U.S. v. Hargus

• Decision Date: 22 October 1997
• Docket Number: No. 97-6014,97-6014
• Citation: 128 F.3d 1358
• Parties: 97 CJ C.A.R. 2429 UNITED STATES of America, Plaintiff-Appellee, v. Charley HARGUS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1358

128 F.3d 1358

97 CJ C.A.R. 2429

UNITED STATES of America, Plaintiff-Appellee, v. Charley HARGUS, Defendant-Appellant.

No. 97-6014.

United States Court of Appeals Tenth Circuit.

Oct. 22, 1997.

Chris Eulberg, Eulberg & Brink, Oklahoma City, OK, for Defendant-Appellant.

Ross N. Lillard, III, Assistant United States Attorney (Patrick M. Ryan, United States Attorney, with him on the brief), Oklahoma City, OK, for Plaintiff-Appellee.

Before BALDOCK, KELLY, and BRISCOE, Circuit Judges.

PAUL KELLY, Jr., Circuit Judge.

Defendant-Appellant Charley Hargus appeals from his jury conviction on twenty-three counts of conspiracy, 18 U.S.C. § 371, mail fraud, 18 U.S.C. § 1341, and money laundering, 18 U.S.C. § 1956(a)(1)(B)(i). The district court sentenced Mr. Hargus to seventy-eight months in prison, a term of supervised release, and ordered him to pay restitution. On appeal Mr. Hargus argues that the trial court erred (1) in denying his motion to suppress evidence obtained from the search of his home; (2) in allowing testimony of a sting operation after the government lost material and exculpatory evidence; and (3) in computing his base sentence and assessing enhancements. Our jurisdiction arises under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a)(2), and we affirm.

Background

On the evening of August 26, 1991, an investigator from the Oklahoma District Attorney's office arrived at Mr. Hargus's oil reclaiming yard. Larry Johnson, a truck driver arrested earlier that day for embezzling oil, also arrived at the yard with a tanker truck containing stolen oil. Cooperating with local authorities in a sting, Mr. Johnson had called Mr. Hargus at home earlier in the day to arrange the sale of the stolen oil. The investigator was introduced to Mr. Hargus as the owner of a fictitious company selling the oil. The conversation between the three men was recorded via a body transmitter worn by Mr. Johnson. The investigator gave Mr. Hargus a false load ticket. A load ticket shows ownership of oil and under Oklahoma law must accompany every truck load of oil in transportation. Mr. Hargus gave the investigator an unsigned check.

Four days later the investigator obtained a warrant to search Mr. Hargus's home and business. The searches lasted approximately five hours and resulted in the seizure of many records, including two file cabinets and items not specified in the warrant.

Approximately four years later Mr. Hargus was arrested after a grand jury indicted him on the present charges of conspiracy, mail fraud, and money laundering. The evidence at trial indicated that Mr. Hargus organized a scheme to steal oil from a tank battery located at the Borque oil lease, belonging to Star Production, Inc. A pumper at the lease, Ronney Dice, diverted the oil and stored it for pickup in the Borque tank. Mr. Johnson picked up the oil, and, with load tickets stating it was "tank bottoms" from the Karla 2, a dry well Mr. Hargus owned, trucked the good oil either to the JADCO or SUN oil companies, or to Hargus Reclaimers, where it would be picked up later by JADCO or SUN. JADCO and SUN bought the oil at market price and were unaware it was stolen. Mr. Hargus had falsely reported to the Oklahoma Corporation Commission that the Karla 2 was a producing well.

The mail fraud counts were based on the checks Mr. Hargus received through the mails from SUN and JADCO in payment for the oil. The money laundering counts were predicated on Hargus's depositing those checks in his bank, and in some cases writing checks to co-conspirator Ronney Dice. The conspiracy count involved Mr. Hargus, Mr. Dice, and Mr. Johnson.

The sentencing court calculated the loss at $582,918.64, enhancing Mr. Hargus's sentence accordingly under U.S.S.G. § 2F1.1. The district court also enhanced Mr. Hargus's sentence for his aggravating role as a leader or organizer, U.S.S.G. § 3B1.1(a), for more than minimal planning, U.S.S.G. § 2F1.1(b)(2)(A), and for obstruction of justice, U.S.S.G. § 3C1.1.

