The opinion of the court was delivered by: SIMANDLE
SIMANDLE, District Judge:
This matter is before the court upon the pretrial motion of defendant Edmund Danzig to suppress evidence obtained during a search conducted on October 24, 1996, at his business premises. Defendant Danzig has been charged in an indictment with one count of wire fraud, in violation of 18 U.S.C. § 1343 and 2. Mr. Danzig's co-defendant, Patrick Gawrysiak, has been charged with various forms of fraud in the same indictment, but has not made any pretrial motions. For the reasons stated herein, defendant Danzig's suppression motion will be denied.
On October 18, 1996, agents from the Federal Bureau of Investigation ("FBI") obtained a warrant to search the business premises of defendant Danzig in Sarasota, Florida. (Df. Ex. A). The warrant was issued by United States Magistrate Judge Mark A. Pizzo of the Middle District of Florida, in Tampa, on the basis of a 24-page affidavit filed with the court by Special Agent Lynn Billings of the FBI. (Df. Ex. C, hereinafter referred to as "Aff.").
By its terms, the warrant imposed four primary limitations on what items could be seized from defendant Danzig's place of business. First, the agents were only permitted to seize evidence of violations of the following federal criminal statutes: 18 U.S.C. § 371 (conspiracy), 18 U.S.C. § 1343 (wire fraud), 18 U.S.C. § 1621 (perjury), and 18 U.S.C. § 1623 (false declarations). Second, the warrant encompassed evidence concerning crimes committed by Edmund Danzig, Patrick Gawrysiak, Thomas Fox and their co-conspirators only. Third, the warrant only encompassed evidence of these crimes committed by those individuals between 1992 and 1995. Fourth, the warrant explained that the evidence to be seized had to pertain to one of sixteen enumerated persons or entities, such as "Edmund R. Danzig," "Terra Ceia Ventures, Inc.," or "Jonathan Bowers." These terms of the warrant were set forth in Attachment B to the warrant.
The affidavit submitted to Magistrate Judge Pizzo, subscribed by Special Agent Lynn M. Billings, gave the details of pervasive fraud investigations being conducted by the FBI's Special Agent Wadsworth in New Jersey and Special Agent Lynn Williams in Virginia targeting Patrick Gawrysiak and identifying Danzig as a co-conspirator. (Aff. PP 3-7). Gawrysiak, using the alias Gray, claimed to be the principal of Great American Raceways International, Inc. ("GARI"), (Aff. P 8), which issued forged GARI bonds falsely claimed to be backed by U.S. Treasury bonds. (Id.). Danzig was described as President of Terra Ceia Ventures, Inc., a financially troubled company which had undertaken a real estate development project on Terra Ceia Island, Florida, for which Danzig and Gawrysiak sought interim financing ("bridge financing"). Gawrysiak had allegedly victimized numerous investors and potential business partners through this and other fraudulent schemes involving forged bonds, bogus financial statements, and fraudulent claims of oversees financing. (Aff. P 6). The affidavit disclosed that through Agent Wadsworth's investigation Gawrysiak's apartment in New Jersey had been searched pursuant to a warrant in September 1995, and that documents of Gawrysiak's frauds including documents linking Gawrysiak and Danzig, were seized. (Aff. P 6, n.1).
The affidavit laid out the contours of four known frauds allegedly involving Danzig occurring between 1992 and January 1996, which were:
(1) a scheme involving misappropriation of at least $ 250,000 as "loans" from Moors & Cabot brokerage accounts by Thomas Fox to Edmund Danzig in 1992 and 1993 (Aff. PP 23-25);
(3) a scheme to gain a $ 1 million loan from Citizen's Bank to be collateralized by Gawrysiak's forged GARI bonds in May and June 1993 (Aff. PP 11-13 and Exs. 1-3 thereto);
(4) a scheme to falsely represent to victim Paul Maillis that Danzig had $ 40 million in financing, and that Maillis' loan to Danzig would be backed by the worthless GARI bonds (Aff. PP 21-22).
The affidavit supporting the warrant also attached numerous exhibits as examples of the forgeries and misrepresentations mentioned in the affidavit. In addition to the fraud schemes, the affidavit also outlined proof of Danzig's alleged perjury when testifying in a civil lawsuit brought by Bowers against Fox, Gawrysiak, and Danzig in the U.S. District Court for the District of Columbia. Testifying at that trial in January 1996, Danzig denied knowing on August 20, 1993, that the GARI bonds were worthless, contrary to Danzig's statements to Agent Wadsworth and the record of loan negotiations with Citizen's Bank. (Aff. PP 17-18). This allegedly evidenced perjury and false testimony, in violation of 18 U.S.C. §§ 1621 & 1623, as alleged in the affidavit.
