United States v. McNally

• Decision Date: 15 January 1973
• Docket Number: No. 72-1297.,72-1297.
• Parties: UNITED STATES of America, Appellant, v. Joseph F. X. McNALLY a/k/a "Pope" McNally, Appellee.
• Court: U.S. Court of Appeals — Third Circuit

473 F.2d 934 (1973)

UNITED STATES of America, Appellant, v. Joseph F. X. McNALLY a/k/a "Pope" McNally, Appellee.

No. 72-1297.

United States Court of Appeals, Third Circuit.

Argued November 2, 1972.

Decided January 15, 1973.

William D. Hyatt, Tax Division, Dept. of Justice, Washington, D. C., for appellant.

Meyer A. Bushman, Philadelphia, Pa., for appellee.

Before FORMAN, ADAMS and MAX ROSENN, Circuit Judges.

OPINION OF THE COURT

ADAMS, Circuit Judge.

This appeal, in which the government challenges a suppression of evidence ordered by the district court, 338 F.Supp. 341, forces us to peer once again into the murky area surrounding the precepts governing averments necessary for a finding of probable cause, the basic component that permits a search warrant to issue.

The Fourth Amendment commands:

"The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."

A significant number of United States Supreme Court cases¹ require that, if a statement made by an unidentified informer is to be an element in the determination of probable cause, the importance of the statement and the weight to be accorded it in that determination must be analyzed carefully.² Thus the task facing the Court in this case is to ascertain whether the affidavit, produced to support the issuance of the search warrant, containing, inter alia, a statement by two unidentified informers, provided a sufficient basis for a finding of probable cause to search a property at 3039 Belgrade Street, Philadelphia.

I.

Defendant Joseph F. X. "Pope" McNally was indicted on seven counts of (a) failing to file income tax returns and (b) filing fraudulent tax returns for the years 1963-1966, on income totaling $833,055.17. The charges were based primarily on evidence gathered at a house located at 3039 Belgrade Street, occupied by McNally's mother. That evidence, implicating McNally in a wide-ranging wagering operation, was seized in a search conducted pursuant to a warrant. It was this warrant that was successfully attacked in the district court.³

The affidavit submitted to the magistrate in support of the warrant indicated an extensive system of numbers gambling and horse race wagering. The betting operation described, situated in the Richmond section of Philadelphia, Pennsylvania, was quite active, employing techniques typical of such an enterprise. This much of the affidavit is not in contention. Rather, the controversy turns on the allegations identifying McNally as the "banker" and establishing a nexus between his activity and 3039 Belgrade. The averments include statements that:

(1) "Confidential information was received from two confidential sources, proven reliable in the past, that a large scale wagering operation was being conducted in the Richmond section of Philadelphia, and the `banker' of this operation was Joseph `Pope' McNally."

(2) McNally had been arrested fifteen times and convicted six times for numbers violations.

(3) McNally was observed driving in a surreptitious manner on several occasions.

(4) McNally was seen carrying a brown paper bag on two occasions.

(5) Several conversations were overheard by special agents in which reference was made to the leader of this operation, referred to as "Pope."

(6) McNally appeared several times in various taverns in which special agents had placed bets.

(7) McNally visited the house searched, 3039 Belgrade, the home of his mother, ten times within a two-month period under questionable circumstances.

The district court, holding United States v. Harris, 403 U.S. 573, 91 S.Ct. 2075, 29 L.Ed.2d 723 (1971), not controlling, considered itself bound by what it referred to as "the somewhat unrealistic standards" required by Spinelli v. United States, 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637 (1969).

Focusing on the allegations linking McNally to the gambling operations and finding them inadequate to establish probable cause to suspect that McNally was the "banker" of the business, the district court did not go on to consider whether the affidavit provided any indication that 3039 Belgrade was the locus of criminal activity because it did not find that McNally, himself, was involved in criminal activity.

II.

