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United States v. Manafort

United States District Court, District of Columbia

June 21, 2018

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

          MEMORANDUM OPINION AND ORDER

          AMY BERMAN JACKSON UNITED STATES DISTRICT JUDGE.

         Defendant Paul J. Manafort, Jr. has moved to suppress the evidence obtained when the FBI executed a search warrant issued by the United States District Court for the Eastern District of Virginia, and it seized business records contained in boxes and a filing cabinet in a self-storage unit in Alexandria, Virginia. Manafort argues that the search was unlawful because the agents entered the storage unit and looked around without a warrant the day before they presented their request for a warrant to the court. While they did not open the boxes or review the papers filed in the drawers on that day, they described the exterior of the containers they observed, including the labels on the boxes, in the warrant application. Therefore, Manafort claims, the warrantless initial entry tainted the later search of the files that was authorized by the warrant. He also argues that the warrant itself was too broad to comport with the Constitution for a number of reasons, including that it was not limited to a particular time period and it called for broad categories of financial records.

         The defendant's motion will be denied. Law enforcement agents do not need a warrant to enter a location if they have voluntary consent, and they do not need to have the consent of the person under investigation if they receive permission from a third party who has, or who reasonably appears to have, common authority over the place to be searched. Here, the agents obtained a copy of the lease for the storage unit. The person identified as the lessee or “occupant” of the storage unit was an employee of a company owned by Manafort who had a key to the premises, and he unlocked the door for the agents and gave them written permission to enter. Therefore, the preliminary inspection of the unit falls within the consent exception to the warrant requirement.

         Furthermore, the agents did obtain a search warrant in compliance with the Fourth Amendment for the containers within the storage unit before they opened any of the boxes or drawers or examined the records inside. A review of the warrant affidavit reveals that even if the initial survey of the unit was unlawful, that finding would not invalidate the seizure of the records that was carried out in accordance with the warrant. The affidavit in support of the warrant application set out the agent's reasons to believe that Manafort had been engaged in criminal activity in the conduct of his business, and that his business records had been moved to, and remained in, the locker rented for that purpose. So, if one were to excise the challenged information from the application, and presume that the Magistrate Judge was presented with a warrant application that did not include the few paragraphs describing the contents of the storage unit and the labels on the boxes, the affidavit would still support a finding of probable cause to believe that a crime or crimes had been committed and that records related to those crimes were likely to be found in the unit.

         Finally, the warrant was not overbroad since it called for records related to specific offenses detailed in the application and in the warrant itself. And even if this Court were to conclude that the warrant could or should be have been more tightly drawn, the agents relied in good faith on a warrant that had been reviewed and signed by a United States Magistrate Judge, and therefore, the evidence seized during the execution of the warrant should not, and will not, be excluded.

         BACKGROUND

         I. Procedural History

         On April 6, 2018, defendant filed his motion to suppress evidence seized pursuant to the warrant authorizing the search of the premises located at 370 Holland Lane, Unit 3013, in Alexandria, Virginia on the grounds that the search violated his Fourth Amendment rights. Def.'s Mot. to Suppress Evid. and All Fruits Thereof Relating to the Gov't Search of the Storage Unit Located in Alexandria, Virginia [Dkt. # 257] (“Def.'s Mot.”) at 1, 19-20. The government opposed the motion, Gov't Mem. in Opp. to Def.'s Mot. [Dkt. # 283] (“Gov't Opp.”), defendant replied, Def.'s Reply to Gov't Opp. [Dkt. #287] (“Def.'s Reply”), and the Court heard argument on May 23, 2018.

         II. Applicable Facts

         On May 26, 2017, an FBI agent met with a former employee of Davis Manafort Partners, who is currently a salaried employee of Steam Mountain, LLC, another business operated by the defendant. Aff. in Supp. of an Appl. for a Search Warrant [Dkt. # 257-1] (“FBI Aff.”) ¶ 28. The employee stated “that he performs a variety of functions for Manafort and his companies as directed by Manafort.” Id. He reported that “in approximately 2015, at the direction of Manafort, [he] moved a series of office files of Manafort's business contained in boxes from one smaller storage unit at 370 Holland Lane, Alexandria, Virginia to a larger storage unit, at the same storage facility, also at 370 Holland Lane, Alexandria, Virginia. [The employee] advised that he personally moved the office files into Unit 3013 at that location, and that the files were still in that unit.” Id.

