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United States v. Faller

United States District Court, W.D. Kentucky, Bowling Green Division

April 30, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
JAMES S. FALLER, II, Defendant.

MEMORANDUM OPINION AND ORDER

JOSEPH H. McKINLEY, Jr., Chief District Judge.

This matter is before the Court on a motion by Defendant, James S. Faller, II, to request a Franks hearing and to suppress all evidence obtained from a search of his home and office. [DN165]. Fully briefed, this matter is ripe for decision. For the reasons that follow, Defendant's motion is DENIED.

I. BACKGROUND

Defendant, James S. Faller, II, is charged with, inter alia, tax evasion and failure to timely file a U.S. Individual Income Tax Return, Form 1040, for the 2006 through 2009 tax years.[1] On November 3, 2010, Special Agent Matthew Sauber (the "affiant") submitted an application for a search warrant [Application and Affidavit for Search Warrant "Appl. and Aff., " DN 173-1] for Defendant's residence and office located at 530 G.V. Hale Avenue, Russell Springs, Kentucky, to seize papers and effects related to Defendant's tax returns. The search warrant was signed by former United States Magistrate Judge Goebel. On November 4, 2010, special agents of the Internal Revenue Service executed the search warrant. Defendant contends that the affiant intentionally made false statements or had a reckless disregard for the truth in applying for the search warrant. As a result, Defendant maintains that all evidence seized incident to the search must be suppressed.

II. STANDARD OF REVIEW

The Fourth Amendment states that "no Warrants shall issue, but upon probable cause, supported by Oath or affirmation." U.S. CONST. amend. IV. "When probable cause is required, it is an obvious assumption that there will be a truthful showing of probable cause." United States v. Witherspoon, 2010 WL 724663, *2 (W.D. Ky. Feb. 25, 2010) (citing Franks v. Delaware, 438 U.S. 154 (1978)). In challenging the veracity of statements contained in the affidavit, the defendant must prove by a preponderance of the evidence that "a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit." Franks, 438 U.S. at 155-56. "If this is established by the defendant, then the false material must be set aside in determining whether the remaining content is sufficient to establish probable cause." Witherspoon, 2010 WL 724663, *2 (citing Franks, 438 U.S. at 156). In the case where the remaining material fails to establish probable cause, "the search warrant must be voided and the fruits of the search excluded to the same extent as if probable cause was lacking on the face of the affidavit." Franks, 438 U.S. at 156.

To be entitled to a Franks hearing, a defendant must (1) "make[] a substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit, " and (2) "the allegedly false statement is necessary to the finding of probable cause." United States v. Graham, 275 F.3d 490, 505 (6th Cir. 2001) (citation and internal quotation marks omitted). The Sixth Circuit's "well-settled framework for Franks hearings requires a defendant to point to specific false statements' and then accompany his allegations with an offer of proof.'" United States v. Green, 572 Fed.Appx. 438, 442 (6th Cir. 2014) (quoting United States v. Cummins, 912 F.2d 98, 101, 103 (6th Cir. 1990)). Further, while alleged omissions on the part of the affiant are not excluded from consideration under Franks, "to be constitutionally problematic, the material must have been deliberately or recklessly omitted and must have undermined the showing of probable cause." United States v. Carpenter, 360 F.3d 591, 596-97 (6th Cir. 2004). This does not mean, however, that officers must divulge every piece of exculpatory evidence in the affidavit. Mays v. City of Dayton, 134 F.3d 809, 816 (6th Cir. 1998) ("To interweave the Brady due process rationale... places an extraordinary burden on law enforcement officers, compelling them to follow up and include in a warrant affidavit every hunch and detail... to prove the negative proposition that no potentially exculpatory evidence had been excluded.").