Before commencing an inquiry into the sufficiency of the affidavit, it is important to note the presumptions with which reviewing courts are directed to approach such an examination:

"... that only the probability, and not a prima facie showing, of criminal activity is the standard of probable cause, Beck v. Ohio, 379 U.S. 89, 96, 85 S.Ct. 223, 13 L.Ed.2d 142 (1964); that affidavits of probable cause are tested by much less rigorous standards than those governing the admissibility of evidence at trial, McCray v. Illinois, 386 U.S. 300, 311, 87 S.Ct. 1056, 18 L.Ed.2d 62 (1967); that in judging probable cause issuing magistrates are not to be confined by niggardly limitations or by restrictions on the use of their common sense, United States v. Ventresca, 380 U.S. 102, 108, 85 S.Ct. 741, 13 L.Ed.2d 684 (1965); and that their determination of probable cause should be paid great deference by reviewing courts, Jones v. United States, 362 U.S. 257, 270-271 80 S. Ct. 725, 4 L.Ed.2d 697 (1960)."⁴

The first step in the analysis is to determine whether the finding of probable cause is based on the informant's tip alone, the tip plus evidence corroborating the tip, or the tip and other incriminating evidence. If the tip alone or the tip plus corroboration of the tip are the sole grounds for the finding by the magistrate of probable cause, then Spinelli and Aguilar v. Texas, 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964), demand that the tip or the tip plus corroboration meet certain standards. The trial judge found no evidence beyond the tip from which a link between McNally and the numbers operation could be forged. Having reached this conclusion, he then measured the tip against the Aguilar and Spinelli standards and held that no basis for probable cause existed. He concluded, "No nexus had been shown connecting the defendant with the operation in question other than unsubstantiated rumor."

In Aguilar the Supreme Court was asked to determine whether a warrant could issue based on an affidavit that alleged only:

"Affiants have received reliable information from a credible person and do believe that heroin, marijuana, barbiturates and other narcotics and narcotic paraphernalia are being kept at the above described premises for the purpose of sale and use contrary to the provisions of the law."⁵

The Aguilar Court found the warrant had been issued improperly, pointing at two crucial inferences that had been made by the police, not the "neutral, detached" magistrate. First, the affidavit did not reveal to the magistrate any of the basis from which the informer concluded that the contraband, illegal activity, or evidence thereof, could be found in a certain area. Second, no evidence was offered the magistrate as to how the police knew that the informer was "a credible person."

In Spinelli, however, the Court defined the use that could be made of evidence beyond the tip contained in the affidavit, including evidence intended to substantiate the informer's tip. The Court made its re-definition in the context of the following allegations:

(1) The FBI "had been informed by a confidential reliable informant" that Spinelli was operating a wagering operation from two telephones, the numbers of which the informer also supplied.

(2) Spinelli had been observed by the FBI for five days during August, 1965. On four of the days he was seen crossing from Illinois to Missouri at noon-time and entering an apartment building in the late afternoon. On one of the afternoons he was followed into the building where he was observed entering a specific apartment.

(3) A check with the telephone company revealed that the telephone numbers supplied by the informant were listed at the apartment Spinelli had been seen to enter.

(4) A statement that "Spinelli is known to this affiant and to federal law enforcement agents and local law enforcement agents as a bookmaker, an associate of bookmakers, a gambler, and an associate of gamblers."

In holding these allegations insufficient to support a search warrant, the Supreme Court tested the warrant through the following procedure: It first determined that "The tip , has a fundamental place in this warrant application. Without it, probable cause could not be established."⁶ Since the tip was essential to a finding of probable cause, it was then lined up against Aguilar. Finding the tip obviously inadequate to meet the two prongs of the Aguilar test, the Court then turned to the additional allegations. The latter allegations, the Court stated, could be used to corroborate the tip, to bring it up to a level of reliability satisfying both branches of Aguilar. Thus, the material outside the tip could be used to support a magistrate's conclusion both that the informer had a reasonable and legitimate basis for his statement that linked defendant to criminal activity and that the police had reason to credit the informer. Pointing to Draper v. United States, 358 U.S. 307, 79 S.Ct. 329, 3 L.Ed. 2d 327 (1959), the Court held that a tip that included a plethora of detail might provide the necessary corroboration.⁷

The Supreme Court also made clear that assertions of unsavory reputation regarding the target of the search, without more, were to be disregarded.

Testing the affidavit in Spinelli against these criteria, the Supreme Court found the information beyond the tip inadequate to bring the tip up to the level of reliability required in Aguilar.

The tip proffered in United States v. Harris, supra, was far...