The opinion of the court was delivered by: Spatt, District Judge.
This suppression hearing was initiated because of the
information provided in a letter from Douglas E. Grover, Esq.,
dated March 9, 2001. In this letter Attorney Grover asserted
that there was a theft of documents from the Numisgroup offices
by an undercover informant, which theft constituted an illegal
search. Further, Attorney Grover contends that this illegal
seizure by an agent of the Government vitiates the search
warrant previously issued, under which multitudes of records
were seized by the Government. The defendants move for the
suppression of these documents.
The affidavit in support of the application for arrest and
search warrants, by United States Postal Inspector Sol Farash,
dated February 25, 2000 describes a conspiracy to defraud with
regard to the sale of valuable coins. In this affidavit,
Inspector Farash describes a "boiler room" sales operation
consisting of a scheme to "fraudulently sell items (coins) at
highly inflated prices by means of false and fraudulent
representations." Inspector Farash conducted an investigation
into the activities of the coin sale businesses involved in this
case. He interviewed approximately twenty persons who purchased
coins from Numisgroup, Galerie des Numisatique and/or Meridian.
Farash also interviewed "a confidential informant," we now know
to be one Michael Zelen, "who at the direction and under the
supervision of law enforcement agents, obtained a position as a
sales person with Numisgroup."
A review of the affidavit in regard to the allegations leading
to this suppression hearing reveals that Inspector Farash
interviewed George Barre, Roxie Hollingshead and John Pirile,
names of customers given to him by the confidential informant.
These customers gave relevant information to Farash.
A suppression hearing was held in response to the defendants'
position on March 13 and 14, 2001.
Presently before the Court are motions by the defendants to
suppress any evidence obtained pursuant to the search warrant on
the grounds that the information in the affidavit in support of
the warrant was illegally obtained by confidential informant
Michael Zelen in violation of the defendants' Fourth Amendment
In order to successfully challenge a search warrant based on
the allegations in a supporting affidavit, a defendant "must
show by a preponderance of the evidence that the affidavit
contained false statements that were material on the issue of
probable cause." U.S. v. Wapnick, 60 F.3d 948 (2d Cir. 1995);
see also Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57
L.Ed.2d 667 (1978). Where the affiant obtains his information
from a government informant, a deliberate or reckless falsehood
or omission may be grounds for suppression. Id. In this case,
the Government concedes that Zelen was a confidential informant
working undercover for the Government, and thus, any searches or
seizures he conducted are the equivalent of Government searches
for purposes of the Fourth Amendment.
The defendants' right to be free from unlawful searches
extends only to those items in which they possess a legitimate
expectation of privacy. U.S. v. Knoll, 16 F.3d 1313, 1320 (2d
Cir. 1994). In Knoll, the Second Circuit discussed the
situation in which a government agent makes an unauthorized
"search" in a suspect's office. Obviously, if documents are
given, made available or openly displayed in plain view to a
sales person in the course of his employment, there is no
reasonable expectation of privacy and the documents may be used
by the Government. It is only when the documents are secured in
folders or in locked or even closed private filing cabinets,
that the expectation of privacy protects the documents. As
stated in Knoll:
The Fourth Amendment only protects against a search
that intrudes upon an individual's reasonable
expectation of privacy. See Illinois v. Andreas,
463 U.S. 765, 771, 103 S.Ct. 3319, 3324, 77 L.Ed.2d
Under Fourth Amendment law a container need not
be locked or fastened shut for there to be a
legitimate expectation of privacy in its contents,
though those facts are emphasized when they exist.
See, e.g., Smith v. Ohio, 494 U.S. 541, 541-42,
110 S.Ct. 1288, 1289, 108 L.Ed.2d 464 (1990) (brown
paper bag is a closed container); United States v.
Donnes, 947 F.2d 1430, 1435-36 (10th Cir. 1991)
(reasonable expectation of privacy in opaque camera
lens case). The Supreme Court has rejected a
constitutional distinction between "worthy" and
"unworthy" containers and has noted that "the
Fourth Amendment provides protection to the owner
of every container that conceals its contents from
plain view." United States v. Ross, 456 U.S. 798,
822-23, 102 S.Ct. 2157, 2171-72, 72 L.Ed.2d 572
(1982). The often-stated requirement that a
container need only be "closed" reflects the
standard that for there to be a reasonable
expectation of privacy, the contents of a container
should not be apparent without opening.
So long as the opaque file folders were closed or
were in closed boxes, and did not reveal their
contents, then a reasonable expectation of privacy
continued even after they were stolen from Knoll's
The defendants could not support an expectation of privacy in
information made available to Zelen in his capacity as
salesperson. See, e.g., U.S. v. Jenkins, 43 F.3d 447 (5th Cir.
1995) (there is no Fourth Amendment violation where
informant/employee with routine access to his employer's
videotapes searched those tapes and produced them to the
Government); United States v. Goldin, 1996 WL 294366 at * 16
(S.D.Ala. 1996) (there is no violation where company secretary
produced to Government corporate documents that she had access
to as part of her employment responsibilities); see also United
States v. Bonfiglio, 713 F.2d 932, 937 (2d Cir. 1983) (clearly
labeled cassette tape "had the practical effect of putting the
contents of the tape in plain view and therefore reducing the
expectation of privacy").
Of course, if the Numisgroup search is found to be invalid,
virtually all the documentary evidence seized by the Government
from the Numisgroup offices may require suppression as "fruits
of the poisonous tree." Wong Sun v. United States,
371 U.S. 471, 487-88, 83 S.Ct. 407, 417-18, 9 L.Ed.2d 441 (1963).
II. THE HEARING — FINDINGS OF FACT
There were only two witnesses presented at the hearing,
Inspector Sol Farash and Michael Zelen, both produced by the
Inspector Sol Farash testified that he was first involved in
this matter when he received a call from United States Postal
Inspector Mike Hartman from the Harrisburg, Pennsylvania
division. Hartman advised him that he had a coin boiler room
case and "that he had an individual who was willing to work, who
came from the Long Island, New York area." That person, Michael
Zelen, had been arrested for and pled guilty to another crime in
Pennsylvania. Zelen told Farash about coin boiler rooms on Long
Island, including companies called Numisgroup and Nationwide,
also known as Meridian, in Holbrook, with one Bob Dupurton as
the owner. Zelen told Farash that Dupurton was selling "rare
coins" in a classic boiler room operation. Zelen also mentioned
other companies called New World Rarities and Heritage
Zelen responded to an employment ad by Numisgroup and set up
an interview with John Laura of that company. Farash recalled
that he had arrested a John Laura six or seven years ago for a
boiler room operation involving chemicals. On September 7, 1999,
the day Zelen was to start work at Numisgroup, he met with
Farash who directed him to comply with seven conditions (see
U.S. Ex. 7). One of the conditions was: "4. You do not do
anything illegal. Must Be Clean."
Farash testified that he told Zelen on that occasion:
Number four, which I highlighted, and I underlined,
you do not, I underlined both, do anything illegal.
You must be clean. You must not take anything. You
must do nothing wrong. You are working as an agent
for the government.
Q And number four says, you do not do anything
illegal, must be clean; is that right?
Q Were those the exact words that you related to Mr.
But all you wrote down is you did not — do not
do anything illegal, must be clean; is that
Q On direct examination did you say you said
something additional in that vein?
Q What was it that you recollect you told Mr. Zelen
along that vein?
A In substance, I don't want him stealing anything. I
don't want him cheating anybody. I don't want
anything illegal. In other words, you have to be
squeaky clean because you are an agent of the
Q And those are the things that you recollect telling