SUSAN ILLSTON, District Judge.
On December 20, 2016, the Court held a hearing on defendant Lonich's motion to suppress. After consideration of the parties' arguments and the record, the Court enters this order.
On March 18, 2014, the government filed a twenty-nine count indictment against defendants David Lonich, Brian Melland, and Sean Cutting.
The indictment alleges: "No later than approximately March 2009 until approximately September 2012, the defendants devised and executed a material scheme to defraud Sonoma Valley Bank and others and to obtain money from Sonoma Valley Bank and others by means of materially false and fraudulent pretenses, representations, and promises and by omissions and concealment of material facts." Dkt. No. 1 ¶ 7.
In April 2014, Special Agent Terry M. Neeley of the Special Inspector General for the Troubled Asset Relief Program ("SIGTARP") submitted a search warrant application to Chief Magistrate Judge Joseph C. Spero. Dkt. No. 190-5 (Neeley Decl. ¶ 2). Neeley's twenty-nine page affidavit, which was provided in support of and incorporated into the search warrant application, described the nature of the investigation and the bases for probable cause. See Dkt. No. 326-1 (Warrant Affidavit). The affidavit provided:
Id. ¶¶ 3-4.
Attachment B "ITEMS TO BE SEIZED" of the affidavit to the warrant application identified the following items for seizure:
Id.
Id. ¶ 95.
Attachment C to the warrant required the Government to purge from its possession all electronic files that fell outside the scope of the warrant's authorized seizures, as follows:
Id. at USA 3172.
Because Lonich is an attorney, the search warrant and affidavit set forth a process by which the government formed a "privilege team"
On April 7, 2014, Judge Spero approved the search warrant application. Dkt. No. 191-5 (Neeley Decl. ¶ 2). The warrant authorized the search of Lonich's residence, Madjlessi's residence, and the three business units located at Park Lane Villas ("PLV"), 960 Doubles Drive, Unit Nos. 112, 113, and 114. Dkt. No. 187, Ex. A. In a declaration filed on November 23, 2016, Lonich states,
Dkt. No. 282 ¶¶ 1-12.
On April 9, 2014, the government executed the search warrant and seized materials from the two residences and the three units at 960 Doubles Drive. Defendant states, and the government does not dispute, that agents seized and carted away for later inspection all electronic files and 143 boxes of paper documents that defendant maintained in his home and office. Dkt. No. 186 at 1; Dkt. No. 237 at 2.
On March 4, 2016, defendant Lonich moved to suppress evidence obtained as a result of the execution of a search warrant. Dkt. No. 186.
In response, the government argued that the warrant did not authorize the seizure of "all" documents in the manner suggested by defendant. The government contended,
Dkt. No. 191 at 3:21-4:6.
The government argued that Lonich "misread" the warrant when he claimed that it authorized the seizure of all documents having anything to do with any of the listed names and entities. The government asserted that "the warrant does not authorize the seizure of all documents associated with, for example, Sonoma Valley Bank. Rather, it only authorizes the seizure of `evidence of the ownership, custody, control of, and association with' Sonoma Valley Bank as it relates to the overall scheme to defraud." Id. at 4:15-17.
In an order filed April 15, 2016, the Court denied Lonich's motion to suppress. The Court agreed with the government that "when read holistically, the warrant validly seeks seizure of `evidence of ownership, custody, control of, and association with' the listed individuals and entities as it relates to the overall scheme to defraud." Dkt. No. 206 at 8:18-20.
Id. at 8-9.
On June 10, 2016, Lonich filed a second motion to suppress evidence. Lonich contended that when law enforcement agents executed the search warrant they exceeded the search warrant's scope, as defined by the Court's April 15, 2016 order, by seizing vast amounts of paper and electronic documents that do not relate to the alleged 101 Houseco fraud. In support of that motion, defense counsel filed a declaration stating "I am informed and believe that the evidence contained in Exhibits B and C to ECF No. 227
Dkt. No. 245 at 12-13. The Court then examined the seven documents identified by the government and found that "a reasonable officer would have interpreted the warrant to permit the seizure of exhibits B and H to the government's opposition, but that the remaining examples are outside of the scope of the warrant." Id. at 14:28-15:2. The Court analyzed each document in detail in order to provide the parties guidance for their meet and confer efforts. Id. at 15-21.
