UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON

Transcription

1 0 0 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON UNITED STATES OF AMERICA, ) NO. CR-0-0-LRS- Plaintiff, CR-0-0-LRS- ) CR-0-0-LRS- CR-0-0-LRS- v. ) ) TO SUPPRESS AND DISMISS DIXIE ELLEN RANDOCK, STEVEN KARL RANDOCK, SR., ) HEIDI KAE LORHAN, ROBERTA LYNN MARKISHTUM, ) Defendants. ) ) BEFORE THE COURT are e Defendants Motion To Suppress Evidence (Ct. Rec. ) and e Defendants Motion To Dismiss Indictment, Or Alternatively, Suppress Evidence (Ct. Rec. ). On October - and November -, 00, an evidentiary hearing was conducted on ese motions in Spokane. Concluding oral arguments were heard in Yakima on January 0, 00. The court has considered e evidence presented (testimony and exhibits) and e oral arguments in making ese rulings. I. BACKGROUND In January 00, e United States Secret Service initiated an investigation into a number of Internet-based virtual schools at were alleged to have fraudulently sold high school and college degrees. A number of e schools were TO SUPPRESS AND DISMISS -

2 0 0 believed to be operating out of an office leased by Defendant Steven Karl Randock, Sr., located in e basement of a building, e Post Falls Professional Center, at 0 E. Seltice Way, Suite B, Post Falls, Idaho. On March, 00, John E. Neirinckx, II, an agent wi e United States Secret Service, and oer agents of e Secret Service, including Agent Greg Ross and Agent Kevin Miller, went to e Post Falls Professional Center. The basis for e Secret Service to suspect, prior to March, 00, at e schools were operating out of is office is detailed in e March, 00 Affidavit of John E. Neirinckx, II, (Ex. to Ct. Rec. 0 at pp. -0, Paragraphs -) which was submitted in support of a search warrant issued on at date. In e information e Secret Service had obtained prior to March, 00, A+ Institute and AEIT were business names at had come up repeatedly in connection wi e office located at 0 E. Seltice Way, Suite B, Post Falls, Idaho. According to Neirinckx in his affidavit (Paragraph ): On //0, Your Affiant observed approximately boxes in a hallway wiin e building located at 0 E. Seltice Way, Post Falls, ID. The aforementioned hallway is located adjacent to suite B, and shares a common wall wi suite B. I noticed many of e boxes contained files and what appeared to be documents and oer articles wiin ose files. I also noticed at some of e files had information written on em to include: AEIT and A+ Institute. There was a door to is hallway off of what has been referred to as e main hallway in e basement of e Post Falls Professional Center. Located wiin e subject hallway on one side was a door leading to Suite B, and off to e oer side, was anoer door leading to five individually locked storage units which businesses could rent for storage purposes. On March, 00, based on e information contained in e Neirinckx affidavit, District of Idaho U.S. Magistrate Judge Mikel H. Williams auorized a search of e hallway (Attachment A to Application And Affidavit For Search TO SUPPRESS AND DISMISS -

3 0 0 Warrant, Ex. to Ct. Rec. 0 at p. ) and seizure of various items contained in e boxes. The list of items to be seized included [p]apers, documents, notes, financial and business records, diplomas, school transcripts, correspondence in written form, and computer disks, contained in approximately boxes located in e above described hallway, which are related to AEIT, A+ Institute and oer businesses affiliated wi Suite B. (Attachment B to Application And Affidavit For Search Warrant, Ex. to Ct. Rec. 0 at p. ). On March, e warrant was executed and e Secret Service seized boxes of material located in e subject hallway. ( Ex. to Ct. Rec. 0 at p. 0). After seizing e boxes, Agent Neirinckx posted a handwritten note on e wall above e area in e hallway where e boxes had been seized. This note stated at an angry tenant had taken e boxes to e county landfill. The warrant was executed at approximately : p.m. A copy of e warrant and receipt was subsequently served by Agent Neirinckx on Ray Guerra, e landlord of e Post Falls Professional Center, at Mr. Guerra s home. Approximately eight weeks later, on May, 00, Defendant Roberta Markishtum, who worked in Suite B of e Post Falls Professional Center, contacted e Post Falls Police Department and reported e boxes had been stolen. Post Falls Police Officer Kristi Mattson interviewed Markishtum. On May, Neirinckx spoke wi Post Falls Police Detective Dave Beck who had been assigned to investigate e eft at Suite B. Neirinckx informed Beck at e boxes stolen were likely e same boxes which had been seized by e Secret Service pursuant to e March warrant. Neirinckx requested Beck s assistance in confirming who owned e boxes and Beck agreed to e same. Alough e Magistrate Judge dated e warrant March, e court believes is was a mistake and ere is noing suggesting to e contrary. TO SUPPRESS AND DISMISS -

