US v. Hughes

• Citation: 823 F. Supp. 593
• Decision Date: 03 May 1993
• Docket Number: No. SCR92-19.,SCR92-19.
• Parties: UNITED STATES of America v. Sally HUGHES, Maria Paradise, Michelle Tynes Rauscher, Thomas Seymour, Luisito Sison, Jan Stakowicz; and Michael Walton.
• Court: U.S. District Court — Northern District of Indiana

823 F. Supp. 593

UNITED STATES of America v. Sally HUGHES, Maria Paradise, Michelle Tynes Rauscher, Thomas Seymour, Luisito Sison, Jan Stakowicz; and Michael Walton.

No. SCR92-19.

United States District Court, N.D. Indiana, South Bend Division.

May 3, 1993.

COPYRIGHT MATERIAL OMITTED

Thomas Plouff, South Bend, IN, for plaintiff.

Martin W. Kus, LaPorte, Philip C. Parenti, Chicago, IL, C. Kenneth Wilber, Elkhart, IN, David B. Weisman, Brian May, Deborah G. Dunn, William R. Dunn, David Keckley, South Bend, IN, for defendants.

MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

On June 11, 1992, a Federal Grand Jury sitting in the Northern District of Indiana returned a multi-count indictment against the above captioned defendants. Specifically, the Indictment charges the defendants with violations of 18 U.S.C. Section 1341 (mail fraud), 1343 (wire fraud), and 1365 (consumer product tampering); 21 U.S.C. Section 331 (misbranded products in commerce); and 42 U.S.C. Section 1320a-7b(a) (Medicare fraud) and 1320a-7b(b) (Medicare kickback); and Title 42 U.S.C. Section 408 (illegal use of social security numbers).

Now before the court are various pretrial motions filed by several of the defendants in the above captioned case. The government has filed responses to the motions. At a pretrial hearing on December 16, 1992, many of the issues contained in the motions were argued.

I. Defendant Walton's Motion to Suppress¹

Initially, this court notes that there are six separate warrants at issue. Defendant Walton ("Walton") has filed a "Motion to Quash and to Suppress," and asserts that all the warrants lacked any indicia of probable cause. Additionally, Walton maintains that all of the search warrants were facially overbroad and lacked particularity, thereby resulting in a general search. The government has filed a "Government's Preliminary Response To Defendant Walton's Motion to Suppress" in which the government argues that the motion to suppress should be summarily denied and that the defendant has made no showing that would merit an evidentiary hearing.

The warrants at issue are the following and are referred to sequentially as Warrants A through F:

On February 20, 1990, Magistrate Rodovich issued a search warrant filed under Case No. H90-65R for the business premises of Michael Walton located at 6731 Kennedy Avenue, Hammond, Indiana. On February 20, 1990, agents of the Federal Bureau of investigation executed the search warrant and removed numerous items from the premises.

On February 20, 1990, Magistrate Rodovich issued a search warrant filed under Case No. H90-65R for a second floor residential apartment belonging to Michael Walton and located at 6731 Kennedy Avenue, Hammond, Indiana. On or about February 20, 1990, agents of the Federal Bureau of Investigation executed the search warrant and removed numerous items from Mr. Walton's apartment.

On February 20, 1990, Magistrate Rodovich issued a search warrant filed under Case No. H90-66AR for the Bank of Highland located at 6211 Highway Avenue, Highland, Indiana. On or about February 20, 1990, agents of the Federal Bureau of Investigation executed the search warrant and removed numerous items from safe deposit boxes at that location.

On February 20, 1990, Magistrate Rodovich issued a search warrant filed under Case No. H90-67R for a safe deposit box in the name of Michael Walton located at the Gainer Bank, 169th Street, Hammond, Indiana. On or about February 20, 1990, agents of the Federal Bureau of Investigation executed the search warrant.

On February 21, 1990, Magistrate Rodovich issued a search warrant filed under Case No. H90-70R for safe deposit boxes in the name of Clifton Webb which were located at the Gainer Bank, 169th Street, Hammond, Indiana. On or about February 21, 1990, agents of the Federal Bureau of Investigation executed the search warrant and removed numerous items from the safe deposit boxes.

On August 3, 1990, Magistrate Rodovich issued a search warrant filed under Case No. H90-119R for Michael Walton's residence. On or about August 3, 1990, agents of the Federal Bureau of Investigation executed the search warrant and removed numerous items from Walton's apartment.

