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United States v. Mitan

July 23, 2009

UNITED STATES OF AMERICA
v.
KENNETH MITAN, FRANK MITAN,



MEMORANDUM

Presently before this Court is Defendant Kenneth Mitan's Motion to Suppress (Doc. No. 110), which was joined by Defendant Frank Mitan (hereinafter referred to as Kenneth and Frank). The Motion concerns evidence seized by the Redondo Police Department on January 12, 2005, from a car driven by Kenneth, following his arrest. The Court held a two-day evidentiary hearing on the Motion at which the Government's witness, Redondo Beach Police Detective Michael Strosnider, presented lengthy testimony. Based on the extensive post-hearing briefs and the following analysis, Defendants' Motion is GRANTED in part and DENIED in part.

I. Factual Background

The facts presented below come largely from the testimony of the Government's sole witness, Detective Strosnider, at this Court's evidentiary hearing on May 6 and 7, 2009. Because the Court found the witness to be generally credible, the Court finds facts based on his testimony, with any inconsistencies as noted.

As a preliminary matter, it should be noted that none of the evidence in question in this Motion relates to the specific alleged criminal conduct for which Defendants were indicted. The seizure of this evidence occurred nearly six months prior to the commencement of the alleged criminal activity described in the Indictment. However the Government seeks to introduce this evidence under Federal Rule of Evidence 404(b).

A. Investigation Prior to the Day of Arrest

In January 2005, Detective Strosnider of the Redondo Beach Police Department was contacted by an American Express representative about a possible fraudulent corporate business account in the name of Prime-Line, Inc. (Hr'g Tr. 32:16-19, May 6, 2009.) On January 6, 2005, American Express faxed to Strosnider the application for a corporate card for Prime-Line Inc. (Hr'g Ex. G-1, May 6.) The application was signed by "Frank Mitan," and his title was listed as "CEO." (Id. at USA039648-49.) The contact name on the application was "John Smith"*fn1 (Id. at USA039648), and both "Kenneth Mitan" and "Frank Mitan" had applied to receive employee cards (Id. at USA039649-50). A "Rush Card Request" form was included in the fax, requesting that the cards be sent to Frank Mitan of Prime-Line Inc. at a mail box in Redondo Beach, California. (Id. at USA039653). During the course of his investigation, Detective Strosnider learned that a John Smith had contacted American Express several times regarding the status of the application and the rush request, that Kenneth Mitan went by the name John Smith sometimes, and that Kenneth was part of several attempted business transactions on behalf of his father that were involved in legal disputes. (Hr'g Tr. 33:12-16, 34:3-7, May 6.) American Express also informed Strosnider that Kenneth and Frank were connected to several other "accounts that were never paid, and ultimately they determined on their end that those were fraudulent accounts." (Hr'g Tr. 67:13-15, May 7, 2009.) These accounts were mainly for business and resulted in a $325,000 loss to American Express. (Hr'g Tr. 36:8-17, May 6; Hr'g Tr. 67:18-21, May 7.) In addition, Strosnider obtained information about Kenneth from an internet website mitanalert.com, which alleged additional small business fraud by Kenneth.*fn2

(Hr'g Tr. 34:8-10, May 6.)

Strosnider investigated Prime-Line, Inc. by contacting the person he knew to be the owner, Doug Feeney, who informed Strosnider that neither Kenneth Mitan nor John Smith owned the company nor had permission to apply for a corporate credit card. (Hr'g Tr. 36:22-37:4, 57:5-21, May 6.) In subsequent conversations prior to Kenneth's arrest, Strosnider learned that there had been a sale of the company and that Feeney and Kenneth were involved in a civil dispute over ownership of the company. (Hr'g Tr. 57:24-58:3, May 6.)Strosnider did not investigate the civil dispute further.(Hr'g Tr. 59:4-12, May 6.)Feeney's name did not appear anywhere on the American Express application received by Strosnider. (Hr'g Tr. 32:20-24, May 7.) Strosnider testified that on the day of Kenneth's arrest he believed Mr. Feeney to be the President of Prime-Line, Inc. (Hr'g Tr. 37:21-24, May 7.)

