U.S. v. McGuire

• Decision Date: 11 October 2002
• Docket Number: No. 99-30166.,No. 99-30165.,99-30165.,99-30166.
• Citation: 307 F.3d 1192
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. John P. McGUIRE, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Cherlyn Petersen, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

307 F.3d 1192

UNITED STATES of America, Plaintiff-Appellee, v. John P. McGUIRE, Defendant-Appellant.

United States of America, Plaintiff-Appellee, v. Cherlyn Petersen, Defendant-Appellant.

No. 99-30165.

No. 99-30166.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted August 6, 2002.

Filed October 11, 2002.

COPYRIGHT MATERIAL OMITTED

Edmund F. Sheehy, Jr., Cannon & Sheehy, Helena, MO, for defendant-appellant John Patrick McGuire.

Brian K. Kohn, Billings, MO, for defendant-appellant Cherlyn Petersen.

George Z. Toscas (argued), Terrorism and Violent Crime Section, Crim. Div., U.S. DOJ, William Mercer, U.S. Atty., Dist. of Montana, James E. Seykora, Asst. U.S. Atty, Dist. of Montana, Patty Merkamp Stemler, Robertson T. Park and David S. Kris, Department of Justice, Washington, DC, for the plaintiff-appellee.

Appeal from the United States District Court for the District of Montana; John C. Coughenour, District Judge, Presiding. D.C. No. CR-95-00117-JCC.

Before HAWKINS, GOULD, Circuit Judges, and WARE, District Judge.^*

OPINION

GOULD, Circuit Judge.

Defendants-Appellants John P. McGuire and Cherlyn Petersen were members of a group known as the Montana Freemen. They were convicted of bank fraud for participating in a scheme that involved printing bogus checks on a home computer and trying to exchange them for real currency. Petersen asserts that wiretapping conducted by the FBI during its investigation violated the federal wiretap statute because wiretapping was not "necessary" and because agents did not follow adequate minimization procedures during their interception of facsimile transmissions. McGuire asserts that the wiretap recordings were improperly sealed. He challenges the district court's decision to admit a witness's prior testimony when the witness was seven months pregnant and had a note from her doctor stating that the pregnancy prevented the witness from testifying. McGuire also asserts ineffective assistance of trial counsel. We affirm.

I

McGuire and Petersen were members of a group called the "Montana Freemen," which was hostile to the United States government. The Freemen attempted to establish their own government and financial system. To this end, they printed and distributed thousands of fraudulent financial instruments. The Freemen wrote more than 3300 checks that purported to be worth more than $15 billion but that drew on bank accounts with little or no cash. They distributed these checks widely and used them to overpay debts, cashing or depositing any refund received. The Freemen also held classes to teach others their fraudulent techniques. The classes were conducted at the "schoolhouse," a building located on rural Montana property owned by two of the Freemen and referred to as "Justus Township." The district court that convicted the Freemen described the group's activities as "an unusually large and complex criminal scheme" involving hundreds of persons and millions of dollars in losses.

McGuire participated in the fraud by using Freemen financial instruments to purchase various goods and services. Twenty-two fraudulent checks were made out to him, including several presented for payment of debts and used to buy merchandise from L.L. Bean. McGuire also was convicted of robbery for taking sound recording equipment from a three-person ABC news television crew that had come to Justus Township to interview the Freemen. Petersen participated in the fraud by attempting to deposit unfunded Freemen checks.

Although many of the Freemen's crimes were transactional in nature, the Federal Bureau of Investigation (FBI) had reason to believe the group was capable of violence. The group members were known to possess a large number of firearms, including hunting and assault weapons. Many of them had been seen wearing sidearms at Justus Township. One group member had threatened a local sheriff, telling him the sheriff would be hanged and thrown off a bridge. Other group members had threatened to kidnap, assault, and murder a United States district judge. They had sent the judge and other public officials a letter stating, "Our special Orders ... is for our special appointed Constables and our Lawful Posse to shoot to kill any public hireling or fourteenth ammendment[sic] citizen who is caught in any act whatsoever of taking Private property."