The affidavit also described ties between Danzig and Fox arising from the Virginia investigation, in which Danzig received transfers of funds from Moors & Cabot customers through intermediary accounts, allegedly victimizing ten investors for a total of $ 250,000. (Aff. P 24). The affidavit alleges that none of these transfers were authorized by the brokerage clients and none of the money was repaid by Danzig. (Id.).
The affidavit demonstrated that evidence of Danzig's culpability for these schemes was likely to be found at his office, as well as evidence implicating others in these crimes even if Danzig is himself innocent.
The affidavit is too detail-rich to fully recount here. It adequately tied together the various accomplices, victims, and other actors into a highly articulated demonstration of a pattern of fraud characterized by the "advanced fee scheme" concept. The advanced fee scheme fraud, as allegedly perpetrated by Gawrysiak with the help of Danzig and others, involved forged bonds, other forged documents, fraudulent claims of access to overseas financing, and bogus financial statements seeming to come from banks and respected accounting firms, to induce investors to loan money in reliance on these misrepresentations.
On October 24, 1996, FBI agents executed the search, seizing from defendant's place of work approximately five boxes of various materials as well as copies of defendant's computer files.
In moving to suppress the seized items, defendant Danzig alleges primarily that: 1) the search warrant issued by Judge Pizzo was overbroad and therefore invalid; and 2) the law enforcement agents conducting the search acted in bad faith and with the intent to seize items beyond the scope of the warrant. In evaluating these claims, the court has before it documentary evidence such as the search warrant and the affidavit made in support of the warrant and the documentary evidence which served as an appendix to the affidavit, as well as the suppression hearing testimony of Special Agent Donald A. Wadsworth of the FBI. Agent Wadsworth, who testified on behalf of the United States, was the sole witness to testify at the suppression hearing, which was conducted by this court on April 3, 1997.
Agent Wadsworth testified at the hearing that he was one of the six FBI agents who conducted the search of defendant Danzig's premises, along with Special Agents Lynn M. Billings, Richard Blake, Vincent Rosado, James Handley, and Rod Huff. Although Mr. Danzig's office is located in Sarasota, Florida and Agent Wadsworth is based in Atlantic City, New Jersey, Agent Wadsworth went to Florida to lead the search team. Agent Wadsworth had also previously interviewed Mr. Danzig in the same Sarasota office that was the subject of the search warrant, so he was familiar with the premises in question. It had been determined that Agent Wadsworth's presence would be necessary at the search because of his familiarity with this case and with illegal fraud schemes in general.
In the days leading up to the warrant application on October 18 and the search on October 24, Agent Wadsworth had extended conversations with Agent Billings, giving her the details of the investigation so that she could be a knowledgeable affiant. He had also sent her his investigation case report including the leads being pursued in the investigation.
Agent Wadsworth testified that before commencing the search, the other five agents participating in the search met with him to discuss how to conduct the search at the Sarasota FBI at 8:00 a.m. The meeting lasted approximately 30 minutes. Agent Billings gave a presentation about the search plan and made the warrant available to the others. For part of that time, Agent Wadsworth described to the other agents the type of fraudulent schemes believed to be involved in this case. Agent Wadsworth reviewed Attachment B of the warrant with the searching agents, and Agent Billings also gave a short presentation regarding the substance of her search warrant affidavit and the conditions imposed by Attachment B.
A copy of the warrant as well as Agent Billings' affidavit made in support of the warrant were made available to the agents. Agent Wadsworth testified that he personally saw each of the agents read Agent Billings' affidavit.
