The opinion of the court was delivered by: GOETTEL
Defendant Albert H. Socolov ("Socolov"), one of eleven defendants named in this ten-count indictment, has filed five substantive motions.
Socolov himself is named in only one count of the indictment, Count Nine, which charges a racketeering conspiracy in violation of section 1962(a) of Title 18, United States Code.
That section of the law, commonly referred to as RICO (Racketeer Influenced and Corrupt Organizations), has its own conspiracy subsection, which is paragraph (d) of section 1962. Socolov's motions, some of which require extensive consideration, are as follows:
1. to suppress the electronic surveillance evidence;
2. to suppress use of certain of the electronic surveillance evidence as being privileged communications;
3. to suppress evidence obtained from Socolov's law offices by virtue of a search warrant;
4. to dismiss the indictment; and
5. alternatively, to sever the trial of this defendant from the trial of the other defendants.
The motions, except for the severance motion, as to which consideration has been deferred, will be considered in the order in which they arose chronologically in the Government's investigation.
Background of the Investigation
As is more fully described in this Court's Memorandum Decision of May 22, 1981, the investigation of the alleged Loften heroin ring arose from the Government's earlier investigation of the Todisco ring. See United States v. Todisco, (2d Cir. May 22, 1981) (Nos. 81-1052-1058). At the time the wiretap authorization was obtained for Loften's telephones, the Government apparently had no knowledge of Socolov's relations with Loften. Indeed, when their conversations were first intercepted, the Government did not even know that Socolov was an attorney. The first five-day report does not mention Socolov as being an attorney, although there were three conversations intercepted during that period. However, only one or two were of any consequence and it was not clear from the contents of the discussions that Socolov was an attorney. Only by use of a pen register, which gave the Government Socolov's telephone number, and a reverse directory, did the Government become aware that he was an attorney.
When the United States Attorney's office became aware that Socolov was an attorney, it reviewed certain of the discussions and came to the conclusion that Socolov was giving primarily business advice, so that the conversations did not fall within the attorney-client privilege. It continued monitoring their numerous telephone discussions until the tap was terminated with Loften's arrest.
On November 1, 1980, following the arrest of Loften and other defendants in this case, the Government obtained a warrant to search Socolov's offices. The documents taken as a result were placed in a sealed box pending a motion to suppress. The Government also served a parallel grand jury subpoena on Socolov, which was also the subject of a motion challenging aspects of the subpoena.
An indictment was returned on November 10, 1980 with respect to the original narcotics offenses, but it did not contain a RICO count or name Socolov as a defendant. Thereafter, on February 5, 1981, a superseding indictment was obtained, which added counts against the other defendants and included the RICO count for conspiracy to violate the antiracketeering statutes, naming Loften, his cousin Roy Harris, James Jones (who is currently a fugitive), and Socolov as defendants. Following discovery, the motions under consideration were filed. They will be considered separately.
Besides supporting the arguments advanced by the other defendants in their motion to suppress the wiretap evidence arguments already rejected by this Court Socolov offers the following additional arguments:
1. There was inadequate probable cause to authorize interception of communications concerning purported RICO violations.
2. Normal investigative techniques were not exhausted with respect to the RICO offenses.
3. The scope of the search allowed became impermissibly broad.
4. The Government violated the authorizing order by overhearing attorney-client communications. (This argument will be considered under the next heading involving attorney-client privilege.)
We start with the assumption that in a close case, doubts should be decided in favor of upholding the warrant. See United States v. Ventresca, 380 U.S. 102, 109, 85 S. Ct. 741, 746, 13 L. Ed. 2d 684 (1965); United States v. Jackstadt, 617 F.2d 12, 14 (2d Cir.), cert. denied, 445 U.S. 966, 100 S. Ct. 1656, 64 L. Ed. 2d 242 (1980). In focusing on the RICO violations separately, the defendant overlooks the interrelationship between the two grounds for the interception order. The existence of substantial assets and investments acquired by Loften was evidence of both heroin activities and possible violations of RICO. As this Court has already held, there was probable cause to indicate violations by Loften of the narcotics laws, 21 U.S.C. §§ 841, 846, and 848. Consequently, there was no need for independent support of probable cause for believing that RICO violations were occurring. The monitoring agents had authority to intercept the same conversations Socolov challenges, since they concerned substantial income and resources acquired by Loften in the course of a continuing criminal enterprise. Proof of the possession of large sums of cash by persons with no legitimate occupations is admissible as tending to prove that such money was derived from illicit sources. See United States v. Barnes, 604 F.2d 121, 146-47 (2d Cir. 1979), cert. denied, 446 U.S. 907, 100 S. Ct. 1833, 64 L. Ed. 2d 260 (1980); United States v. Viserto, 596 F.2d 531, 536 (2d Cir.), cert. denied, 444 U.S. 841, 100 S. Ct. 80, 62 L. Ed. 2d 52 (1979). Even if the conversations were not evidence of narcotics offenses as to which probable cause had been established, the interception would still have been lawful, since conversations pertaining to other crimes can be overheard if the issuing judge is subsequently apprised of this fact, so as to insure that the original wiretap order was not being used as a mere pretext for subsequent interception. 18 U.S.C. § 2517(5). See, e.g., United States v. Masciarelli, 558 F.2d 1064, 1066-68 (2d Cir. 1977).
