US v. Warshawsky, 91-CR-20050-BC.

Decision Date29 January 1993
Docket NumberNo. 91-CR-20050-BC.,91-CR-20050-BC.
Citation818 F. Supp. 181
PartiesUNITED STATES of America, Plaintiff, v. Leroy WARSHAWSKY, Ira Warshawsky, and Ted Warshawsky, Defendants.
CourtU.S. District Court — Western District of Michigan

Michael J. Hluchaniuk, Asst. U.S. Atty., Bay City, MI, for plaintiff.

Michael D. Ettinger, Oak Lawn, IL, for Leroy Warshawsky.

Patrick A. Tuite, Chicago, IL, for Ted Warshawsky.

Dennis A. Berkson, Chicago, IL, for Ira Warshawsky.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS FOR JUDGMENT OF ACQUITTAL OR, IN THE ALTERNATIVE, FOR A NEW TRIAL

CLELAND, District Judge.

I. BACKGROUND

As part of an investigation focussing on the theft and distribution of stolen automobile parts, the government set up an undercover warehouse in Freeland, Michigan and held itself out as a wholesale automobile parts broker. Its day to day activities included initiating and receiving contacts with people in the automotive industry — including dealerships, brokers and warehouse distributors — for the purpose of buying and selling automobile parts. General Motors assisted in the investigation by providing the agents with training concerning legitimate as well as illegitimate aspects of the auto parts business, and by shipping large quantities of its products to the government's warehouse for use during the investigation. Furthermore, General Motors officials gave the agents permission to use any stolen General Motors parts that it recovered as part of the continuing investigation. The investigation was comprehensive, running from November of 1988 through January, 1991.

On June 6, 1990, the government agents obtained possession of 5,100 stolen General Motors air filters from Murray Donald and stored them in its undercover warehouse until October 25, 1992, when they shipped them to M & A Automotive, defendants' place of business in Chicago. Similarly, on December 19, 1990, the government agents obtained possession of 145 stolen General Motors air conditioning compressors from Stephen LaFay and stored them in its the warehouse until December 27, 1990, when they also were shipped to defendants' place of business in Chicago. Several other quantities of non-stolen auto parts provided by General Motors to the government agents for use during its undercover investigation were also shipped to the defendants' place of business, but none of these parts form the basis of the substantive charges.

Defendant Ted Warshawsky was convicted on one count of conspiracy to transport stolen goods under 18 U.S.C. § 371. Defendants Leroy Warshawsky and Ira Warshawsky were convicted on two counts of transporting stolen goods under 18 U.S.C. § 2314 and one count of conspiracy to transport stolen goods under 18 U.S.C. § 371. Specifically, count two charged defendants Leroy Warshawsky and Ira Warshawsky with transporting in interstate commerce the stolen air filters that the government obtained from Murray Donald while count three charged them with transporting the stolen air conditioning compressors that it obtained from Stephen LaFay (Indictment 3-4).

II. PROCEDURAL POSTURE

All three defendants moved for a Judgment of Acquittal (Fed.R.Crim.P. 29) or, in the Alternative, for a New Trial (Fed. R.Crim.P. 33). Defendants Leroy and Ira Warshawsky argue, inter alia, that all of the property charged in the substantive counts had been recovered by the F.B.I. and thus it can no longer be considered "stolen" under United States v. Monasterski, 567 F.2d 677 (6th Cir.1977). That court reiterated the common law rule that an individual cannot be convicted of receiving stolen goods when actual physical possession of such goods has been recovered by the owner's agent before delivery to the intended receiver. Id. at 684; see also Leroy Warshawsky's Motion for Judgment of Acquittal or, in the Alternative, for a New Trial at 4; Ira Warshawsky's Motion for Judgment of Acquittal or, in the Alternative, for a New Trial at 4. In its Response the government maintains that, despite having obtained exclusive possession, custody and control of the goods, its agents never intended to return them to the rightful owner, General Motors. Government's Response at 1. Rather, the intent was merely to use the property, with the owner's permission, to aid in the undercover investigation. It is the government's position that because its agents did not intend to recover the property for the owner, but instead intended merely to use it as part of an investigation, the property did not lose its stolen character. Id. at 3. After a thorough review of this issue1 this Court holds that under Monasterski (and the common law rule) one cannot be convicted of transporting stolen goods under 18 U.S.C. § 2314 when actual physical possession of the goods has been recovered by their owner or his agent (i.e. Any person with a right to possession or control over the goods) before delivery to the intended receiver. The Court further holds that this rule applies without regard to the intent of the government agents vis-a-vis the recovered property. Accordingly, defendants' Leroy Warshawsky's and Ira Warshawsky's Motions for Judgment of Acquittal on Counts 2 and 3 are GRANTED and the verdicts on those counts are hereby set aside under Fed. R.Crim.P. 29(c). All three of the defendants' Motions for Judgment of Acquittal or, in the Alternative, for a New Trial on the remaining conspiracy conviction (Count 1) are DENIED.

