United States v. Ianniello

• Citation: 621 F. Supp. 1455
• Decision Date: 12 November 1985
• Docket Number: S 85 Crim. 116.
• Parties: UNITED STATES of America v. Matthew IANNIELLO, a/k/a "Matty the Horse," Benjamin Cohen, a/k/a "Benny Cohen," Paul Gelb, Pauline Gelb, Bernard Kurtz, Chester Cohen, Morton Walker, George Vallario, Jr., Carl Moskowitz, Bradford Cohen, Sol Goldman, Alfred Ianniello, Oscar Ianello and Robert Ianniello, Defendants.
• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

621 F. Supp. 1455

UNITED STATES of America v. Matthew IANNIELLO, a/k/a "Matty the Horse," Benjamin Cohen, a/k/a "Benny Cohen," Paul Gelb, Pauline Gelb, Bernard Kurtz, Chester Cohen, Morton Walker, George Vallario, Jr., Carl Moskowitz, Bradford Cohen, Sol Goldman, Alfred Ianniello, Oscar Ianello and Robert Ianniello, Defendants.

S 85 Crim. 116.

United States District Court, S.D. New York.

October 29, 1985.

As Amended November 12, 1985.

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Paul Goldberger, New York City, for Morton Walker.

Gustave H. Newman, New York City, for Carl Moskowitz.

Robert Hill Schwartz, New York City, for Sol Goldman.

Victor Rocco, New York City, for Oscar Ianello; Judd Burstein, Anne Feigus, Roger Parloff, Mark Pomerantz, Mark Somers, of counsel.

Thomas P. Puccio, New York City, for George Vallario, Jr.

Ronald P. Fischetti, Fischetti, Feigus & Pomerantz, New York City, for Bradford Cohen.

John L. Pollok, Hoffman Pollok & Gasthalter, New York City, for Alfred Ianniello.

Gerald L. Shargel, New York City, for Robert Ianniello.

Rudolph W. Giuliani, U.S. Atty., New York City, for the U.S. of America; James B. Rather, Howard E. Heiss, Asst. U.S. Attys., of counsel.

Jay Goldberg, New York City, for Matthew Ianniello.

Al Brackley, Brooklyn, N.Y., for Paul Gelb.

Gerald B. Lefcourt, New York City, for Bernard Kurtz.

Frederick Hafetz, Goldman & Hafetz, New York City, for Benjamin Cohen.

Steven K. Frankel, New York City, for Pauline Gelb.

Eugene Kaplan, New York City, for Chester Cohen.

OPINION

EDWARD WEINFELD, District Judge.

Fourteen defendants have been indicted upon charges of violating and conspiring to violate the Racketeer Influenced and Corrupt Organizations ("RICO") statute¹ and committing the crimes of mail fraud, bankruptcy fraud, income tax evasion and conspiracy to commit bankruptcy fraud and tax fraud. In broad outline, the indictment charges that over a six-year period the defendants, in varying combinations, fraudulently operated restaurants and bars under concealed and hidden ownership through "front" companies; submitted false information in support of applications for liquor licenses from the New York State Liquor Authority in order to conceal their actual ownership interests; skimmed from the receipts of such restaurants and bars over two million dollars, which they failed to report to state and federal taxing authorities; made fraudulent statements and kept fraudulent accounts regarding the corporations which operated the bars and restaurants; made false statements and submitted false records in Chapter XI proceedings before the United States Bankruptcy Court for the Southern District of New York; and used the mails to defraud — in sum, the indictment alleges a RICO enterprise which included the fourteen defendants and six corporations that owned the bars and restaurants named in the indictment. In addition to these charges of criminal conduct, the indictment, pursuant to RICO's forfeiture provision,² seeks the forfeiture of property or interests acquired by any defendant in violation of RICO. Defendants bring numerous motions, including ones seeking suppression of evidence acquired through a program of electronic surveillance, challenging the legal sufficiency of the indictment, and addressing matters of pretrial and trial procedure.

