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U.S. v. MAIN STREET DISTRIBUTORS

April 26, 1990

UNITED STATES OF AMERICA
v.
MAIN STREET DISTRIBUTORS, INC., STEVEN PESCE, MARK BENOWITZ, ARTHUR EISENMAN, ROBERT CAVALIERE, AND STUART PODOLSKY, DEFENDANTS.



The opinion of the court was delivered by: Mishler, District Judge.

MEMORANDUM OF DECISION AND ORDER

The court's memorandum of decision of October 4, 1989, directed an evidentiary hearing on the defendants' motion (a) to suppress physical evidence seized on March 31, 1988;*fn1 (2) suppression of statements made by defendants Steven Pesce, Robert Cavaliere and Stuart Podolsky; and (3) dismissal of the indictment on the ground that the government intentionally and/or recklessly submitted false testimony to the grand jury.

Motion to Suppress the Seized Evidence

As previously noted (in our October 4, 1989, opinion), the defendants' challenge to the validity of the search warrants issued on March 2, 1988, and March 30, 1988, based on the claim of lack of probable cause, was rejected in a memorandum of decision by Judge Raggi dated November 22, 1988.

Defendants claim that the evidence seized on March 3, 1988, and March 31, 1988, should be suppressed because the search warrants failed to particularize the premises to be searched. The warrants described the premises to be searched as "Premises Known and Described as Main Street Distributors, Inc., 40-06 Oser Avenue, Hauppauge, New York." The affidavit, by Special Agent Anthony Giattino, in support of the warrant issued on March 30, 1988, stated:

  The Premises occupy a single-floor at 40-06 Oser Avenue in an
  industrial park in Hauppauge. The greater part of the space at
  that address consists of a warehouse area containing rows of
  free-standing metal shelving; also occupying space at that
  location is an office area at front of the building.

Defendants argue that 40-06 Oser Avenue is not occupied by Main Street Distributors, Inc. ("Main St."), alone but is a multi-unit building which is also occupied by OMT Distributors ("OMT") and other businesses.

Defendants urge that the evidence seized on March 31, 1988, be suppressed because of the conduct of the law enforcement officers in executing the warrant on that day.

The hearing established the following facts:

In January 1988, a Customs Inspector stationed in Port Newark, New Jersey, advised Import Specialist John Barry that a shipment believed to be glass crack pipes known as "stems" had arrived at the Railhead Terminal in Port Newark. Barry advised Special Agent Anthony Giattino of this conversation. Barry and Giattino examined the shipping documents at the terminal and learned that the shipment consisted of 500,000 four-inch glass stems consigned to Freedom Imports, 872 Broadway, New York. Barry interviewed Alain Elkaim, the president of Freedom Imports, and learned that part of the shipment was destined for Main Street.

In April 1987, Barry had visited Main Street to investigate a complaint of the Mini-Grip Corporation, the owner of patents and trademarks for "ziplock" plastic bags which were the subject of a patent exclusion order. When he entered the premises at 40-06 Oser Avenue he noticed a sign with the names Main Street Distributors, Butco, Strike-A-Light, and OMT Distributors on the entrance door.

Barry discussed the complaint with Donna Ferraro, office manager for Main Street. In response to Barry's inquiry as to whether Main Street imported other merchandise, Ferraro stated that Butco had imported brass screens for pipe filters and that Butco and Main Street were the same company doing business under different names. Defendant Arthur Eisenman entered the conference room where the interview was being held and indicated he knew of the complaint filed by Mini-Grip. Barry observed nothing in the premises to indicate that any individual or entity other than Main Street occupied any part of the building.

Giattino had a basis for believing that Main Street was in the business of distributing drug paraphernalia from the premises at 40-06 Oser Avenue. In February 1988, he assigned Special Agent Gary Kiernan to conduct a surveillance of the premises. Kiernan noticed a roof sign on the building which read "40-06 Main Street." No sign described the premises as 40-06 Oser Avenue. The building is located in an industrial park. 40-06 Oser Avenue is the address of a building with party walls on both sides, indicating the use or potential use by firms unrelated to Main Street. In the rear of 40-06 Oser Avenue is a parking area, also a loading dock for Main Street's warehouse portion of the premises. Giattino learned from the utility companies that Main Street paid the bill for all utilities to the building.

