U.S. v. Brown

Decision Date20 February 1992
Docket NumberNo. 90-50487,90-50487
Citation951 F.2d 999
PartiesUNITED STATES of America, Plaintiff-Appellant, v. Nancy BROWN and Michael Kaliterna, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Jeffrey C. Eglash, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellant.

Roger S. Hanson, Santa Ana, Cal., for defendant-appellee Brown. Leonard Levine, Los Angeles, Cal., for defendant-appellee Kaliterna.

Before BROWNING, ALARCON and T.G. NELSON, Circuit Judges.

ALARCON, Circuit Judge:

The United States Government appeals from the order granting motions filed by Nancy Brown and Michael Kaliterna to suppress evidence seized from their residences. The district court ruled (1) the warrants authorizing the searches were not supported by probable cause, and (2) the officers who obtained the warrants did not act in good faith.

The Government seeks reversal on the following grounds: (1) the magistrate had substantial basis to conclude that probable cause existed for the search of appellees' residences based on the affidavits offered in support of the search warrants, and (2) the officers who conducted the searches had a reasonable, good-faith belief in the validity of the warrants. We reverse because we conclude that the officers had a reasonable, good-faith belief in the validity of the search warrants.

I. FACTS

Defendants Brown and Kaliterna were law enforcement officers assigned to a narcotics and money laundering detection unit of the Los Angeles County Sheriff's Department (LACSD) known as Major Violators Crew 2 (Majors 2). The Majors 2 team was one of four units responsible for the investigation of major narcotics dealers and money launderers. Majors 2 consisted of nine officers.

On June 13, 1989, Special Agent Robert Hightower of the Federal Bureau of Investigation (FBI) received a report from Lieutenant Kenneth Chausee of the LACSD that members of the Majors teams were engaging in criminal activity. Lt. Chausee informed Agent Hightower that he had received an anonymous letter from a person who claimed to be the wife of a Majors team member in which the informant asserted that her husband, his teammates, and other Majors personnel were stealing money and other items seized from suspects. The informant also reported that Majors team members were living well beyond the means to which they were limited by their government salaries.

On the basis of this letter, the FBI, LACSD and the Internal Revenue Service (IRS) began an investigation of the activities of Majors team members. As a part of this investigation, Agent Hightower and other officers secretly examined the financial records of all the members of the Majors teams and collected information from various sources regarding thefts and acts of corruption committed by Majors members. The investigation also included an undercover sting operation, designed to catch Majors team members in the act of stealing from law enforcement officers impersonating drug traffickers and money launderers.

In preparation for the sting operation, two officers posing as money launderers, rented a penthouse room in the Valley Hilton Hotel in Sherman Oaks, California, on August 29, 1989. Information concerning the purported money launderers was transmitted to the Majors 2 team through official channels.

On the afternoon of August 30, 1989, the entire Majors 2 team conducted a surveillance of the activities of the guests in the Hilton penthouse. At approximately 2:00 p.m., one of the undercover officers, who was posing as a money launderer, left the penthouse room. Officers James Bauder and Daniel Garner, two of the members of Majors 2, entered the room without a search warrant. The officers found an athletic bag planted by the undercover officers that contained $30,000. Bauder and Garner removed the $30,000 from the bag and left the room.

Later that evening, at approximately 9:00 p.m., Majors 2 team members Robert Sobel, Bauder, Brown, Garner and Kaliterna detained one of the undercover officers outside the penthouse room. The Majors 2 team "returned" with the undercover officer to the penthouse room. Once inside the penthouse room, Sobel, Bauder, Brown and Garner gathered around a table. Kaliterna was a slight distance away from the table. On the table was the athletic bag, a sack containing $18,000 and a garment bag containing $450,000. Bauder seized the sack, displayed its contents to Sobel, Brown and Garner, and left the room.

Only $450,000 of the $498,000 that the undercover agents originally brought into the penthouse room was booked into the LACSD as evidence. The $30,000 seized by Bauder during his first entry into the penthouse room and the $18,000 subsequently removed by him were not booked into the LACSD as evidence.

