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United States v. Musto

United States District Court, M.D. Pennsylvania

March 22, 2017

UNITED STATES OF AMERICA
v.
CHARLES MUSTO, Defendant

          MEMORANDUM

          JUDGE JAMES M. MUNLEY United States District Court.

         In the instant criminal matter, the United States of America (hereinafter “the government”) charges Defendant Charles Musto (hereinafter “defendant”) with crimes arising from the filing of a joint federal income tax return for the calendar years 2009 and 2010. Before the court for disposition are the defendant's motions to dismiss the superseding indictment (Doc. 44) and to suppress evidence (Doc. 16). For the reasons explained below, we will deny both motions.

         Background

         A Grand Jury in the Middle District of Pennsylvania indicted the defendant on April 12, 2016. (Doc. 1, Indictment). The one-count indictment charged the defendant with filing a false tax return for the calendar year 2009 in contravention of 26 U.S.C. § 7206(1).

         On April 28, 2016, the government executed five (5) search warrants at three (3) locations and seized approximately twenty (20) boxes of paper records and eleven (11) electronic hard drives. (Docs. 16-6 to 16-10, Exs. D-1 to D-5, Search and Seizure Warrants dated 4/27/16; Doc. 16-12, Ex. F, Search Warrant Items to be Seized). Subsequent to the search and seizure of defendant's property, the Grand Jury returned a superseding indictment adding two additional charges. Count II charges the defendant with filing a false tax return for the calendar year 2010, in violation of 26 U.S.C. § 7206(1). Count III charges the defendant with tax obstruction in contravention of 26 U.S.C. § 7212(a).

         On June 17, 2016, the defendant filed a motion to suppress all evidence directly and derivatively obtained by the government arising from the government's execution of five (5) search warrants on April 28, 2016. (Doc. 16). Additionally, on October 11, 2016, the defendant filed a motion to dismiss the superseding indictment. (Doc. 44). The court held an evidentiary hearing addressing these motions on January 9, 2017. (Doc. 57, 58). At the conclusion of the evidentiary hearing, the court directed the parties to submit post hearing briefs with citations to the record. (Doc. 59, 60). Having received the parties post-hearing submissions, the matter is ripe for disposition.

         Discussion

         The defendant moves to dismiss the superseding indictment, asserting that the government's investigation and prosecution of this matter eviscerated his constitutionally protected due process rights under the Fifth Amendment[1] and Sixth Amendment right to counsel.[2] Alternatively, the defendant moves to suppress all evidence arising from the government's execution of five (5) search warrants on April 28, 2016, arguing the government lacked probable cause to obtain these search warrants. The court will address these motions in seriatim.

         Motion to Dismiss

         The defendant first seeks to dismiss the superseding indictment pursuant to the Fifth Amendment's Due Process Clause and Sixth Amendment's right to counsel.[3] To warrant the extreme sanction of dismissal of the indictment under the Fifth and Sixth Amendments, the defendant must demonstrate that the government's misconduct caused the defendant to suffer substantial prejudice. See United States v. Voigt, 89 F.3d 1050, 1064, 1067 (3d Cir. 1996) (stating that to offend due process under the Fifth Amendment, the government's misconduct must shock the universal sense of justice, and the defendant must establish actual and substantial prejudice); United States v. Morrison, 449 U.S. 361, 364 (1981) (holding that the defendant must demonstrate prejudice, or a substantial threat thereof, to obtain dismissal under the Sixth Amendment).

         In the instant matter, the defendant alleges that the government's conduct during and after the execution of five (5) search warrants on April 28, 2016 demonstrates substantial prejudice. As previously stated, on April 28, 2016, the government executed five (5) search warrants at three buildings: (1) defendant's personal residence; (2) defendant's periodontal office; and (3) a building associated with defendant's real estate entities. (N.T. at 50-51, 57-58; Docs. 16-6, 16-7, 16-8, 16-9, and 16-10).

         While searching defendant's house, Special Agent Marita Gehan (hereinafter “SA Gehan”) located a notebook. (N.T. at 114). The notebook had the phrase “attorney-client privilege” marked on the front cover. (N.T. at 114). SA Gehan briefly reviewed the notebook and determined the notebook may contain privileged materials. (N.T. at 114-15). As such, SA Gehan segregated the notebook from other seized materials. (N.T. at 114-15).

