The opinion of the court was delivered by: Chin, District Judge.
AMENDED MEMORANDUM DECISION
In this RICO and securities fraud case, several defendants move to
suppress wiretap evidence. For the reasons set forth below, the motions
are denied, except that the request to suppress recordings intercepted by
the government after the period of authorization had expired for two of
the wiretaps is granted.
The superseding indictment in this case charges the defendants with
engaging in a scheme to defraud investors by manipulating the market
price of stocks for several companies. The government alleges, among other
things, that defendants, including alleged members and associates of
organized crime families, arranged to artificially inflate the price of
stock through deceptive practices and threats of violence.
The wiretap evidence in this case was obtained from wiretaps on
cellular telephones used by defendants Eugene Lombardo, Rosario Gangi,
and Ernest Montevecchi. On December 30, 1996, based on the affidavit of
FBI Special Agent Stephen B. Hessinger, Judge Barbara S. Jones issued an
order authorizing a wiretap, for a period of 30 days, on defendant Eugene
Lombardo's cellular telephone ("Lombardo I"). The authorization was
extended for three additional 30-day periods ("Lombardo II, III, and IV")
by Judge Kevin Thomas Duffy.
On April 16, 1997, Lombardo began using a different cellphone and
accordingly monitoring of Lombardo's first cellphone ceased. On April
24, 1997, Judge Duffy authorized the wiretapping of Lombardo's new
cellphone for a period of 30 days ("Lombardo V"). He later extended the
authorization for six additional 30-day periods ("Lombardo VI-XI").
Judge Duffy also authorized a wiretap on defendant Montevecchi's
cellphone for a period of 30 days ("Montevecchi I"), which he extended
for three additional 30-day periods ("Montevecchi II-IV). Finally, Judge
Duffy authorized a wiretap for a period of 30 days on a cellphone used by
Gangi ("Gangi I"). Gangi later changed cellphones and
Judge Duffy authorized a wiretap on his new cellphone ("Gangi II").
The procedures governing the authorization of wiretaps are set out in
18 U.S.C. § 2518. Section 2518(3) requires a judge, before
authorizing the interception of wire communications, to determine that
(a) there is probable cause for belief that a crime has been, is being,
or is about to be committed; (2) there is probable cause for belief that
particular communications concerning the crime will be obtained through
the wiretapping; (3) normal investigative procedures have been tried and
have failed or reasonably appear to be unlikely to succeed or to be too
dangerous; and (4) there is probable cause for belief that the phones to
be wiretapped are being used for criminal purposes or by the target of
the wiretap. See also United States v. Wagner, 989 F.2d 69, 71 (2d Cir.
1993); United States v. Ambrosio, 898 F. Supp. 177, 180 (S.D.N.Y. 1995);
United States v. McGuinness, 764 F. Supp. 888, 898 (S.D.N.Y. 1991).
Defendants make several arguments for the suppression of the wiretap
evidence in this case: (1) the Hessinger affidavit, which was used in the
application for Lombardo I and incorporated in later requests for
authorizations, did not contain sufficient facts to support a finding of
probable cause that the defendants were engaged in criminal activity; (2)
the government failed to meet the requirement that court-ordered
electronic surveillance be conducted in a way to minimize the
interception of communications not otherwise subject to interception, as
set forth in 18 U.S.C. § 2518 (5); (3) during certain of the periods
in question agents monitored for more time than the authorization order
allowed; and (4) the government, without adequate excuse, failed to
obtain the sealing of recordings of electronic surveillance in a timely
fashion.*fn1 I will address each of defendants' contentions in turn.
Probable cause to authorize a wiretap "is established if the `totality
of the circumstances' contained in the affidavit indicates a probability
of criminal activity and that evidence of the criminal activity could be
obtained through the use of electronic surveillance." Ambrosio, 898 F.
Supp. at 181. The issuing officer must "make a practical, common-sense
decision whether, given all the circumstances set forth in the affidavit
before him [or her], including the `veracity' and `basis of knowledge' of
persons supplying hearsay information, there is fair probability that . .
. evidence of a crime will be found." Illinois v. Gates, 462 U.S. 213,
238, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983).
Additionally, the issuing judicial officer's decision to authorize
wiretaps "should be paid great deference by reviewing courts." Spinelli
v. United States, 393 U.S. 410, 419, 89 S.Ct. 584, 21 L.Ed.2d 637
(1969). Thus, any doubt as to the existence of probable cause should be
resolved in favor of upholding the authorization. Gates, 462 U.S. at
237, 103 S.Ct. 2317.
In authorizing Lombardo I, Judge Jones found that the Hessinger
affidavit provided probable cause to believe that the targets of the
wiretap (Gangi, Lombardo, Montevecchi, Irwin Schneider and. Claudio
Iodice (the "target defendants"))*fn2 were engaging in criminal
activities including racketeering, wire fraud, money laundering,
extortion and loansharking. Defendants contend that the Hessinger
affidavit did not establish probable cause. In contending that Judge
Jones erred in her findings, defendants dissect each piece of information
in the Hessinger affidavit to show that each fact taken alone does not
establish probable cause. "This approach, however, is flawed, for the
contained in a wiretap affidavit should be read as a whole
and in a common-sense manner." Ambrosio, 898 F. Supp. at 181; see also
Gates, 462 U.S. at 230, 103 S.Ct. 2317; United States v. Ruggiero,
824 F. Supp. 379, 399 (S.D.N.Y. 1993), aff'd 44 F.3d 1102 (2d Cir.
1995). Keeping these principles in mind and after reviewing the Hessinger
affidavit, I conclude that the Hessinger affidavit provided sufficient
probable cause to believe that the targets of the electronic surveillance
were engaging in criminal activity.
First, the Hessinger affidavit recited information, given by several
confidential informants, on the target defendants' illegal activities.
The affidavit explained that three confidential sources ("CS-1," "CS-2,"
and "CS-3") reported that members and associates of organized crime
families were involved in fraudulent schemes to manipulate the price of
stocks. All three confidential sources stated that the fraudulent schemes
included extorting and threatening owners of small brokerage firms. The
confidential sources also stated that the target defendants were involved
in the schemes.
Second, the confidential informants gave very specific detail on how
the targets were effectuating the fraudulent schemes. For example, one
informant, CS-2, described a scheme termed a "clean up" operation,
pursuant to which members and associates of organized crime families would
take over a company that was in financial straits and merge it with other
companies that had been temporally infused with cash to create the facade
that the newly created company had a greater net worth than it actually
had. Once it appeared that the merged company was financially solvent,
steps were taken to trade the company's stock in the market.
Additionally, various stock brokers would be given "kickbacks" to promote
the stock and some of the defendants or their associates would purchase
the stock before the price started to go up. (Hessinger Aff. ¶ 17).
According to the informants, the stock price would then ...