U.S. v. Gurr

• Citation: 471 F.3d 144
• Decision Date: 08 December 2006
• Docket Number: No. 05-3122.,05-3122.
• Parties: UNITED STATES of America, Appellee v. Bernard GURR, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

471 F.3d 144

UNITED STATES of America, Appellee v. Bernard GURR, Appellant.

No. 05-3122.

United States Court of Appeals, District of Columbia Circuit.

Argued September 25, 2006.

Decided December 8, 2006.

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Appeal from the United States District Court for the District of Columbia (No. 99cr00394-01).

Joseph R. Conte, appointed by the court, argued the cause and filed the briefs for appellant.

John P. Gidez, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Kenneth L. Wainstein, U.S. Attorney at the time the brief was filed, and Roy W. McLeese III and Elizabeth Trosman, Assistant U.S. Attorneys.

Before: SENTELLE, ROGERS and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge.

Appellant Bernard Gurr appeals his conviction by a jury of defrauding the United States when he was the manager of a federal credit union in American Samoa. He contends that the district court erred in (1) denying his motion to suppress documents discovered during a border search upon his arrival at the Honolulu International Airport; (2) admitting, over his hearsay objection, a report by an examiner from the National Credit Union Administration ("NCUA"); and (3) denying his motion for judgment of acquittal of embezzlement (Count 18) and witness tampering (Count 20). Gurr pro se also contends that the district court lacked subject matter jurisdiction and that venue was improper. We affirm.

I.

From June 1986 until October 1993, Bernard Gurr was the manager of the American Samoa Government Employees Federal Credit Union, located in American Samoa and supervised and insured by the NCUA. In late 1992, Pete Steiger, a Problem Case Officer at the NCUA, was assigned to review problems that had been identified at the credit union, including inadequate liquidity, poor loan underwriting and a high loan-deficiency rating. Steiger's investigation and audit of the credit union, which was summarized in a report consisting of an Order of Conservatorship and Confidential Statement of Grounds for Conservatorship, led the NCUA to place the credit union in conservatorship in October 1993. In December 1999, Gurr was indicted with three other credit union employees for conspiring to defraud the United States. The indictment alleged that the goals of the conspiracy were to keep the NCUA from discovering the true financial status of the credit union and to maintain control of the credit union's assets for the personal benefit of the conspirators.

Flying from American Samoa on December 11, 1999, Gurr was arrested for credit union fraud upon landing in Hawaii at the Honolulu International Airport. Shortly after his arrival, two United States Customs officials seized and searched his luggage and discovered financial documents taken from the credit union. On May 30, 2000, Gurr was charged in a superseding indictment with conspiracy, in violation of 18 U.S.C. § 371 (Count 1); two counts of knowingly making and causing to be made false federal credit institution entries, and aiding and abetting, in violation of 18 U.S.C. §§ 1006, 2 (Counts 2 and 3); fourteen counts of willfully and knowingly defrauding lending, credit, and insurance institutions, and aiding and abetting, in violation of 18 U.S.C. §§ 657, 2 (Counts 4, 6-18); knowingly making and causing to be made false statements in a loan and credit application, and aiding and abetting, in violation of 18 U.S.C. §§ 1014, 2 (Count 5); obstruction of an examination of a financial institution, and aiding and abetting, in violation of 18 U.S.C. §§ 1517, 2 (Count 19); and tampering with a witness, and aiding and abetting, in violation of 18 U.S.C. §§ 1512, 2 (Count 20).

The district court denied Gurr's motion to suppress the financial documents seized during Customs officials' search of his luggage and his motion to reconsider. The district court also overruled Gurr's objections to the admission of the NCUA report prepared by Problem Case Officer Steiger as hearsay, ruling that the report was admissible as a business record under FED. R. EVID. 803(6). The district court granted the government's mid-trial motion to dismiss one count of fraud (Count 7). A jury found Gurr guilty of the remaining counts. On November 14, 2003, the district court sentenced Gurr to 70 months' imprisonment to be followed by three years' supervised release.

II.

