U.S. v. Seidlitz, No. 76-2027

CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)
Writing for the CourtBefore WINTER, Circuit Judge, FIELD, Senior Circuit Judge, and HALL; FIELD
Citation589 F.2d 152
PartiesUNITED STATES of America, Appellee, v. Bertram E. SEIDLITZ, Appellant.
Docket NumberNo. 76-2027
Decision Date05 December 1978

Page 152

589 F.2d 152
UNITED STATES of America, Appellee,
v.
Bertram E. SEIDLITZ, Appellant.
No. 76-2027.
United States Court of Appeals,
Fourth Circuit.
Argued July 19, 1978.
Decided Dec. 5, 1978.

Page 153

David M. Dorsen, Washington, D. C. (Sachs, Greenebaum & Tayler, Washington, D. C., Beverly Sherman Nash, Washington, D. C., Sachs & Greenebaum, Chevy Chase, Md., on brief), for appellant.

Robert A. Rohrbaugh, Asst. U. S. Atty., Baltimore, Md. (Russell T. Baker, Jr., U. S. Atty., Baltimore, Md., on brief), for appellee.

Before WINTER, Circuit Judge, FIELD, Senior Circuit Judge, and HALL, Circuit Judge.

FIELD, Senior Circuit Judge:

Bertram Seidlitz appeals from his conviction on two counts of fraud by wire in violation of 18 U.S.C. § 1343. 1 As grounds for reversal, he urges that the trial court erred in its denial of a pretrial motion to suppress evidence, and that the prosecution failed to establish certain material elements of the crime. Although advanced in a somewhat novel factual context, we find appellant's contentions to be without merit.

On January 1, 1975, defendant Seidlitz assumed the position of Deputy Project Director for Optimum Systems, Inc. (OSI), a computer service company which was under contract to install, maintain, and operate a computer facility at Rockville, Maryland, for use by the Federal Energy Administration (FEA). Under the arrangement between OSI and FEA, persons working for FEA in various parts of the country could use key boards at communications terminals in their offices to send instructions over telephone circuits to the large computers in Rockville, and the computers' responses would be returned and reflected on a CRT (cathode ray tube) terminal which is a typewriter-like device with a keyboard and display screen similar to a television screen upon which the information is displayed as it is sent and received. 2 Mr. Seidlitz helped

Page 154

to prepare the software 3 which was installed at the Rockville facility as part of the project, and he was also responsible for the security of the central computer system. During his tenure, he had full access to the computers and to a software system known as "WYLBUR" which resided within them. 4 In June, 1975, Seidlitz resigned this job and returned to work at his own computer firm in Alexandria, Virginia.

William Coakley, a computer specialist employed by FEA, was assigned temporarily to the OSI facility. On December 30, 1975, in an attempt to locate a friend who might be using the OSI system, he had the computer display the initials of everyone who was then using the WYLBUR software. Among the initials displayed by the computer were those of his supervisor, who was standing nearby and who was not using the computer. Suspicious that an unauthorized "intruder" might be using these initials in order to gain access to the system, 5 Coakley asked Mr. Ewing, an OSI employee, if Ewing could determine what was happening. He also asked Mr. Wack, an OSI supervisor, if he (Wack) could determine whether the mysterious user was at a remote terminal or at one of the terminals within the OSI complex which were directly wired to the computer and did not employ telephone circuits. Ewing instructed the computer to display for him the data it was about to transmit to the possible intruder, and it proved to be a portion of the "source code" of the WYLBUR software system. 6 Using other data provided by the computer, Wack concluded that the connection was by telephone from outside the complex. At his request, the telephone company manually traced the call to the Alexandria office of the defendant. 7 Wack was told that the trace was successful, but the telephone company informed him that it could not divulge the results of the trace except in response to a legal subpoena.

The following day, OSI activated a special feature of the WYLBUR system known as the "Milten Spy Function," which automatically recorded, after they had been received by the machinery at Rockville, any requests made of the computer by the intruder. The "spy" also recorded, before they were sent out to the intruder over the telephone lines, the computer's responses to such requests. Mr. Wack again asked the telephone company to trace the line when it was suspected that the unauthorized person, employing the same initials, was using the computer to receive portions of the WYLBUR source code. This manual trace on December 31 led once more to the defendant's office in Virginia, although OSI was not so informed.

