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United States v. Williams

United States District Court, D. Hawaii

July 26, 2019

ANTHONY T. WILLIAMS (01), Defendant.



         Before the Court are pro se Defendant Anthony T. Williams's (“Defendant”): Motion for Suppression of Evidence (“Motion to Suppress”), filed on March 19, 2019; and Motion for Evidentiary Hearing on Motion to Suppress (“Motion for Hearing”), filed on March 25, 2019. [Dkt. Nos. 437, 441.] Plaintiff the United States of America (“the Government”) filed its memorandum in opposition to the Motion to Suppress (“Suppress Opposition”) on April 29, 2019, [1] and Defendant filed his reply in support of the Motion to Suppress (“Suppress Reply”) on May 7, 2019. [Dkt. nos. 467 (sealed), 474.] These matters came on for hearing on May 10, 2019. On May 17, 2019, the Government filed a supplemental memorandum in opposition to the Motion to Suppress (“Supplemental Suppress Opposition”), and Defendant filed a supplemental reply in support (“Supplemental Suppress Reply”) on June 2, 2019. [Dkt nos. 480, 501.] Defendant's Motion for Hearing and Motion to Suppress are hereby denied for the reasons set forth below.


         Defendant is currently facing fifteen counts of wire fraud, in violation of 18 U.S.C. § 1343, and seventeen counts of mail fraud, in violation of 18 U.S.C. § 1341. [Superseding Indictment, filed 3/28/18 (dkt. no. 154).[2] The charges against Defendant arise from an alleged mortgage fraud scheme. The scheme involved two entities, Mortgage Enterprise Investments (“MEI”), and The Common Law Office of America (“CLOA”). The Superseding Indictment states Defendant was the founder, chief executive officer (“CEO”), and partner of MEI. [Id. at ¶ 1.]

         Defendant challenges two warrants that a magistrate judge issued on December 14, 2015. [Motion to Suppress, Decl. of Counsel (“Counsel Suppress Decl.”), Exh. A at 5.[3] One warrant was for the search of an office space on Democrat Street in Honolulu that Defendant used (“Office Warrant”), and the other was for Cabebe's residence in Aiea (“Residence Warrant” and collectively “Warrants”). [Suppress Mem. at 11; Suppress Opp., Exh. A (Office Warrant and supporting application), Exh. B (Residence Warrant and supporting application).] Both applications were supported by the same Affidavit in Support of a Search Warrant by Federal Bureau of Investigation (“FBI”) Special Agent Megan Crawley (“Crawley Affidavit”). [Suppress Opp., Exh. A at 2-30, Exh. B at 2-30.]

         Defendant argues the Crawley Affidavit was “deliberately and recklessly false in material respects, ” and therefore the Warrants were not supported by probable cause. [Suppress Mem. at 3.] Defendant asserts the Crawley Affidavit concealed the fact that the FBI's investigation was not prompted by any complaint brought by one of Defendant's clients, and he claims the investigation was in retaliation for Defendant's efforts to publicize government corruption. [Id. at 4.] Defendant argues the Crawley Affidavit made the following statements, which he contends were deliberately or recklessly false:

-Defendant held himself out as an attorney; [id. at 5;]
-Defendant and MEI guaranteed their clients reductions in their mortgage loan amounts, mortgage loan terms, and monthly mortgage loan payments; [Suppress Reply, Decl. of Counsel (“Counsel Suppress Reply Decl.”), Exh. A at 3;[4]
-Defendant made misrepresentations and falsified documents to create the impression that MEI was licensed to service and/or modify mortgages, and some of MEI's clients became delinquent in their mortgage loans after acting upon Defendant's advice; [id.;]
-the FBI received a call from a state agency that had received a number of complaints regarding a mortgage reduction program, which the Crawley Affidavit suggests was MEI; [id. at 6;]
-Defendant instructed MEI clients to stop making their mortgage payments and to pay the money to Defendant instead; [id. at 9;] and
-M.V., one of Defendant's alleged victims, was not delinquent in his mortgage payments when he began Defendant's program, but M.V. became delinquent because he stopped making his mortgage payments, [id. at 11].

         In addition, Defendant argues the Warrants “are facially defective and repeatedly and consistently failed to adequately particularize the place to be searched or the things to be seized.” [Suppress Mem. at 3.] Defendant therefore contends the Warrants were invalid.

         Even if each of the Warrants was valid, Defendant contends each was executed in an illegal manner. According to Defendant, Agent Crawley and the FBI exceeded the scope of the Warrants and used the Warrants as granting “general rights of search and seizure.” [Id.]

         The Motion to Suppress and the Motion for Hearing request an evidentiary hearing, pursuant to Franks v. Delaware, 438 U.S. 154 (1978), to challenge the Crawley Affidavit. Ultimately, Defendant seeks the suppression of all evidence obtained as result of the searches and the dismissal of all of the charges that were based on the illegally obtained evidence. [Suppress Mem. at 2.] At the hearing, Defendant's Exhibits A, B, C, E, F, H, J, O, and R were received in evidence. [Minutes, filed 5/10/19 (dkt. no. 477), at 1.[5]


         I. Request for a Franks Hearing

An evidentiary hearing pursuant to Franks allows a defendant to test the veracity of an affidavit supporting a warrant. [438 U.S. 154.] Given the assumption of validity underlying a supporting affidavit, a party moving for a Franks hearing must submit “allegations of deliberate falsehood or of reckless disregard for the truth, and those allegations must be accompanied by an offer of proof.” Franks, 438 U.S. at 171. Furthermore, the movant must show that any omitted information is material. United States v. Kiser, 716 F.2d 1268, 1271 (9th Cir. 1983). The movant bears the burden of proof and must make a substantial showing to support both elements. See United States v. Garcia-Cruz, 978 F.2d 537, 540 (9th Cir. 1992).
The Ninth Circuit has identified five requirements that a defendant must satisfy before he is entitled to a Franks hearing: “(1) the defendant must allege specifically which portions of the warrant affidavit are claimed to be false; (2) the defendant must contend that the false statements or omissions were deliberately or recklessly made; (3) a detailed offer of proof, including affidavits, must accompany the allegations; (4) the veracity of only the affiant must be challenged; and (5) the challenged statements must be necessary to find probable cause.” United States v. DiCesare, 765 F.2d 890, 894-895 (9th Cir. 1985).