I. The Legal Basis of the Surveillance Orders

The government investigation which culminated in this indictment included extensive electronic surveillance of the office premises of C & I Trading, a partnership registered in the names of defendants Matthew Ianniello and Benjamin Cohen. This surveillance, whose legality is challenged by the defendants, was ordered by the district court after an application by the government on August 26, 1982, and was conducted, pursuant to extensions of the original order, through December 27, 1982. Concealed audio and video surveillance equipment was installed at C & I Trading, which occupied a suite of offices on the 18th floor of a building in midtown Manhattan. According to an affidavit submitted by defendant Benjamin Cohen, at the time of the surveillance he and Matthew Ianniello shared a single office within the suite.³ Other offices within the suite were sublet to lawyers. One of these attorneys, Carl Moskowitz, is named as a co-defendant in this case; two others, not charged with any illegal activity, also subleased offices in the suite at the time the surveillance took place.⁴ Defendants challenge the surveillance on numerous grounds, including an alleged extension of the authorization issued by the Assistant Attorney General, the sufficiency of the evidence presented as showing probable cause for the issuance of the surveillance orders, and the legal sufficiency of the order authorizing the use of video surveillance.

A. Authorization by the Justice Department

Defendants move for the suppression of all evidence resulting from electronic surveillance on the ground of improper authorization. In particular, defendants point to the fact that the Assistant Attorney General's authorization permitted an application for interception of communications "from the offices of Matthew Ianniello and Benjamin Cohen, situated within the premises known as C & I Trading located at 135 West 50th Street, New York, New York," while the application submitted to United States District Judge Tenney requested authority to intercept conversations "of Matthew Ianniello and Benjamin Cohen, and others as yet unknown, occurring within the offices of C & I Trading, 135 West 50th Street."

This claimed variance between communications "from the offices of Matthew Ianniello and Benjamin Cohen" and conversations "of ... Ianniello and ... Cohen ... occurring within the offices of C & I Trading" is, in defendants' view, a fatal violation of the demands of Title III of the Omnibus Crime Control and Safe Streets Act of 1968,⁵ which governs the authority of the federal courts to order electronic surveillance. The authorization from the Assistant Attorney General, in defendants' reading, permitted electronic surveillance only in the offices of Cohen and Ianniello within the suite, and was thus more restrictive than the application submitted by the United States Attorney to the district court.

Defendants' hypertechnical reading of the Attorney-General's authorization is without foundation. The Assistant Attorney General had before him the proposed order to be submitted to the district court at the time the authorization letter was issued.⁶ Thereupon the Assistant Attorney General issued the authorization letter approving the application to the district court. Defendants do not claim that this application as submitted to the district court lacked the requisite specificity; rather, they argue that it impermissibly exceeded the authorization. Since the Assistant Attorney General had the proposed application before him when the authorization was issued, this objection is without substance.

In addition, United States District Judge Tenney, who issued the order authorizing the surveillance, did not adopt either the language of the Assistant Attorney General's authorization or that of the application by the Assistant United States Attorney. The order authorized the interception of communications "occurring within the premises known as the offices within C&I Trading, 135 West 50th Street, New York, New York of Matthew Ianniello and Benjamin Cohen and others as yet unknown."⁷ The district court independently evaluated the material before it, and issued an order specifying the permitted area of search.

Moreover, it is clear that variances in wording between or among the authorization letter from the Attorney General, the application to the district court, and the court's order directing surveillance, even assuming they are technical violations of the requirements of Title III, do not mandate suppression of the fruits of the surveillance. The Supreme Court has held that not all violations of the provisions of Title III require suppression. "To the contrary, suppression is required only for a `failure to satisfy any of those statutory requirements that directly and substantially implement the congressional intention to limit the use of intercept procedures to those situations clearly calling for the use of this extraordinary investigative device.'"⁸

The statutory provision relevant here requires that

each application for an order authorizing or approving the interception ... shall include the following information: ...

(b) a full and complete statement of the facts and circumstances relied upon by the applicant to justify his belief that an order should be issued, including ... (ii) a particular description of the nature and location of the facilities from which or the place where the communication is to be intercepted.⁹

Defendants argue that since this provision is intended to implement the Fourth Amendment requirement of particularity, the asserted violation here is within the Donovan standard.¹⁰ However, the application was specific. If there is any violation at all, it arises from the fact that the authorization by the Attorney General differed slightly from the application presented to and independently evaluated by the district court. This circumstance does not fall within the Donovan test. The Supreme Court has said that the congressional purpose underlying the requirement of authorization by the Attorney General was to "condition use of intercept procedures upon the judgment of a senior official in the Department of Justice ..."¹¹ This review by the appropriate senior official took place. Moreover, as noted above, the district court, in granting the application, made an independent judgment as to the proper wording of the order. In addition, the central purpose of ensuring that applications for wiretap authorization meet the Fourth Amendment's requirement of particularity was also served,...