices.

Defendants Lefkowitz and Sullivan were corporate officers of all or most of the corporations whose offices, located in suite 335, 9171 Wilshire Blvd. (hereinafter "suite"), were searched. Both defendants were physically present at the suite during the search. Lefkowitz asserts, by virtue of his presence, that he has standing to challenge the search and seizure. This argument, however, is without merit. Mere presence, in and of itself, has been rejected by the Supreme Court, in Rakas v. Illinois, ___ U.S. ___, 99 S.Ct. 421, 58 L.Ed.2d 387 (1978), as a basis for standing. A defendant who seeks to exclude evidence must establish that the search or seizure violated his or her Fourth Amendment rights, which in turn "requires a determination of whether the disputed search and seizure has infringed an interest of defendant which the Fourth Amendment was designed to protect." Id. at ___, 99 S.Ct. at 429.

Examination of the facts, nevertheless, reveals a sufficient proprietary interest in the suite, which was the target of the search and where corporate records were seized, to impart standing upon both Lefkowitz and Sullivan. The suite was not only the corporate offices of the corporations whose records were seized of which Lefkowitz and Sullivan acted as officers, but was also where defendants Lefkowitz and Sullivan maintained their place of employment. "It has long been settled that one has standing to object to a search of his or her office, as well as of his or her home." Mancusi v. DeForte, 392 U.S. 364, 88 S.Ct. 2120, 20 L.Ed.2d 1154 (1968).

The government urges this court to limit standing to the search conducted of Lefkowitz's and Sullivan's own offices and desks at the corporate offices and not to any other areas in the suite. The suggested limitation must be rejected by this court. The fact that Lefkowitz and Sullivan did not reserve exclusive use of the entire suite does not, in and of itself, vitiate a finding of a reasonable expectation of privacy. See Mancusi v. DeForte, supra at 368-9, 88 S.Ct. 2120. The suite was apparently not open to the general public. Both Lefkowitz and Sullivan could reasonably expect that the "private" suite, where both were employed, would be permissibly entered only by the employees of the corporations and those individuals receiving permission from the appropriate individuals. This expectation of privacy would be infringed, as it was in the case at bar, by the examination and seizure of such corporate records by government officials.

While this court finds standing as to Lefkowitz and Sullivan, defendant Babic's assertion of standing is rejected. Babic, whose place of employment was not at the suite, has not made a sufficient showing of a possessory or proprietary interest in the area searched, or the property seized.

II FACIAL EXAMINATION OF AFFIDAVIT

Defendants challenge the validity of the subject search warrants, contending that they were not issued upon probable cause in violation of the Fourth Amendment to the Constitution. Based upon a facial examination of the warrants and the affidavits of agent Laffer, incorporated in the warrants, this court finds that there is probable cause to support the issuance of the warrants.

Determining the sufficiency of the search warrants requires a finding of probable cause to believe that a crime has been committed and that evidence of the crime will be found at the location to be searched.

Laffer's affidavits indicate, based upon the personal knowledge of informants, that some corporate records summoned by the IRS, which defendant Babic represented to affiant "did not exist, had been destroyed or...