United States v. Laulea, Cr. No. 13-00824 ACK, 2014 WL 3579642, at *2 (D. Hawai`i July 18, 2014). A defendant requesting a Franks hearing is not required to present “[c]lear proof” that the affiant made deliberate or reckless statements or omissions, but “the defendant must make at least a ‘substantial showing' that the affiant” either made intentional or reckless statements or “intentionally or recklessly omitted facts required to prevent technically true statements in an affidavit from being misleading.” United States v. Gonsalves, Criminal No. 06-00080 (03) SOM, 2008 WL 148938, at *7 (D. Hawai`i Jan. 16, 2008) (some citations omitted) (quoting United States v. Stanert, 762 F.2d 775, 781 (9th Cir. 1985)).

         Defendant has identified specific portions of the Crawley Affidavit that he contends were deliberately or recklessly false, and he has made an offer of proof, with affidavits and other documents. See DiCesare, 765 F.2d at 894-95. Defendant's offer of proof, however, does not make a “substantial showing” that Agent Crawley made deliberate or reckless representations or omissions in her affidavit. See Stanert, 762 F.2d at 781.

         A. Whether Defendant Stated He Was an Attorney

          Agent Crawley stated Defendant “personally represents himself as a [Private Attorney General] and carries badges/credentials to that effect.” [Crawley Aff. at ¶ 14.] Defendant admits this. [Suppress Reply Mem. at 10 (“Every client was told that [Defendant] was a Private Attorney General . . . .”).] Defendant has also described himself as a Private Attorney General in the instant case. See, e.g., Suppress Mem. at 1; Suppress Reply Mem. at 1. Defendant emphasizes that: he told each of his clients he was not a member of any bar; and each client granted him a power of attorney. [Suppress Mem. at 5.] Defendant also states his clients received an explanation of the difference between a Private Attorney General and an “attorney in fact.” [Suppress Reply Mem. at 10.] Thus, the statement in the Crawley Affidavit that Defendant represents himself as a Private Attorney General was not a deliberately or recklessly false statement.

         The Crawley Affidavit also states W.R, one of Defendant's clients, reported that he met with Defendant after “a mass sign-up” session at the Democrat Street office, and Defendant “represented himself as an attorney and stated he knew the law book inside-out.” [Crawley Aff. at ¶ 33.] To the extent Defendant asserts W.R.'s statement was false, Defendant is challenging W.R.'s veracity, not Agent Crawley's. See DiCesare, 765 F.2d at 895 (stating only the affiant's veracity must be challenged to obtain a Franks hearing). Defendant has presented no evidence that Agent Crawley made deliberately or recklessly false statements about W.R. Defendant has not made a substantial showing that Agent Crawley deliberately or recklessly made false statements about Defendant's representation that he is either an attorney or a Private Attorney General. Further, Agent Crawley's statements about those representations are not necessary to support the magistrate judge's probable cause finding. Defendant is not entitled to a Franks hearing to challenge Agent Crawley's statements that Defendant held himself out as an attorney and a Private Attorney General.

         B. Instruction to Stop Paying Their Mortgage

          Defendant argues Agent Crawley lied when she stated that Defendant instructed his clients to stop paying their mortgages and to make their payments to MEI instead. [Suppress Reply Mem. at 9.] What the Crawley Affidavit stated is that MEI was

offering a mortgage reduction program to clients in Hawaii and the mainland. The program guarantee[d] a reduction of overall loan amount, loan term, and monthly mortgage payment by half. After an initial sign-up fee to MEI, clients are instructed to cease all payments to their mortgage lender and to direct all future mortgage payments to MEI. However, because MEI [wa]s not a licensed mortgage company with the ability to create, service, or modify loans, the client's loan with their actual mortgage lender continue[d] to become increasingly delinquent as MEI d[id] not have authority, or make an attempt, to satisfy the client's mortgage before reassigning it to MEI.

[Crawley Aff. at ¶ 8.] The Crawley Affidavit also stated Defendant instructed clients to stop making payments to their mortgage lender and make the payments to MEI instead. [Id. at ¶ 32.]

         Crawley's statements were supported by statements from MEI clients, such as that of D.A., who stated that, during a meeting in which Henry Malinay (“Malinay”) explained the mortgage reduction program to her, Malinay told her to stop paying her mortgage. At that meeting, Malinay collected various fees from D.A. D.A. and her husband later met with Defendant at the Democrat Street office to sign more paperwork. [Id. at ¶ 34.] Agent Crawley stated her “investigation has currently discovered one (1) of D.A.'s checks deposited into an Extraco Bank checking account ending in 678 that is held by MEI, with [Defendant] and Barbara [Williams] as signatories.” [Id.]

         Agent Crawley also notes that Malinay testified during his deposition in a bankruptcy proceeding that Defendant recruited Malinay to make referrals to Defendant's program. [Id. at ¶ 28.] Further, a confidential source (“CS”) who was a MEI client, told the FBI that Malinay said the program would reduce the CS's mortgage by fifty percent. Agent Crawley states she observed the CS drop off a mortgage payment to Cabebe at the Aiea residence. [Id. at ...

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