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United States v. Manafort

United States District Court, E.D. Virginia, Alexandria Division

July 9, 2018

UNITED STATES OF AMERICA,
v.
PAUL J. MANAFORT, Defendant.

          MEMORANDUM OPINION

          T. S. Ellis, III United States District Judge

         At issue in this multi-count bank and tax fraud prosecution is defendant's motion to suppress evidence recovered from a May 27, 2017 search of a storage unit. Defendant argues that suppression is warranted

(i) because the search warrant application was based on an earlier warrantless search of the storage unit conducted without valid consent,
(ii) because the search warrant was unconstitutionally overbroad as the warrant failed to identify with adequate particularity the items to be seized, and
(iii) because the executing agents exceeded the search warrant's scope.

         The government opposes these arguments, contending

(i) that the individual who authorized the initial search of the storage unit had both actual and apparent authority to consent to the search,
(ii) that the search warrant specified the matters to be seized with the particularity required to satisfy Fourth Amendment requirements, and
(iii) that executing agents seized only evidence within the scope of the warrant.

         These issues have been fully briefed and argued and are now ripe for disposition.

         I.[1]

         On May 26, 2017, Special Agent Pfeiffer interviewed Alex Trusko (“Trusko”), an individual who, in his own words, served as defendant's “personal assistant”. June 29, 2018 Hr'g Tr. 15:14-20. Specifically, Trusko had formerly worked for defendant through two different companies operated by defendant, namely Davis Manafort Partners (“DMP”), and Steam Mountain LLC (“Steam Mountain”). Id. at 16:3-20. Trusko was employed by Steam Mountain at the time of the interview. Id. at 16:16-18. During the interview with Special Agent Pfeiffer, Trusko told Special Agent Pfeiffer that defendant used a storage unit at Public Storage to store business records. Id. at 17:2-8. Trusko explained that at defendant's direction Trusko had moved business records from defendant's residence into the unit on prior occasions and that Trusko believed the records would still be contained within the storage unit. Id. at 17:9-14; 18:21-19:2. Trusko also informed Special Agent Pfeiffer that Trusko (i) had access to the storage unit, (ii) had a key to the unit, and (iii) was willing to take Special Agent Pfeiffer to the unit. Id. at 19:3-20. Although Trusko believed that defendant also had a key to the unit, Trusko doubted that defendant had ever visited the storage unit himself. Id. at 27:2-8.

         Special Agent Pfeiffer and Trusko subsequently traveled from Trusko's home to the storage unit. There, Special Agent Pfeiffer spoke with the property manager of the storage facility and asked the property manager for a copy of the lease for the unit to verify Trusko's level of access to the unit. Id. at 19:21-20:7. The lease agreement listed Trusko as the “Occupant” of the unit, listed Trusko's phone number under contact information, and bore Trusko's signature as the occupant. The lease also listed defendant as a person with “Authorized Access” to the unit. Special Agent Pfeiffer also received from the property manager a copy of the occupant information, insurance addendum, and customer transaction journal for the unit. The occupant information listed Trusko as the “Occupant” and Trusko's e-mail address for contact information. Like the lease, the occupant information also listed defendant as an “Authorized User.” The insurance addendum produced by the property manager bore Trusko's signature, and the customer transaction journal, which recorded lease payments for the unit, was addressed to Trusko.

         After interviewing Trusko and reviewing the documents associated with the storage unit, Special Agent Pfeiffer then asked for Trusko's consent to search the unit. In doing so, Special Agent Pfeiffer presented Trusko with the FBI's standard consent-to-search form, and asked Trusko to read the form and sign it if appropriate. June 29, 2018 Hearing Tr. at 27:9-19. Trusko did so and signed the form without hesitation. Then Trusko unlocked and opened the door to the storage unit. Id. at 27:20-28:16. Special Agent Pfeiffer then entered the storage unit where he observed, but did not open, several bankers' boxes and a filing cabinet, which later were found to contain documents.