When the FBI began investigating the Freemen, we appointed a United States District Judge from the District of Oregon to supervise the FBI's wiretapping, pursuant to Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-2521. We appointed a judge from outside the District of Montana because all of the federal judges there recused themselves or were in ill health.¹

Based on FBI affidavits, the United States District Judge whom we had appointed approved the FBI's requests to conduct phone and fax wiretapping on Freemen properties, and he later approved placing a microphone on the premises to record conversations. Because the judge had his chambers in Oregon and was often outside the District of Montana, he issued several orders authorizing the FBI to postpone sealing the recordings as required by statute.

The FBI arrested two Freemen on March 25, 1996. The remaining Freemen, including McGuire and Petersen, engaged in an 81-day standoff with state and federal officials. The standoff ended without violence on June 13, 1996.

A first trial resulted in a hung jury. Before retrial, the doctor for one of the ABC news crew robbery victims wrote to the court to say that the victim would be unable to travel to Montana for the trial and would be unable to testify by video because of her pregnancy. Over McGuire's objection, the district court allowed the victim's videotaped testimony from the first trial to be admitted. A jury convicted McGuire of bank fraud, robbery, and four firearms violations, and he was sentenced to 180 months imprisonment. Petersen was convicted on two counts of bank fraud and one count of mail fraud. She was sentenced to time served and five years of supervised release.

II

Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-2520, permits law enforcement officials to engage in electronic surveillance if certain privacy safeguards are observed. The defendants allege that the FBI failed to heed three required safeguards: that wiretapping be "necessary," that the government "minimize" interception of communications not pertinent to the criminal investigation, and that intercepted communications be "sealed" immediately.

A. Necessity

An application for a court-authorized wiretap must include "a full and complete statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous." 18 U.S.C. § 2518(1)(c). It must recite facts indicating that "normal investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous." Id. § 2518(3)(c). This "necessity" requirement can be satisfied by a showing in the application that ordinary investigative procedures, employed in good faith, would likely be ineffective in the particular case. United States v. Brone, 792 F.2d 1504, 1506 (9th Cir.1986). We have said that the wiretap should not ordinarily be the initial step in the investigation,² but that law enforcement officials need not exhaust every conceivable alternative before obtaining a wiretap. Id.

The court authorizing a wiretap has considerable discretion, United States v. Martin, 599 F.2d 880, 886-87 (9th Cir.), cert. denied, 441 U.S. 962, 99 S.Ct. 2408, 60 L.Ed.2d 1067 (1979), so the standard of review is deferential. Brone, 792 F.2d at 1506. Although we review de novo whether the application for wiretapping was submitted in compliance with 18 U.S.C. § 2518(1)(c), we review the issuing court's decision that the wiretaps were necessary for an abuse of discretion. Brone, 792 F.2d at 1506.

In this case, the issuing judge did not abuse his discretion in finding that the affidavit in support of the initial wiretap met the statutory requirement of "necessity." The FBI's forty-page affidavit presented an elaborate and convincing explanation of the need to intercept telephone and fax communications. FBI agents could not have conducted on-site surveillance of the Freemen property because of its remote, rural location and group members' alertness to law enforcement activities, which created grave dangers. Agents also would have faced risks in executing any search warrant at the compound, because of the group's known violent propensity and undisputed possession of assault weapons. Federal agents would have had difficulty infiltrating the group with FBI informants, as a result of the Montana Freemen's close-knit nature. Interviewing witnesses would have helped little, as the only persons knowledgeable about the content of the defendants' transactions were the defendants themselves, and the defendants had limited incentive to cooperate. Although three witnesses were cooperating with the FBI when it applied for wiretapping authority, those witnesses were able to give agents only limited information, not including the names of all members of the conspiracy. Moreover, the most valuable evidence in this case seemed likely to be direct evidence of the illicit transactions that took place via telephone and fax. Finally, without the intelligence they gained by wiretapping, FBI agents would have faced great difficulties and dangers in making a plan to locate and safely to apprehend the many armed criminal suspects residing on a potentially dangerous parcel of unfamiliar real estate. It was necessary to wiretap to avoid jeopardizing the lives of the agents, the suspects, and the general public.

Just as important as these practical considerations, however, was the nature of the entity the government was...