Discussion

I. The Search

Mr. Hargus contends that the search of his home violated the Fourth Amendment on four grounds. First, he argues that the affidavit in support of the search warrant contained false and misleading statements. Second, he argues no probable cause existed to search his home for the items listed in the warrant. Third, he challenges the particularity of the warrant. Fourth, he argues that the officers executed the search in flagrant violation of the terms of the warrant. When reviewing a district court's denial of a motion to suppress, we accept its factual findings unless clearly erroneous and view the evidence in the light most favorable to the government. See United States v. Villa-Chaparro, 115 F.3d 797, 800-01 (10th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 326, 139 L.Ed. 2d 252 (1997). The credibility of witnesses at the suppression hearing and the weight to be given to the evidence, along with all reasonable inferences from it, are matters for the trial court. See id. at 801. The ultimate determination of reasonableness under the Fourth Amendment, however, is a question of law which we review de novo, considering the totality of the circumstances. See id.

A. The Warrant Application

Mr. Hargus argues that the affidavit on which the search warrant was issued contained false and misleading statements and omissions. He contends the affiant failed to tell the issuing magistrate that he had no reason to believe the conspiracy involved anyone other than Hargus, Johnson, and Dice; that he had no reason to believe Mr. Hargus was involved in any illegal activity dealing with gas, salt water and other fluid transfers, or that gas gauge books were located either at Mr. Hargus's business or home. In addition Mr. Hargus argues that the affiant had no reason to believe that certain specified items, such as certificates of deposit, were evidence of criminal activity; and he challenges the veracity of various details in the affidavit. We need not reach these issues because the affidavit contains adequate facts to establish probable cause without considering the allegedly false statements and material omissions. The affidavit recited the sting operation in which Mr. Hargus bought stolen oil at his reclaiming yard; it described the conspiracy between Hargus, Johnson, and Dice; and it described oil transfer reports and daily time sheets provided to the affiant by Mr. Johnson and his employer, indicating that the trafficking in stolen oil had been going on for at least three months. In our view these facts alone established probable cause for the warrant. See Franks v. Delaware, 438 U.S. 154, 155-56, 98 S.Ct. 2674, 2676-77, 57 L.Ed.2d 667 (1978) (even if a court finds that some information is false, suppression is required only if the false or misleading information is necessary to a finding of probable cause); United States v. Myers, 106 F.3d 936, 940 (10th Cir.) (declining to address alleged falsehoods because even without them the warrant established probable cause), cert. denied, --- U.S. ----, 117 S.Ct. 2446, 138 L.Ed.2d 205 (1997).

Mr. Hargus also contends that the affidavit did not provide probable cause to believe the specified items could be found in his house, and consequently the warrant to search his house violated the Fourth Amendment. A nexus between the objects to be seized and the place to be searched for them is established when the circumstances set out in the affidavit would warrant a person of reasonable caution to believe that the articles sought would be found at the place to be searched. See United States v. $149, 442.43 in U.S. Currency, 965 F.2d 868, 874 (10th Cir.1992); United States v. Rahn, 511 F.2d 290, 293 (10th Cir.1975). There need not be direct evidence or personal knowledge that the items sought are located at the place to be searched, and we have recognized that courts often rely on the opinion of police officers as to where contraband may be kept. See $149, 442.43 in U.S. Currency, 965 F.2d at 874. Here the investigator's affidavit indicated that Mr. Hargus was reached at his home when the stolen oil buy was arranged. This fact, together with the nature of the small business Mr. Hargus operated and the ongoing conspiracy described in the affidavit, made it reasonable for the issuing judge to conclude that the records described in the affidavit would be found at Mr. Hargus's house.

B. The Warrant

Mr. Hargus next argues that the search warrant did not describe with sufficient particularity the things to be seized, in violation of the Fourth Amendment. We review de novo whether the warrant was overbroad or insufficiently particular under the Fourth Amendment. See Davis v. Gracey, 111 F.3d 1472, 1478 (10th Cir.1997). "[A] warrant's description of things to be seized is sufficiently particular if it allows the searcher to reasonably ascertain and identify the things authorized to be seized." United States v. Finnigin, 113 F.3d 1182, 1187 (10th Cir.1997) (omitting quotations and citations). Further, the warrant must leave nothing to the officer's discretion as to what is to be seized, so that the officer is prevented from generally rummaging through a person's belongings. See Lawmaster v. Ward, 125 F.3d 1341, 1347-48 (10th Cir.1997).

The warrant described the following particular things to be seized:

1. oil and gas gauge books;

2. telephone records, bills, and invoices;

3. business records, receipts, invoices, accounts payable, and other records regarding oil and gas, salt water and other fluid transfers of the business known as Hargus Reclaimers;

4. check books and check stubs;

5. checking account records of all accounts of Charley Hargus and Hargus Reclaimers;

6. oil transfer reports;

7. certificates of deposit;

8. bank deposit statements of savings and other accounts;

9. income tax records;

10. any and all records relating to the business of Hargus Reclaimers and records pertaining to the purchase and sale of oil, oil...