4 0 0 On May, 00, Beck made contact wi Defendants Steven Randock, Dixie Randock and Roberta Markishtum at Suite B. Spokane Police Department Fraud Unit Detective Bryan Tafoya accompanied Beck. Tafoya was part of e Secret Service task force, Operation Gold Seal, investigating e alleged diploma mill being operated by e Defendants. Tafoya asked for blank copies of some of e business forms at AEIT (Advanced Education Institute Trust) routinely used so as to become familiar wi e type of records at had been stolen. Dixie Randock and Roberta Markishtum provided Tafoya wi copies of certain documents. Beck expressed interest in collecting badges and seals and he was provided wi some foil seals bearing e name Association of International Educational Assessors (AEIA). On June, 00, Tafoya and Beck returned to Suite B to re-interview Markishtum. During is interview, Beck once again expressed interest in some seals he saw on Markishtum s work station. Markishtum gave Beck two foil seals bearing e name National Board Of Education (NBOE). On June, 00, Tafoya interviewed Amy Hensley who also worked for AEIT and whom during e May interview e Randocks identified as one of eir employees. The interview wi Hensley did not occur at Suite B, however. It occurred at Hensley s new place of employment. On August 0, 00, e Secret Service obtained seven search warrants which were executed on August at e following locations: ) e residence of Dixie and Steven Randock in Colbert, Washington; ) Heidi K. Lorhan s residence in Veradale, Washington; ) Amy Hensley s residence in Spokane; ) Richard J. Novak s residence in Peoria, Arizona; ) Suite B in e Post Falls Professional Center; ) Nor Newport Highway, Mead, Washington; and ) Norwest Business Stamp located in Spokane. /// TO SUPPRESS AND DISMISS -

5 0 0 On October, 00, a grand jury returned an Indictment against e Defendants. All of e Defendants are charged in Count wi Conspiracy To Commit Mail Fraud and Wire Fraud in violation of U.S.C.,, and. Defendant Dixie and Steven Randock are also charged in Count wi Conspiracy To Launder Monetary Instruments in violation of U.S.C. (h). II. DISCUSSION A. March, 00 Search A [Four Amendment] search occurs when an expectation of privacy at society is prepared to consider reasonable is infringed. United States v. Jacobsen, U.S. 0,, 0 S.Ct. (). A reasonable expectation of privacy in e area searched is required. Katz v. United States, U.S., 0, S.Ct. 0 (). A reasonable expectation of privacy exists if one has an actual, subjective expectation of privacy and if e expectation is one society is prepared to recognize as reasonable. Id. at. The expectation of privacy in a commercial area is lower an at in a residential area. Minnesota v. Carter, U.S., S.Ct., ()( [p]roperty used for commercial purposes is treated differently for Four Amendment purposes an residential property ); New York v. Burger, U.S., 00, 0 S.Ct. ()( expectation of privacy in commercial premises... is different from, and indeed less an, a similar expectation in an individual s home ). It is e Defendants burden to establish at under e totality of e circumstances, ey had a legitimate expectation of privacy in e hallway in which e boxes were located. Rawlings v. Kentucky, U.S., 0, 00 S.Ct. (0). This court concludes at Defendants did not have a reasonable expectation of privacy in e subject hallway and hence, e discovery of e boxes on March, 00 by Agent Neirinckx did not constitute a search for Four Amendment TO SUPPRESS AND DISMISS -

6 0 0 purposes. Because ere was no reasonable expectation of privacy in e area searched, none of e Defendants can claim e protection of e Four Amendment and erefore, none of em have standing to challenge e search at occurred on March, 00. U.S. v. Paopao, F.d 0, ( Cir. 00). A privacy interest in e place or ing searched is always required in order for a defendant to challenge e search. Id. at. The preponderance of e evidence establishes at e door off e main hallway to e secondary hallway in which e boxes were located was not equipped wi a lock and erefore, access to e secondary hallway by e public and oer building tenants was not restricted. Defendants Markishtum and Hensley testified e door did have a lock at one period of time, and at e lock must have been subsequently removed. They are not as credible as e witnesses who testified e door was not equipped wi a lock. In is regard, e court notes e conflicting statements Markishtum provided as to when she last saw e boxes in e hallway, as well as her admission to e use of aliases, and her admission at she falsely represented to e public at in her employment wi OTAC (Official Transcript Archive Center), she was physically located in Delaware. Hensley has pled guilty to Count of e Indictment charging her wi Conspiracy To Commit Wire Fraud and Mail Fraud. Hensley acknowledged telling Safeco Special Investigator Traci Johnson in an interview on July, 00 at [A]s far as I know, ere was a keyed entry from e outside of e door. Hensley also admitted at as a result of coaching from Dixie Randock prior to e interview, The burden of proof on e government in a suppression hearing is preponderance of e evidence since guilt or innocence is not being determined. U.S. v. Matlock, U.S., n., S.Ct. (), citing Lego v. Twomey, 0 U.S., -, S.Ct. (). TO SUPPRESS AND DISMISS -

7 0 0 she was evasive wi Johnson and indeed, told her several falsehoods. Defendant Steven Randock testified at in late July or early August 00, he inspected Suite B and at at time, he looked inside e subject hallway briefly and noticed a twisty type lock on e interior of e door leading into e main hallway. He acknowledges he spent only a total of roughly ten minutes inspecting Suite B before subsequently signing a lease for Suite B. Mr. Randock testified he subsequently visited Suite B approximately five times prior to May, 00, but on ose occasions he never looked inside e interior of e subject hallway. There were no signs on or around e door to e secondary hallway indicating access by e public was restricted. The Defendants did not exercise control over access to e hallway. The hallway was a common area and did not qualify as business curtilage of Suite B. The hallway was not part of e leased space of Suite B. Furermore, e court finds credible e testimony of Agent Nierinckx at he found e hallway door partially open on March, 00, alough even had e door been closed, at would not have created a reasonable expectation of privacy in a hallway area at was located behind an unlockable door in a commercial building readily accessible to e public, as well as to oer tenants in e building. It is noted at all of e Defendants who worked in Suite B and/or who had placed material in e hallway eier knew or had reason to know at oer tenants in e building had ready access to e area, inasmuch as miscellaneous furniture and oer materials were stored erein. Wiout a reasonable expectation of privacy in e hallway, e Defendants did not have a reasonable expectation of privacy in e contents of e boxes, Defendant Dixie Randock testified at she had not visited Suite B prior to e May, 00 meeting wi Detectives Beck and Tafoya. This testimony was corroborated by e testimony of Agent Greg Ross. TO SUPPRESS AND DISMISS -