III. ANALYSIS

In Defendant's motion for a Franks hearing, he alleges Special Agent Sauber intentionally or recklessly made multiple false statements and omissions in the affidavit submitted for the search warrant. Specifically, Defendant contends that the affiant relied entirely on a confidential source (the "CS") without corroborating the veracity of the CS's statements. Defendant also asserts that it would have been impossible for the affiant to verify CS's statements because they were false. In response, the United States argues that the "false statements" identified by the Defendant were accurate and sufficiently corroborated by the affiant. Alternatively, the United States posits that even if some of the statements were excluded from consideration for the purposes of probable cause, the affidavit would still contain more than enough evidence to support probable cause.

The Court also believes it prudent at this early juncture to clarify an important point regarding the purposes of a Franks analysis for the parties. It has become clear that Defendant intends to use a Franks hearing to disprove all charges against him; however, a Franks hearing is the improper forum. Mays, 134 F.3d at 816 ("[T]he probable cause determination in Franks, derived from the Fourth Amendment, involves no definitive adjudication of innocence or guilt...."). Particularly, a discussion of those charges involving payroll taxes for Call Center Communications, Inc. (Count II) and making a false statement for Wage Earners and Self-Employed Individuals, Form 433-A, is irrelevant to the probable cause analysis because the application for the search warrant did not allege probable cause for these crimes. Additionally, the events that transpired following the execution of the search warrant are unrelated to Franks. Therefore, the focus of this Opinion will be on probable cause for failure to timely file taxes and tax evasion.

A. Confidential Source

Before discussing the details of each party's position, the Court finds it necessary to clarify the basis for obtaining a Franks hearing, specifically as it applies to statements made by a confidential source. In situations where the majority of the evidence in an affidavit for a search warrant derives from a confidential source, courts "must consider the veracity, reliability, and the basis of knowledge for that information as part of the totality of circumstances." United States v. Helton, 314 F.3d 812, 819 (6th Cir. 2003). "These factors are not evaluated independently; rather, the presence of more of one factor makes the others less important. For instance, the more reliable the informant, the less detail the informant must provide in his tips before a magistrate can find probable cause." United States v. Ferguson, 252 Fed.Appx. 714, 721 (6th Cir. 2007) (citing Illinois v. Gates, 462 U.S. 213, 233 (1983)). However, even when there is a question concerning the reliability of the confidential source, "probable cause may exist when there is some independent corroboration by the police of the informant's information.'" United States v. Gregory, 311 Fed.Appx. 848, 856 (6th Cir. 2009) (quoting United States v. Jackson, 470 F.3d 299, 307 (6th Cir. 2006)).

Another issue that arises throughout the parties' briefs involves the veracity of the CS. Particularly, throughout Defendant's motion for a Franks hearing, he consistently attributes statements to the affiant when they were actually made by the CS. In fact, the application for the search warrant specifically delineated between statements made by each party as evidenced by the two sections entitled "Employee's Statements" and "Statements Made by the CS that have been Corroborated." It is vital to properly distinguish between the two types of statements because the key inquiry for Franks is whether the affiant intentionally or recklessly included a false statement, not the CS. United States v. Fields, 229 F.3d 1154, *3 (6th Cir. 2000) ("A Franks hearing requires that the defendant make a substantial preliminary showing that the affiant, rather than the informant, deliberately or recklessly included false information in the affidavit." (emphasis added)); see also Mays, 134 F.3d at 816 ("Franks recognizes that information an affiant reports may not ultimately be accurate, and is willing to tolerate such a result at that early stage of the process, so long as the affiant believed the accuracy of the statement at the time it was made." (citing Franks, 438 U.S. at 165)). Therefore, while the veracity of the CS is important in evaluating probable cause, ultimately, Franks turns on the awareness of the affiant of any false statements.

B. Failure to Timely File Tax Returns

The United States obtained the search warrant for Defendant's home and office in order to gather evidence concerning Defendant's alleged tax evasion and failure to file his 2006, 2007, 2008, and 2009 individual income tax returns. [Appl. and Aff., DN 173-1, at ΒΆ 3]. The United States asserts that the affidavit set forth sufficient information to ...


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