Following the Court's September 2, 2016 order, the parties met and conferred regarding the documents that Lonich contended were outside the scope of the warrant. On November 23, 2016, Lonich filed a supplemental memorandum in support of the June 10, 2016 motion to suppress. The government filed an opposition, the Court held a hearing on December 20, 2016, and defense counsel filed a supplemental declaration on December 21, 2016.
Lonich first contends that the government has not complied with Attachment C to the warrant, which required the government to purge from its possession all electronic files that fell outside the scope of the warrant's authorized seizures. Attachment C provides:
Dkt. No. 326-1 at USA 3172.
The Court's September 2, 2016 order directed parties to meet and confer regarding whether the documents listed in Exhibit B to Dkt. No. 227 were outside the scope of the warrant. In his declaration filed November 23, 2016, Mr. Balogh states following the September order, he engaged in multiple conversations with Taint Team member AUSA Quiroz. Dkt. No. 281 ¶ 2 (Balogh Decl.). Mr. Balogh states, "During our conversations, we addressed the thousands of pages—highlighted on Exhibits B and C to ECF No. 227—to identify which, if any, the Taint Team contended were properly seized pursuant to the April 7, 2014 search warrant. Of those thousands of pages, AUSA Quiroz informed me that the Government would contest only seven documents . . . ." Id. Mr. Balogh's meet and confer sessions with the Trial Team appear to have been less productive, with Trial Team member AUSA Rees refusing to meet and confer regarding electronic documents for which the government contends Lonich does not have Fourth Amendment standing. See id. ¶¶ 3-5.
At the December 20, 2016 hearing, the Court asked the parties about whether the government had complied with the electronic media protocol. Dkt. No. 334 at 63 (Dec. 20, 2016 transcript). Defense counsel argued that the government has not complied with the protocol because (1) the government chose not to meet and confer regarding the majority of documents listed in Exhibit B, thereby abandoning the claim that those documents were within the scope of the warrant, and (2) the government has not destroyed those documents. Mr. Rees did not directly respond to Mr. Balogh's statements regarding the meet and confer, and instead referred the Court to the declaration of Special Agent John Wilbur, the Forensic Team Leader responsible for forensic imaging/data extraction of electronic media discovered at the three search site locations. Id. at 65-66; Dkt. No. 191-2 (Wilbur Decl.). Mr. Rees argued,
Dkt. No. 334 at 65:23-66:11.
The Court concludes that the government has not demonstrated that it has used reasonable efforts to comply with the electronic media protocol. As an initial matter, the Court finds that compliance with this protocol is required as a term of the court-approved search warrant, and does not depend on whether Lonich can establish Fourth Amendment standing for every document listed in Exhibit B. See generally United States v. Comprehensive Drug Testing, Inc., 621 F.3d 1162, 1171-72 (9th Cir. 2010). In any event, the Court finds that because the government only chose to contest certain documents in Exhibit B as being within the scope of the warrant, the government has now waived any argument that the uncontested documents listed in Exhibit B are within the scope of the warrant. Further, the government has conceded that it seized electronic documents that are outside the scope of the warrant, yet the government asserts that it cannot delete or destroy these documents because they are located on images that contain relevant documents, and deleting individual files destroys the forensic integrity of the images. However, the government does not explain why it cannot create copies of the images it currently possesses and go through a similar sorting and deleting process as described in Mr. Wilbur's declaration at Paragraphs 12-16. See Dkt. No. 191-2 ¶¶ 12-16. If it is not technically possible to perform such a process, the government shall file a declaration explaining why this is so.
As an initial matter, the Court notes that Lonich's November 23, 2016 supplemental memorandum asserts for the first time that the government should not be permitted to challenge Lonich's standing with respect to the 101 Houseco documents maintained in the searched office spaces at 960 Doubles Drive "because the Government premised its search warrant on the factual allegation that Mr. Lonich and Mr. Madjlessi owned 101 Houseco." Dkt. No. 280 at 13:15-16. Defendant argues that "that allegation alone or in combination with Mr. Lonich's role as general counsel, establishes his standing over materials seized from the entire premises." Id. at 13:18-24 (citing United States v. Gonzalez, 412 F.3d 1102 (9th Cir. 2005), and United States v. Issacs, 708 F.2d 1365 (9th Cir. 1983)).
