United States District Court, N.D. Illinois
January 14, 2004.
UNITED STATES OF AMERICA, v.- MICHAEL SEGAL, DANIEL WATKINS, and NEAR NORTH INSURANCE BROKERAGE, INC.
The opinion of the court was delivered by: RUBEN CASTILLO, District Judge
MEMORANDUM OPINION AND ORDER
On January 26, 2002, FBI agents searched Michael Segal's office, his
two residences one on Lake Shore Drive and another on Sheridan
Road and a storage area associated with the Lake Shore Drive
residence. Presently before this Court is Segal's motion to suppress
evidence obtained during the searches of his residences and associated
storage area. For the reasons provided below, we deny his motion to
suppress. (R. 143-1.)
The warrants for these searches were based on an affidavit by FBI agent
Patrick Murphy. The affidavit includes sixty-four paragraphs; the final
twelve paragraphs discuss the locations of the records that support the
criminal allegations, In addition to providing a detailed description of
the charges against Segal, the affidavit contains the following
information in support of the Government's request to search Segal's
residences and associated storage area: (1) two confidential informants
stated that Segal conducts business from both of his residences; (2) both
residences are equipped with computers that can access Near North's email
system; (3) Near North employees gather business and personal documents
for Segal at the end of each work day for him to take to his residences;
(4) a confidential informant stated that he has performed personal
services for the Segal family at both residences; (5) a confidential
informant stated that
Segal has a storage area associated with his Lake Shore residence;
and (6) according to the affiant's experience, it is common to store
financial records, correspondence, and documents in storage areas
affiliated with residences.
When issuing a search warrant, a magistrate judge must "make a
practical, common-sense decision whether, given all the circumstances set
forth in the affidavit before him, including the `veracity' and `basis of
knowledge' of persons supplying hearsay information, there is a fan
probability that contraband or evidence of a crime will be found
in a particular place." Ill. v. Gates, 462 U.S. 213, 238 (1983).
A magistrate judge's determination is accorded "great deference."
Id. at 236 (quoting Spinelli v. United States,
393 U.S. 410, 419 (1969)). The reviewing court only determines whether the
magistrate judge had a "`substantial basis for . . . conclud[ing]' that
probable cause existed." Id. (quoting Jones v. United
States, 362 U.S. 257, 271 (1960)). Finally, a magistrate judge's
probable cause determination "should be overruled only when the
supporting affidavit, read as a whole in a realistic and common sense
manner, does not allege specific facts and circumstances from which the
magistrate could reasonably conclude that the items sought to be seized
are associated with the crime and located in the place indicated."
United States v. Spry, 190 F.3d 829, 835 (7th Cir. 1999) (citing
United States v. Pritchard, 745 F.2d 1112, 1120 (7th Cir.
Defendants assert that the Government's affidavit contains insufficient
facts to permit the magistrate judge to conclude that probable cause
existed to search Segal's Lake Shore Drive and Sheridan Road residences
and the associated storage area. Defendants argue that United States
Brown, 832 F.2d 991 (7th Cir. 1987), United States v.
Dickerson, 975 F.2d 1245 (7th Cir. 1992), and United States v.
McNeal, 82 F. Supp.2d 945 (S.D. Ind. 2000), compel this Court to
find that the magistrate judge lacked a substantial basis for concluding
that probable cause existed. In Brown, the Government requested
a warrant to search an apartment, but the affidavit did not indicate how
the Government knew that the apartment "was truly one of [the
defendant's] addresses" and contained "a paucity of information
suggesting that a search of the [apartment] would uncover evidence of
wrongdoing." 832 F.2d at 994. Thus, the Seventh Circuit stated that it
did not dispute "the district court's conclusion that the totality of
the circumstances in this case did not establish a substantial basis for
concluding that probable cause existed." Id. In Dickerson, the
Government requested a warrant to search a residence, but the affidavit
"stated only that a witness saw the robber run from the bank to a car
parked in the emergency lane of 1-69 and the license plate number of the
car was registered to [the defendant's residence]." 975 F.2d at 1249-50.
