U.S. v. Lefkowitz

• Decision Date: 31 January 1980
• Docket Number: No. 79-1328,79-1328
• Parties: 80-2 USTC P 9722 UNITED STATES of America, Plaintiff-Appellee, v. Albert M. LEFKOWITZ, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1313

618 F.2d 1313

80-2 USTC P 9722

UNITED STATES of America, Plaintiff-Appellee, v. Albert M. LEFKOWITZ, Defendant-Appellant.

No. 79-1328.

United States Court of Appeals Ninth Circuit.

Jan. 31, 1980.

Rehearing Denied March 31, 1980.

Larry S. Flax, Los Angeles, Cal., Bruce I. Hochman, Beverly Hills, Cal., argued, for defendant-appellant; Richard L. Rosenfield, Flax & Rosenfield, Los Angeles, Cal., on brief.

Steven Kramer, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before DUNIWAY, CHOY and SCHROEDER, Circuit Judges.

CHOY, Circuit Judge:

Lefkowitz appeals from his convictions for various tax fraud offenses. He challenges the validity of the search warrants issued to search his home and his corporate offices, focusing on the failure of the supporting affidavit to disclose the identity of the IRS's secret informant: his estranged wife Helen. This failure, he says, prevented the magistrate from exercising an informed, independent judgment in issuing the warrants and renders the affidavit insufficient to support a finding of probable cause. He further argues that the privilege against adverse spousal testimony or the confidential marital communications privilege prohibits the use of his wife as an informant. We affirm.

I. Statement of the Case

Lefkowitz was convicted after a bench trial on stipulated facts of violating 18 U.S.C. §§ 371 and 1001 and 26 U.S.C. §§ 7201, 7203 and 7206(1). He was sentenced to four years imprisonment and placed on three years probation to begin after his prison term.

Lefkowitz was the president of several related small corporations, most of them in the car rental/leasing business. On June 12, 1975, IRS agents went to the Lefkowitz corporate offices, told Lefkowitz that he and his corporations were under investigation for possible violations of the tax laws and served him with a summons calling for the 1971-74 books and records of the Lefkowitz corporations to be produced at the IRS offices on June 23, 1975.

Sometime during the next week Lefkowitz, his lawyer Babic and his accountant Fisher met in Lefkowitz's private office to discuss the impending IRS document inspection. ¹ In response to Lefkowitz's concern over large cash shortages evidenced by the 1973 books for N/U Rent-A-Car, one of the Lefkowitz entities, Fisher jokingly suggested burning the books. The less drastic solution of rewriting the books was chosen, and a secret, separate office was rented in which Fisher could perform his cosmetic accounting.

On June 23, the three conspirators met with agents at the IRS offices and Babic represented that the records called for in the summons did not exist or had been lost or destroyed. The date of July 14, 1975 was set for the production of whatever records could be found by then.

The next week Lefkowitz, with the help of his secretary Patricia Sullivan, Fisher, Mark Nestico (an employee) and Helen Lefkowitz, moved boxes of corporate records to Sullivan's apartment. On July 14, the IRS agents were given the then-completed spurious 1973 N/U Rent-A-Car records.

On November 7 and 10, 1975, IRS agents received information from a confidential source (later revealed to be Helen Lefkowitz). She told the agents about the falsified books and about the removal of the original records to Sullivan's apartment, and added that some of the original records had been moved back into the corporate offices after July 14, when the false N/U Rent-A-Car documents had been produced. She had seen these records in the corporate offices as late as mid-October.

On November 17, an IRS agent interviewed Nestico, who admitted that on Lefkowitz's instructions he had helped move some boxes of records from the Sullivan apartment to Lefkowitz's residence, where he had seen them as late as the end of October. Nestico also saw records in the corporate offices at the end of October.

On the basis of an affidavit by IRS agent Laffer reciting this and other information, search warrants were issued on November 17 for the Lefkowitz corporate offices and Lefkowitz's residence. The affidavit did not reveal that the secret informant was Helen Lefkowitz. Much of the evidence used to convict Lefkowitz was obtained through the execution of these warrants.

II. The Nondisclosure that the Secret Informant Was Helen Lefkowitz

A. The Facial Sufficiency of the Affidavit

The threshold issue ² is whether the affidavit provided the magistrate enough essential facts to enable her to exercise her independent judgment and perform her function as a "neutral and detached magistrate." See United States v. Beusch, 596 F.2d 871, 874 (9th Cir. 1979); Aguilar v. Texas, 378 U.S. 108, 111, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964), quoting Johnson v. United States, 333 U.S. 10, 14, 68 S.Ct. 367, 92 L.Ed. 436 (1948).

