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United States v. Chavez

United States District Court, W.D. North Carolina, Charlotte Division

November 6, 2019



          Max O. Cogburn Jr. United States District Judge.

         THIS MATTER is before the Court on Defendant's Motion to Suppress evidence obtained from his social media account pursuant to an electronic search warrant. (Doc. No. 74). After an evidentiary hearing and several rounds of briefing, this matter is now ripe for review. For the reasons that follow, the Court denies Defendant's Motion to Suppress.

         I. BACKGROUND

         A. Factual Background

         In late 2009, law enforcement officers from several federal agencies began investigating a transnational fraudulent scheme. About nine years later, on June 25, 2018, the officers applied for a search warrant from United States Magistrate Judge Cayer. To support the application, United States Postal Investigator Mark Heath submitted an affidavit providing extensive details regarding the alleged scheme. The following facts are taken from that affidavit.

         Essentially, the scheme unfolded as a fraudulent sweepstakes targeting United States residents, many of whom are elderly. Telemarketers in Costa Rica purportedly phoned their victims, then used various opening pitches to deceive them into believing they had won large monetary prizes in a sweepstakes. Of course, there was a catch: the victims had to wire transfer funds as an “insurance fee” to receive their “winnings.” When victims were willing to pay, telemarketers called them repeatedly, asserting additional fees had to be paid in order to claim the prize. This continued until the victims were unwilling to pay. (Doc. No. 74-1 at 14).

         In September 2016, investigators received a report from one of the victims of this scheme who stated that she had received a call in June 2015 informing her that she had won a $4.5 million sweepstakes but that she needed to pay certain fees upfront to collect her prize. Over the next six months, she sent over $220, 000 to various individuals through money orders and direct deposits in a fruitless attempt to claim a prize. (Id.). Officers obtained records for the bank accounts where the victim made her direct deposits. From the records, officers learned that co-defendant Paul Stiep owned one of those accounts and that, from September 2014 to January 2016, that account had received about $760, 000 in suspicious deposits. During that time, Stiep had also wired about $613, 000 to Costa Rican recipients. (Id. at 14-15).

         Inspector Heath and another inspector interviewed Stiep on August 16, 2017. During the interview, Stiep admitted he was involved in the scheme. First, he confessed that the deposits in his account derived from victims who were attempting to claim prizes. Next, he admitted he knew that telemarketers were making false statements to induce victims to part with their money. According to Stiep, his role was to take the received funds and forward them to others. In exchange, Stiep kept between ten and fifteen percent of the funds received. (Id. at 15).

         Stiep indicated that he received instructions from two individuals in Costa Rica: co-defendant Roger Roger and Eugenio Castro. During the interview, Stiep allowed the inspectors to search his phone, including Facebook messages that he had exchanged with Roger. In the messages, Stiep and Roger discussed fraudulent deposits, Stiep's commission, and how to structure transfers to avoid scrutiny from the Internal Revenue Service. Roger also floated having Stiep fly to Costa Rica and work as one of his telemarketers. (Id. at 15-16).

         Furthermore, during the interview, Stiep stated that he introduced his friend, Defendant Manuel Chavez, to Roger and Castro. Defendant was a Facebook Friend of both Stiep and Roger. (Id. at 18). According to Stiep, Defendant “knowingly moved sweepstakes related victim money at the direction of Roger and Castro and was paid a commission to do [so].” (Id. at 15). While reviewing Stiep's Facebook messages, officers discovered that Stiep had complained to Roger that “Manny” received a fifteen percent commission for his wire transfers while Stiep received only ten percent. (Id. at 16-17). Based on this information, the IRS reviewed Defendant's bank accounts and discovered about $227, 731.95 in fraudulent deposits. At least some of those deposits came from reporting victims-including the victim who reported being defrauded in September 2016. The IRS also traced about $202, 926 in wire transfers, which were sent to multiple recipients in Costa Rica, including Castro. (Id. at 18-19).

         In the supporting affidavit, Postal Inspector Heath also discussed his experience investigating large-scale fraudulent telemarketing schemes. He averred that participants “routinely utilize electronic communications [like Facebook] to distribute lead lists, relay information about victims mailing and wires and to share specific instructions with co-conspirators on how to wire funds overseas.” (Id. at 21). Inspector Heath detailed Facebook's various features and the data it collects. He declared each piece of data can “provide crucial evidence of the ‘who, what, why, when, where, and how' of the criminal conduct under investigation” and “can indicate who has used or controlled the Facebook account.” (Id. at 25).

         On June 25, 2018, the magistrate judge found that Inspector Heath's affidavit afforded probable cause to search and seize several forms of evidence, and thus commanded Facebook to “disclose[]” the following information from Defendant's account:

(a) All contact and personal identifying information, including full name, user identification number, birth date, gender, contact e-mail addresses, Facebook passwords, Facebook security questions and answers, physical address (including city, state, and zip code), telephone numbers, screen names, websites, and other personal identifiers;
(b) All activity logs for the account and all other documents showing the user's posts and other Facebook activities;
(c) All photos and videos uploaded by that user ID and all photos and videos uploaded by any user that have that user tagged in them;
(d) All profile information; News Feed information; status updates; links to videos; photographs, articles, and other items; Notes; Wall postings; friend lists, including the friends' Facebook user identification numbers; groups and networks of which the user is a member, including the groups' Facebook group identification numbers; future and past event postings; rejected “Friend” requests; comments; gifts; pokes; tags; and information about the user's access and use of Facebook applications;
(e) All other records of communications and messages made or received by the user, including all private messages, chat history, video calling history, and pending “Friend” requests;
(f) All “check ins” and other location information;
(g) All IP logs, including all records of the IP addresses that logged into the account;
(h) All records of the account's usage of the “Like” feature, including all Facebook posts and all non-Facebook webpages and content that the user has “liked”;
(i) All information about the Facebook pages that the account is or was a “fan” of;
(j) All past and present lists of friends created by the account;
(k) All records of Facebook searches performed by the account;
(l) All information about the user's access and use of ...

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