8 0 0 particularly when e boxes were not clearly marked as belonging to e tenants of Suite B as eir personal and business effects, and ere were no lids on many of e boxes. The court, however, finds credible e testimony of e Secret Service agents at ey did not examine e contents of e boxes in e hallway on March, 00. Had e agents examined e contents, and assuming e Defendants had a reasonable expectation of privacy in e contents as eir personal or business effects, a warrantless Four Amendment search of ose contents would have been justified based on e plain view exception. The plain view exception requires at: () e initial intrusion must be lawful; and () e incriminatory nature of e evidence must be immediately apparent to e officer. United States v. Garcia, 0 F.d, ( Cir.), cert. denied, U.S. (000). See also United States v. Bradley, F.d, - ( Cir. 00)(observations of contraband inside residence when police executed warrantless entry to check on safety of nine-year old could be used to support search warrant application because items were in plain view). As ere was no reasonable expectation of privacy in e hallway, e agents intrusion into e hallway was lawful. Furermore, e court finds credible e testimony of Agents Neirinckx and Ross at plainly visible to em in e boxes were files or folders wi information written on e headings including AEIT and A+ Institute. The incriminatory nature of is evidence would have been immediately apparent to e agents so as Defendants maintain ere were lids on e boxes and at e agents must have gone rough e boxes to know at computer disks were contained erein, items which in e March application for a search warrant were specifically listed as items to be seized. Pictures taken on e scene clearly suggest at few, if any, of e boxes were secured wi lids, and at files were placed in such a fashion at computer disks, as well as papers and records, would have easily been visible in at least some of e boxes even before ey were moved. TO SUPPRESS AND DISMISS -

9 0 0 to justify furer investigation of e contents of e boxes. No Four Amendment search occurred on March, 00. Alternatively, if any Four Amendment search did occur wiout a warrant, it was justified by e plain view exception. Accordingly, noing which occurred on March, 00 tainted e search warrant subsequently obtained on March. B. The March, 00 Search Warrant. Omissions In The Affidavit Defendants note at Agent Neirinckx s affidavit in support of is warrant did not mention ere was any door to e hallway in which e boxes were discovered. (Paragraph to Neirinckx Affidavit, Ex. to Ct. Rec. 0). The court finds is was not an intentional or reckless omission. Since Agent Neirinckx found e door partially open, e fact he did not mention e existence of e door is not particularly surprising and any significance of ere being a door to e hallway was markedly diminished, if not eliminated. Had Agent Neirinckx informed e Magistrate Judge of e partially open door, is court believes e Magistrate Judge would still have issued e warrant by finding at no reasonable expectation of privacy of e Defendants was infringed by e agents in eir discovery of e boxes in e hallway, and at ere was still probable cause to search e hallway and seize e boxes... Particularity Of The Warrant Defendants note at Attachment A to e March, 00 warrant stated e hallway to be searched was to e West of suite B, when it was in fact to e nor of Suite B. There must be sufficient particularity in a warrant so as to give meaningful guidance to searching officers. United States v. Clark, F.d, ( Cir. TO SUPPRESS AND DISMISS -

10 0 0 ). The purpose of e requirement is to prevent a general, exploratory rummaging. Coolidge v. New Hampshire, 0 U.S.,, S.Ct. 0 (). Agent Neirinckx testified at Attachment A mistakenly indicated e hallway was to e West of suite B. Agent Neirinckx, however, knew exactly where e hallway to be searched was located. The mistake had no adverse impact upon e Defendants. The hallway to e West of suite B was e main hallway. Noing belonging to e Defendants was located in at hallway which e public used to access entrances to e various businesses located on e basement floor of is commercial building. Additionally, e area to be searched was, in effect, an extension of e main hallway and adjacent ereto. Any error in e use of e term West raer an Nor could not have misled e Magistrate Judge issuing e search warrant in light of all e detailed information provided concerning e actual area to be searched.. Execution Of Warrant In 00, Fed. R. Crim. P. (f)() provided at: The officer executing e warrant must: (A) give a copy of e warrant and a receipt for e property taken to e person from whom, or from whose premises, e property was taken; or (B) leave a copy of e warrant and receipt at e place where e officer took e property. Agent Neirinckx served e warrant and e receipt on Ray Guerra, e landlord of e Post Falls Professional Center. The search was not executed until : p.m., after e normal close of business for most offices. Defendants contend Agent Neirinckx acted wi intentional and deliberate disregard of Rule (f)() and at is is a violation of e Four Amendment because a copy of e search warrant was served on e landlord who did not own any of e property at was taken, and e agent knew well whose property was taken. TO SUPPRESS AND DISMISS - 0