There are several problems with this argument. First, the Court agrees with the government that it is improper for Lonich to raise an entirely new legal argument for the first time in his supplemental memorandum. Second, even if the government had premised its search warrant on the allegation that Lonich owned 101 Houseco
Lonich also raises a factual challenge to the Court's earlier holding that Lonich did not have standing to challenge the search of 960 Doubles Drive Units 112-114 beyond the search of his own personal office. Lonich asserts that the Court incorrectly believed that there were only three offices that were searched (each of the three units), and that the Court did not understand that there were numerous offices within the three units and that Lonich maintained his legal files not only in his personal office, but in other spaces within Unit 112, such as the storage spaces, hallway, and in his paralegal's office. The parties agree that the Court's earlier orders regarding standing were based on a misunderstanding of the layout of the office space that was searched, although each side blames the other for not providing a full or accurate record on this point. In any event, the Court finds that its previous determination regarding Lonich's standing to challenge the search of 960 Doubles Drive was based on a factual error, and therefore that it is appropriate to revisit this question on an accurate record.
Defendant has the burden to establish his standing to challenge a search or seizure on Fourth Amendment grounds. United States v. Ziegler, 474 F.3d 1184, 1189 (9th Cir. 2007), cert. denied, 552 U.S. 1105 (2008). In SDI Future Health, Inc., the Ninth Circuit held, "except in the case of a small business over which an individual exercises daily management and control, an individual challenging a search of workplace areas beyond his own internal office must generally show some personal connection to the places searched and the materials seized." 568 F.3d at 698. The Court concludes that based upon Lonich's November 23, 2016 declaration, Lonich has established his standing to challenge the seizure of documents from his own personal office ("1J"), as well as the seizure of his client files from the storage offices, the office used by his paralegal,
However, the Court finds that Lonich has not established standing to challenge the seizure of documents from any of the other searched spaces at 960 Doubles Drive. As the government notes, Lonich states in his declaration that he was retained as general counsel for Bijan Madjlessi, as well as entities that he controlled and all entities that Biganeh Madjlessi controlled, and that the Madjlessis "and the employees of the entities they controlled" maintained their offices at 960 Doubles Drive. Id. at ¶¶ 2-4. Thus, according to Lonich, the other offices were the Madjlessis' or those of Bijan Madjlessi's employees. Lonich's role as general counsel for Madjlessi does not establish, on its own, that he exercised daily management and control over, for example, Stephanie Burman's office (Lonich states that Stephanie Burman provided accounting and bookkeeping services for Bijan Madjlessi and/or his controlled companies, Id. ¶ 5).
The Court now turns to the contested documents. There are seven taint team documents at issue. The Court finds that Lonich does not have standing as to the five documents seized from Stephanie Burman's office. As to the other two documents (Documents 281 (SVBSW-CF-OS-0120847) and 289 (SVBSW-CF-OS-0126513)), the Court finds that Document 281 does not fall within the scope of the warrant but that Document 289 does. On its face, Document 281 does not contain any reference to 101 Houseco, discusses an unidentified loan that does not have any apparent connection to 101 Houseco, and it is dated December 21, 2012, which is outside the alleged conspiracy time period. Document 289, on the other hand, explicitly mentions "Houseco" and is dated within the alleged conspiracy period. Even if Document 289 is not evidence of the alleged 101 Houseco fraud, a reasonable executing agent would have interpreted the warrant to permit the seizure of this document.
This document is an email from John Barr to Madjlessi and Lonich dated July 27, 2010, and the email "recap[s] our discussions yesterday" regarding, inter alia, "132 Village" and rents and repairs. The warrant affidavit describes 132 Village Square, LLC as the entity that obtained several loans to fund the PLV project, including the IndyMac loan to construct the East Side of the Park Lane Villas, and it is this loan that Madjlessi defaulted on and that 101 Houseco purchased in the auction. See Dkt. No. 326-1 ¶¶ 9-13. The search warrant authorized the seizure of evidence of "ownership, custody, control of, and association with" 132 Village Square. The Court finds that because the search warrant affidavit contains information directly tying 132 Village Square to the alleged 101 Houseco fraud, a reasonable executing agent would have interpreted the warrant to permit the seizure of this document as evidence of Lonich and Madjlessi's "ownership, custody, control of, and association with" 132 Village Square.