According to Agent Wadsworth, the agents also reviewed the "Search Plan" that had been drafted by Agent Billings. (See Df. Ex. B). The Search Plan set forth the background of the government's investigation of defendants Gawrysiak and Danzig, and described the responsibilities of each of the six agents participating in the search. Attachment B to the warrant had apparently been appended to the search plan, as had a separate list of names and entities that were not mentioned in the warrant itself or the affidavit supporting the warrant. (See id.). The fourteen persons listed on this latter page were persons whom the investigating agent believed to be victims of the fraudulent schemes allegedly perpetrated by the defendants, which were described in the warrant; it was thought that files with the names of these victims might be "markers" signalling a file with evidence that might meet the four criteria, above, and so these individual names in the search plan were to be used as a guide, not as a separate rationale for seizure of documents. The ten business entities listed were believed by the government to be companies that had been promoted by stockbroker Thomas Fox as part of the fraudulent schemes allegedly orchestrated by Fox and the defendants in this case; again, it was believed that files or documents with the names of these related entities could contain evidence of the crimes meeting the criteria described in the warrant.
At the suppression hearing, Agent Wadsworth testified that this list of victims and "pet companies" was intended to be used as "flags" for the searching agents to aid the agents in their search for documents that fell within the scope of the warrant. Wadsworth and Billings feared that without such a list, the other agents might have difficulty in searching through reams of documents that could potentially be evidence of the complicated "advance-fee" fraud schemes allegedly carried out by these defendants. Wadsworth testified that he understood that the scope of the search was defined only by the warrant and its Attachment B, and he noted further that all documents were reviewed before they were seized to ensure that they fell within Attachment B. According to Wadsworth, the victims/pet companies list was used only to limit the search and to facilitate the search by providing potentially helpful information to the searching agents.
Agent Wadsworth further testified that the agents used substantial care during the search itself. The premises before, during, and after the search were photographed by Special Agent Blake. Also, because of concern that defendant Danzig's files might contain privileged attorney/client information, Agent Huff, who is also an attorney, was assigned the responsibility of functioning as a "Chinese Wall" during the search and seizure to ensure that the other agents would not come in contact with such potentially privileged documents. Special Agent Wadsworth briefed Special Agent Huff at length about the scope of the investigation and of the intended search, so that Huff could perform the privilege-screening duties on site during the search. Agent Rosado, who has special training in the retrieval of computer files, was assigned the task of seizing materials in defendant Danzig's computer files. Agent Wadsworth knew that computer files would be part of the search because he had observed a computer in defendant Danzig's office when he interviewed Danzig there on July 11, 1996. (Gov. Ex. 4, P 13). Rosado was a member of the FBI's Computer Assisted Recovery Team ("CART"). Instead of seizing defendant's computer hardware, Agent Rosado was able to copy defendant Danzig's electronically stored files on to computer equipment that Rosado had brought to the search. Rosado remained busy with these computer retrieval chores all day, copying the electronic disks but not producing or printing any paper copies.
Agent Wadsworth testified that all telephone logs, telephone messages, and information on computer was seized without independent review by Wadsworth himself. Agent Wadsworth personally reviewed all other documents and files, however, to determine whether seizure of the items would be permissible under the warrant. The other agents initially scanned potentially relevant documents, using the search plan and looking for evidence of fraudulent schemes involving the same pattern and modus operandi as was employed in the allegedly fraudulent schemes concerning which the government already had knowledge. Then, Agent Wadsworth, as the agent most familiar with the case, made the final determination concerning whether seizure would be appropriate within the warrant's terms.
According to Agent Wadsworth, out of approximately 200 boxes of documents in defendant Danzig's office, only five boxes of documents were ultimately seized. (Gov. Ex. 4, P 21). The parties agree, however, that the agents seized approximately half of the documents in the office that pertained to the time period of 1992 through 1995. The government explains this substantial 50% ratio by arguing that within that time period, defendant Danzig's business affairs were pervaded by fraud.
Mr. Danzig was allowed to be present during the search. Afterward, the FBI furnished a detailed inventory of all documents taken, along with copies of same; defendant has pointed to no document that is beyond the scope permitted by the warrant, nor has defendant indicated that any seized document is within a privilege.
I find the testimony of Special Agent Wadsworth to have been credible and candid. His testimony was comprehensive, convincing, and essentially unrebutted. He described a careful and deliberate investigation of wide-ranging wire and mail fraud schemes in New Jersey, Virginia, and Florida. In general, he amply demonstrated that the agents participating in the search of defendant Danzig's premises used care and good faith in endeavoring to abide by the terms of the search warrant while conducting their search as quickly and efficiently as possible.
Defendant's contentions in support of his motion to suppress may be grouped into two general areas of inquiry: 1) whether Magistrate Pizzo issued a valid warrant that was sufficiently particularized and not a "general warrant"; and 2) whether the government's search team acted in good faith and properly ...