11 0 0 The policies underlying e warrant requirement include providing e property owner assurance of e lawful auority of e executing officer, his need to search, and e limits of his power to search. United States v. Celestine, F.d 0, 00-0 ( Cir. 00). [A]bsent exigent circumstances, if a person is present at e search of her premises, [Rule (f)] requires officers to give her a complete copy of e warrant at e outset of e search. United States v. Gantt, F.d, 00 ( Cir. ). In e case at bar, ere was no violation of Rule (f)(). Copies of e warrant and receipt were served on Ray Guerra, e person... from whose premises[] e property was taken. The boxes were not located in Suite B, but in a common public hallway in e Post Falls Professional Center. Defendants leased Suite B. They did not lease e hallway and so e hallway does not qualify as eir premises. A plain reading of Rule (f)() does not, by its terms, require e warrant and receipt to have been served on e tenant of Suite B or an employee who worked ere. The court has no auority to add such a provision under e guise of legal interpretation, particularly in e absence of any case law to e contrary. Moreover, a finding at ere is no Rule (f)() violation is consistent wi e finding at Defendants had no reasonable expectation of privacy in e hallway.. Inventory Requirements In 00, Fed. R. Crim. P. (f)() provided: Likewise, e fact Defendants had no reasonable expectation of privacy in e hallway renders insignificant e fact e warrant was executed after e close of business. There is some question wheer Guerra was served wi Attachment A and Attachment B to e warrant. Guerra, however, is e only one who would have standing to assert any such deficiency. TO SUPPRESS AND DISMISS -

12 0 0 An officer present during e execution of e warrant must prepare and verify an inventory of any property seized. The officer must do so in e presence of anoer officer and e person from whom, or from whose premises, e property was taken. If eier one is not present, e officer must prepare and verify e inventory in e presence of at least one oer credible person. The record indicates at Agent Greg Ross, who was not present during e execution of e warrant on March, verified on April, 00, an inventory of e items seized. (Ex. to Ct. Rec. 0 at Bates p. 0). To e extent ere was any violation of Rule (f)(), however, it does not require suppression of e items seized. Suppression is rarely e proper remedy for a Rule violation. U.S. v. Williamson, F.d, ( Cir. 00), quoting United States v. Calandra, U.S., n., S.Ct. ()(Federal Rules of Criminal Procedure do not constitute a statutory expansion of e exclusionary rule ). Only a fundamental violation of Rule requires automatic suppression, and a violation is fundamental only where it, in effect, renders e search unconstitutional under traditional four amendment standards. United States v. Johnson, 0 F.d, ( Cir. ). There are ree circumstances under which evidence obtained in violation of Fed. R. Crim. P. requires suppression: () e violation rises to a constitutional magnitude; () e defendant was prejudiced, in e sense at e search would not have occurred or would not have been so abrasive if law enforcement had followed e Rule; or () officers acted in intentional and deliberate disregard of a provision in e Rule. Williamson, The inventory is distinguishable from e receipt at was served on Mr. Guerra on March. What Ross signed is titled a Certification and it was signed and subscribed before District of Idaho Magistrate Judge Larry M. Boyle on April, 00. TO SUPPRESS AND DISMISS -

13 0 0 F.d at. Any violation of Rule (f)() in e case at bar did not render e March search unconstitutional. The inventory occurred subsequent to e search. Defendants were not prejudiced as e search would have occurred in any event, and e manner in which e inventory was prepared and verified had no bearing on e manner in which e search was conducted. See United States v. Dudek, 0 F.d, ( Cir. ) ( [F]ailure to follow e requirements of Rule of e Federal Rules of Criminal Procedure pertaining to inventory of objects seized and prompt return to e court has been held not to require invalidation of an oerwise properly issued and executed search warrant or e suppression of evidence acquired under it ). Finally, even if any violation of Rule (f)() was intentional, e court was not presented wi evidence indicating at any violation was committed deliberately so as to result in some type of prejudice to e Defendants. C. Alleged Outrageous Conduct Defendants contend e note left by Agent Neirinckx indicating e boxes had been taken by an angry tenant and could be found at e landfill had e desired effect of causing Defendants to contact law enforcement about a eft which, in turn, provided law enforcement wi an opportunity to gain access to Suite B. Defendants contend Detectives Beck and Tafoya intentionally and deliberately misrepresented eir true purpose in contacting e Defendants which was to investigate e alleged diploma mill being operated out of Suite B. At e outset, e court finds e preponderance of e evidence indicates Williamson did not involve any of Rule 's inventory requirements. The challenge ere pertained to e failure of searching officers to present a complete copy of e warrant at e outset of e search. TO SUPPRESS AND DISMISS -

14 0 0 e overwhelming primary purpose of e aforementioned ruse was to assist e Operation Gold Seal task force wi eir investigation of what it believed was a diploma mill being operated out of Suite B. Suspected insurance fraud on e part of e Defendants was, at best, a very minor and secondary consideration. In order to warrant dismissal on due process grounds, government misconduct must be so grossly shocking and so outrageous as to violate e universal sense of justice. United States v. King, 00 F.d 0, ( Cir. ). A defendant must prove at e government s conduct was so excessive, flagrant, scandalous, intolerable, and offensive as to violate due process. United States v. Edmonds, 0 F.d, ( Cir. ), quoting United States v. Garza-Juarez, F.d, 0 ( Cir. ), cert. denied, 0 U.S. 0 (). The Nin Circuit has found outrageous government conduct in instances where e government has engineered and directed e criminal enterprise from start to finish and where e police have been brutal, employing physical or psychological coercion against a defendant. U.S. v. Fernandez, F.d, ( Cir. 00). The Nin Circuit has identified two remedies: ) dismissal of e indictment, which is drastic, disfavored, and us used only in e most egregious cases; or ) suppression at trial of evidence improperly obtained. United States v. Haynes, F.d, ( Cir. 000), cert. denied, U.S. 0 (00). The government and e Defendants have cited various cases for eir respective positions, but to no great surprise, none of ose cases present e unique factual circumstances present in e case at bar. In United States v. Bosse, F.d ( Cir. 0), e defendant was a licensed semiautomatic firearms dealer and had an application pending for a state license to buy and sell automatic machine guns. An agent of e California Department of Justice inspected e defendant s home and surrounding premises wi defendant s consent as part of TO SUPPRESS AND DISMISS -

