U.S. v. Schultz

• Decision Date: 20 January 1994
• Docket Number: No. 93-3051,93-3051
• Citation: 14 F.3d 1093
• Parties: P UNITED STATES of America, Plaintiff-Appellee, v. James E. SCHULTZ, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1093

14 F.3d 1093

1994 Fed.App. 12P

UNITED STATES of America, Plaintiff-Appellee, v. James E. SCHULTZ, Defendant-Appellant.

No. 93-3051.

United States Court of Appeals,

Sixth Circuit.

Argued Oct. 14, 1993.

Decided Jan. 20, 1994.

William E. Hunt (argued and briefed), Office of the U.S. Attorney, Cincinnati, OH, for plaintiff-appellee.

Thomas W. Miller, W. Kelly Johnson (argued and briefed), Miller & Rosewald, Cincinnati, OH, for defendant-appellant.

Before: MERRITT, Chief Judge; JONES, Circuit Judge; and CELEBREZZE, Senior Circuit Judge.

MERRITT, Chief Judge.

James Schultz appeals his conviction and sentencing for possession of hashish with intent to distribute, in violation of 21 U.S.C. Sec. 841(a)(1) and (b)(1)(C). Schultz seeks to overturn his conviction on the ground that the two search warrants which produced the evidence used to convict him were issued without probable cause. Failing that, he seeks to have his sentence reduced on the grounds that (1) the trial court inappropriately assigned him a two-point enhancement for being a "leader" or "organizer," and (2) the trial court inappropriately increased his Criminal History Category from III to VI by using two out-of-time convictions to characterize him as a career offender.

We affirm Schultz's conviction but vacate his sentence and remand the case to the district court for resentencing.

I. The Search Warrant Issue

On January 6, 1992, Detective Rick Ideker of the Delhi Township (Ohio) Police Department arrested David Koerner for possession of controlled substances. Koerner told Ideker that his supplier was Andrew Hoernschmeyer and that the local source of the controlled substances had Jamaican connections. On January 17, 1992, Ideker arrested Hoernschmeyer, who told Ideker that he had purchased controlled substances from John Reid. The next day, Ideker arrested Reid, who told Ideker that he had purchased illegal drugs from James Leek and that it was his understanding that Leek's supplier owned an ice cream business around the corner from Leek's residence. On January 23, 1992, Ideker arrested Leek, who told Ideker that his local source was Schultz. This was Ideker's first evidence directly concerning Schultz. None of the above individuals had previously been used as police informants.

Ideker investigated Schultz, who did in fact own the ice cream business Reid had mentioned. Ideker found that Schultz had prior convictions for possession of marijuana products and that Florida police had observed Schultz in Fort Myers, Florida. Leek gave Ideker a phone number he had used to order illegal drugs, and Ideker learned that the number was listed to a woman in whose car Schultz had once been issued a traffic citation.

Ideker obtained, by court order, phone records of the telephone number Leek had provided. Four calls had been made from it to the Fort Myers area, and three calls had been made to it from Jamaica. The number was registered to Apartment 509 at 707 W. Martin Luther King Drive in Cincinnati, Ohio. Police found that automobiles registered to Schultz were parked in that complex, but they never observed Schultz on the premises or observed any illegal activities there, prior to obtaining the first search warrant. Leek also told Ideker that he had never been to Apt. 509 and had never purchased controlled substances from that address.

By means of a credit check, Ideker learned that Schultz maintained safe deposit boxes at the Ludlow Street branch of Star Bank in Cincinnati. Through a grand jury subpoena, Ideker identified the exact boxes and learned that Schultz had a loan at Star Bank. On March 19, 1992, on the basis of the foregoing, Ideker obtained from the Hamilton County Municipal Court a warrant to search the safe deposit boxes. Ideker, a trained narcotics officer, conducted the search that same day and found $41,840.00 in U.S. currency in the boxes. He also thought he detected the odor of hashish coming from the boxes, and on the money was a black, tarry substance that Ideker believed to be hashish oil. He did not field test the substance. (A later test confirmed that it was not a controlled substance.)

Later that same day, Ideker obtained a second warrant, this time to search Apt. 509. The affidavit which supported this second warrant included the information from the first affidavit, plus Ideker's discovery of the money and belief that it was smudged with hashish oil, plus his discovery that Apt. 509 was Schultz's residence. Still on the same day, he and other officers conducted the search and found and seized controlled substance, U.S. currency, a triple-beam scale, financial records, keys to safe deposit boxes, and other material.