         Later the same day, the employee led the agent to the storage facility, where the agent obtained a copy of the lease for Unit 3013 from the manager of the facility. FBI Aff. ¶ 29. The lease identifies the employee as the “Occupant” of the unit, and also identifies defendant as “Occupant's Authorized Access Person[]”and Richard Gates, with whom defendant worked in Ukraine, as “Alternate Contact.”[1] Id. ¶¶ 29, 35; Lease Agreement [Dkt. # 257-3] (“Lease”) at 1. The lease states: “By INITIALING HERE [the employee] Occupant acknowledges that the above information is correct, that unless Occupant is identified above as a business[, ] Occupant is a consumer, ” Lease at 1, and that “the Owner agrees to let the Occupant use and occupy a space in the self-service storage facility.” Lease ¶ 1. It further provides that “[t]he space named in the agreement is to be used by the Occupant solely for the purpose of storing any personal property belonging to the Occupant, ” Lease ¶ 5, and that “Occupant shall not assign or sublease the Premises.” Lease ¶ 15(e).

         The employee provided law enforcement with a key to unlock the unit, and he described the contents of the unit: boxes of office files from defendant's business and a metal filing cabinet containing additional, more recent office files from defendant's business. FBI Aff. ¶ 30. He explained that he moved the filing cabinet from defendant's former residence in Virginia in the spring of 2015, and he “indicated that Manafort was using his former residence as an office at the time.” Id. The agent noted in his affidavit that the employee stated that the cabinet was extremely heavy, “indicating that it contained a large amount of records.” Id. The employee was unable to describe the contents of the filing cabinet in detail, but he stated that Manafort occasionally sent him emails directing him to put certain records, which the employee described as “brown, legal-sized files, ” into the filing cabinet on Manafort's behalf. Id. His recollection was that he last added to the filing cabinet in the spring of 2016. Id.

         The agent provided the employee with a written consent form which stated:

1. I have been asked by Special Agents of the Federal Bureau of Investigation to permit a complete search of [the unit].
2. I have been advised of my right to refuse consent.
3. I give this permission voluntarily.
4. I authorize the agents to take any items which they determine may be related to their investigation.

         Consent Form [Dkt. # 283-2]. The form identified the storage unit, and the employee signed the consent form. See Consent Form; FBI Aff. ¶ 31. The employee then used the key in his possession to open the unit in the presence of the agent. FBI Aff. ¶ 31. The agent reports that “[w]ithout opening any boxes or filing cabinet drawers, ” he observed “approximately 21 bankers' boxes that could contain documents, as well as a five-drawer metal filing cabinet” inside the unit. Id. None of the file drawers were marked as to their contents, but some of the boxes bore labels such as “Admin, ” with subcategories including “Tax Returns, ” and “Box 12 Ukraine Binders, ” including subcategories such as “Surrogates, ” “Political, ” and “Media, ” which led the agent to conclude that they contained information related to, among other things, taxes, finances, and international activities connected to Ukraine and a company called Manhattan Productions International, in which defendant has a stake. Id. ¶¶ 31-35.

         Afterwards, the unit was locked and surveilled while the agent sought a warrant authorizing the search of the unit and its contents. Id. ¶¶ 38, 46; Application for a Search Warrant [Dkt. # 257-1]. United States Magistrate Judge Theresa Carroll Buchanan signed the warrant on May 27, 2017. Search and Seizure Warrant [Dkt. # 257-2] (“Warrant”).

         The warrant authorized agents to search the storage unit, including “any locked drawers, locked containers, safes, computers, electronic devices, and storage media, ” Warrant, Attach. A, and to seize certain records. Specifically, the warrant authorized seizure of eight categories of “[r]ecords 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).” Warrant, Attach. B ¶ 1. It further authorized seizure of “[c]omputers or storage media used as a means to commit the Target Offenses, ” id. ¶ 2, as well as thirteen categories of evidence relating to the use and control of those items. Id. ¶ 3. The warrant limited the seizure of evidence concerning who used, owned, or controlled a computer or storage medium to evidence relating to that use, ownership, or control “at the time the things described in this warrant were created, edited, or deleted, ” id. ¶ 3(a), but otherwise, the warrant did not include date-range limitations on what could be seized.

