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United States v. Cioffi

October 26, 2009

UNITED STATES OF AMERICA,
v.
RALPH CIOFFI AND MATTHEW TANNIN, DEFENDANTS.



The opinion of the court was delivered by: Block, Senior District Judge

MEMORANDUM AND ORDER

Defendant Matthew Tannin ("Tannin") is charged with conspiracy, securities fraud and wire fraud in connection with two hedge funds he managed for Bear Stearns Asset Management ("BSAM"). He moves to suppress evidence seized from his personal email account on the ground that the warrant authorizing the seizure did not comply with the Warrants Clause of the Fourth Amendment.*fn1 For the following reasons, the motion is granted.

I.

On July 7, 2009, FBI Special Agent Mark Munster ("Munster") applied to Magistrate Judge Cheryl Pollak for a warrant to search Tannin's personal email account. See Letter from P. Sinclair (Oct. 12, 2009), Ex. ("Search Warrant"). An affidavit executed by Munster accompanied the application. See id., Ex. ("Affidavit in Support of a Search Warrant").

A. The Affidavit

The Affidavit began with a boilerplate description of the Internet, email and Google (the company who hosted the targeted account). It then set forth Munster's proffered bases for issuing the Warrant.

First, the Affidavit expressly incorporated by reference the 27-page indictment to demonstrate probable cause that Tannin had committed the charged crimes. To connect those crimes to Tannin's personal email account, the Affidavit alluded to paragraph 41 of the indictment, which excerpted an email sent by Tannin from his personal account to Cioffi on April 22, 2007 ("the April 22nd Email"):

[T]he subprime market looks pretty damn ugly. . . . If we believe the [CDO report is] ANYWHERE close to accurate I think we should close the funds now. The reason for this is that if [the CDO report] is correct then the entire subprime market is toast. . . . If AAA bonds are systemically downgraded then there is simply no way for us to make money -- ever.

Indictment ¶ 41 (alterations in original).*fn2

As recounted in the Affidavit, the April 22nd Email was produced to BSAM's counsel in the course of an investigation into the funds' collapse. BSAM turned the email over to the Securities Exchange Commission ("SEC") and the United States Attorney's Office in November 2007. Munster opined that Tannin's use of his personal email account, instead of his Bear Stearns account, to discuss work-related matters made it "likely that Matthew Tannin purposely used THE SUBJECT E-MAIL ACCOUNT to facilitate the charged conspiracy" because the conspirators "were able to communicate privately by using THE SUBJECT E-MAIL ACCOUNT, in that their communications would not be subject to capture and review by Bear Stearns." Affidavit ¶ 15.

The Affidavit then quoted at length from the Stored Communications Act, 18 U.S.C. §§ 2701-12. As pertinent here, the Act allows government agents to obtain from companies such as Google the contents of their subscribers' accounts pursuant to a warrant issued by the "court with jurisdiction over the offense under investigation." Id. § 2703(b)(A).

In the Affidavit's next section, Munster described the procedures necessary to adequately execute the search. First, he averred that the search would be limited to emails created on or before August 12, 2007, "the day prior to Tannin's retention of private counsel, to prevent the danger of intercepting privileged communications." Affidavit ¶ 22. He then stated that the nature of electronically stored data required "the searching authorities [to] carefully open and examine all the stored data to determine which of the various files are evidence, fruits, or instrumentalities of the crime," and that such a procedure "would be impractical to do at Google's offices" and would instead need to be carried out off-site "in a controlled environment." Id. ¶ 23. Finally, he averred that "[f]ederal law enforcement officials will review the records sought by the search warrant and will segregate any messages and content constituting evidence of violations of federal criminal law." Id. ¶ 24.

The final paragraph of the Affidavit recited Munster's belief, based on the facts set forth, that "there is probable cause to search THE SUBJECT E-MAIL ACCOUNT for evidence of activities relating to conspiracy to commit securities fraud and wire fraud, in violation of 18 U.S.C. § 371; securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff; and wire fraud, in violation of 18 U.S.C. § 1343." Id. ¶ 25.

B. The Warrant

Magistrate Judge Pollak signed the Warrant, which authorized a search of "the premises known and described as electronic mail address 'matt.tannin@gmail.com'." The Warrant contained a boilerplate statement reflecting the magistrate judge's "satisf[action] that the affidavit(s) and any recorded testimony establish probable cause to believe that the person or property . . . described is now concealed on the . . . premises above-described and establish grounds for the issuance of this warrant."*fn3 The government concedes, however, that the Affidavit was not attached to or incorporated by reference into the Warrant.

The Warrant authorized Munster (or "any Authorized Officer of the United States") to seize from Tannin's email account the items set forth in "Attachment A" to the Warrant. The attachment listed seven categories of "records and other stored information" relating to Tannin's account; the category pertinent here was described as "all e-mail up through August 12, 2007, including any attachments, and all instant messages, sent by or received by the accounts [sic], whether saved or deleted, whether contained directly in the e-mail account or in a customized 'folder.'"*fn4 There was no provision limiting the emails to be seized to those containing evidence of the crimes charged in the indictment or, indeed, of any crime at all.

Attachment A also set forth procedures for obtaining the account from Google. It directed Google employees to "locate, isolate, and create an exact duplicate" of all records sought, and to produce the duplicate to the executing officer "in electronic form." The attachment did not, however, describe any procedures for the executing officer to follow in searching the account and seizing particular records.

C. Execution of the Warrant

The Warrant was served on Google. On July 17, 2009, Google wrote to the government that it was "no longer able to extract the information requested in the Search Warrant" because Tannin's account had been "deleted." Letter from K. Untiedt to I. Jaroslaw (July 17, 2009). On the eve of trial, however, Google advised the government that it had located a copy of the account as it existed on November 7, 2007. Google promptly sent the government a CD-ROM containing that version of the account.

Members of the prosecution team searched the account. See Letter from I. Jaroslaw (Oct. 8, 2009) ("Today the government received via Federal Express from Google the contents of defendant Matthew Tannin's G-Mail account as it existed on November 7, 2007 on a CD-ROM. We have not had an opportunity to review the account in its entirety."). During an "initial look" at the account, the government isolated a November 23, 2006 email from Tannin to himself ("the November 23rd Email"). The lengthy email is essentially a diary entry, in which Tannin recorded his thoughts about such sundry matters as recent vacations and medical issues; however, several paragraphs were devoted to Tannin's anxiety about work and the state of the market.*fn5

D. The Motion to Suppress

On October 8, 2009, the government informed me and defense counsel that it intended to offer the November 23rd Email into evidence as bearing on Tannin's "knowledge and intent on all the pending charges against him." Letter from I. Jaroslaw (Oct. 8, 2009). Tannin moved to suppress the email (which has been marked for identification as Government Exhibit 100); he argued that the Warrant was "invalid on its face because it failed to describe with particularity the materials that would be the proper subject of a search" and that "[s]uch a warrant is unreasonably broad and therefore unconstitutional." Tannin's Mem. of Law at 2.*fn6 The government has filed a series of letter memoranda in response.

Taken collectively, the parties' submissions frame the following three issues ...


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