Opinion
Case No. 4:21-cr-113-JDK-KPJ-1
2021-11-12
UNITED STATES of America v. Rodney James MCGAFFEY
Jonathan Richard Hornok, Assistant US Attorney, U.S. Attorney's Office, Texarkana, TX, Robert Austin Wells, Assistant US Attorney, U.S. Attorney's Office, Tyler, TX, for United States of America. Scott H. Palmer, Niles Stefan Illich, Russell Sloan Turkel, Scott H. Palmer, PC, Addison, TX, for Rodney James McGaffey.
Jonathan Richard Hornok, Assistant US Attorney, U.S. Attorney's Office, Texarkana, TX, Robert Austin Wells, Assistant US Attorney, U.S. Attorney's Office, Tyler, TX, for United States of America.
Scott H. Palmer, Niles Stefan Illich, Russell Sloan Turkel, Scott H. Palmer, PC, Addison, TX, for Rodney James McGaffey.
ORDER DENYING MOTION TO SUPPRESS
JEREMY D. KERNODLE, UNITED STATES DISTRICT JUDGE
Before the Court is Defendant Rodney James McGaffey's motion to suppress. Docket No. 31. In his motion, McGaffey seeks to exclude evidence obtained from the search of a Dropbox account pursuant to a warrant issued by a United States Magistrate Judge. For the reasons explained below, the Court DENIES the motion. I.
The facts of this case are in relevant part undisputed. On April 14, 2020, Magistrate Judge Caroline M. Craven issued a warrant authorizing the search and seizure of several Dropbox accounts associated with McGaffey and his businesses, including the specific Dropbox account at issue here: an account associated with the email address ceo@bossexotics.com. Dropbox is one of many publicly available internet services (like Apple's iCloud, Microsoft's OneDrive, and Google Drive) that provide electronic file storage in the "cloud." Cloud storage services store electronic files (like documents, photos, videos, etc.) on physical servers controlled by the service provider, but the files are generally accessible only to the account holder and anyone with whom the account holder shares access to the files.
McGaffey does not contest the Government's search of the other Dropbox accounts specified in the warrant.
The Government sought a warrant to search the Dropbox account associated with ceo@bossexotics.com on the grounds that McGaffey utilized Boss Exotics as a shell company to launder illegal drug proceeds and used the Dropbox account to store information related to the money-laundering scheme. Docket No. 36, Ex. 7 ¶¶ 21, 52–53. In applying for the warrant, the Government submitted the sworn affidavit of Danny Kelly, a Special Agent with the Texas Department of Public Safety, who detailed his extensive investigation of McGaffey and his businesses, including Boss Exotics. See generally id. Approximately a year after securing and executing the warrant, the Government indicted McGaffey for wire fraud in violation of 18 U.S.C. § 1343. Docket No. 1 at 1–6. Specifically, the Government alleges that McGaffey tried to fraudulently obtain hundreds of thousands of dollars from auto insurance companies by using fake rental invoices. Id. at 3–4.
McGaffey now moves to suppress the evidence seized during the search of the Dropbox account associated with ceo@bossexotics.com. See Docket No. 31. McGaffey claims he has standing to challenge the search and argues that the search violated the Fourth Amendment because there was insufficient evidence to justify the issuance of a search warrant under both the good-faith exception and the probable cause standard. Id. at 11–14. The Government challenges McGaffey's standing, arguing that McGaffey lacks a reasonable expectation of privacy in the account because his brother paid for and shared access to the company-owned account and because of the nature of Dropbox's terms of service. The Government also argues that, even if he has standing, McGaffey cannot defeat the good-faith exception, and in any event, the warrant was issued upon probable cause. See Docket No. 36.
II.
The Fourth Amendment guarantees the "right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures" and requires that search warrants issue only "upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. U.S. CONST. AMEND. IV. "When government officials conduct a search in violation of the Fourth Amendment, prosecutors are barred from introducing evidence obtained in the unlawful search at trial." United States v. Aguilar , 973 F.3d 445, 449 (5th Cir. 2020), cert. denied, ––– U.S. ––––, 141 S. Ct. 1102, 208 L.Ed.2d 550 (2021). This judicially-created remedy—designed to "safeguard Fourth Amendment rights generally through its deterrent effect"—is known as the exclusionary rule. United States v. Beverly , 943 F.3d 225, 232 (5th Cir. 2019), cert. denied, ––– U.S. ––––, 140 S. Ct. 2550, 206 L.Ed.2d 485 (2020) (cleaned up).
