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United States v. Schwartz

decided: April 20, 1976.

UNITED STATES OF AMERICA, APPELLEE,
v.
ROBERT BENNETT SCHWARTZ, APPELLANT



Appeal from judgment entered in the United States District Court for the Eastern District of New York, Orrin G. Judd, Judge, convicting appellant of conspiracy to traffic in narcotics in violation of 21 U.S.C. §§ 173, 174. Affirmed.

Feinberg, Oakes and Van Graafeiland, Circuit Judges.

Author: Van Graafeiland

VAN GRAAFEILAND, Circuit Judge:

On this appeal from a judgment of the United States District Court for the Eastern District of New York convicting appellant of conspiracy to traffic in narcotics in violation of 21 U.S.C. §§ 173, 174, appellant does not challenge the sufficiency of the evidence against him. Finding no basis for appellant's numerous claims of procedural error, we affirm.

The proof may be succinctly summarized. During 1970, Luis Ureta-Morales, known also as Lucho, was importing cocaine from South America and selling it in New York City. Among his customers was Claudina Leiros who, in turn, was selling to appellant's wife. On May 9, 1970, two of Lucho's couriers were arrested and detained in Los Angeles, and Lucho sought legal advice. Leiros introduced Lucho to appellant, a lawyer then under a three year suspension from practice.

This introduction permitted appellant to explore with Lucho the possibility of eliminating Leiros as the middleman and purchasing directly from Lucho. After some negotiations, Lucho told appellant that a large shipment of cocaine would shortly be imported through Texas and that appellant could have ten or fifteen kilograms from it.

Shortly thereafter, Lucho met Juan Besolo, another drug trafficker, who had five kilograms of cocaine available for ready sale, and arranged for this to be sold to appellant. During the course of this transaction, Besolo stated that after payment was made he would have ten more kilograms to sell, and Lucho arranged for this also to be purchased by appellant.

Before this transaction was consummated, Lucho flew to Texas to pick up the shipment he was awaiting. There he was arrested. The cocaine, however, was not found. When Lucho, having made bail, returned to New York, he found that Besolo, frightened off by Lucho's arrest, had reneged on the ten kilogram deal. Lucho promised appellant once more that he would receive a portion of the unseized Texas shipment when it arrived in New York but was again arrested before this could take place.

Although both Mr. and Mrs. Schwartz were indicted on December 10, 1974, Mrs. Schwartz fled the country shortly after pre-trial hearings had commenced in March 1975. Judge Judd directed, nonetheless, that the trial proceed against both defendants, and both were convicted.

On December 26, 1974, following appellant's arrest, Special Agent John P. Cipriano of the Drug Enforcement Administration applied to a United States magistrate for warrants authorizing the search of several safe deposit boxes rented by Mr. and Mrs. Schwartz. Five such warrants were issued authorizing the seizure of "large quantities of United States currency". One of the boxes was found to contain $75,000 in cash, jewelry, a deed to property in Jamaica purchased for $210,000, money wrappers and documents evidencing other large financial holdings by appellant and his wife, all of which were seized. Only the cash, money wrappers and the deed were subsequently offered in evidence.

Prior to trial, defendants moved to suppress the evidence thus seized, asserting that certain statements in the warrant application relative to the "laundering" of the proceeds of narcotics sales were untrue and that the application improperly disclosed information concerning appellant's failure to file income tax returns which he had given the United States Attorney upon the assurance it would not be used against him.

The affidavit stated that police officers had seen defendants go to a bank on several occasions and convert cash into bills of large denomination, cashier's checks or money orders and then drive to the banks where defendants' safe deposit boxes were located. In this manner, it was said, narcotics dealers laundered the proceeds of their sales. Judge Judd found that the hearsay affidavit of an investigator who had interviewed employees of the bank did not disprove that laundering had taken place. He also found that there was enough information contained in the application to justify the issuance of a warrant, and he, therefore, deemed it unnecessary to resolve the question of a breach of confidence.

On appeal, appellant has broadened his attack. He now states that Agent Cipriano lied when he stated in his affidavit that his "investigation" revealed that defendants had not filed tax returns since 1968, because this "investigation" consisted solely of a conversation with the Assistant United States Attorney in charge of the case. Appellant also argues that the information contained in the affidavit was stale and did not establish probable cause as of the time the warrants were issued. Finally, appellant contends that the seizure of the deed and other items in the safe deposit box went beyond the scope of the warrant and violated his Fifth Amendment privilege against self-incrimination. These contentions are without substance.

We find no error in Judge Judd's rulings on the motion to suppress, and appellant does not seriously contend that there was error. Instead, he has shifted his position and now advances arguments not made below. The Government very properly points out that the failure to assert a particular ground in a pre-trial suppression motion operates as a waiver of the right to challenge the subsequent admission of evidence on that ground. United States v. Rollins, 522 F.2d 160, 165 (2d Cir. 1975); United States v. Sultan, 463 F.2d 1066, 1070 (2d Cir. 1972). Moving past this point, however, we see no knowing falsehood in Cipriano's failure to state that the product of his investigation was information supplied to him by an Assistant United States Attorney, who, it would seem, could be considered a fairly reliable source. Statements contained in Cipriano's affidavit concerning the recent laundering activities of Mrs. Schwartz and her attempt to secure access to her safe deposit box on December 16, 1974, for the apparent purpose of securing $25,000 needed for bail, could reasonably lead the magistrate to conclude that cash from narcotics sales was in the box. Because the box was sealed and remained sealed until the warrant was executed, this information could not in any way be considered stale. Mapp v. Warden, 531 F.2d 1167 (2d Cir. 1976), Slip op. at 2675, 2680. Seizure of the deed and money wrappers was clearly justified under the "plain view" doctrine. Id. slip op. at 2681; Rollins, supra, 522 F.2d at ...


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