United States v. Adams

Kimberly A. Brawley, Norman Cairns, U.S. Attorney's Office, Albuquerque, NM, for Plaintiff.

Nancy Hollander, Vincent J. Ward, Freedman Boyd Hollander Goldberg Urias & Ward, PA, Robert R. Cooper, Albuquerque, NM, Brett A. Purtzer, Hester Law Group Inc. P.S., Tacoma, WA, for Defendant.

MEMORANDUM OPINION AND ORDER

James A. Parker, SENIOR UNITED STATES DISTRICT JUDGE

On May 2, 2014, Defendant Robert E. Adams filed a motion asking the Court to reconsider its denial of Defendant's motion to suppress the evidence seized from Defendant's home and business properties in January 2013. See DEFENDANT ROBERT E. ADAMS' MOTION TO RECONSIDER THE ORDER DENYING DEFENDANT'S MOTION TO SUPPRESS EVIDENCE OR, IN THE ALTERNATIVE, TO HOLD A FRANKS HEARING (Doc. No. 48) (Motion to Reconsider). Defendant argues that the Court's denial resulted from its misapprehension of material facts concerning: (1) the dates of Defendant's 2011 travel to Canada, (2) the results of the 2006 and 2009 administrative compliance inspections of Defendant's firearms businesses, and (3) the contents of the importation paperwork submitted by Defendant regarding his purchase of firearms from Bud Haynes & Company Auctioneers (Bud Haynes & Company), a Canadian auction house.

In the response, the Government admits the Court mistakenly concluded that Defendant neglected to obtain approval, using a Form 6, to import 51 of the 133 firearms Defendant purchased from Bud Haynes & Company. But, the Government takes the position that this mistake was de minimis and opposes Defendant's Motion to Reconsider. See UNITED STATES' RESPONSE TO DEFENDANT ROBERT E. ADAMS' MOTION TO RECONSIDER THE ORDER DENYING DEFENDANT'S MOTION TO SUPPRESS EVIDENCE OR, IN THE ALTERNATIVE TO HOLD A FRANKS HEARING (Doc. No. 57) (Response). The Government asks the Court to reaffirm the validity of the warrants, which authorized agents to search Defendant's possessions for evidence of firearms smuggling and related crimes.

On May 20, 2014, the Court held a hearing during which it questioned counsel about the importation process and asked counsel for the Government to identify all of the factors contained in the warrant affidavit that would give a reasonable person probable cause to believe Defendant was engaged in firearms smuggling.¹ The

Government highlighted the following allegations: (1) Defendant was not keeping adequate records of his firearms transactions, (2) Defendant was advertising firearms for sale as not having importer's marks, (3) Defendant had submitted but failed to use multiple Form 6 applications to import firearms into the United States, and (4) Defendant purchased firearms from Bud Haynes & Company, which the Government contends he attempted to smuggle into the United States.

The Court held a second hearing on June 26, 2014, after Defendant filed DEFENDANT ROBERT E. ADAMS' UNOPPOSED MOTION FOR LEAVE TO FILE A RESPONSE TO UNITED STATES' SUPPLEMENTAL BRIEF REGARDING DEFENDANT ROBERT E. ADAMS' MOTION TO RECONSIDER THE ORDER DENYING DEFENDANT'S MOTION TO SUPPRESS EVIDENCE, OR, IN THE ALTERNATIVE TO HOLD A FRANKS HEARING (DOC. 69) (Doc. No. 70) indicating that Defendant disagreed with some of the facts the Government labeled as “undisputed.”² After reviewing the evidence, considering oral argument, and examining the briefs,³ the Court meticulously reread the warrant affidavit. Because the Court now concludes that the excised affidavit does not support a finding of probable cause, the Court will grant Defendant's Motion to Reconsider and will suppress all evidence seized from Defendant's home and business properties during the January 2013 searches.