Advised by OSI of the events of December 30 and 31, the FBI on January 3, 1976, secured, but did not then execute, a warrant to search the defendant's Alexandria office. 8 At the FBI's suggestion, the telephone

Page 155

company conducted two additional manual traces when alerted to incoming calls by OSI, but in each instance the calls were terminated before the traces had progressed beyond the telephone company's office in Lanham, Maryland, which served 10,000 subscribers. The phone company then installed "originating accounting identification equipment" in the Lanham office, the function of which was to automatically and quickly ascertain, without intercepting the contents of any communication, the telephone number of any of the 10,000 area telephones from which any subsequent calls to the OSI computers originated. Two such calls were made on the morning of January 9, and the equipment attributed both of them to a phone at the defendant's Lanham residence. That afternoon, the FBI executed the warrant to search Seidlitz' Alexandria office, seizing, among other items, a copy of the user's guide to the OSI system and some 40 rolls of computer paper upon which were printed the WYLBUR source code. 9 A warrant was then issued to search the Seidlitz residence in Lanham, 10 where officers found a portable communications terminal which contained a teleprinter for receiving written messages from the computer, as well as a notebook containing information relating to access codes 11 previously assigned to authorized users of the OSI computers.

The indictment handed down on February 3, 1976, charged that the defendant had, on December 30 and 31, transmitted telephone calls in interstate commerce as part of a scheme to defraud OSI of property consisting of information from the computer system. 12 A motion to suppress the evidence seized from the office and the residence was considered at a hearing on April 30, 13 after which the district judge rendered an oral opinion rejecting the defendant's argument that the searches were invalidated by the use of illegal electronic surveillance to obtain the information contained in the affidavits supporting the warrants. Specifically, the district judge ruled that (1) as to the information obtained by use of the "spy", Section 605 of the Communications Act of 1934, 47 U.S.C. § 605, does not apply, and neither Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510, Et seq., nor the Fourth Amendment were violated, since the information was obtained with the consent of a party to the defendant's telephonic communications, and (2) with respect to the tracing of the telephone calls, neither Title III nor the Fourth Amendment are offended when, as in the "pen register" cases, the number of the telephone from which a call is placed is determined by a process which does not entail the interception of the contents of the communication. Over defense objection, much of the challenged evidence was admitted at trial, and the telephone traces, as well as the operation of the "Milten Spy", were described to the jury. In the face of this evidence, the defendant conceded that he had retrieved the information

Page 156

from the computers, but claimed to have acted only out of concern for the security of the OSI system. In negation of fraudulent intent, Seidlitz testified that he acquired the data with the sole intention of presenting the printouts to OSI officials to prove to them that the steps taken to prevent unauthorized use of the computers were inadequate. Additionally, it was his position at trial that the WYLBUR software was not a trade secret or other property interest of OSI sufficient to qualify as "property" within the meaning of the wire fraud statute. On appeal he renews the "illegal surveillance" claims and also argues that the evidence before the jury was insufficient to establish either his fraudulent intent or that WYLBUR constituted "property."

In considering the surveillance questions, we assume that if, as the defendant contends, either the "spy" activities or the traces were conducted illegally, then the evidence seized at both the office and the residence should have been suppressed, since the affidavits upon which the warrants were issued contained information attributable to the "spy" and the telephone traces which was essential to the finding of probable cause to search. 14 Furthermore, if the statutory or constitutional standards upon which the defendant relies were transgressed, then the jury should not have been informed of the deployment of the "spy" and the traces of the telephone calls. 15

It can safely be said, however, that even if, as the defendant argues, the Milten Spy or the telephone traces resulted in the "interception" of his communications with the computers, these communications were wire or telephone communications since in each instance the defendant was exchanging messages with the computers over commercial telephone circuits. 16 For this reason the district court correctly concluded that Section 605 of the Communications Act of 1934, 47 U.S.C. § 605, could have no bearing whatever upon the legality of these activities. While at one time Section 605 did contain standards for determining the legality of the interception of telephone conversations, the statute was amended by Section 803 of Pub.L. 90-351, 82 Stat. 223, in 1968, for the express purpose of excluding from its...