         Subsequent to SA Gehan segregating the notebook, Supervisory Special Agent Ben Wylam (hereinafter “SSA Wylam”) arrived at her search area. (N.T. at 114-15; 148-49). SA Gehan advised SSA Wylam she had located a notebook. (N.T. at 116). SSA Wylam located the notebook and flipped through the notebook's contents. (N.T. at 149). Prior to discussing whether to seize the notebook with SA Gehan, SSA Wylam ensured no other agents were located in their vicinity, including the lead investigating case agent-Special Agent Maria Grabinski (hereinafter “SA Grabinski”).[4](N.T. at 159).

         SSA Wylam next advised SA Gehan not to discuss the notebook with other agents or prosecutors. (N.T. at 149). Specifically, SSA Wylam stated that:

if she believed [the notebook] should be seized, seize it. Place it in an envelope and have the evidence envelope sealed, to indicate on the outside of the evidence envelope the notebook with the annotation of attorney-client privilege and make sure that it is annotated on the inventory records so it kind of puts a spotlight on it. My conversation to her was, you can't really unsee what you already have seen.

(N.T. at 149). Finally, SSA Wylam reiterated to SA Gehan not to discuss anything with any other special agent or the prosecuting attorneys. (N.T. at 149).

         Soon thereafter, SA Gehan placed the notebook into an evidence envelope and appropriately labeled the envelope attorney-client privilege. (N.T. at 116). SSA Wylam removed the envelope from defendant's home and transported it to the federal building in Scranton. (N.T. at 151). The lead case agent, SA Grabinski, did not travel back to Scranton with SSA Wylam. (N.T. at 162-63). Rather, SSA Wylam traveled alone from the defendant's residence in Forty Fort to Scranton. (N.T. at 163).

         Subsequent to arriving at the federal building in Scranton, SSA Wylam immediately delivered the notebook to the filter attorney, AUSA Fran Sempa.[5] (N.T. at 153). AUSA Sempa reviewed the notebook's contents. (N.T. at 153). Shortly thereafter, AUSA Sempa determined the notebook contained protected attorney-client materials, and he returned the notebook to defense counsel the very next day. (N.T. at 153).

         Confronted with this undisputed evidence, the defendant first contends that the government's outright seizure of his attorney-client notebook demonstrates substantial prejudice. Specifically, the defendant argues that the government's seizure of this notebook violated the government's search protocol pertaining to the handling of potentially privileged information. We disagree.

         Pursuant to the search protocol, the government created a filter team, or taint team, comprised of an Assistant United States Attorney and other agents. (N.T. at 52-55). The taint team reviewed all potentially privileged materials seized on April 28, 2016. (N.T. at 154). If the filter attorney determined the seized materials were privileged, these materials were returned to defense counsel, without the prosecution team ever reviewing them. (N.T. at 154-55).

         Here, the government's temporary seizure of the defendant's notebook fails to demonstrate substantial prejudice. Initially, SA Gehan appropriately seized the defendant's notebook to ensure the defendant had not concealed any relevant information under the guise of an attorney- client notebook. Also, prior to SA Gehan and SSA Wylam discussing the notebook at the defendant's residence, SSA Wylam ensured no government agents were present, including the lead case agent SA Grabinski. SSA Wylam also repeatedly advised SA Gehan not to discuss the notebook with other agents or the prosecuting attorneys. Finally, SSA Wylam immediately delivered the notebook to the filter attorney for review. Thus, the government's temporary seizure of this notebook fails to demonstrate substantial prejudice.

         The defendant next argues that SSA Wylam's decision on April 28, 2016, to flip through defendant's notebook immediately after receiving it from SA Gehan caused substantial prejudice.[6] The undisputed hearing evidence, however, demonstrates that the instant SSA Wylam flipped through the notebook, he immediately transferred from the prosecution team to the filter team, and he ceased all communication with SA Grabinski and the prosecuting attorneys regarding defendant's criminal prosecution.

         Prior to the execution of the search warrants, SSA Wylam did indeed assist the prosecution team and had a limited supervisory role in defendant's investigation. (N.T. at 56, 138-49). Specifically, SSA Wylam reviewed the case three times a year with SA Grabinski, assisted SA Grabinski with interviews, and reviewed the affidavit of probable cause.[7](Doc. 59, Notes of Testimony dated 1/9/17 (hereinafter “N.T.”) 1/9/17 at 139-40).

         On April 28, 2016, SSA Wylam's role in the criminal prosecution changed. Within seconds of reviewing the notebook's contents, SSA Wylam understood that he could no longer participate in the investigation. (N.T. at 160-61). Instead, SSA Wylam walled himself off ...


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