These documents include an email dated March 11, 2009 that has a number of title-related documents attached to it. The property at issue is a condominium in the "Village Square at Courtside Village" project, and a title report shows that "132 Village Square Group, LLC" has multiple deeds of trust on the property. The government argues that these documents are within the scope of the warrant because, inter alia, they include an Exhibit A that is signed by Bijan Madjlessi on behalf of "132 Village Square, LLC" and in his role of "President" of "Park Lane Villas, Inc." 132 Village Square obtained several of the loans to fund the PLV project, and thus the Court finds that evidence regarding Madjlessi's connection to 132 Village Square LLC, even if that evidence predates the alleged conspiracy and involves a different real estate project, is relevant to this case.
This document is a transfer agreement between "132 Village Square, LLC," "Bijan Madjlessi," and "Sonoma Valley Bank." The document makes specific reference to the April 11, 2007 loan Sonoma Valley Bank made to 132 Village Square, which is one of the loans that is discussed in the warrant affidavit that provided funds to build the Park Lane Villas. The Court finds that a reasonable executing agent would have interpreted the warrant to permit the seizure of this document.
The title of each of these documents is "Owner's Affidavit," both are dated July 2010, and both documents relate to "132 Village Square, LLC." For the reasons stated above, the Court finds that it was reasonable for an officer to seize what appears to be evidence of the ownership of 132 Village Square, LLC.
These are pleadings filed by Lonich in 2013 in his capacity as attorney for Madjlessi relating to litigation between Madjlessi and WestAmerica Bank in Sonoma County Superior Court. WestAmerica Bank is alleged in the search warrant affidavit to be the successor institution to Sonoma Valley Bank. In one document, Lonich states that he "caused" an attached declaration of Steven Bauer to be lodged with the court. Mr. Bauer's declaration states that he has become aware of a "federal grand jury investigation [that] relates to the failure of Sonoma Valley Bank in 2010." Box_135-000166. The Court finds that these documents were within the scope of the search warrant because the search warrant authorized the seizure of evidence relating to "Section 1512(c) (Attempted Obstruction of Justice — Tampering with a Witness)." The affidavit alleges, inter alia, that Lonich and Madjlessi attempted to obstruct justice, and the indictment specifically alleged that Lonich attempted to obstruct the federal grand jury mentioned in this document.
These documents are more pleadings from the case discussed supra between Madjlessi and WestAmerica Bank, as well as other documents related to that litigation such as discovery responses, emails and notes. The documents include a declaration of Lonich where he states that he has "since 2009 been the attorney for a limited liability company named 101 Houseco, LLC (`Houseco'), which in 2009 entered into a loan transaction with Sonoma Valley Bank." Box_135-001501. These documents also contain references to the criminal investigation by a federal grand jury, as well as Sonoma Valley Bank's loan to 132 Village Square. The Court finds that a reasonable officer could conclude that these documents were evidence of the alleged 101 Houseco fraud as well as attempted obstruction of justice.
These are documents evidencing a loan between Sonoma Valley Bank and Farhad Hariri (Madjlessi's brother in law) and his defaulting on that loan, as well as documents related to a foreclosure lawsuit filed by WestAmerica Bank against Farhad Hariri. Neither the lawsuit nor the loan involves 101 Houseco or the PLV project. The government argues that this evidence is within the scope of the warrant because the search warrant affidavit alleges that "Madjlessi's brother in law" was involved with a precursor company to 101 Houseco called 103 Star LLC. The Court notes, however, that Hariri is not identified as Madjlessi's brother in law in the affidavit, and his name simply appears on the list of individuals in Attachment B who are "witnesses, potential victims, or [] potentially involved in the scheme described herein." The government also notes that one document in the box states that Brian Melland was the loan officer for Farhad Hariri's loan at Sonoma Valley Bank. See Box_135-001639. The government argues that a "reasonable officer was entitled to seize this evidence that connects one of the defendants and the victim bank to an individual directly connected to the 101 Houseco fraud as detailed in the search warrant." Dkt. No. 326 at 7:13-16.