Execution of the March 2, 1988, Search Warrant

Special Agent Ray Barrett was the lead agent in the execution of the warrant on March 3, 1988. Barrett entered the premises with other law enforcement officers at about 1:00 p.m. and exhibited the warrant to the receptionist. He was advised that the owner (previously identified through a Dun and Bradstreet report as Steven Pesce) was not present. About 15 minutes after entering, while agents were conducting a security sweep, Stuart Podolsky pointed to an area in the warehouse consisting of a room which had an open front gate and stated that the area was used by his company, which was engaged in printing emblems on shirts. Pesce arrived at about 2:30 p.m. and told Barrett that some office space was leased to Mark Benowitz and Podolsky. No signs were displayed nor was there any indication, other than Pesce's and Podolsky's statements, that any space in the premises was occupied by any individual or entity other than Main Street. In one of the offices (either A or B), there was a desk with a sign which stated "Steven Pesce, President."

After consulting by telephone with an Assistant United States Attorney for the Southern District of New York, offices D and E were not searched; items in the warehouse area which Podolsky claimed to be his were not seized since they were not the subject of the search.

The agents seized the contraband they found in the warehouse. They also seized Main Street records. Among the records seized was a letter addressed to "Mr. Stuart Podolsky, Main Street Distributors" (Ex. S-11) and a letter addressed to "Mark Benowitz, Import Director, Main Street Dist., Inc." (Ex. S-12).

Execution of the March 30, 1988, Search Warrant

Giattino led a team of law enforcement officers in executing the search warrant on March 31, 1988. He exhibited the search warrant to Ferraro. In answer to Giattino's question as to who was in charge, she stated that she had five bosses: Pesce, Benowitz, Cavaliere, Podolsky and Eisenman — all partners.

Giattino asked Cavaliere, Podolsky and Benowitz what interest they had in Main Street. Cavaliere said he had nothing to do with Main Street; he said he operated a jewelry business under the trade name Golden Opportunities.*fn2 Podolsky denied any relationship with Main Street; he stated he operated OMT Distributors, which occupied office space in the premises. Benowitz stated that he occupied an office in the premises separate and apart from the premises occupied by Main Street.

The agents seized a Main Street record entitled "Corporate Books File Sign Out Corp. Book Sheet" with the following instruction:

IF ANYONE (PARTNERS OR OTHER) TAKE A CORP. BK. PLS SIGN ENCLSD.

The attachment to the instruction sheet dated March 12, 1987, listed 18 corporations (including Main Street and Golden Opportunity Redemption Ctr., Inc.). It noted "Assorted Corporate Seals in Main Street's (Steve's office) Safe."

During the security sweep agents saw drug paraphernalia and catalogs pertaining to drug paraphernalia in the office Benowitz and Podolsky claimed they used for the separate business conducted under the name OMT Distributors, Inc. (Office D). After discussing the claim made by Benowitz and Podolsky with an Assistant United States Attorney for the Eastern District of New York, and the assistant having authorized a search of that office (Office D), the agents conducted the search.

DISCUSSION RE SUPPRESSION

The Fourth Amendment, in prohibiting general searches, directs that "no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched . . . ."

A warrant complies with the particularization requirement of the Fourth Amendment if the officers executing the warrant can "with reasonable effort ascertain and identify the place intended." Steele v. United States, 267 U.S. 498, 503, 45 S.Ct. 414, 416, 69 L.Ed. 757 (1925). See United States v. Ofshe, 817 F.2d 1508, 1514 (11th Cir.), cert. denied, 484 U.S. 963, 108 S.Ct. 451, 98 L.Ed.2d 391 (1987) (Search of multiunit building upheld where warrant authorized search of a single business. Officers had no reason to know that the premises were subdivided into separate offices.); Marvin v. United States, 732 F.2d 669, 673 (8th Cir. 1984) (Search of private apartments upheld where the warrant authorized the search of a clinic because the officers did not know or could not reasonably have been expected to know the ...


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