U.S. v. Gregg

• Decision Date: 30 October 1987
• Docket Number: Nos. 86-1572,s. 86-1572
• Citation: 829 F.2d 1430
• Parties: 23 Fed. R. Evid. Serv. 1170 UNITED STATES of America, Appellee, v. Werner Ernst GREGG and Roswitha Gregg, Appellants. /1787WM, 87-1622WM.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1430

829 F.2d 1430

23 Fed. R. Evid. Serv. 1170

UNITED STATES of America, Appellee, v. Werner Ernst GREGG and Roswitha Gregg, Appellants.

Nos. 86-1572/1787WM, 87-1622WM.

United States Court of Appeals Eighth Circuit.

Submitted June 8, 1987.

Decided Sept. 22, 1987.

Rehearing Denied Oct. 30, 1987.

John R. Osgood, Asst. U.S. Atty., Kansas City, Mo., for appellee.

James R. Hobbs and Thomas V. Bender of Linde, Thomson, Fairchild, Langworthy, Kohn & Van Dyke, P.C., Kansas City, Mo., for appellant, Werner Gregg.

James R. Wyrsch and Charles E. Atwell of Koenigsdorf, Kusnetzky & Wyrsch, Kansas City, Mo., for appellant, Roswitha L. Gregg.

Before WOLLMAN and MAGILL, Circuit Judges, and DUMBAULD, ^* Senior District Judge.

DUMBAULD, Senior District Judge.

Appellants, Werner Ernst Gregg and his wife Roswitha Gregg, operated an export business known as Gregg International, handling avionics devices. Both defendants appeal from denial of their motion to suppress evidence. ¹ Werner Gregg also alleges various trial errors. We affirm the judgments of conviction.

The curious feature of this case is that the customs agents investigating defendants' possible violation of export prohibitions first scrutinized trash collected from defendants' residence and place of business, and "found gold" in the form of discarded telex communications between defendants and customers. On the basis of these telexes the agents prepared affidavits which convinced Magistrate Calvin Hamilton that a search warrant should issue authorizing interception of current telex communications of Gregg International. ² Details of the investigation are described in the opinion of the District Court ³ denying the motion to suppress. U.S. v. Gregg, 629 F.Supp. 958, 959-61 (W.D.Mo.W.D.1986). As a result of the telex materials, together with subsequent searches of the Greggs' residence and business, customs searches when Werner Gregg was personally attempting to carry merchandise out of the country, and statements taken from the defendants, an indictment containing thirteen counts ⁴ was returned against both defendants. Werner Gregg was convicted on Counts I-IV, and VII-IX, both inclusive and was sentenced, in the aggregate, to three years custody, followed by five years' probation, and a $200,000 fine. Roswitha Gregg was fined $4000 and three years confinement, suspended except for six months. A proviso ordered that husband and wife not be incarcerated simultaneously.

Defendants contend that all evidence seized from them should be suppressed, arguing that each subsequent seizure resulted as the poisonous fruit of prior illegal seizures, and hence that everything must be excluded.

However, as the District Court properly found, this "house that Jack built" argument collapses because the initial trash search was not illegal (629 F.Supp. at 960), citing U.S. v. Michaels, 726 F.2d 1307, 1312-13 (8th Cir.1984); and U.S. v. Biondich, 652 F.2d 743, 744-45 (8th Cir.1981). And in the case at bar as in Biondich, "Since we have concluded that the inspection of his garbage was lawful, the magistrate properly considered the items found in the trash when he made his determination that probable cause existed to justify the warrant", (652 F.2d at 745). Once the propriety of taking the results of the trash search into account is established, there is obviously substantial evidence justifying issuance of the warrant. We note also, as recognized in Michaels (726 F.2d at 1313-14), that under Illinois v. Gates, 462 U.S. 213, 236, 103 S.Ct. 2317, 2331, 76 L.Ed.2d 527 (1983), our scrutiny "of the sufficiency of an affidavit should not take the form of de novo review". A "substantial basis" for concluding that evidence of wrongdoing will be found is all that is required. As stated in Massachusetts v. Upton, 466 U.S. 727, 728, 104 S.Ct. 2085, 2085, 80 L.Ed.2d 721 (1984): "[T]he task of a reviewing court is not to conduct a de novo determination of probable cause, but only to determine whether there is substantial evidence in the record supporting the Magistrate's decision to issue the warrant".