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28 practice notes
  • State v. Stevens, No. 9982
    • United States
    • Appellate Court of Connecticut
    • March 3, 1992
    ...fourth amendment is called into play. Coolidge v. New Hampshire, supra, 403 U.S. at 487, 91 S.Ct. at 2049; see United States v. Seidlitz, 589 F.2d 152, 158-59 (4th Cir.1978), cert. denied, 441 U.S. 922, 99 S.Ct. 2030, 60 L.Ed.2d 396 Here, we believe that the fourth amendment clearly applies......
  • United States v. Upton, Crim. No. 80-00028-01-D.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of New Hampshire
    • November 24, 1980
    ...414 U.S. 1117, 94 S.Ct. 851, 38 L.Ed.2d 744 (1973); United States v. Bragan, 499 F.2d 1376 (4th Cir. 1974); United States v. Seidlitz, 589 F.2d 152 (4th Cir. 1978), cert. denied, 441 U.S. 922, 99 S.Ct. 2030, 60 L.Ed.2d 396 (1979); Cooper v. United States, 594 F.2d 12 (4th Cir. 1979); Ansley......
  • State v. Thompson, No. 16145
    • United States
    • Idaho Court of Appeals
    • November 2, 1987
    ...records the data being conveyed, does not "intercept" communications within the meaning of the statute. See United States v. Seidlitz, 589 F.2d 152 (4th Cir.1978), cert. denied, 441 U.S. 922, 99 S.Ct. 2030, 60 L.Ed.2d 396 (1979). See also United States v. Gregg, 629 F.Supp. 958 (W.D.Mo.1986......
  • Com. v. Harris
    • United States
    • Appeals Court of Massachusetts
    • January 16, 1981
    ...660. See also Coolidge v. New Hampshire, 403 U.S. 443, 487-490, 91 S.Ct. 2022, 2048-50, 29 L.Ed.2d 564 (1971); United States v. Seidlitz, 589 F.2d 152, 158-159 (4th Cir. 1978), cert. denied, 441 U.S. 922, 99 S.Ct. 2030, 60 L.Ed.2d 396 (1979); Smith v. State, 258 Ind. 594, 597-598, 283 N.E.2......
  • Request a trial to view additional results
28 cases
  • State v. Stevens, No. 9982
    • United States
    • Appellate Court of Connecticut
    • March 3, 1992
    ...fourth amendment is called into play. Coolidge v. New Hampshire, supra, 403 U.S. at 487, 91 S.Ct. at 2049; see United States v. Seidlitz, 589 F.2d 152, 158-59 (4th Cir.1978), cert. denied, 441 U.S. 922, 99 S.Ct. 2030, 60 L.Ed.2d 396 Here, we believe that the fourth amendment clearly applies......
  • United States v. Upton, Crim. No. 80-00028-01-D.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of New Hampshire
    • November 24, 1980
    ...414 U.S. 1117, 94 S.Ct. 851, 38 L.Ed.2d 744 (1973); United States v. Bragan, 499 F.2d 1376 (4th Cir. 1974); United States v. Seidlitz, 589 F.2d 152 (4th Cir. 1978), cert. denied, 441 U.S. 922, 99 S.Ct. 2030, 60 L.Ed.2d 396 (1979); Cooper v. United States, 594 F.2d 12 (4th Cir. 1979); Ansley......
  • State v. Thompson, No. 16145
    • United States
    • Idaho Court of Appeals
    • November 2, 1987
    ...records the data being conveyed, does not "intercept" communications within the meaning of the statute. See United States v. Seidlitz, 589 F.2d 152 (4th Cir.1978), cert. denied, 441 U.S. 922, 99 S.Ct. 2030, 60 L.Ed.2d 396 (1979). See also United States v. Gregg, 629 F.Supp. 958 (W.D.Mo.1986......
  • Com. v. Harris
    • United States
    • Appeals Court of Massachusetts
    • January 16, 1981
    ...660. See also Coolidge v. New Hampshire, 403 U.S. 443, 487-490, 91 S.Ct. 2022, 2048-50, 29 L.Ed.2d 564 (1971); United States v. Seidlitz, 589 F.2d 152, 158-159 (4th Cir. 1978), cert. denied, 441 U.S. 922, 99 S.Ct. 2030, 60 L.Ed.2d 396 (1979); Smith v. State, 258 Ind. 594, 597-598, 283 N.E.2......
  • Request a trial to view additional results

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