In United States v. Leon , the Supreme Court established an exception to the exclusionary rule: the good-faith exception. 468 U.S. 897, 919–922, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984). Leon held that the exclusionary rule should not apply where the officer's reliance on the warrant was objectively reasonable and in "good faith"—even if the search warrant is later invalidated for lack of probable cause. Id. ; United States v. Payne , 341 F.3d 393, 399 (5th Cir. 2003). Relying on Leon , the Fifth Circuit has held that "if law enforcement officials act in objectively reasonable good-faith reliance upon a search warrant, then evidence obtained pursuant to the warrant is admissible even if the affidavit on which the warrant was grounded was insufficient to establish probable cause." United States v. Juarez , 407 F. App'x 824, 825 (5th Cir. 2011).
Accordingly, when a defendant moves to suppress evidence obtained with a warrant, courts generally determine first whether the good-faith exception applies. See, e.g., United States v. Sibley , 448 F.3d 754, 757 (5th Cir. 2006) ; Payne , 341 F.3d at 399 ; United States v. Gates , 2021 WL 3022037, at *2 (E.D. Tex. July 16, 2021) (citing Sibley , 448 F.3d at 757 ). If the exception applies, then courts typically deny the motion without deciding whether the warrant was based on probable cause. Gates , 2021 WL 3022037, at *2 (citing United States v. Cherna , 184 F.3d 403, 407 (5th Cir. 1999) ) (If the good-faith exception applies, courts do not need to decide "whether there was a substantial basis for the magistrate's determination that probable cause existed."); United States v. Maggitt , 778 F.2d 1029, 1033 (5th Cir. 1985) (quoting Illinois v. Gates , 462 U.S. 213, 264, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983) (White, J., concurring)).
If, however, the case presents a "novel question of law whose resolution is necessary to guide future action by law enforcement officers and magistrates," then courts may proceed to the next step of deciding whether the warrant was based on probable cause. See Maggitt , 778 F.2d at 1033. Because McGaffey does not argue that this case presents such a "novel question" and because the Court finds the good-faith exception applies here, the Court need not consider whether Judge Craven had a substantial basis for finding probable cause. See, e.g., United States v. Contreras , 905 F.3d 853, 857–58 (5th Cir. 2018) (quotation omitted); United States v. Kleinkauf , 2010 WL 3781882, at *2 (E.D. Tex. Sept. 20, 2010), aff'd, 487 F. App'x 836 (5th Cir. 2012).
In determining whether the good-faith exception applies, the Court does not "attempt an ‘expedition into the minds of police officers’ to determine their subjective belief regarding the validity of the warrant." Payne , 341 F.3d at 400 (quoting Leon , 468 U.S. at 922 n.23, 104 S.Ct. 3405 ). Rather, the Court's inquiry is "confined to the objectively ascertainable question whether a reasonably well-trained officer would have known that the search was illegal despite the magistrate's authorization." Leon , 468 U.S. at 922 n.23, 104 S.Ct. 3405. Such an inquiry "will ordinarily depend on an examination of the affidavit by the reviewing court" and will consider "all of the circumstances" surrounding the warrant. Payne , 341 F.3d at 400 ; Leon , 468 U.S. at 922 n.23, 104 S.Ct. 3405. "Issuance of a warrant by a magistrate normally suffices to establish good faith on the part of law enforcement officers." E.g., United States v. Shugart , 117 F.3d 838, 843–44 (5th Cir. 1997) (citation omitted).
The Fifth Circuit has recognized four situations in which the good-faith exception generally does not apply—only two of which are relevant here: "when the warrant affidavit is so lacking in indicia of probable cause as to render official belief in its existence unreasonable" and "when the warrant is so facially deficient in failing to particularize the place to be searched or the things to be seized that executing officers cannot reasonably presume it to be valid." United States v. Powell , 850 F. App'x 284, 285 (5th Cir. 2021) ; Docket No. 31 at 12–14.
The other two scenarios arise when "the issuing magistrate was misled by information in an affidavit that the affiant knew or reasonably should have known was false" and when "the issuing magistrate wholly abandoned his judicial role." Powell , 850 F. App'x at 285.
When challenging the application of the good-faith exception, the defendant bears the burden to prove by a preponderance of the evidence that the exception does not apply. United States v. Rosa , 721 Fed. App'x 403 (5th Cir. 2018).
III.
