United States v. Luciano

Citations: 785 F. Supp. 878; 1991 U.S. Dist. LEXIS 19728; 1991 WL 323137Docket: No. CR 91-1-M-CCL

Court: District Court, D. Montana; December 18, 1991; Federal District Court

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Defendant Luciano seeks to suppress evidence obtained from a search warrant issued on January 24, 1990, citing three primary reasons. First, he argues that Agent Steven J. MacKinnon made intentional or reckless misrepresentations to Magistrate Judge Robert M. Holter concerning the facts supporting the warrant. Second, he claims the affidavit lacks sufficient facts to establish probable cause that Alfred J. Luciano committed a crime. Third, he contends the warrant application does not specifically identify the property constituting evidence of a crime, contraband, or items intended for criminal use, as required by Rule 41(b) of the Federal Rules of Criminal Procedure. Luciano requested a Franks hearing to assess the affidavit's validity, which the United States agreed to, leading to a hearing on December 16, 1991.

The search warrant was executed on January 25, 1990, at The Land Store in Eureka, Montana, a sole proprietorship owned by Alfred A. Luciano, the defendant's son. The premises housed various records for approximately thirty business entities, though Alfred A. Luciano had no interest in any except The Land Store. During the search, agents seized around 20,000 documents, including accounting, tax records, correspondence, and banking information, related to all entities in the building, not just The Land Store.

Luciano's claim of misrepresentation in the affidavit includes a specific instance where Agent MacKinnon referenced an affidavit from Special Agent Donald Bambenek regarding safe deposit box 840 at Mountain Bank. Luciano argues that MacKinnon's assertion that the attached affidavit contained relevant information about the safe deposit box was false and constituted intentional misrepresentation.

The Bambenek affidavit did not mention safe deposit box 840, which was irrelevant to the current warrant, as that box had already been searched under a separate warrant on February 13, 1989. The focus of the Magistrate Judge was on the evidence found in that box, which included 30 shares of Rocky Mountain Land and Cattle Company stock, signed by Alfred A. Luciano but not countersigned, indicating they were in bearer form. Edwin Elgersma possessed the key to the box, suggesting he was the de facto owner of the shares. The defendant contested this representation, noting that the shares' status was determined in a prior case, United States v. Thirty Shares of Stock in the Rocky Mountain Land and Cattle Company, which ruled the shares were non-bearer and non-transferable.

The court found that MacKinnon's knowledge of the shares' legal status was unclear, as he was not questioned on this point. Nonetheless, Elgersma's possession of the stock indicated a connection to the Rocky Mountain Land and Cattle Company. The defendant also challenged MacKinnon's assertion that Elgersma owned thirty percent of the company and, by extension, the Cadillac Casino, arguing that the non-transferability of the stock precluded such ownership. The court accepted MacKinnon's claim of ignorance regarding the stock's legal status, reinforcing the link between Elgersma and the company, which owned the land for the Cadillac Casino.

Additionally, the defendant disputed MacKinnon's characterization of Alfred A. Luciano's involvement with The Land Store, claiming the government was aware he had no ownership interest by October 1986. MacKinnon stated that Luciano took control of the business in January 1987 and implied that both partners were involved in financing schemes related to Rocky Mountain Land and Cattle Company, leading to the conclusion that they were still partners at the time of the affidavit's submission.

Agent MacKinnon was not questioned during the hearing regarding his knowledge of the ownership and control of The Land Store, leading the court to conclude that he lacked awareness that the store was solely owned by Alfred A. Luciano. MacKinnon believed, based on his investigation, that Alfred J. Luciano had a proprietary interest and some control over the business. The defense argued that the affidavit misrepresented the nature of consultations between Alfred J. and Alfred A. Luciano regarding the Cadillac, asserting that 'constant consultation' was misleading since only two meetings were mentioned. However, the court found that the term 'constant consultation' was relative and represented MacKinnon's interpretation, not a misrepresentation of facts. 