A. Probable Cause

The Fourth Amendment provides:

The right of the people to be secure in their person, 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 person or things to be seized.

U.S. Const. amend. IV. In his famous treatise on the subject, Search and Seizure, the author, Wayne R. LaFave, explained that "the essence of the Fourth Amendment has never been better stated than in the oftquoted dissent of Justice Brandeis in Olmstead v. United States, 277 U.S. 438 48 S.Ct. 564, 72 L.Ed. 944 (1928):

The makers of our Constitution undertook to secure conditions favorable to the pursuit of happiness. They recognized the significance of man's spiritual nature, of his feelings and of his intellect. They knew that only a part of the pain, pleasure and satisfactions of life are to be found in material things. They sought to protect Americans in their beliefs, their thoughts, their emotions and their sensations. They conferred, as against the government, the right to be let alone — the most comprehensive of rights and the right most valued by civilized men."

Id. See generally Wayne R. LaFave, Search and Seizure.

1. Affidavits

Initially, Walton lodges a facial attack on the relevant affidavits. Walton asserts that the affidavits used in the probable cause determination were defective. In making this assertion, Walton explains that the affidavits contained no allegations or evidence to validate the various searches premised on the aforementioned criminal statutes. Specifically, Walton maintains the affidavit of Agent Ormsby contains no valid indicia of probable cause, and is only particularized by a general reference to the statutes at issue for the abovementioned crimes.

In opposition to these assertions, the government points out that essentially the same affidavit used in connection with Warrant A (H90-65R) was used to support Warrants B, C, D, and E, and that this warrant was sufficient for purposes of probable cause. The government indicates that FBI Agent Ormsby's affidavit supporting the warrants was based on interviews and investigations stemming from discussions with five individuals who were past and present employees of Walton's. The information provided by these employees established the following: 1. Walton gave tickets for various entertainment events, as well as other gifts, dinners, and prostitutes, to certain doctors in a quid pro quo for the purchase of pacemakers; 2. Walton used various aliases and social security numbers to effectuate this scheme; 3. Walton systematically removed various identifying labeling and markings; 4. Walton removed or altered expiration dates on the pacemakers in order to present a current date. Additionally, the government maintains that the information provided by the witnesses was based on personal knowledge and corroborated by independent investigation. Finally, the government asserts that Agent Ormsby investigated this information and corroborated several facts such as the use of aliases at various banks.

Initially, this court finds Agent Ormsby's reliance on various former and present employees was sufficient for purposes of securing a warrant. Walton suggests that Agent Ormsby's reliance on said employees was insufficient and points to the test enunciated by the Supreme Court in Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983). Additionally, Walton maintains:

Viewing the affidavit under the "totality of the circumstances" test leads to the conclusion that no probable cause existed for the issuance of the warrant. The affidavit relies on five unidentified individuals who purportedly worked or previously worked for Walton's companies. There is no information contained in the affidavit that those individuals had provided reliable information in the past and there is no corroboration of the cooperating witnesses' statements.

Most importantly, none of the cooperating witnesses appear to have given the FBI information concerning what evidence was on the premises at the time of the application for the search and seizure warrant. Almost all of the cooperating witnesses' information was concerned with past events and none of the witnesses appear to have given the FBI information concerning evidence which was on the premises at the time they spoke to the FBI.

Motion to Suppress at 14.

First, this court finds this assertion to be irreconcilable with the contentions that Walton makes in another part of their motion. In another argument, Walton contends that Agent Ormsby could have made the affidavit in support of the warrant more detailed in description because the employees were able to provide reliable information. In fact, Walton points out:

Certainly one of those five individuals could have assisted Agent Ormsby in narrowing the search. A reasonable investigation by the FBI would certainly have indicated the types of pacemakers which were allegedly being altered, the number of altered pacemakers which were on the premises, the brand names of the altered pacemakers, the location of the altered pacemakers, and the warrant could have been limited to a specific period of time which coincided with the suspect transactions. The warrant authorized the seizure of all pacemakers — not just those suspected to have been tampered with.

Agent Ormsby's affidavit, assuming it could be used to limit the scope of the search, indicates that four (4) months prior to the execution of the search warrant Walton's employees had used steel wool to remove brand names and "other identifying marks" from pacemakers. The FBI, using this

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