According to the Rush Card Request form, the credit cards were to be delievered to 409 N. Pacific Coast, #755, Redondo Beach, CA. (Hr'g Ex. G-1 USA039653.)This address corresponds to a UPS Store where Kenneth held Box 755. (Hr'g Ex. G-2 USA039665.) The application form for Box 755 authorized restricted delivery mail for the following individuals: John Smith, Kenneth Mitan, John Adams. (Id.) Strosnider reviewed the UPS Store application form for Box 755 prior to his arrest of Kenneth. (Hr'g Tr. 38:11-13, May 6.)

Based on the above information, Strosnider, with American Express investigators, set up a controlled delivery of the Prime-Line credit cards to the address requested. (Hr'g Tr. 38:19-24, May 6.) He contacted the UPS Store where the cards were to be delivered and informed them of the investigation. (Hr'g Tr. 39:2-6, May 6.)

B. Events Leading Up to Arrest and the Arrest

On January 12, 2005, the day of the controlled delivery, Strosnider received a phone call from the UPS Store around 10 a.m. advising him that someone was there to pick up a package for Box 755. (Hr'g Tr. 39:13-15, May 6.) Strosnider, along with approximately five undercover officers in separate vehicles, responded to the UPS Store. (Hr'g Tr. 39:17-20, 61:8-16, May 6.) Strosnider entered the UPS Store acting as an employee, and observed Kenneth-who he identified from viewing prior photos-outside. (Hr'g Tr. 39:23-40:4, May 6.) Strosnider then observed Kenneth walk inside and ask for the package, appearing nervous and anxious. (Hr'g Tr. 40:4-8, May 6.) Kenneth picked up the package and signed for it, signing "Frank Mitan" on the signature form. (Hr'g Tr. 40:14-17, May 6.) The package was an 11 inch by 14 inch envelope with a UPS insignia. (Hr'g Tr. 59:23-25, May 6.) Kenneth immediately opened the envelope and appeared to grab a smaller envelope from inside as he was walking out of the store. (Hr'g Tr. 40:19-22, May 6.) Based on his observations at the UPS Store and information from American Express, Strosnider believed that the package contained the Prime-Line credit cards. (Hr'g Tr. 66:19-21, May 6.) Strosnider radioed his fellow officers in the parking lot that Mitan was exiting the store with the package. (Hr'g Tr. 40:24-25, May 6.)Strosnider than saw Kenneth enter an unoccupied, white, four-door, 2002 Chrysler Concorde with Michigan plates. (Hr'g Tr. 41:16-20, May 6.) The police later learned that the car was registered to Frank Mitan, Kenneth's father, with an address in Farmington Hills, Michigan. (Hr'g Ex. G-4 USA039637.)

Strosnider and the other officers followed Kenneth as he drove north on the Pacific Coast Highway to Hermosa Beach, where Kenneth stopped at a cell phone store, Virtually Wireless. (Hr'g Tr. 42:21-24, 43:5-9, May 6.) According to Strosnider's Investigation Follow-Up Report, it appeared that Kenneth was on a cell phone prior to arriving at Virtually Wireless, and it was later determined that he was activating the credit cards. (Hr'g Ex. D-1 USA0390617.) Kenneth entered the store and exited fifteen to twenty minutes later. (Hr'g Tr. 43:12-14, May 6.) Strosnider was in touch with American Express investigators at the time, who were monitoring the credit card charges.*fn3 (Hr'g Tr. 43:18-20, May 6.) At or near the time of the transaction and prior to Kenneth's arrest, American Express advised Strosnider that Kenneth used one of the Prime-Line cards at Virtually Wireless to purchase items worth $108.25. (Hr'g Tr. 43:20-22, 64:5-6, 64:14-17, May 6.) After Kenneth exited the store, Strosnider observed him holding a bag and then re-entering his vehicle. (Hr'g Tr. 43:25-44:2, May 6.) Based on the amount charged and his observations, Strosnider believed that Kenneth purchased a cell phone. (Hr'g Tr. 49:22-50:12, May 7.)