As explained below, the Court need not decide whether McGaffey has standing to challenge the search of the Dropbox account because McGaffey has failed to negate the good-faith exception here.
A.
"[A] court may not exclude evidence under the Fourth Amendment unless it finds that an unlawful search or seizure violated the defendant's own constitutional rights." United States v. Payner , 447 U.S. 727, 731, 100 S.Ct. 2439, 65 L.Ed.2d 468 (1980). Courts therefore typically first consider whether someone has standing to challenge a search. United States v. McMillon , 657 F. App'x 326, 332 (5th Cir. 2016). On several occasions, however, the Fifth Circuit has declined to reach the issue of a defendant's standing when the motion to suppress failed on other grounds. United States v. Webster , 960 F.2d 1301, 1306 n.2 (5th Cir. 1992) ("Since we agree with the district court that the search was conducted in good-faith reliance on the warrant, we do not reach the question of standing."); McMillon , 657 F. App'x at 332 ("We need not reach this novel argument [on standing]. Even assuming arguendo that [defendant] has standing, each of his challenges to the search clearly fail.").
This case, like McMillon , involves difficult standing questions, including whether McGaffey had a reasonable expectation of privacy in a Dropbox account that may have been paid for, accessible to, or owned by his brother and/or the company, and that was governed by terms of service authorizing Dropbox to disclose potentially illegal activity to law enforcement. See Docket No. 36 at 3–6. Nevertheless, because the Court finds that McGaffey's motion to suppress fails on the merits, it need not decide these standing questions here. See McMillon , 657 F. App'x at 332.
B.
McGaffey argues that the good-faith exception does not apply in this case because Special Agent Kelly's affidavit supporting the warrant was "bare bones" and "facially deficient." The Court disagrees.
1.
McGaffey first argues that Kelly's affidavit, "while lengthy, provides no justification to believe that McGaffey's Dropbox account would have yielded any evidence of criminal activity." Docket No. 31 at 12. McGaffey complains that the affidavit focuses on McGaffey's alleged drug trafficking and money laundering, but fails to "explain why there is probable cause to search the Dropbox account." Id. at 12–13. The affidavit was thus "bare bones," and "no law enforcement officer could rely on a warrant based on [such] an affidavit." Id. at 13.
Kelly's thirty-five page affidavit was not bare bones. "Bare bones" affidavits typically contain "wholly conclusory statements, which lack the facts and circumstances from which a magistrate can independently determine probable cause." United States v. Godfrey , 805 F. App'x 318 (5th Cir. 2020) (citation omitted). Here, in contrast, Kelly's affidavit set out "an assemblage of facts" discovered during the investigation that was "appropriately presented and considered as probable cause" for the warrant. United States v. Massi , 761 F.3d 512, 530 (5th Cir. 2014). The affidavit extensively documented Kelly's investigation into McGaffey and his brother, McGaffey's use of the alias "Kyle Styles," and their use of sham businesses to purchase illegal narcotics and launder drug proceeds. See generally Docket No. 36, Ex. 7. The affidavit identified multiple LLCs, including Boss Exotics, connected to McGaffey's name and social security number and those companies’ connections with the non-residential address listed on McGaffey's driver's license. Id. ¶¶ 6–12, 20–23, 31, 36. The affidavit noted McGaffey's criminal history associated with narcotics distribution and money laundering through a car company under the alias "Kyle Styles." Id. ¶¶ 17–18. The affidavit also thoroughly detailed Kelly's investigation into financial transactions between McGaffey/Boss Exotics and several known narcotics distributors and purchasers. Id. ¶¶ 6–12, 39–42. The affidavit, moreover, identified multiple transactions to and from Boss Exotics’ PayPal account in a manner indicative of money laundering. Id. ¶¶ 40.
The affidavit then connected this extensive evidence of criminal activity to the Dropbox account at issue here. First, the affidavit documented how McGaffey and his brother used "Boss Exotics credit card[s] issued to each of them to make payments to Dropbox consistent with maintaining accounts with Dropbox." Id. ¶ 53. The email address associated with the Dropbox account in question—ceo@bossexotics.com—moreover, utilized the web domain and name of Boss Exotics, a company about which the affidavit clearly documents extensive criminal activity. Id. at ¶¶ 7, 15–16, 30, 36–37, 40–41. The affidavit then states that photocopies of McGaffey's and his brother's driver's licenses were found "printed from a Boss Exotics Dropbox account." Id. ¶ 21. And it explains that the McGaffeys "utilized Dropbox to provide stored copies of government issued identifying information for the purpose of maintaining the mailbox at 2807 Allen St ... from an account titled ‘Boss Exotics (BOSS).’ " Id. ¶ 53.