III. STOLEN GOODS

In United States v. Monasterski, 567 F.2d 677 (6th Cir.1977), three youths agreed to steal tires from a railroad boxcar. During the heist, they were arrested by the local police who then called the F.B.I. The police and the F.B.I. agents persuaded the youths to press on with the delivery of the tires so that the "fence" might be apprehended. The police then placed identifying markings on some of the tires and loaded them into a van that they supplied. The remaining tires were loaded into a car owned by one of the youths. The van was driven to a park by the local police, accompanied by the others in a car owned by one of the youths. The thieves delivered the tires to an intermediary, James Logan, who delivered them to the eventual defendant, Monasterski. A search warrant executed at Monasterski's residence produced the tires. He was ultimately charged and convicted of possessing "stolen goods" under 18 U.S.C. § 659.

In reversing Monasterski's conviction, the court relied on the common law rule that one cannot be convicted of receiving stolen goods if, before the stolen goods reached the intended receiver, they have been recovered by their owner or his agent. Monasterski, 567 F.2d at 679 (citing Regina v. Schmidt, L.R. 1 Cr.Cas.Res. 15 (1866) and Regina v. Dolan, 29 Eng.Law & Eq. 533 (1855)). The court held that:

In summary, we hold that, in accord with the common law rule, one cannot be convicted of receiving stolen goods when actual physical possession of the stolen goods has been recovered by their owner or his agent before delivery to the intended receiver. We further hold, also in accord with the common law rule, that the term "agent" means any person with a right to possession or control over the goods....

Monasterski, 567 F.2d at 684 (emphasis added). In a footnote the court noted that the term agent "will generally work to include all types of police officers...." Id. at n. 16.

The Monasterski court, in determining that at some point in time stolen goods that come into the possession and control of the police lose their status as stolen, further determined that:

... The best and only workable rule is the common law rule — viz, the goods lost their stolen character immediately upon being recovered by the owner or his agent. Trying to choose some later point in time to support the conviction in this case would necessitate a strained reading of the words involved and would yield unnecessary uncertainty

Monasterski, 567 F.2d at 681 (footnote omitted).

The government argues that the facts in the instant case can be distinguished from Monasterski because its agents did not intend to recover the property for the owner, but instead intended to use it as part of its investigation. Government's Response at 3. Indeed the true owner of the property, General Motors, gave permission to the F.B.I. agents to use, without having to return, any property recovered to facilitate the investigation. Government's Memorandum on Motion for a New Trial pp. 1-3. In support of its argument the government proffers three cases: United States v. Johnson, 767 F.2d 1259 (8th Cir.1985); United States v. Dove, 629 F.2d 325 (4th Cir.1980); and United States v. Muzii, 676 F.2d 919 (2nd Cir.1982).

The government's argument must fail for two reasons. Firstly, it is impossible to distinguish the facts in the instant case from Monasterski. With respect to the property involved in the instant case, the F.B.I. agents took possession, custody, and control of the stolen goods before they were sold to the defendants. The stolen air filters (Count 2) were purchased by the F.B.I. and taken into its custody on June 6, 1992, "several months before they were sold to the defendants" on October 25, 1992 (Government's Response at 4). Similarly, the stolen air conditioning compressors (Count 3) were in the exclusive possession and control of the F.B.I. for over one week before they were shipped to the defendants on December 27, 1992 (Tr. 98). Furthermore, the government obtained the owner's permission to use any recovered property in its investigation. Thus, when the government later obtained possession and control of the property, it did so acting as General Motors' "agent" as that term is defined by Monasterski and by other courts construing its common law definition. Monasterski, 567 F.2d at 684; United States v. Cawley, 255 F.2d 338 (3rd Cir.1958) (mail had lost its stolen character because, before its delivery to the defendant, postal inspectors with right to possess were deemed "agent...

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