Kenneth continued to drive north and then stopped at a Kinko's copy store in El Segundo. (Hr'g Tr. 44:1-7, May 6.) Strosnider observed Kenneth exit his vehicle, enter Kinko's, and then exit Kinko's empty-handed approximately fifteen minutes later. (Hr'g Tr. 44:10-12, 68:15-17, May 6.) American Express did not advise Strosnider of any charges made at Kinko's. (Hr'g Tr. 68:18-22, May 6.) Strosnider does not recall that he observed Kenneth going into his trunk at any time during the surveillance. (Hr'g Tr. 62:23-25, 63:15-16, 68:23-69:1, May 6.)

Kenneth next drove to a parking lot for the Los Angeles International Airport and parked his car. (Hr'g Tr. 44:14-16, 45:2-3, May 6.) Around that time and prior to Kenneth's arrest, Strosnider learned from American Express that Kenneth had used one of the credit cards to purchase a plane ticket from Los Angeles to Georgia. (Hr'g Tr. 44:20-24, 69:2-7, May 6.)

At this point, Strosnider "formed the opinion that Mr. Mitan had fraudulently obtained corporate American Express credit cards, used them at a cell phone store and also purchased a plane ticket. Therefore, I advised the other officers to detain him pending further investigation." (Hr'g Tr. 45:5-8, May 6.) This opinion was based on all the information he had obtained prior to the arrest, the information from American Express, Kenneth and Frank's names being associated with other fraudulent accounts that American Express had given him, the information from Prime-Line's owner, and the possible allegations on the mitanalert website. (Hr'g Tr. 71:9-14, May 6.) The other officers detained Kenneth for the Prime-Line credit-card fraud at approximately 11:44 a.m. (Hr'g Tr. 71:23-25, 89:23-25, May 6; Ex. D-3.)

Strosnider was in his car a short distance away when the other officers detained Kenneth; he arrived at the lot within a minute or two of him being detained.*fn4 (Hr'g Tr. 45:10-20, 70:23-24, May 6.) When he arrived, he observed that Kenneth was standing next to his vehicle with the other officers standing near him. (Hr'g Tr. 45:16-18, May 6.) Strosnider does not remember if Kenneth was handcuffed, but Strosnider testified that Kenneth was not free to leave. (Hr'g Tr. 73:24-74:3, May 6.) The arrestee identified himself to Strosnider as Kenneth Mitan but said that he was trying to change his name to John Adam Smith. (Hr'g Tr. 52:8-9, May 6; Hr'g Tr. 58:12-19, May 7.) The two Prime-Line corporate credit cards were found on Kenneth's person at the time of the arrest. (Hr'g Tr. 66:19-24, 68:1-2, May 6; Ex. G-5; Ex. D-2.) Kenneth was booked for the following charges under the California Penal Code: § 530.5(a), improper use of personal identifying information, and § 484g(b), credit card theft misrepresentation. (Hr'g Tr. 21:5-9, May 7; Ex. D-3.)

C. Events at Airport Lot Following Kenneth Mitan's Arrest, Relevant for Search and Seizure Issues

After Strosnider arrived at the airport lot and observed that Kenneth was detained, he conducted a visual search of the car's interior. (Hr'g Tr. 45:22-23, May 6.) During his visual search, he observed the cell phone store bag in the front passenger area of the vehicle. (Hr'g Tr. 46:1-3, May 6.) He also observed loose papers and documents with business names and various addresses in both the front passenger area and the back seat, a laptop in the back seat, trash, and newspapers. (Hr'g Tr. 46:3-7, May 6.)