Challenging the denial of his motion to suppress the financial documents that U.S. Customs officials seized during a search of his luggage upon his arrival in the United States, Gurr contends that even if Customs officials generally have the legal authority to perform routine border searches of passengers' luggage, in this case, the warrantless search was unreasonable. The U.S. Customs Service is authorized, pursuant to 19 U.S.C. § 1582,¹ to subject every international traveler to a routine warrantless inspection. See United States v. Galloway, 316 F.3d 624, 629 (6th Cir.2003); Bradley v. United States, 299 F.3d 197, 202 (3rd Cir.2002); United States v. Yang, 286 F.3d 940, 944 (7th Cir.2002); United States v. Fortna, 796 F.2d 724, 738 (5th Cir.1986); 19 C.F.R. § 162.6 (2006). Gurr does not deny this, but instead maintains that the FBI's involvement transformed the inspection from a permissible border action into "an FBI fishing expedition." Appellant's Br. at 11. As proof of the FBI's dominating influence, Gurr points to evidence that the FBI agents were on site and that Customs officials asked the FBI agents whether they should keep the financial documents and, upon seizing them, immediately handed the documents over to the FBI. As Gurr sees it, Customs had no suspicion that his luggage contained contraband or dutiable merchandise,² and hence the search was capricious and illegal. Our review of the denial of a motion to suppress is de novo. See Ornelas v. United States, 517 U.S. 690, 691, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996).

Congress enjoys a plenary "power to protect the Nation by stopping and examining persons entering this country [and, accordingly], the Fourth Amendment's balance of reasonableness is qualitatively different at the international border than in the interior." United States v. Montoya de Hernandez, 473 U.S. 531, 537, 105 S.Ct. 3304, 87 L.Ed.2d 381 (1985). "[N]ot only is the expectation of privacy less at the border than in the interior ..., the Fourth Amendment balance between the interests of the Government and the privacy right of the individual is also struck much more favorably to the Government at the border." Id. at 539-40, 105 S.Ct. 3304. "[S]earches made at the border, pursuant to the long-standing right of the sovereign to protect itself by stopping and examining persons and property crossing into this country, are reasonable simply by virtue of the fact that they occur at the border." United States v. Ramsey, 431 U.S. 606, 616, 97 S.Ct. 1972, 52 L.Ed.2d 617 (1977). The search of a passenger's luggage upon arriving in the United States after a nonstop flight from outside the country is considered "the functional equivalent of a border search." Almeida-Sanchez v. United States, 413 U.S. 266, 273, 93 S.Ct. 2535, 37 L.Ed.2d 596 (1973).

Courts have routinely rejected the notion that cooperation among federal agencies renders a border search unlawful. For example, then-Judge Anthony Kennedy, writing in United States v. Schoor, 597 F.2d 1303, 1306 (9th Cir.1979), confronted similar circumstances as here and rejected the argument that a search violated the Fourth Amendment because it was not limited to a search for contraband and was conducted at the behest of Drug Enforcement Administration ("DEA") agents who lacked probable cause to search. In Schoor, DEA agents alerted Customs officials that two passengers suspected of smuggling heroin in transistor radio shipments were en route to the United States on a flight from Thailand and requested that Customs search them, as they might be carrying narcotics. A subsequent search by Customs, in the presence of a DEA agent, revealed bills for radios and other items transported earlier from Thailand, as well as airway bills apparently relating to a shipment of heroin-filled radios seized in Thailand. The two men were arrested by DEA agents for conspiracy to smuggle heroin into the United States, and the DEA agents seized the documents incident to the arrest. Judge Kennedy explained the court's reasoning:

[T]here is no dispute that the search was conducted at an international border by customs officers legally entitled to search persons entering the United States. That the search was made at the request of the DEA officers does not detract from its legitimacy. Suspicion of customs officials is alone sufficient justification for a border search. The source of that suspicion is irrelevant in sustaining the search.

Moreover, the border search was legitimate in scope. We recognize that the primary purpose of a border search is to seize contraband property unlawfully imported or brought into the United States. However, where customs officers are authorized to search for material subject to duty or otherwise introduced illegally into the United States and they discover the instrumentalities or evidence of crimes, they may seize the same.

Id. (citations omitted). The decisions in the other circuits are to the same effect. See United States v. Boumelhem, 339 F.3d 414, 423 (6th Cir.2003); People v. Villacrusis, 992 F.2d 886, 887 (9th Cir.1993); United States v. Carter, 592 F.2d 402, 406 (7th Cir.1979); United States v. Bates, 526 F.2d 966, 967 (5th Cir.1976).

Gurr thus misstates the law in arguing that no case suggests that Customs officials may seize something that they do not know to be contraband. The distinction that Gurr would draw between contraband and documentary evidence of a crime is without legal basis. Cf. Warden, Md. Penitentiary v. Hayden, 387 U.S. 294, 301, 87 S.Ct. 1642, 18 L.Ed.2d 782 (1967...