Aguilar announced a two-pronged test of the sufficiency of affidavits based on hearsay: first, the affidavit must provide information showing the reliability of the informant's information; second, the affidavit must provide information indicating the informant's credibility.

The affidavit here indicated that the informants had personally heard and observed that which they asserted. The first requirement, reliability, was therefore satisfied.

The affidavit here is replete with data indicating the informants' credibility: their information is firsthand, specific and highly detailed, thus it is "self-corroborating." United States v. Banks, 539 F.2d 14, 17 (9th Cir.), cert. denied, 429 U.S. 1024, 97 S.Ct. 644, 50 L.Ed.2d 626 (1976). Certain aspects of the information were independently corroborated by information already known to the IRS. See United States v. Prueitt, 540 F.2d 995, 1005 (9th Cir. 1976), cert. denied, 429 U.S. 1063, 97 S.Ct. 790, 50 L.Ed.2d 780 (1977). The information was given to the IRS in circumstances subjecting the informants to possible personal or penal risk. See United States v. Wood, 550 F.2d 435, 438 (9th Cir. 1976). In addition, Helen Lefkowitz's and Nestico's stories corroborated each other.

The affidavit is clearly sufficient on its face to support a finding of probable cause. The information from the two hearsay sources satisfied both prongs of the Aguilar test.

B. The Challenge to the Affidavit

Lefkowitz argues, however, that this court should look beyond the four corners of the affidavit and consider its sufficiency given Helen's identity and the accompanying credibility problems.

In Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), the Supreme Court held that in order to challenge an affidavit valid on its face, a defendant must show (1) the affidavit contains intentionally or recklessly false statements, and (2) the affidavit purged of its falsities would not be sufficient to support a finding of probable cause.

Lefkowitz satisfies neither of these requirements. ³ He asserts no intent or recklessness in the omission of Helen's identity (in fact, Laffer swore that he offered the identity to the magistrate, who declined it). Moreover, even if the affiant had revealed Helen's identity, the affidavit still would have sufficed to support a finding of probable cause to issue search warrants.

True, Helen Lefkowitz was the estranged wife of the appellant and as such may have had motivation to contact the IRS other than a sense of civic duty. After being married for 23 years, appellant and Helen Lefkowitz separated in August 1975. Appellant began living with Sullivan, his secretary, in September 1975. Helen Lefkowitz contacted the IRS in November 1975. The Lefkowitzes were eventually divorced in 1977. Inferences of spite, vengeance, and perhaps a desire to obtain advantageous property settlement information via an IRS investigation might spring from this scenario. However, the district court expressly found that the magistrate could have found Helen credible even considering her identity, and thus the affidavit would support a finding of probable cause even if the omission was cured. This is not, therefore, a case like United States v. Esparza, 546 F.2d 841 (9th Cir. 1976), where the misinformation was crucial to the finding of probable cause; rather, it is more like United States v. Taxe, 540 F.2d 961, 967 (9th Cir. 1976), cert. denied, 429 U.S. 1040, 97 S.Ct. 737, 50 L.Ed.2d 751 (1977), where omissions from an affidavit were deemed immaterial. The district court's determination here was not clearly erroneous.

The nondisclosure of Helen Lefkowitz's identity does not require us to look beyond the four corners of the facially valid affidavit under the Franks v. Delaware test. Even considering her identity, she could still be found a credible informant. ⁴

III. The Privilege Against Adverse Spousal Testimony and the Confidential Marital Communications Privilege

Although Lefkowitz confuses these privileges, they are distinct. ⁵ See United States v. Bolzer, 556 F.2d 948, 951 (9th Cir. 1977). The first can be invoked to prevent one spouse from testifying against the other. ⁶ E. g., Hawkins v. United States, 358 U.S. 74, 79 S.Ct. 136, 3 L.Ed.2d 125 (1958). The second can be invoked to prevent the disclosure of confidential communications arising out of the marital relationship. E. g., Blau v. United States, 340 U.S. 332, 71 S.Ct. 301, 95 L.Ed. 306 (1951).

The privilege against adverse spousal testimony is of no use to Lefkowitz here because his wife did not "testify" against him, but provided information used to support the issuance of a search warrant. See United States v. Mendoza, 574 F.2d 1373, 1379 (5th Cir.), cert. denied, 439 U.S. 988, 99 S.Ct. 584, 58 L.Ed.2d 661 (1978) (introduction of co-conspirator wife's taped statements did not violate the privilege against adverse spousal testimony, "because Mrs. Mendoza did not testify at trial"). Moreover, this privilege does not preclude the use of a wife's statements against a defendant husband at trial when they are...