BACKGROUND

I. The Warrant Affidavit

In January 2013, Special Agent Frank Ortiz (SA Ortiz), a former Bureau of Alcohol,

Tobacco, Firearms and Explosives (ATF) agent, prepared a 41–page warrant affidavit, which he used to secure warrants to search Defendant's home and business properties. See January 2013 Warrants, Exhibits A–D to DEFENDANT ROBERT E. ADAMS' MOTION TO SUPPRESS EVIDENCE OR, IN THE ALTERNATIVE, TO HOLD A FRANKS HEARING, AND MEMORANDUM IN SUPPORT THEREOF (Motion to Suppress) (Doc. Nos. 28–1 through 28–9). During the execution of these warrants, SA Ortiz and other law enforcement officials seized approximately 1,600 firearms, most of which have since been returned to Defendant. Officials also seized firearms-related paperwork. The Government seeks to use this evidence against Defendant at trial.

II. Defendant's Motion to Suppress and the Court's Prior Ruling

In the Motion to Suppress, Defendant asserted that SA Ortiz knowingly or recklessly made false statements and omitted material information from the warrant affidavit. See Motion to Suppress at 22. Defendant argued that once these inaccuracies were disregarded the warrant affidavit would lack sufficient factual allegations to support a finding of probable cause. Id. at 26. In other words, Defendant asked the Court to suppress the evidence seized under the search warrants in accordance with Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978).

In ruling on this request, the Court first considered whether Defendant had carried his burden of showing by a preponderance of the evidence that there were mistakes in the warrant affidavit and that these mistakes were either intentional or reckless.⁴ See MEMORANDUM OPINION AND ORDER (Doc. No. 39 at 5–13). The Court carefully reflected on its impression of SA Ortiz, an individual with 27 years of experience working with ATF, and concluded that SA Ortiz acted recklessly when he inaccurately claimed (1) that the removal of importer's marks was a felony and (2) that Defendant violated 18 U.S.C. § 922(t)(1) in 2006 by failing to file ATF Form 4473 documents. The Court based this conclusion on SA Ortiz's alleged expertise, its impression of SA Ortiz's credibility at the March 14, 2014 hearing, and the pattern of misstatements in the warrant affidavit.⁵ Consequently, the Court excised those parts of the warrant affidavit.

Additionally, the Court found that SA Ortiz recklessly transcribed the expiration dates for Defendant's ATF Form 6 permit/permit applications⁶ into the warrant affidavit. As a result of this recklessness, SA Ortiz misled the magistrate judges who reviewed the warrant affidavit into believing that Defendant possessed at least one approved permit to import firearms at the time the warrant was issued. This was almost certainly incorrect. According to SA Ortiz's warrant affidavit, Defendant last submitted an ATF Form 6 seeking approval to import firearms on September 21, 2011. WA ¶ 13. SA Ortiz's warrant

affidavit does not indicate when this form was processed or whether this particular form was ever approved. Yet, ATF Form 6 permits have a one-year expiration date. TRANSCRIPT OF MARCH 14, 2014 HEARING (Doc. No. 38 at 133:7–10) (March Transcript). It is, therefore, safe to say Defendant did not have ATF approval to import firearms at the time the warrant was issued, as SA Ortiz's warrant affidavit wrongly suggests. To address this error, the Court excised the portions of the warrant affidavit that contained the false expiration dates.

The Court then considered whether the excised warrant affidavit supported a finding of probable cause and concluded that it did. See MEMORANDUM OPINION AND ORDER (Doc. No. 39 at 13–20). The Court based its decision on its understanding of the factual allegations contained in the warrant affidavit, including a series of allegations involving Defendant's purchase of firearms from Bud Haynes & Company, a Canadian auction house, and his 2011 attempt to transship these firearms into the United States. As the Court understood the facts, Defendant had (1) purchased 133 firearms from Bud Haynes & Company; (2) obtained an approved Form 6 permit from ATF to import some, but not all of these firearms; (3) began the process of shipping all of the 133 firearms into the United States, without the required approved ATF Form 6 for 51 of the 133 firearms; but (4) eventually diverted the entire shipment and placed the firearms in a storage locker in Canada in violation of Canadian law.

Defendant now argues that the Court should have excised additional statements from the warrant affidavit, namely (1) the statement that Defendant flew to Canada on April 12, 2011 without a return ticket and (2) the affiant's characterization of the results of the ATF administrative compliance inspections, particularly the statement that a review of Defendant's 2009 business records showed that he was manipulating the records in violation of federal law. More importantly, Defendant contends—and the Government agrees—that the Court misconstrued a key fact concerning Defendant's approval to import the entire shipment of firearms purchased from Bud Haynes & Company. Defendant maintains that this mistake caused the Court to...