Following his visual search, Strosnider entered the vehicle to recover the cell phone store bag because he believed this to be fraudulently obtained. (Hr'g Tr. 66:2-4, May 6.) He also believed other documents related to Prime-Line may have been in the car. (Hr'g Tr. 10:3-9, May 7.) Strosnider was not aware of whether Kenneth had been asked to consent to the search and did not recall if the car was locked (Hr'g Tr. 75:15-21, 76:19-21, May 6); however he was not under the impression that it was a consent search (Hr'g Tr. 80:6-13, May 6). In the cell phone store bag he found a box and a completed application from the cell phone store. (Hr'g Tr. 46:9-16, May 6.) The application contained the business name B&B Concrete, which was not the company that Strosnider was investigating. (Hr'g Tr. 46:16-19, May 6.) Strosnider testified that he believed he may have taken the bag from the vehicle at that time. (Hr'g Tr. 79:5-6, May 6.)

Upon searching the vehicle, Strosnider observed other loose papers in the car, including papers with signatures, dates, business names, and business information; escrow papers; bank records; and business bank statements. (Hr'g Tr. 46:21-24, 52:23-25, May 6.) However Strosnider testified that he did not recognize the company names on the papers. (Hr'g Tr. 81:5-10, May 6.) Strosnider moved some documents around to determine their validity but left these inside the car. (Hr'g Tr. 52:21-22, 79:6-7, May 6.) According to Strosnider, "based on the volume of them, it needed to be examined later to determine if I had any Prime-Line information inside." (Hr'g Tr. 46:21-24, May 6.) Strosnider then used Kenneth's key to open and visually search the trunk "to determine if there was any further evidence that could be connected that should be immediately removed. (Hr'g Tr. 46:23-24, 47:2-3, 66:10-22, May 6.) In the trunk, Strosnider observed "the same type of paperwork in volume." (Hr'g Tr. 47:12-13, May 6.) He testified that he moved some things around to look at the documents. (Hr'g Tr. 74:4-8, May 7.) Strosnider does not recall removing documents or anything else besides the cell phone bag from the car at the airport parking lot. (Hr'g Tr. 53:3-7, 84:18-22, May 6.)

Initially Strosnider testified that the purpose of the search was for evidence because he was "recovering documents and/or paperwork I believe connected to this case."(Hr'g Tr. 82:18-20, May 6.) However, on re-direct, Strosnider also testified that one of the purposes of his visual search of the trunk was a safety search, "to make sure there was nothing in there that could be harmful during the towing process." (Hr'g Tr. 66:12-14, May 7.) Strosnider then testified that this safety search was part of an initial inventory search. (Hr'g Tr. 66:23-67:2, May 7.) On re-cross, Strosnider clarified the purpose of the airport parking lot search:

A: It was a two-part search. First a quick evidence recovery search for the evidence that's related to this case, and a-the beginning portion of an inventory search to make sure that the vehicle was safe to be towed and it was not going to harm anyway [sic]. There was nothing inside that could harm officers and/or other citizens.

Q: Now you said that there was-this search was conducted also for safety, is that correct?

A: Correct. (Hr'g Tr. 71:19-72:2, May 7.) Strosnider testified that he had no reason to believe Mitan was armed and dangerous or that the car contained weapons. (Hr'g Tr. 72:3-20, May 7.)

After Strosnider's visual search, Kenneth was placed in a police vehicle. (Hr'g Tr. 48:7-8, May 6.) Strosnider continued "the processing" of the vehicle. (Hr'g Tr. 48:10, May 6.) Based on the amount of documents in the vehicle, Strosnider was concerned about the parking lot being an "uncontrolled environment," so he requested a tow truck to respond to the airport lot to tow Kenneth's car. (Hr'g Tr. 48:13-16, 82:21, May 6.) Strosnider testified that he was concerned about the following: (1) not wanting to leave the vehicle in the parking lot where it could be damaged, (2) believing that the documents inside could be "related to my investigation or further investigative leads," and (3) not wanting the registered owner of the car to show up and take the vehicle and / or its contents. (Hr'g Tr. 48:19-49:1, May 6.) As such, Strosnider had the ...


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