The Court finds that the connection the government seeks to draw is too attenuated, particularly given the fact that the search warrant affidavit does not explain who Hariri is or his connection to the alleged 101 Houseco fraud. Further, the documents on their face do not have any relationship to the alleged 101 Houseco fraud. Under these circumstances, the Court finds that this document is outside the scope of the warrant.
This is a Sonoma Valley Bank document titled "Enterprise Review" that examines the loan relationship between the Madjlessis and Sonoma Valley Bank. The document details the loan to 132 Village Square, LLC for the PLV project, and makes numerous references to the PLV project. The Court agrees with the government that a reasonable officer would believe these documents to be related to the alleged 101 Houseco fraud.
This document is titled "Capital raised by Ananda Advisors vs. PPM Criteria," and contains a chart showing amounts raised. The government argues that this document shows the identity of the owners of an entity that was specifically alleged to be a straw owner of 101 Houseco. The government notes that search warrant affidavit alleges that in March 2011, J.H. "was removed as the [straw] owner of 101 Houseco and replaced by a company known as Ananda Partners 1, LLC." Dkt. No. 326-1 ¶ 42 (search warrant affidavit).
If this document showed the identity of the owners of Ananda Partners 1, LLC, the Court would agree with the government. However, there is nothing on the face of this document showing the identity of the owners, nor is there anything suggesting a connection to the overall alleged scheme to defraud. Accordingly, the Court finds a reasonable officer would not have believed this document to be within the scope of the warrant.
This document is a chart listing monthly disbursements to partners of Ananda Partners I, II and III, and lists the identities of the partners. Because the affidavit alleges that Ananda Partners I replaced J.H. as the straw owner of 101 Houseco, the Court finds that this document is within the scope of the warrant.
This document is titled "G & J Exposure." The government asserts that this document presumably relates to "G"reg Smith and "J"ed Cooper, who are both named in the search warrant. The government notes that one of the listed exposures is "Conflict between Gregg as CPA and his clients, Ananda, its investors, and SABT/Houseco" while another is "CPA directed adjustments to be made on books of SABT and Houseco without consent of manager." The second page also includes two explicit references to 101 Houseco and what appear to be payments to 101 Houseco.
The Court agrees with the government that a document that specifically references 101 Houseco was reasonably seized pursuant to the search warrant.
These documents are pleadings from lawsuits brought by WestAmerica Bank, the successor to Sonoma Valley Bank, against Cooper, Smith and Hariri regarding the Petaluma Greenbriar loans. Lonich represented Cooper and Smith in those lawsuits. The documents also include an email from Lonich to Cooper and Smith. The government argues these documents are within the scope of the warrant because Cooper, Smith and Hariri are mentioned in the search warrant affidavit as being related to the fraud. The government also argues that the documents demonstrate that Lonich had access to private information of Cooper and Smith in that he sends emails purporting to contain their "financial information" and a "declaration regarding net worth." Box_132-002232-33.
The Court is not persuaded by the government's arguments. The government does not argue that the Petaluma Greenbriar loans or lawsuits are evidence of the alleged 101 Houseco fraud. Further, as the Court noted in its September 2, 2016 order, the search warrant affidavit does not explain who Cooper and Smith are or their connection to the alleged 101 Houseco fraud. See Dkt. No. 245 at 15-16. Similarly, as noted above, the search warrant affidavit does not explain who Hariri is. Without any information in the affidavit tying these individuals to the alleged fraud, the Court cannot find that a reasonable executing agent would believe that the warrant authorized the seizure of these documents under the construction of the warrant advocated by the government and adopted by this Court.
This document lists "All Ananda Partners" for Ananda Partners I, Ananda Partners II, and Ananda Partners III as of October 9, 2012. As stated above, because the search warrant alleges that Ananda Partners I replaced J.H. as the straw owner of 101 Houseco, the Court finds that this document showing the identities of the Ananda Partners I is within the scope of the warrant.
This document includes a Certificate of Board of Directors for Greenbriar Construction Company which is signed by Madjlessi and that authorizes Lonich to "execute any and all documents that he deems reasonably necessary for the Company [Greenbriar Construction] to purchase" a certain piece of property. The Court finds that a reasonable officer was entitled to seize this document because it is direct evidence of the "ownership, custody, [and] control of... Greenbriar Construction," and the search warrant alleges that Madjlessi served as the primary construction contractor for PLV through, inter alia, Greenbriar Construction. Dkt. No. 326-1 ¶ 9.