15 0 0 e license application process. A federal Alcohol, Tobacco and Firearms (ATF) agent accompanied e state inspector on e search wiout identifying himself as an ATF agent. Subsequently, e ATF sought and obtained a search warrant for e defendant s home. It was undisputed at e ATF Agent had accompanied e state inspector not for e purpose of assisting e inspector, but raer to furer e ATF agent s investigation into possible federal firearms violations. The ATF agent testified he accompanied e state inspector in his capacity as a federal agent and prepared diagrams of e layout of e defendant s house in preparation for obtaining and executing a search warrant. The state inspector identified himself to e defendant as a state agent conducting an inspection in connection wi e defendant s pending license application and explained at e ATF agent is wi me. The Nin Circuit Court of Appeals found at in ese circumstances, e ATF agent s silence amounted to a deliberate misrepresentation at his purpose was at announced by e state inspector, and erefore a deliberate misrepresentation of his true purpose. The circuit held e ATF agent s surreptitious entry into e home was illegal. Id. at. One of e cases cited in e Bosse decision was United States v. Phillips, F.d ( Cir. ). In Phillips, a federal agent, in order to gain entry into e defendant s office building, asked Santa Monica police officers for help. Under e direction of e federal agent, e uniformed officers knocked on e door and asked permission to enter to investigate a report of burglary in e building. There was no such report, however, as it had been invented by e federal agent. After some delay, e door was opened by an occupant and e uniformed policemen entered, followed immediately by undercover narcotics agents, who had emerged from hiding. The occupants of e building were led to believe ey were admitting officers to investigate a burglary when, in fact, e TO SUPPRESS AND DISMISS -

16 0 0 officers and agents were entering to arrest e defendant. The Nin Circuit held e entry and e subsequent arrest of e defendant (Phillips) were invalid because e agents did not have probable cause to believe e defendant was in his office at e time of e raid. Id. at. An agent must have probable cause to believe at e person he is attempting to arrest, wi or wiout a warrant, is in a particular building at e time in question before at agent can legitimately enter e building by ruse or any oer means. Id. Recently, Bosse was cited in U.S. v. Alverez-Tejeda, F.d 0 ( Cir. 00), a case in which federal Drug Enforcement Agents employed an elaborate ruse to seize an automobile. It was undisputed at e DEA agents had e right to seize e car wiout a warrant. The agents had probable cause to believe e car had been used for carrying contraband because ey had purchased drugs from inside it as part of eir investigation. They also had probable cause to believe e car was carrying contraband on e day of e seizure based on several intercepted phone calls and direct surveillance. The only issue was e unorodox meod of seizing e car. Wi regard to at meod, e Nin Circuit Court of Appeals held: Nor was ere anying unreasonable in e agents choice of guile to seize e car, raer an taking it outright, as ey were entitled to do. While we don t generally secondguess e government s use of steal to ferret out criminal activity... we take a closer look when agents identify emselves as government officials but mislead suspects as to eir purpose and auority. This because people should be able to rely on [e] representations of government officials. United States v. Bosse, F.d, ( Cir. 0)(per curiam)(internal quotation marks omitted). If people can t trust e representations of e government officials, e phrase I m from e government and I m here to help will become even more terrifying. This concern is at its zeni when government officials lie in order to gain access to places and ings ey would oerwise have no legal auority to reach.... This consideration is not implicated by e agents actions here because ey already had e auority TO SUPPRESS AND DISMISS -

17 0 0 Id. at 0. to seize e car and arrest Alverez-Tejeda; eir lies didn t have e effect of expanding eir ostensible auority beyond e scope of eir actual auority. The only consequence of eir deceit was to treat Alverez-Tejeda as a victim, raer an a criminal suspect-driving him to a hotel raer an immediately dragging him off to jail- and e only harm he suffered was being misled and subjected to e fright at comes from being a crime victim. We find e agents actions in misleading Alverez-Tejeda were reasonable in light of eir vital interest in seizing e drugs and not exposing eir investigation. While e Nin Circuit Court of Appeals take[s] a closer look when agents identify emselves as government officials but mislead suspects as to eir purpose and auority, ere is no rule at whenever agents engage in is kind of activity it is per se unconstitutional and illegal. So too, is court has taken a closer look to determine wheer e ruse perpetrated in e case at bar constitutes outrageous conduct. Conflicting testimony was offered at e evidentiary hearing as to wheer Detective Tafoya identified himself as a member of e Post Falls Police Department when he in fact is a Spokane police officer who had been assigned to e Operation Gold Seal task force to assist in e diploma mill investigation. Defendants testified at Tafoya identified himself as a Post Falls police officer during eir contact wi him on May, 00. Tafoya testified at he said noing about e nature of his official position and at e Defendants never asked him about it. Certainly, under e circumstances it would have been reasonable for e Defendants to assume Tafoya was wi e Post Falls Police Department since e Defendants had reported e eft to e Post Falls Police Department and Tafoya was accompanied by Detective Beck who did identify Detective Beck corroborated Tafoya s testimony on is point and also testified at he did not recall specifically identifying Tafoya as his partner. TO SUPPRESS AND DISMISS -