McGaffey argues that none of this shows that searching the Dropbox account "would have yielded any evidence of criminal activity." Docket No. 31 at 12. But the government-issued IDs stored on Dropbox falsely identified McGaffey's residence as 2807 Allen St., #617—an address that the McGaffeys and their associates allegedly used numerous times to establish sham companies for money laundering. Docket No. 36, Ex. 7 ¶¶ 20, 23, 34, 36, 42, 46, 48, 53. As the affidavit explains, 2807 Allen St. "is actually a mail drop at a mailing center." Id. ¶ 20. The McGaffeys, moreover, used their fraudulent IDs to open up the mail drop, and at least two of their sham companies—including Boss Exotics—paid the monthly fee for the Dropbox account at issue. Id. ¶¶ 34, 53. The affidavit also states that the McGaffeys created "multiple businesses with Paypal accounts ... at the mail drop located at 2807 Allen St # 617." Id. ¶ 42.
These facts, taken in their totality, "lend support to the inference that evidence of [criminal activity] might be discovered" in the Dropbox account. Payne , 341 F.3d at 401 (holding that affidavit was sufficient to allow a judge to infer that evidence of child pornography would be found at defendant's home because defendant had a home computer with internet, admitted to posting illegal content online, and indicated that he had engaged in sexually exploitative activity). Certainly, Judge Craven could reasonably conclude that there was a "fair probability that contraband or evidence of a crime" would be found in the Dropbox account associated with Boss Exotics, an alleged sham business established by McGaffey for money laundering. Gates , 462 U.S. at 238, 103 S.Ct. 2317 ; see also United States v. Perea , 839 F. App'x 923, 924 (5th Cir. 2021) (holding that magistrate judge could reasonably infer probable cause to believe that "additional stolen items" and weapons relating to stolen property could be found at defendant's residence based on evidence that defendant was in possession of specific stolen tools and had knowledge of a stolen truck); United States v. Freeman , 685 F.2d 942, 949 (5th Cir. 1982) (upholding a search warrant that in part sought identification documents regarding a person suspected of using multiple aliases for drug smuggling operations); United States v. Rodriguez , 551 F. App'x 164, 166 (5th Cir. 2014) (The issuing judge, moreover, may "draw reasonable inferences from the affidavit, and the ultimate determination of the affidavit's adequacy is entitled to great deference on review.").
The Court therefore finds that McGaffey has failed to carry his burden to show that the officers searching the Dropbox account unreasonably relied "on a warrant based on an affidavit [ ] lacking in indicia of probable cause." Cherna , 184 F.3d at 409 (cleaned up).
2.
McGaffey also briefly asserts that "the warrant itself was so facially deficient that the executing officers could not have reasonably relied on its validity." Docket No. 31 at 13–14.
The Fourth Amendment requires that a warrant—including "its accompanying affidavit and attachments"—provide sufficient detail such that "a reasonable officer would know what items he is permitted to seize." United States v. Aguirre , 664 F.3d 606, 614 (5th Cir. 2011). The Fifth Circuit has upheld warrants as sufficiently particularized "where a searched or seized item was not named in the warrant ... but was the functional equivalent of other items that were adequately described." Id.
The Court finds that the warrant and the supporting affidavit here were sufficiently particularized. See Perea , 839 F. App'x at 924 (holding that a warrant and affidavit were sufficiently particularized where they directed police to seize stolen items from defendant's residence after showing that defendant had previously kept stolen items at his residence). The affidavit identified the property to be searched: the Dropbox account associated with the email ceo@bossexotics.com. Docket No. 36, Ex. 7 at 25, 30. And an attachment to the affidavit described the particular information to be seized, including: business records; documents regarding the purchase, possession, or sale of vehicles; and financial or property transactions that constitute evidence of drug trafficking, money laundering, bank fraud, and wire fraud, among other crimes. Id. at 34–35. The warrant then incorporated the affidavit and its attachments in identifying the property to be searched and seized. Docket No. 36, Ex. 6 at 1–8.
The affidavit also identified names, credit card accounts, and credit card transaction IDs that were associated with the various Dropbox accounts to be searched. Docket No. 36, Ex. 7 ¶¶ 1, 53.