These documents include a Transfer Agreement, emails, and documents related to a lawsuit between Menlo Oaks Corporation and Sonoma Valley Bank. The government notes that an addendum to the Transfer Agreement sets forth an agreement between 101 Houseco, LLC and an individual. The documents also contain a number of instances of Madjlessi signing documents as "President" of Menlo Oaks Corporation. The Court finds that a reasonable officer was justified in seizing this document given that it mentions 101 Houseco. Further, this document is within the scope of the warrant because it is evidence of the ownership, custody, and control of Menlo Oaks, and the search warrant alleges that Madjlessi served as the primary construction contractor for PLV through, inter alia, Menlo Oaks. Dkt. No. 326-1 ¶ 9.
These are pleadings in a lawsuit filed by WestAmerica Bank against Madjlessi, and there are references in the documents to a "criminal investigation" that the government asserts is the criminal investigation in this case. The Court agrees with the government that a reasonable officer would believe that these documents are within the scope of the warrant.
The first document is an email to Lonich wherein he receives financial information that he had "requested" for three Ananda entities, including "Ananda Advisors, LLC." The second document is a check from Lonich's account to Annadel Capital, with a reference to "Ananda I." The third document is an invoice from Ananda Partners II, LLC to Lonich, as well as a statement regarding Ananda Partners II. The fourth batch contains one invoice from Ananda Partners, III, and three documents related to Ananda I, two of which specifically reference Houseco. See Box_142-001090, Box_142-001092.
The Court finds that first document is within the scope of the warrant because the warrant states that Ananda Advisors is connected to 101 Houseco, LLC, and that document shows Lonich requesting information in order to make a deposit into Ananda Advisors. The Court also finds that the second and fourth batches fall within the scope of the warrant, both because several of them explicitly mention "Houseco" and because the warrant affidavit states that once J.H. was removed as the straw owner of 101 Houseco, Ananda Partners 1, LLC became the straw owner. However, the search warrant does not tie Ananda II or Ananda III to the alleged 101 Houseco fraud (indeed, these entities are not mentioned in the affidavit), and thus the Court finds the third group of documents are outside the scope of the warrant.
These are two checks, the first from the law office of David Lonich to the law office of Paul Wolf "for Patricia Brajkovich." The government notes that the search warrant affidavit alleges that one of the false asset verification letters created by Lonich and Cutting as part of their fraudulent efforts to gain control of PLV was submitted on Brajkovich's behalf. See Dkt. No. 326 ¶¶ 43-51. The government argues, and the Court agrees, that evidence that Lonich made a payment to a lawyer for or on behalf of Brajkovich is evidence he may have involved her in the 101 Houseco fraud.
The second document is a check from Lonich's attorney/client trust account to himself. The Court agrees with the government that it was reasonable to seize evidence of payments Lonich made to himself given that a goal of fraud is to obtain money and property.
This document, dated April 29, 2011, is a request by Lonich for a wire transfer to William Vandever in the amount of $252,500. The government states that while it "understands the Court's prior order that not all evidence of association between the various individuals listed in the warrant is seizable, evidence of such a large monetary payment from one of the named defendants to another party specifically named in Attachment B was reasonably seized." Dkt. No. 326 at 11.
The problem with this argument is that the search warrant affidavit does not contain any information about Vandever or his connection to the alleged fraud. The only reference to Vandever is his inclusion in the list of names of individuals in Attachment B who are "witnesses, potential victims, or [] potentially involved in the scheme described herein." Without either more information in the affidavit regarding Vandever or some indication on the face of the document that there is a connection to the alleged fraud, the Court finds this document outside the scope of the warrant.
These documents are various emails between individuals discussing the FBI's investigation into Madjlessi and a Reno real estate project. However, as the government notes, in those emails the individuals also discuss matters directly relevant to this case, including the fact that Madjlessi reacquired the defaulted IndyMac note in the DebtX auction and that Madjlessi used straw buyers for the "Santa Rosa Condo Sales." The Court finds that all of these documents were properly seized.
This is Lonich's resume, in which he describes his work with Madjlessi on the Park Lane Villas project. The Court finds that his document was properly seized.