18 0 0 himself as a Post Falls police officer and left a business card wi e Defendants confirming e same. There is no doubt Tafoya hoped e Defendants would assume he was a member of e Post Falls Police Department. The court finds credible Tafoya s testimony at he did not say anying to e Defendants about e nature of his official position and at he was not asked about it by e 0 Defendants. The court also finds at is does not rise to e level of e affirmative or deliberate misrepresentation at issue in Bosse where e state inspector specifically advised e defendant at e ATF agent is wi me. Furermore, in Bosse, e state inspector was truly conducting a state inspection 0 The Defendants who testified at e hearing are not credible on is factual matter. See pp. - supra. Nor does it rise to e level of e affirmative misrepresentation at issue in United States v. Stringer, 0 F.Supp.d 0 (D. Or. 00). In Stringer, a district court dismissed indictments, and alternatively ordered evidence suppressed, where it found egregious government misconduct in concealing in a civil securities investigative proceedings e fact at criminal prosecutions were already contemplated and for which e civil proceedings were being used to gaer evidence. In response to direct questions by defendant s attorney, a Securities Exchange Commission (SEC) attorney affirmatively misrepresented at e defendant Stringer was not e target of any investigation and at e SEC was not working in conjunction wi e U.S. Attorney s Office regarding a possible criminal investigation. Id. at 0-, citing among oer cases, United States v. Tweel, 0 F.d, 00 ( Cir. ). The court noted it is a due process violation if government agents make affirmative misrepresentations as to e nature or existence of parallel proceedings and at a government agency may not develop a criminal investigation under e auspices of a civil investigation. Because e defendants were identified as subjects of a criminal investigation, e government s tactic to move forward under e guise of a civil investigation violated defendants due process rights. Id. at 0, citing United States v. Robson, F.d, ( Cir. ). TO SUPPRESS AND DISMISS -

19 0 0 and e ATF agent used at as a reason to gain entry into e defendant s home, whereas in e case at bar, bo Beck (e Post Falls police officer) and Tafoya (e federal task force officer) went to Suite B for e ostensible purpose of investigating a eft, alough ey bo knew it was likely at e boxes in question were ose at had been taken by e Secret Service on March. That, however, is not e end of e inquiry, nor e most important component of e due process analysis. There is no discussion in Bosse wheer e ATF agent already had probable cause to enter and search e defendant s home before he entered e home wi e assistance of e state inspector. It appears e ATF agent did not have such probable cause ( Rusin accompanied Dunkin not for e purpose of assisting in e state licensing inspection, but raer to furer Rusin s investigation into possible federal firearms violations ). Bosse, F.d at (emphasis added). The ATF agent testified he wanted to gain entry to gaer information to assist him in obtaining a search warrant. In oer words, probable cause had not yet been established. A search warrant was subsequently issued and it was during at search at a sawed-off shotgun was discovered in e home at led to e federal firearm charge against e defendant. The Nin Circuit noted e fact e ATF agent s prior entry into e home wi e state inspector was illegal did not end e inquiry because it needed to be determined wheer e illegal entry tainted e warrant and e probable cause supporting e warrant. In oer words, if e warrant- e probable cause- arose from a source entirely independent of e illegal search, suppression of e shotgun was not necessary. The circuit remanded e case to e district court for Because Markishtum had reported to Officer Mattson at eight boxes were missing and at she had last seen em on May, 00, ere was not absolute certainty by Beck and Tafoya at ese were e same boxes (totaling in number) as ose seized by e Secret Service on March, 00. TO SUPPRESS AND DISMISS -

20 0 0 at determination. Id. at. In Phillips, what was critical was at e federal agents did not have probable cause to believe e defendant was in e office building at e time of e entry at was gained by means of a ruse, at being e fictitious burglary report. Likewise, in Alverez-Tejeda, what was critical was e agents already had probable cause to believe e car had been used for carrying contraband prior to its seizure by means of a ruse, and had probable cause to believe e car was carrying contraband on e day of at seizure. Agent Neirinckx obtained a search warrant auorizing seizure of e boxes in e common public hallway located adjacent to Suite B. The Neirinckx search warrant affidavit established probable cause at ere was illegal diploma mill activity occurring in Suite B which justified seizure of boxes found in a hallway adjacent to Suite B. (Neirinckx Affidavit at Paragraphs -, Ex. to Ct. Rec. 0). These boxes contained files which, in plain view, had written labels/markings identifying businesses e Secret Service had probable cause to believe were associated wi Suite B. The Secret Service already had probable cause to obtain a search warrant for e interior of Suite B at e time it sought a search warrant for e adjacent hallway auorizing seizure of e boxes. The information contained in e boxes strengened probable cause for e issuance of /// /// /// In Phillips, e federal agents made up e burglary report on e spot and ere was in fact never any such report. In e case at bar, ere was an actual eft report filed by e Defendants wi e Post Falls Police Department, albeit a report at was precipitated by e deception of e Secret Service in leaving a note at stated e boxes had been taken to e landfill by an angry tenant. TO SUPPRESS AND DISMISS - 0