Later that day Ideker arrested Schultz and another individual and charged them with Trafficking in Marijuana in violation of Ohio Revised Code 2925.03. On April 15, 1992, Schultz was indicted in the Southern District of Ohio for possession of hashish oil with intent to distribute, in violation of 21 U.S.C. Sec. 841(a)(1) and (b)(1)(C). Schultz was arrested by federal authorities on April 28, 1992, and the parallel state charges were dismissed.

On June 5, 1992, Schultz moved to suppress the fruits of the two searches on the ground that there had not been probable cause to support the warrants. The district court denied the motion on July 9, 1992, finding that (1) there was probable cause for both warrants, and (2) in any case, the "good faith" exception of U.S. v. Leon, 468 U.S. 897, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984), applied. On July 17, 1992, Schultz entered a conditional guilty plea to the indictment, reserving his right to appeal the court's denial of his Motion to Suppress.

On appeal, Schultz continues to maintain that there were insufficient indicia of probable cause to issue either warrant. He argues further that, if this court were to find that there were sufficient indicia of probable cause for the second warrant but not for the first, he would still be entitled to have his conviction vacated because the second warrant was obtained with the poisonous fruits of the first warrant.

There was more than good reason for Officer Ideker to believe that a crime had been committed. Leek identified Schultz by name and supplied the telephone number from which he had ordered illegal substances. Moreover, Officer Ideker did not simply rely on a chain of finger-pointing by unproven informants. He conducted an independent investigation which established plausible links between Schultz and Florida and Jamaica; between Schultz and an ice-cream business fitting Reid's description; between Schultz and the phone number supplied by Leek; and between that phone number and Florida and Jamaica. All of this research--particularly Schultz's connection to the phone number--tended to corroborate Leek's direct identification of Schultz and served as a plausible basis for believing that Schultz had distributed illegal drugs.

Even without the fruits of the first search (the money in the safe deposit boxes), there was also sufficient reason for Ideker to believe that he would find evidence of Schultz's involvement with illegal drugs at Apt. 509, the location of the second search. Ideker had discovered initially that automobiles registered to Schultz were parked in the apartment complex; eventually, he found that Schultz resided in Apt. 509. The number Leek said he had called to order drugs was registered to Schultz's female acquaintance at Schultz's own residence. This connection gave sufficient reason to believe that Schultz was distributing drugs from that residence, which in turn was sufficient reason to believe that evidence of that activity would be found there. True, the fruits of the first search were cited in the affidavit for the second warrant; but the second affidavit was sufficient to search the residence even without those fruits, and the second warrant was therefore valid.

Since the second search yielded all the controlled substance on the basis of which Schultz was convicted, his conviction stands regardless of whether the first warrant was valid. The first search, however--which produced money used in the sentencing phase of the case to increase the penalty--was also properly upheld by the district court.

Officer Ideker had not made any material connection between the bank and any criminal activity. Star Bank employees did not report any illegal activities related to either the loan or the safe deposit boxes, and Ideker had no other information connecting them to any illegal activity. In his affidavit for the first warrant, the only connection Ideker made was that, "Based on his training and experience, [he] believe[d] ... that it is not uncommon for the records, etc. of such [drug] distribution to be maintained in bank safe deposit boxes."

While an officer's "training and experience" may be considered in determining probable cause, see, e.g., Texas v. Brown, 460 U.S. 730, 742-43, 103 S.Ct. 1535, 1543, 75 L.Ed.2d 502 (1983); U.S. v. Martin, 920 F.2d 393, 399 (6th Cir.1990), it cannot substitute for the lack of evidentiary nexus in this case, prior to the search, between the safe deposit boxes and any criminal activity. Officer Ideker did not have anything more than a guess that contraband or evidence of a crime would be found in the boxes, and therefore the first warrant should not have been issued. To find otherwise would be to invite general warrants authorizing searches of any property owned, rented, or otherwise used by a criminal suspect--just the type of broad warrant the Fourth Amendment was designed to foreclose.

Nevertheless, under current Supreme Court doctrine, the district court was correct to deny the Motion to Suppress, because the first warrant comes under the so-called "good faith" exception in Leon, 468 U.S. at 918-21, 104 S.Ct. at 3418-19. There is no evidence that Officer Ideker gave a knowingly false affidavit or otherwise acted in bad faith. The warrant was issued by a...