More interesting, and novel, is the Greggs' contention that interception of telex communication is subject to the requirements of Title III of the Omnibus Crime Control and Safe Streets Act of June 18, 1968, 82 Stat. 212, 18 U.S.C. Sec. 2510 et seq. It is there enacted that

"intercept" means the aural acquisition of the contents of any wire or oral communication through the use of any electronic, mechanical, or other device. [18 U.S.C. Sec. 2510(4) ].

Evidence obtained by interception is to be excluded if disclosure of the information would be in violation of Title III. 18 U.S.C. Sec. 2515. Procedure for obtaining court approval for interception is provided in 18 U.S.C. Secs. 2516-19. Those procedures were not followed in the case at bar. ⁵

We agree with the District Court's conclusion (629 F.Supp. at 962) that the printouts of telex communications do not constitute "aural" acquisition of the contents of the communications. Telex communication, unlike telephonic communication, does not involve hearing sounds of the voice. It is more like a pen register or television monitoring. Sight rather than hearing is the means of apprehending the contents. ⁶ Title III did not apply. ⁷ There is no merit in any of appellants' arguments in favor of suppressing the evidence.

Turning to the trial errors challenged by appellant Werner Gregg, we find no error in the District Court's rulings. It will be helpful first to set forth the unlawful acts involved in the counts of which defendant Werner Gregg was convicted by the jury.

Counts I-IV charged violations of section 38 of the Foreign Military Sales Act of October 22, 1968, 82 Stat. 1320, as added by Section 212(a)(1) of the International Security Assistance and Arms Export Control Act of 1976, 90 Stat. 729, 744-45, section 201(a) of which changed the name of the Foreign Military Sales Act to the Arms Export Control Act [90 Stat. 734], 22 U.S.C. Sec. 2778, which provides in pertinent part:

(a)(1) In furtherance of world peace and the security and foreign policy of the United States, the President is authorized to control the import and the export of defense articles and defense services and to provide foreign policy guidance to persons of the United States involved in the export and import of such articles and services. The President is authorized to designate those items which shall be considered as defense articles and defense services for the purposes of this section and to promulgate regulations for the import and export of such articles and services. The items so designated shall constitute the United States Munitions List. ⁸

(b)(2) Except as otherwise specifically provided in regulations issued under subsection (a)(1) of this section, no defense articles or defense services designated by the President under subsection (a)(1) of this section may be exported or imported without a license for such export or import, issued in accordance with this chapter and regulations issued under this chapter....

(c) Any person who willfully violates any provision of this section or section 2779 of this title, or any rule or regulation issued under either section, or who willfully, in a registration or license application or required report, makes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, shall upon conviction be fined not more than $100,000 or imprisoned not more than two years, or both.

It will be noted that allegations of willfulness are contained in every count under which Werner Gregg was convicted. It is also noteworthy that the prosecutors did not utilize the false representation provisions of 22 U.S.C. Sec. 2778(c), but relied on 18 U.S.C. Secs. 1001 and 1002. ⁹

Count VII involved items for which a license from the Commerce Department was required, and alleged violation of section 11(b) of the Export Administration Act of 1979, 93 Stat. 503, 529, 50 U.S.C.App. Sec. 2410, which provides:

(a) Except as provided in subsection (b) of this section, whoever knowingly violates or conspires to or attempts to violate any provision of this Act [sections 2401 to 2420 of this Appendix] or any regulation, order, or license issued thereunder shall be fined not more than five times the value of the exports involved or $50,000, whichever is greater, or imprisoned not more than 5 years, or both.

(b)(1) Whoever willfully violates or conspires to or attempts to violate any provision of this Act [sections 2401 to 2420 of this Appendix] or any regulation, order, or license issued thereunder, with knowledge that the exports involved will be used for the benefit of, or that the destination or intended destination of the goods or technology involved is, any controlled country or any country to which exports are controlled for foreign policy purposes--

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(B) in the case of an individual, shall be fined not more than $250,000, or imprisoned not more than 10 years, or both.

It will be noted that conviction under this statute requires proof of (1) willfulness; (2) violation of the Act or a regulation issued thereunder; (3) knowledge that the exports involved will be used for the benefit of, or that the destination or intended destination of the goods or technology involved is, any controlled country or any country to which exports are controlled for foreign policy purposes.

The Court's charge clearly covered these requisites:

The crime of attempted unlawful export of an item on the Commodity Control List as charged in Count VII of the indictment has two essential elements which are:

One: That the defendant intended to commit the crime of unlawful export of an item on the Commodity Control List; and

Two: That on or about June 25, 1984, the defendant intentionally carried out some act which was a substantial step towards the commission...