Based on the evidence that $48,000 was retained by members of the Majors 2 team from the total amount seized from the undercover officers, which confirmed the various tips that the unit was corrupt and engaged in thievery, federal agents sought warrants to search the residences of each of the Majors 2 members who entered the penthouse room, including those of Brown and Kaliterna. The affidavits of Agent Hightower and Special Agent Dwayne Davidson of the IRS were presented in support of the request for warrants. Their affidavits contain three categories of facts and circumstances, (1) information that suggested wrongdoing by the Majors teams as a whole, but that did not name specific teams or current members of those teams, (2) information directly implicating certain members of Majors 2, but not Brown and Kaliterna, and (3) information derived from the retention of some of the money seized from the penthouse room by a member of the Majors 2 team, while Brown and Kaliterna were present.

A. Information on Majors Teams Generally

The affidavits contain reports from four informants who described illegal activities on the part of Majors units but did not implicate any officer who was a current member of the Narcotics Bureau. The first report described in the affidavits is contained in an anonymous letter from a person who identified herself as the wife of a Majors team member. The affidavits allege that she reported that her husband and his teammates stole money and other items during narcotics raids. The second report in the affidavits is from an unidentified LACSD officer who said that it is "standard operating procedure" for Majors team members to keep a portion of the monies seized during their investigations. The third report is from retired LACSD officer J.T. Jones. Mr. Jones told the investigators that unidentified Majors team members were investing large amounts of money in a Sizzler restaurant. The affidavits also contain information received from Sal Munoz, an LACSD officer. Officer Munoz reported that Majors personnel had been stealing raid money since 1985. Although Munoz named several specific officers, none of them were still working in the Narcotics Bureau at the time of the investigation.

B. Information on Deputies Amers, Cortez and Daub

The affidavits contain investigative reports regarding Majors 2 team members Terrell Amers, Eufrasio Cortez and Ronald Daub. Daub and Cortez had purchased expensive cars, boats, and real estate. These expenditures occurred shortly after a large amount of currency was seized by members of Majors 2. The affidavits also allege that Assistant United States Attorney Steven Madison was told by a defendant in another case that Amers and Cortez had reported only $135,000, instead of the $200,000 that was in the defendant's possession at the time of his arrest.

C. Information From the Sting Operation

The affidavits allege that Brown and Kaliterna were present in the penthouse room when Bauder displayed the contents of the sack containing $18,000. The affidavits also state that Kaliterna was standing slightly away from the table where the sack was located.

A magistrate issued warrants for the search of the residences of Brown, Kaliterna and the rest of the Majors 2 team members who were in the penthouse room. These searches resulted in the recovery of a large amount of cash. Part of the sting money used in the undercover operation at the Valley Hilton was found during the search of Brown's and Kaliterna's residences. Subsequently, Brown and Kaliterna were indicted on several charges of theft and conspiracy to commit theft. Kaliterna was also charged with filing a false tax return.

II. DISCUSSION
A. Existence of Probable Cause to Search the Residences of Brown and Kaliterna

The Government contends that the district court erred in determining that the magistrate did not have a substantial basis for finding probable cause to search the residences of Brown and Kaliterna. Instead, the Government argues that evidence that members of Majors 2 were stealing money from arrestees, and the presence of Brown and Kaliterna at the penthouse room when $18,000 was displayed by Bauder, demonstrates that probable cause existed for the issuance of the search warrants. In assessing the validity of a search warrant, this court must determine whether the magistrate had a "substantial basis" to conclude that probable cause existed to issue the warrant. Illinois v. Gates, 462 U.S. 213, 236, 103 S.Ct. 2317, 2331, 76 L.Ed.2d 527 (1983); United States v. Castillo, 866 F.2d 1071, 1076 (9th Cir.1988).

1. Probable Cause Based on Membership in Majors 2

The Government argues that the affidavits contained sufficient facts to provide probable cause for the belief that each of the Majors 2 team members who entered the penthouse was engaged in corrupt conduct. Because of the pervasiveness of this illegal conduct, the Government argues that the officers in the Majors 2 unit could not have continued their thievery without fear of discovery, unless each member of the unit participated. Accordingly, the...

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