Accordingly, the Court finds that McGaffey has failed to show that the warrant was "so facially deficient in failing to particularize the place to be searched or the things to be seized that executing officers cannot reasonably presume it to be valid." Powell , 850 F. App'x at 285.
C.
In the alternative, McGaffey asks that the evidence obtained by searching the Dropbox account "be limited to the identification cards." Docket No. 31 at 14–15. He claims that "[t]he materials allowed to be seized by the warrant vastly exceed any reasonable connection to the material described in the affidavit." Id. at 15.
But, as noted above, the affidavit did not limit itself merely to the seizure of ID cards. Rather, the affidavit identified a range of materials to be searched and seized on the Dropbox account, based on extensive evidence of McGaffey/Boss Exotic's criminal activities, including documents pertaining to potential wire fraud in violation of 18 U.S.C. § 1343. Docket No. 36, Ex. 7 at 32–35. Thus, any seized items within that range of materials fall within the scope of the warrant that law enforcement relied upon in good faith. And even where a warrant is overbroad by authorizing a search for more evidence than what the affidavit identified, where—as here—it is reasonable for officers to believe that there is probable cause to search for that broader range of authorized evidence, the evidence will not be suppressed. Messerschmidt v. Millender , 565 U.S. 535, 548–49, 132 S.Ct. 1235, 182 L.Ed.2d 47 (2012) (holding that even if the scope of a warrant was "overbroad in authorizing a search for all guns when there was information only about a specific one," it was reasonable for law enforcement to believe, given the totality of the circumstances, "that there was probable cause to search for all firearms and firearm-related materials"). See also Williams v. Kunze , 806 F.2d 594, 598–99 (5th Cir. 1986) (holding that warrant was not overbroad for authorizing seizure of files related to domestic criminal activity despite the supporting affidavit focusing primarily on offshore criminal activity because "the description of the documents to be seized was not broader than what was justified by the showing of probable cause upon which the warrant was based."); United States v. Phillips , 588 F.3d 218, 224 (4th Cir. 2009) ("Courts have never held that a search is overbroad merely because it results in additional criminal charges.") (citing Andresen v. Maryland , 427 U.S. 463, 482–84, 96 S.Ct. 2737, 49 L.Ed.2d 627 (1976) ).
Moreover, McGaffey does not point to any particular evidence seized by law enforcement that is beyond the scope of the warrant—he merely asserts that the warrant is generally overbroad. See Docket No. 31. The Fifth Circuit has held that where a defendant "fails to cite specific pieces of evidence that were seized outside the scope of the warrant," courts, "without specifics ... are unable to conclude that any given file was seized improperly." United States v. Loe , 248 F.3d 449, 461 (5th Cir. 2001) (upholding denial of a suppression motion where defendant argued a lengthy search exceeded the scope of the warrant but failed to cite specific pieces of evidence seized outside the scope of the warrant).
Finally, it is well-established that law enforcement executing a valid search warrant may seize other evidence of criminal wrongdoing not described in the warrant under the "plain view" doctrine. Horton v. California , 496 U.S. 128, 131, 142, 110 S.Ct. 2301, 110 L.Ed.2d 112 (1990) (upholding denial of suppression motion under the plain-view doctrine where officer had valid warrant to search defendant's home only for proceeds of a robbery, discovered weapons used in the robbery during the execution of that warrant, and weapons evidence was used to convict defendant of armed robbery); United States v. Hill , 19 F.3d 984, 989–90 (5th Cir. 1994) (holding that check stubs discovered pursuant to a valid warrant are shielded from suppression under the plain-view doctrine even if the stubs were outside the scope of the warrant); United States v. Tidrow , No. 2:17-CR-127-D, 2018 WL 2221531, at *6 (N.D. Tex. May 15, 2018) (denying a suppression motion under the plain-view doctrine where officers executed valid warrant to seize electronics, personal and business records, electronically-stored files, blood, and human remains, but found and seized firearms not described in the warrant located in plain view within a safe); see also United States v. Williams , 592 F.3d 511, 521–24 (4th Cir. 2010) (denying suppression motion under the plain-view doctrine where officers executed a valid warrant to seize evidence of online harassment and threats of death or bodily injury, seized computers, and found computer files containing child pornography).
The Court therefore finds that McGaffey's alternative argument also fails.
CONCLUSION
Because the good-faith exception applies here, McGaffey's motion to suppress (Docket No. 31) is DENIED .
So ORDERED and SIGNED this 12th day of November, 2021.