21 0 0 a search warrant for e interior of Suite B. The Secret Service chose not to obtain a search warrant for e interior of Suite B prior to e discovery of e boxes or immediately after e discovery. This court finds, and e record bears out, ere was a legitimate reason for is. The Secret Service wanted to maintain a covert investigation of e alleged diploma mill activity to furer reveal e alleged criminal design and conspiracy of e Defendants. As in Alverez-Tejeda, e Secret Service did not want to expose its investigation too early and certainly, at would have occurred had a warrant been obtained and a search of Suite B executed in March or May of 00. Alough by March, 00, e Secret Service already had a reasonable suspicion at e Defendants were involved in diploma mill activity originating out of Suite B, e Secret Service still needed to determine e precise roles of e Defendants in is activity, as well as how e various businesses ought to be operating out of Suite B were related. Moreover, is was a far-ranging and extensive investigation involving numerous There was testimony at examination of e contents of e boxes by e Operation Gold Seal task force occurred soon after seizure of e boxes. The inventory was certified by Agent Ross on April, 00, over a mon before Beck and Tafoya visited Suite B. Information derived from e contents of e boxes was used in procuring e warrants at were issued on August 0, 00. (Ex. to Ct. Rec. at Paragraphs 0-; Ex. to Ct. Rec. at Paragraphs 0-0; and Ex. to Ct. Rec. at Paragraphs 0-). See Paragraph of March, 00Affidavit of Nierinckx (Ex. to Ct. Rec. 0 at p. ), indicating at in January 00, based on information obtained from an investigator wi e Washington State Attorney General s Office, e Secret Service commenced its investigation into a number of internet based virtual schools selling fraudulent degrees. The investigator from e state attorney general s office advised at Dixie Randock, Steven Randock, Heidi Lorhan, Amy Hensley, and Robert Markishtum were among e main suspects believed to be operating e schools. TO SUPPRESS AND DISMISS -

22 0 0 individuals (suspects and non-suspects) in multiple locations in addition to Suite B (as borne out by e multiple search warrants executed on August, 00). Indeed, e investigation ultimately led to e foreign nation of Liberia which had suspected involvement in e alleged accreditation of internet schools being operated by e Randocks. A search of e interior of Suite B in March or May 00 pursuant to a warrant would likely have brought e investigation to a close. Accordingly, e Secret Service resorted to deception to furer its investigation of what was actually going on in Suite B. The court finds e government did not act unreasonably in choosing to resort to is deception because it already had probable cause to search e interior of Suite B. The deception did not have e effect of expanding its ostensible auority beyond e scope of its actual auority. As in Alverez-Tejeda, e consequence of e deceit was to treat e Defendants as victims of a crime raer an as criminal suspects. Also of significance is at e Defendants initiated e contact wi law enforcement by reporting e eft and inviting law enforcement to undertake an investigation of e eft. The Defendants were not coerced into reporting e eft to law enforcement. They could have chosen not to file a report. Defendants may argue ey were effectively coerced into reporting e eft because of sensitive customer information contained in e boxes (i.e., credit card information), and at is indeed a legitimate reason to report a eft. These Defendants, however, whom law enforcement already had reasonable suspicion to believe were involved in defrauding eir customers, were not entitled to bliely assume ey could ask law enforcement officers to investigate e eft wiout eir suspected fraudulent activity being investigated by ose same officers. In ese particular circumstances, e Defendants were not entitled /// /// TO SUPPRESS AND DISMISS -

23 0 0 to assume at few, if any, questions would be asked and at ere would be no potential adverse consequences for em. The benchmark for e Four Amendment is reasonableness, which requires weighing e government s justification for its actions against e intrusion into e defendant s interests. Alverez-Tejeda, F.d at 0. Artifice and stratagem may be employed to catch ose in criminal enterprises[;]... to reveal e criminal design; [or] to expose e illicit traffic,... e illegal conspiracy, or oer offenses. Lewis v. United States, U.S. 0, 0 n., S.Ct. (), quoting Sorrells v. United States, U.S., -, S.Ct. 0 (). Here, e government had a legitimate justification for it deception, at being e preservation of e anonymity of its ongoing investigation. This is not a case where e government engineered and directed e criminal enterprise It is noted at e Defendants did not report e eft until approximately eight () weeks after e seizure, and were vague and evasive when asked about what had been stolen. For example, when Post Falls Police Officer Mattson spoke to Steven Randock by telephone on May, 00, and asked him if he had any names or numbers at would help identify e files which had been taken, Mattson reported at Randock did not provide any information in at regard. (Mattson Report, Ct. Rec. - at p. ). Mattson s testimony at e evidentiary hearing was consistent wi her report. On May, 00, when Detective Tafoya asked Dixie Randock what it was at AEIT actually did, she stated it was an on-line document processing center primarily for schools located outside e United States. According to Tafoya, when he asked to what exact schools she was referring, Randock would not name any specific school. And while Randock mentioned at e entity OTAC (Official Archive Transcript Center) was somehow attached to Suite B, Detective Tafoya says she would not elaborate on what OTAC stood for or what its function was. (Secret Service Report Of Investigation (ROI), Ct. Rec. - at p. ). Detective Tafoya s testimony at e evidentiary hearing was consistent wi e information contained in e ROI. TO SUPPRESS AND DISMISS -