Importantly, the affidavit did not state that defendant's car was parked
at the residence the Government wanted to search. Id. Thus, the
Seventh Circuit doubted whether a magistrate judge had a substantial
basis for concluding that probable cause existed. Id. Finally in
McNeal, the court held that the magistrate judge lacked a
substantial basis for concluding that probable cause existed when the
Government requested a warrant to search a residence with an affidavit
that contained no evidence that the defendant "controlled the residence"
and no information about a confidential informant who stated that the
defendant was involved in drug transactions. 82 F. Supp.2d at 960.
After reviewing these cases, we conclude that they do not compel this
Court to find in the present case that the magistrate judge lacked a
substantial basis for concluding that probable
cause existed. First, in both Brown and McNeal
the affidavits failed to indicate that the defendants had any control
over the searched residences. There is no dispute that Segal controlled
both the Lake Shore Drive and Sheridan Road residences. Second, the court
in McNeal could not ascertain the veracity of the information
provided by a confidential informant. The affidavit in the present case
identifies each of the confidential informants and explains their
connection to Segal and Near North. Finally, the only connection between
the residence and the affidavit in Dickerson was the defendant's
car registration. The affidavit in the present case states that Segal
worked at his residences and, thus, provides a much greater connection
between his residences and the alleged fraud crimes. After reviewing
these cases, we find that they are all distinguishable.
In fact, the affidavit provided the magistrate judge with a substantial
basis for concluding that probable cause existed. First, the affidavit
indicated that these residences were controlled by Segal. Second, the
affidavits provided sufficient information about the confidential
informants to permit the magistrate judge to consider the veracity of
their statements. Third, the affidavits contained sufficient information
to permit the magistrate judge to conclude that Segal regularly conducted
business from his two residences. Specifically, the affidavit stated that
Segal worked from home and took documents home with him at the end of the
work date. And finally, the affidavit provides a lengthy description of
how Segal allegedly appropriated monies from Near North's petty cash fund
for Ms own personal use. These facts provide a substantial basis for
concluding that probable cause existed to search Segal's residences,
especially when considering the scope of the alleged fraud and Segal's
role in it, both of which are described in great detail in the affidavit.
We also find that the these facts justify the search of the Lake Shore
area because, reading the affidavit "as a whole in a realistic and
common sense manner," a magistrate judge could reasonably conclude that
evidence of the alleged criminal activity would be found there as well.
Spry, 190 F.3d at 835.
Segal asserts that our affirmation of the magistrate judge's probable
cause finding would permit the Government to search the residence of
anyone suspected of committing a crime at work if the Government can
present evidence that the suspect worked at home. His dire prediction,
however, ignores the totality of the circumstances and instead isolates a
few of the facts and circumstances contained in the affidavit and
divorces them from the context of the crimes with which he is charged. As
probable cause determinations are inherently factual, we do not believe
that our decision is relaxing the probable cause standards. A
common-sense reading of the affidavit indicates that there was a "fair
probability" that evidence would be found in Segal's residences and the
associated storage rooms. Thus, we affirm the magistrate judge's probable
In the alternative, we find that the police officers who conducted the
search relied on the magistrate judge's finding of probable cause in good
faith. See United States v. Leon, 468 U.S. 897 (1984).
An officer's decision to obtain a warrant is
prima facie evidence that he or she was
acting in good faith. Two ways that the defendant
may rebut this prima facie case are by
presenting evidence to establish either that: (1)
the magistrate wholly abandoned his judicial role,
or otherwise failed in his duty to perform his
neutral and detached function and not serve merely
as a rubber stamp for the police; or (2) the
officer submitted an affidavit so lacking in
indicia of probable cause as to render official
belief in its existence entirely unreasonable.
United States v. Koerth, 312 F.3d 862
, 868 (7th Cir. 2002)
(internal citations and quotations omitted). Defendants have not
presented any evidence that the magistrate judge abandoned his
judicial role. Instead they argue that the FBI agents' beliefs that
probable cause existed were unreasonable. As we have already found that
the affidavit provided the magistrate judge with a substantial basis for
concluding that probable cause existed, we also find that the affidavit
possessed sufficient indicia of probable cause to make their beliefs
For the reasons provided above, we deny Segal's motion to suppress
evidence obtained during the searches of his residences and associated
storage room. (R. 144-1.)
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