This is an accounting chart that shows income, expenses, and gross rent for an unnamed real estate project between July 2012 and June 2013. Defendant asserts this document is related to "SABT," but he has cited no evidence to support that claim. The government asserts that this document "just as likely documents the rental income of the Park Lane Villas, and so a reasonable officer was entitled to seize it." Dkt. No. 326 at 12:9-10. The government notes that Attachment B to the search warrant authorized the seizure of "[e]vidence of the custody, occupancy, ownership, or control of PLV and any money generated by or associated with it by any party".
The Court agrees with the government that it was reasonable to seize this document as possible evidence of "money generated by" PLV. The Court also notes that the time period covered by the document overlaps with the timeframe of the alleged conspiracy.
This is a check register showing money paid to and from a bank account controlled by Lonich for the period March to December 2011. The register shows a number of deposits from 101 Park Lane, and also shows that Lonich paid 101 Houseco $10,010 and paid another individual $2,500 with a description listed of 101 Houseco. The Court finds that this document was properly seized.
This is a spreadsheet identifying the signatories for bank accounts of entities specified in the warrant, namely Greenbriar Construction ("Bijan or Stephanie"), Menlo Oaks ("Bijan only"), and Masma Construction ("Bijan or Stephanie"). These entities are described in the affidavit as being controlled by Madjlessi, and also specifically involved in the PLV project. Dkt. No. 326-1 ¶ 9. The Court finds that this document was properly seized as evidence of the "ownership, custody, [and] control of" "Masma Construction, Greenbriar Construction, and Menlo Oaks Corporation."
The first document is a complaint filed by the FDIC as receiver against Cutting, Melland, and another individual alleging gross negligence against them in their handling of, inter alia, their loans to "132 Village Square," for the PLV project. The second set of documents includes a forbearance agreement between 132 Village Square and Madjlessi, and numerous documents relating to the 132 Village Square loans from Sonoma Valley Bank, including board approvals of the loans, financial documents for 132 Village Square, lists of condo purchasers within the Park Lane Villas, and a document signed by Madjlessi in his capacity as the "President" of "Parklane Villas, Inc." that is also signed by Melland on behalf of Sonoma Valley Bank. Box_142-001268.
The Court finds that a reasonable officer would believe these documents fell within the scope of the warrant as they relate to loans for the PLV project and the PLV project generally.
This is a two-page accounting of payments made from Masma Construction to 132 Village Square that includes a reference to an August 25, 2009 payment to "PRESS DEMOCRAT-PLV." The Court finds this document was properly seized because the search warrant specifically authorized the seizure of "any records relating to any funds generated by or associated with PLV and the disposition of any such funds," and the affidavit states that 132 Village Square, LLC and Masma Construction were controlled by Madjlessi and involved in the PLV project.
These are all copies of a transcript of an October 25, 2011 deposition that Lonich gave in a bankruptcy case involving several Petaluma Greenbriar entities. In it, Lonich is questioned about the federal investigation of Madjlessi that led to this case, and he stated he did not know if there was such an investigation. The Court finds that an officer could reasonably believe that this document was covered by the search warrant.
The first set of documents are publically filed court pleadings (complaints and exhibits, declaration of Sean Cutting, court orders) in a lawsuit between Sonoma Valley Bank and 132 Village Square, regarding some of the loans identified in the search warrant. The second set of documents includes a forbearance agreement about those same loans, as well as emails between Lonich and Madjlessi regarding the agreement. The Court finds that these documents are within the scope of the warrant as these materials relate to some of the loans identified in the search warrant that were directly associated with PLV.
Accordingly, the Court holds that (1) the government must comply with the electronic media protocol by destroying or deleting all electronic documents outside the scope of the warrant (including electronic documents that the government did not contest in the meet and confer) as set forth in this order, and if that is not technically possible, file a declaration explaining why, (2) the paper documents that the Court has ruled are outside the scope of the warrant are suppressed, and (3) any paper documents that the government did not contest in the meet and confer process are deemed outside the scope of the warrant and are therefore suppressed.
The parties were unable to agree on additional documents identified by the government (Bates Nos. SVBSW-CF-OS-103807-933; SVBSW-CF-OS-148845-71; SVB-SW-CF-OS-PRIV-000775-927; SVB-SW-CF-OS-PRIV-005401-533; and SVB-SW-CF-OS-PRIV-008004-32), and those documents are discussed infra.