         Law enforcement agents executed the warrant on May 27, 2017, and created an inventory listing nine categories of records seized: eight labeled “documents” and one labeled “documents and binders.” Warrant at 2. There is no indication that any computers or electronic storage media were seized. See id.

         LEGAL STANDARD

         The Fourth Amendment to the United States Constitution guarantees “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” U.S. Const. amend. IV. This protection extends beyond the walls of a private dwelling: “[t]he privacy that is invaded may be sheltered by the walls of a warehouse or other commercial establishment.” Michigan v. Tyler, 436 U.S. 499, 504-05 (1978). The government bears the burden in a challenge to a warrantless search, United States v. Hassanshahi, 75 F.Supp.3d 101, 108 (D.D.C. 2014); see United States v. Peyton, 745 F.3d 546, 552 (D.C. Cir. 2014), and the defendant bears the burden when a search is authorized by a warrant. See Rakas v. Illinois, 439 U.S. 128, 130 n.1 (1978); United States v. de la Fuente, 548 F.2d 528, 533-34 (5th Cir. 1977).

         ANALYSIS

         Defendant asserts that the search of the storage unit violated his Fourth Amendment rights because the initial entry and inspection of the unit was conducted without a warrant, the warrant obtained based on the initial search was overbroad, and the agents who executed the search exceeded the warrant's search parameters. Def.'s Mot. at 1.

         I. The agents had the consent of a person with the authority, or apparent authority, to consent to their initial warrantless entry into the storage unit.

         A search without a warrant is presumed to be unreasonable, but law enforcement agents may rebut that presumption with a showing that a person with authority to do so permitted them to enter the premises. Illinois v. Rodriguez, 497 U.S. 177, 181 (1990). The Supreme Court has made it clear that

when the prosecution seeks to justify a warrantless search by proof of voluntary consent, it is not limited to proof that consent was given by the defendant, but may show that permission to search was obtained from a third party who possessed common authority over or other sufficient relationship to the premises or effects sought to be inspected.

United States v. Matlock, 415 U.S. 164, 171 (1974); see also United States v. Law, 528 F.3d 888, 904 (D.C. Cir. 2008), quoting Matlock, 415 U.S. at 170 (“[C]onsent of one who possesses common authority over premises or effects is valid as against the absent, nonconsenting person with whom that authority is shared.”).

         As the D.C. Circuit emphasized in Peyton, “‘[c]ommon authority' does not refer to some kind of ‘technical property interest.'” 745 F.3d at 552, quoting Georgia v. Randolph, 547 U.S. 103, 110 (2006); see also Matlock, 415 U.S. at 171 n.7 (“Common authority is . . . not to be implied from the mere property interest a third party has in the property. The authority which justifies the third-party consent does not rest on the law of property . . . .”). Rather, the Court of Appeals said, common authority

arises simply from “mutual use of the property by persons generally having joint access or control for most purposes, so that it is reasonable to recognize that any of the co-inhabitants has the right to permit the inspection in his own right and that the others have assumed the risk that one of their number might permit the common area to be searched.”

Peyton, 745 F.3d at 552, quoting Matlock, 415 U.S. at 171 n.7. The parties are agreed that this case must be decided in accordance with Matlock. See Def.'s Reply at 1.

         It is the government's burden to establish that the third party had the authority to consent to a search. Rodriguez, 497 U.S. at 181; United States v. Whitfield, 939 F.2d 1071, 1075 (D.C. Cir. 1991). But “[e]ven a person who does not actually use the property can authorize a search if it is reasonable for the police to believe she uses it. Such ‘apparent authority' is sufficient to sustain a search because the Fourth Amendment requires only that officers' factual determinations in such situations ‘always be reasonable, ' ‘not that they always be correct.'” Peyton, 745 F.3d at 552 (emphasis in original) (citation omitted), quoting Rodriguez, 497 U.S. at 185-87; see also Randolph, 547 U.S. at 110, citing Rodriguez, 497 U.S. at 181-82 (“The common authority that counts under the Fourth Amendment may thus be broader than the rights accorded by property law.”).