         After observing the contents of the storage unit, Special Agent Pfeiffer contacted lawyers at the Department of Justice (“DOJ”). Out of an abundance of caution, DOJ lawyers decided to seek a search warrant before continuing further with a search of the contents of the bankers' boxes and filing cabinet. Id. at 29:8-17. Accordingly, Special Agent Pfeiffer prepared a warrant application with an attached affidavit, setting out Special Agent Pfeiffer's reasons for believing that probable cause existed to support a more comprehensive search of the storage unit. Specifically, Special Agent Pfeiffer explained that he had met with Trusko and that Trusko had advised Special Agent Pfeiffer that “in approximately 2015, at the direction of [defendant], Trusko moved a series of office files of [defendant's business] contained in boxes from one smaller storage unit . . . to [the storage unit to be searched].” Aff. ¶ 28. In his affidavit, Special Agent Pfeiffer further described how Trusko informed Special Agent Pfeiffer that the storage unit “contained several boxes of office files from [defendant's] business, as well as a metal filing cabinet” which was “extremely heavy” suggesting that the filing cabinet “contained a large amount of records.” Id. ¶ 30. Special Agent Pfeiffer also indicated in the affidavit that Trusko advised Special Agent Pfeiffer that Trusko, at defendant's direction, had moved “brown, legal-sized files” into the cabinet as recently as spring 2016. Id.

         Special Agent Pfeiffer also included in his affidavit some of the information he observed from his initial viewing of the unit on May 26, 2017. Specifically, Special Agent Pfeiffer described that he observed approximately “21 bankers' boxes that could contain documents, as well as a five-drawer metal filing cabinet” in the storage unit. Aff. ¶ 31. Special Agent Pfeiffer, in his affidavit, added that some of the bankers' boxes bore markings on the exterior, such as “MPI” which Special Agent Pfeiffer believed referred to “Manhattan Products International” a company in which defendant was believed to have invested. Id. ¶¶ 32-33. Another box bore the marking “Ukraine Binders” on the exterior.

         Special Agent Pfeiffer further explained in his affidavit that he believed that the storage unit contained defendant's business records given (i) the information he learned from Trusko, (ii) his observations of the contents of the storage unit on May 26, 2017, and (iii) the information Special Agent Pfeiffer observed on the lease and other rental agreements. Id. ¶ 35. Special Agent Pfeiffer also believed that the storage unit contained financial records because IRS guidelines recommend that persons and corporations retain business records for several years after filing returns and individuals and corporations often retain copies of records in anticipation for litigation. Id. ¶¶ 35, 37.

         On May 27, 2017, a magistrate judge issued the warrant on the basis of Special Agent Pfeiffer's application and affidavit. The warrant contained two attachments: Attachment A and Attachment B. Attachment A described the property to be searched, namely the storage unit and “any locked drawers, locked containers, safes, computers, electronic devices, and storage media .. ., found therein.” Warrant Attach. A. Attachment B described the property to be seized during the search of the storage unit. Specifically, Attachment B directed executing agents to seize:

1. Records relating to violations of 31 U.S.C. §§ 5314, 5322(a) (Failure to File a Report of Foreign Bank and Financial Accounts), 22 U.S.C. § 618 (Foreign Agent Registration Act), and 26 U.S.C. § 7206(a) (Filing a False Tax Return), including:
a. Any and all financial records for Paul Manafort, Richard Gates or companies associated with Paul Manafort or Richard Gates, including but not limited to records relating to any foreign financial accounts;
b. Any and all federal and state tax documentation, including but not limited to personal and business tax returns and all associated schedules for Paul Manafort, Richard Gates, or companies associated with Paul Manafort or Richard Gates;
b. Letters, correspondence, emails, or other forms of communications with any foreign financial institution, or any individual acting as the signatory or controlling any foreign bank account;
c. Any and all correspondence, communication, memorandum, or record of any kind relating to the Party of Regions, Viktor Yanukovych, the European Centre for a Modem Ukraine, or any other foreign principal of Paul Manafort or Richard Gates, or any company associated with Paul Manafort or Richard Gates;
d. Any and all correspondence, memorandum, press release, or documentation of any kind regarding any lobbying or advocacy performed by Paul Manafort, Richard Gates, or any company associated with Paul Manafort or Richard Gates, on behalf of the Party of Regions, Viktor Yanukovych, the European Centre for a Modern Ukraine, or any other foreign principal of Paul Manafort, Richard Gates, or any company associated with Paul Manafort or Richard Gates[;]
e. Records related to, discussing, or documenting Neocom Systems, Antes Management, Yiakora Ventures, Global Highway Ltd., Global Endeavor, Leviathan Advisors, Peranova Holdings, Bletilla Ventures, Lucicle Consultants, and/or Telmar Investments, including but not limited to bank records, canceled checks, money drafts, letters of credit, cashier's checks, safe deposit records, checkbooks, and check stubs, duplicates and copies of checks, ...

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