24 0 0 from start to finish and/or where e police employed physical or psychological coercion against e Defendants. Instead, law enforcement resorted to deception which, for reasons discussed above, is court does not deem outrageous. The government s conduct was not so excessive, flagrant, scandalous, intolerable, and offensive as to violate due process. Assuming for e sake of argument at Defendants conduct crossed e line and was outrageous, is court would not find at conduct so egregious as to warrant dismissal of e Indictment against Defendants. Instead, e remedy would be suppression of whatever incriminating information or evidence was obtained by Detectives Beck and Tafoya during eir May visit to Suite B and during eir follow-up visit wi Markishtum on June. It is not apparent, however, at Markishtum or e Randocks made any incriminating statements during ese visits. As discussed supra (n. at pp. -), e Defendants gave, at best, vague and evasive statements regarding e nature of e business being conducted out of Suite B. Brief mention of e visits by Beck and Tafoya to Suite B is found in e affidavits at were submitted in support of e search warrants at were issued and executed on August, 00. (Paragraphs - of Neirinckx Affidavit, Ex. to Ct. Rec. ; Paragraphs - of Nierinckx Affidavit, Ex. to Ct. Rec. ; Paragraphs - of e Neirinckx Affidavit, Ex. to Ct. Rec. ). The paragraphs contained in each of ese affidavits are identical as to e There was no violation of e Fif Amendment right against selfincrimination since none of e Defendants were in custody when ey were interviewed by Detectives Beck and Tafoya. United States v. Crawford, F.d 0, 0 ( Cir. 00) (en banc). There was also no violation of e Six Amendment right to counsel since formal adversary proceedings had not been initiated against e Defendants at e time ese interviews took place. McNeil v. Wisconsin, 0 U.S., -, S.Ct. 0 (). TO SUPPRESS AND DISMISS -

25 0 0 information contained erein. None of at information pertains to statements allegedly made by any of e Defendants during e May and June, 00 visits, or to any documents or seals provided by Defendants to Beck and Tafoya during ose visits (listed at p. of Ex. to Ct. Rec. ). Even if ese few paragraphs were excised from e respective affidavits, ere would still have been probable cause for issuance of e warrants based on e remaining detailed information found in e lengy affidavits, each comprised of over one hundred paragraphs and pages. This remaining information was derived from sources oer an Beck and Tafoya and eir May and June, 00 visits to Suite B. During oral argument, Defendants counsel argued at what e Secret Service got from eir visit to Suite B on May, 00 was an informant in e person of Amy Hensley. Hensley was named as a Defendant in e Indictment, but pursuant to a plea agreement, has pled guilty to Count and is currently awaiting sentencing. Hensley testified at at her June, 00 meeting wi Detective Tafoya, he told her at he ought she was e one who had taken e boxes to cover up financial wrongdoing of which she had been accused by Steven and /// /// /// /// /// /// /// The court does not find credible e assertions by e Defendants at once inside e interior of Suite B, Detectives Beck and Tafoya, wiout permission from Defendants, rifled rough drawers and file cabinets in search of particular documents or items. TO SUPPRESS AND DISMISS -

26 0 0 Dixie Randock. Detective Tafoya testified at he did suggest to Hensley at she was responsible for taking e boxes. Hensley denied taking e boxes. A review of e affidavits tendered in support of e search warrants subsequently issued and executed does not reveal at any information obtained from Hensley by Tafoya on June was used to procure any of ose warrants. According to Hensley, e next time she met wi Tafoya was on August, 00, when he confronted her wi e diploma mill allegations and urged her to 0 cooperate or risk going to prison. Hensley testified at Tafoya asked her to call Dixie and Steven Randock and she did so. According to testimony from Tafoya, during Hensley s telephone conversation wi Dixie Randock. Mrs. Randock simply denied at e Randocks were operating a diploma mill. According to Hensley, Steven Randock essentially said noing during his conversation wi her, and moreover, his end of e conversation was not recorded. Detective Tafoya only heard Hensley s end of her conversation wi Mr. Randock. In sum, ere is no indication at any incriminating information was obtained from e Randocks during ese calls. Furermore, Hensley has pled guilty, has agreed to assist e government in is case, and has waived any argument at she was coerced to assist e government in its investigation, or was oerwise e victim Detective Tafoya testified at he asked e Randocks on May wheer ey had any disgruntled employees who might be responsible for e eft of e boxes. Agent Neirinckx testified at e Secret Service ROI showed at in response to at query, Dixie Randock identified Hensley as someone who had caused financial losses for e businesses owned and operated by e Randocks. The Randocks also volunteered information at ere had been a significant discrepancy between checks at were written by Hensley and when ose checks had cleared e bank. 0 August is e same day search warrants were executed for e seven different locations mentioned in e Background section of is order at p.. TO SUPPRESS AND DISMISS -

27 0 0 of any outrageous conduct by e government. In any event, e testimony of Internal Revenue Service (IRS)Agent Janet Tompkins who was present wi Detective Tafoya during e August, 00 meeting wi Hensley, convincingly rebuts any inference at Hensley was coerced into doing anying. In sum, if ere were outrageous conduct warranting suppression, it appears ere would be noing of any consequence to be suppressed. III. CONCLUSION For e reasons set for above, e Defendants Motion To Suppress Evidence (Ct. Rec. ) and Motion To Dismiss Indictment, Or Alternatively, Suppress Evidence (Ct. Rec. ) are DENIED. IT IS SO ORDERED. The District Court Executive is directed to enter is order and forward copies to counsel. DATED is st day of February, 00. s/lonny R. Suko LONNY R. SUKO United States District Judge TO SUPPRESS AND DISMISS -