         Applying these principles, the Court finds that the initial warrantless entry into the storage unit was lawful.

         A. The person who leased the unit possessed actual authority over the premises.

         The starting point of the analysis in this case is the fact that the “occupant” who signed the lease for the premises located at 370 Holland Lane, Unit 3013, was a person other than Paul Manafort. See Lease at 1. It was that person who gave the agents written permission to enter, see Consent Form, and it was that person who opened the door with his key and let them in. FBI Aff. ¶¶ 30-31. The person is “a salaried employee of Manafort's company, ” FBI Aff. ¶ 28, and Manafort's name appears on the lease only as the “Occupant's Authorized Access Person[].” Lease at 1. Thus, the record supports a finding that permission to search was obtained from a person who possessed - at the very least - common authority over the premises to be inspected, and a warrant was not required.[2]

         Manafort points to the statements in the agent's affidavit concerning the actions taken by the employee “at the direction of Manafort.” FBI Aff. ¶ 28; see also Id. (“[H]e performs a variety of functions for Manafort and his companies as directed by Manafort.”). He argues that the affidavit thereby reveals that the employee was only permitted to enter the unit when he was given an express direction to do so. See Tr. of Mots. Hr'g (May 23, 2018) [Dkt. # 305] (“Tr.”) at 12 (“We know from the affidavit that he's only acting at the direction of Mr. Manafort . . . .”); Tr. at 15 (“[W]e're just looking at the affidavit and what's sworn to by the agent. He's saying that only at Mr. Manafort's direction and control. And not just once or twice, but three times, . . . .”). But the affidavit does not say that.

         In paragraph 28 of his affidavit, the agent reports that the employee “advised that in approximately 2015, at the direction of Manafort, [he] moved a series of office files of Manafort's business” from a small unit at Holland Lane to the larger one at issue in this case. FBI Aff. ¶ 28. Paragraph 30 reports that the employee moved a filing cabinet from Manafort's former residence to the unit in the spring of 2015, and that he “advised that Manafort occasionally sent emails to [him] directing [him] to put certain records into the filing cabinet on Manafort's behalf.” FBI Aff. ¶ 30. So the affidavit connects the defendant to the storage unit by establishing that he instructed the employee to place materials in it, but it does not explicitly or implicitly delineate any limits on the employee's right of access at any other time.[3]

         This conclusion that the employee had the authority to consent is consistent with the legal precedent amassed by both parties. The briefs in this case were thorough, and it appears that there have been few reported cases from any circuit that present similar facts. The only two cases presented to the Court involving storage units both concluded that an individual with joint control had actual authority to consent to the search of the unit, and in each of those cases, the facts supporting common authority were not even as strong as they are here.

         In United States v. Kim, 105 F.3d 1579 (9th Cir. 1997), the Ninth Circuit upheld the district court's refusal to suppress evidence seized from a storage locker that had been leased by an associate of the defendant, named Wee, at the defendant's direction. Id. at 1580 (“Wee also told [an agent] that Kim had hired him to rent the storage units . . . .”). The associate rented several units from a storage unit facility, and the lease agreements indicated that other people, including the defendant, were named as additional persons with access to the units. Id. Wee advised law enforcement agents that he believed the defendant had placed stolen goods inside of the units. Id. He did not have a key to the units, but he authorized the agents to cut off the locks, and he consented to a search of the contents. Id. “Agent[s] also learned that Wee had been the only individual present during the unloading of some of the allegedly stolen goods and that Wee had temporarily kept the keys to the storage units afterwards.” Id.

         The Court in Kim began its analysis with the Supreme Court's opinion in Matlock: “[t]he Court defined common authority as ‘joint access or control for most purposes.'” 105 F.3d at 1582, quoting Matlock, 415 U.S. at 171 n.7. The government pointed to the fact that Wee's name was on the lease and that he had a key at one time. Id. But the court was troubled by the fact that Kim “had the only key to the lock and had general control over the unit, ” and it concluded that “[t]hese factors put the case outside the ‘joint access or control for most purposes' test.” Id. Nonetheless, after taking note of the ...


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