The court also addressed the defendant's claim that no probable cause existed for the search warrant, emphasizing that probable cause is a fluid concept assessed through a 'totality-of-the-circumstances' test. The court determined that the Magistrate Judge had a substantial basis for concluding that probable cause existed for the search, as the affidavit provided evidence linking narcotics traffickers Edwin Elgersma and Robert Serry to Alfred A. Luciano and the Cadillac Casino, as well as connections between Alfred J. Luciano and the Cadillac's construction.

The affidavit provided evidence of Alfred J. Luciano’s involvement in Montana Precision Mining, which was allegedly used for bribing bank officers. The court concluded that there was sufficient evidence for the Magistrate Judge to believe that business files at The Land Store, managed by Alfred A. and Alfred J. Luciano, contained evidence of money laundering and bank fraud. The Defendant argued that the search warrant was overly broad, lacking specificity in describing the items to be seized. The search warrant executed at The Land Store covered a building housing records for at least thirty businesses and personal files of Alfred J. Luciano. While Alfred J. Luciano had interests in multiple entities, Alfred A. Luciano was only associated with The Land Store. The warrant's attachment did not specify which documents pertained to particular entities or to Alfred J. Luciano personally, focusing instead on documents related to Robert Serry and Edwin Elgersma. The Defendant asserted that this constituted an unconstitutional general search under the Fourth Amendment, which requires warrants to particularly describe what is to be seized. The warrant did adequately describe the premises, but the concern remained whether it allowed searching files of other entities. The court determined it did, as the warrant permitted searching for any documentary evidence related to unlawful activities. The investigative agent was unaware of the presence of files from multiple entities at the location. The court referenced Maryland v. Garrison, where a warrant was upheld despite a misunderstanding of the premises being searched, concluding that the factual mistake did not invalidate the warrant.

The Court determined that if law enforcement officers had known or should have known about the existence of two separate dwelling units in the building at 2036 Park Avenue, they would have been required to exclude one of the apartments from the warrant's scope. However, the constitutionality of their actions must be evaluated based on the information available at the time of the warrant's issuance. Evidence discovered after the warrant is issued does not affect its validity, and the warrant's legitimacy is judged by the information presented to the magistrate.

In the case at hand, the investigating agent lacked knowledge of the records related to multiple entities within the premises; thus, the warrant was deemed valid despite later findings of insufficient particularity. The defendant argued that the warrant did not meet the specificity requirements of Rule 41 of the Federal Rules of Criminal Procedure, claiming it failed to describe the items to be seized as evidence of a crime. However, the warrant explicitly stated that it sought all documentary evidence related to schemes to disguise unlawful proceeds, fulfilling the requirement of linking the property to criminal activity.

Additionally, the defendant contended that the warrant was overly broad, lacking adequate limitations on the types of property that could be seized. The Court noted that due to the nature of money laundering, it is inherently challenging to distinguish between related and unrelated property, necessitating a broader scope for searches in such cases. Finally, the fact that documentation seized did not pertain to specific individuals named in the warrant did not undermine its validity, as the search was not restricted to documents solely concerning those individuals.

The warrant's last paragraph mandated the seizure of all documentary evidence linked to schemes disguising the source of unlawful activity proceeds, indicating that the Serry/Elgersma limitation proposed by the Defendant was not applicable. Under Maryland v. Garrison, the search and seizure of records from entities other than The Land Store does not invalidate the warrant. Therefore, the discovery of previously unknown records that constitute evidence of a crime does not necessitate a retroactive assessment of probable cause for those entities. Inadvertently discovered evidence will not be suppressed. The claims regarding the seizure of attorney-client privileged correspondence do not impact the warrant's validity, as privilege relates to evidence admissibility, not search scope. Executing agents are not required to evaluate evidence admissibility. Consequently, the court concludes that the January 24, 1990, warrant for The Land Store was issued with probable cause, adequately described the search premises, and was appropriately limited in scope. Defendant Alfred J. Luciano's motion to suppress evidence is therefore denied, and the clerk is instructed to notify counsel of this order.