The argument that "normal investigative techniques" were not properly employed, and could have yielded evidence by which to shape a successful prosecution, is unreasonably fanciful. To suggest that Loften's investments (which had world-wide aspects to them) should have been located by conducting searches of county clerks' offices is clearly unreasonable. Many of Loften's investments either were not yet consummated (e.g., the Arizona gold mine), or were in corporate names (e.g., the Eighth Avenue Real Property), or would not have required filing (e.g., the diamond ventures). Any attempt to obtain information from financial institutions by subpoena or otherwise would have rapidly brought the existence of the investigations to the target's attention. Finally, since the telephone was being used extensively as a means of pursuing the illegal investments, wiretapping was particularly appropriate. See United States v. DePalma, 461 F. Supp. 800, 813 (S.D.N.Y.1978).
Socolov also argues that the scope of the order was impermissibly broad because it authorizes electronic surveillance for evidence of "violations" of "Title 18 United States Code, sections 1962 and 1963 " (emphasis supplied). Since section 1963 sets penalties for section 1962 and does not describe an "offense," the defendant argues that the electronic surveillance became the equivalent of a general search and that the conversations seized must be suppressed. See United States v. Rettig, 589 F.2d 418 (9th Cir. 1978).
With respect to whether the wiretap application and the wiretap order were sufficiently particular, a pragmatic approach of considering the papers as a whole should be taken. See United States v. Tortorello, 480 F.2d 764, 780 (2d Cir.), cert. denied, 414 U.S. 866, 94 S. Ct. 63, 38 L. Ed. 2d 86 (1973). Although the order refers to 18 U.S.C. § 1963, that section is modified by and is particularized by the citation to the preceding section, 1962. Moreover, Judge Carter's continuous supervision of the electronic surveillance imparts maximum specificity to the order and removes any doubt as to whether the agents had too broadly construed their authority. See United States v. Steinberg, 525 F.2d 1126, 1132 (2d Cir. 1975), cert. denied, 425 U.S. 971, 96 S. Ct. 2167, 48 L. Ed. 2d 794 (1976). The order was meant to authorize the interception of conversations concerning Loften's acquisition of assets from revenues received through a pattern of narcotics trafficking, which assets would, therefore, be forfeitable. It is clear that the Government had authority to intercept conversations pertaining to "forfeitable assets" pursuant to the court's finding of probable cause with respect to the narcotics violations. The application and order were, therefore, sufficiently particular.
While Socolov also contends that the wiretap evidence must be suppressed because it is allegedly the illegal fruit of an earlier illegal wiretap, that earlier wiretap has since been upheld by the court of appeals for this circuit. See United States v. Todisco, supra. Moreover, it appears doubtful that Socolov would have standing to make such a challenge in any event, since he was not an aggrieved person (one whose conversation was intercepted) during the Todisco taps. See United States v. Fury, 554 F.2d 522, 525-26 (2d Cir.), cert. denied, 436 U.S. 931, 98 S. Ct. 2831, 56 L. Ed. 2d 776 (1978). Consequently, all of the arguments discussed above, which were advanced to suppress the wiretap evidence, are rejected.
Between September 22, 1980 and October 31, 1980, the Government's wiretap overheard numerous discussions between Socolov and James Loften. Socolov argues that, since he is an attorney, it was clearly improper for the Government to listen to any of his conversations with his client, James Loften. The Government responds that, since the discussions were not attorney-client discussions, but were business discussions, there was no impropriety in listening. The truth lies somewhere between these two positions.
While the defendant's papers sometimes lose sight of the principle, it is important to remember that the attorney-client privilege belongs to the client and not to the attorney. Although the attorney can, and should, assert it, he does so for the benefit of his client.
It appears that the initial relationship between Socolov and Loften was that of attorney and client. It commenced in 1973 and was concerned solely with the purchase of several commercial buildings on Eighth Avenue in New York City. That relationship dwindled away around 1975, although Socolov kept up contacts with James Jones (a/k/a "Crooks") concerning these buildings. Sometime in late 1979 or early 1980, Socolov and Loften renewed their relationship. Initially, it apparently concerned only the same buildings on Eighth Avenue. However, by the time the wiretap commenced in September of 1980, their relationship, and matters of common interest, had grown enormously. In addition to taking an active role in the renovation and operation of the buildings on Eighth Avenue,
Socolov had become deeply involved in Loften's plans to enter into a gold mining venture. There were also discussions regarding the possibility of an international diamond brokerage business, the promotion of a singer, and even mineral resource acquisitions in Zimbabwe.
The gold mining venture involved the development of certain gold mine leases in Arizona. Socolov had accompanied Loften and Harris on an October visit to the sites. As a result of his interest in this matter, Socolov started doing research on the business of gold mining, including the costs of developing the mines. (It was also contemplated that Socolov's son, William, would work at the mines for two years.) Moreover, in addition to his becoming concerned primarily with business matters, it is apparent from some of his discussions with Loften that Socolov had developed a personal interest in the venture, and that it was interfering with his law practice. Indeed, at one point, he commented:
SOCOLOV: "Flying there, flying back. Ah, when I'm away I can't take care of things that are here that produce money. This thing has got a...I got a stake in this thing now. It's got to produce. It's got to produce money."
LOFTEN: "Oh yeah, it has to."
(SOCOLOV:) "My attitude really is that, if it warrants it, I will slowly but surely pull out of this active practice and turn over most of this stuff over to these young guys and, and ah, concentrate on these things. I want to concentrate on running a gold mine, and I have to do that."
SOCOLOV: But it's got to be, I'm talking about big money. I can't, I can't function on a couple of thousand dollars. I got to have, I ...