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United States v. Teyf

United States District Court, E.D. North Carolina, Western Division

November 7, 2019

UNITED STATES OF AMERICA,
v.
LEONID ISAAKOVICH TEYF, Defendant.

          ORDER (SEALED) [1]

          LOUISE W. FLANAGAN, UNITED STATES DISTRICT JUDGE

         This matter comes before the court on defendant's motion to suppress certain evidence and return seized and restrained property, in accordance with the Fourth, Fifth, and Sixth Amendments to the United States Constitution. (DE 182). Pursuant to 28 U.S.C. § 636(b)(1)(B) and Federal Rule of Criminal Procedure 59(b), United States Magistrate Judge Robert T. Numbers, Jr., entered memorandum and recommendation (“M&R”), wherein it is recommended that defendant's motion be denied. (DE 247). Following opportunity to secure new retained counsel, defendant timely objected to the M&R. In this posture, the issues raised are ripe for ruling. For the reasons noted, defendant's motion to suppress evidence and return seized and restrained property is denied.

         STATEMENT OF THE CASE

         Defendant was indicted for conspiracy to commit money laundering, money laundering, bribery of a public official, murder for hire, possession of a firearm with an obliterated serial number, conspiracy to harbor illegal aliens, visa fraud, making false statements on a tax return, and failing to file a report of foreign bank and financial accounts. In the fourth superceding indictment returned May 9, 2019, the government also noticed forfeiture of certain property in this case, including: four tracts of real property; 17 firearms; all related ammunition and accessories; six motor vehicles; artwork purchased on or about August 14, 2015, for $2, 600, 000.00; 25 bank accounts; miscellaneous jewelry; and sums of currency.

         On March 15, 2019, defendant filed the instant motion to suppress. Defendant contends that seizure warrants issued December 5, 2018, pertaining to four motor vehicles and 22 bank accounts, are not supported by probable cause. Defendant argues that, even if the seizure warrants are facially valid, the affidavits supporting the seizure warrants contain false and misleading statements rendering the warrants defective. Defendant further argues the seizures of his property, including his cars, artwork, and currency, made at his residences located on New Market Way and Glenwood Avenue in Raleigh, North Carolina, exceeded the scope of the search warrants issued for those locations. Finally, defendant asserts the government unlawfully restrained assets untainted by defendant's alleged bribery and kickback scheme. In support of the motion, defendant relies upon an officer's affidavit from one of the seizure warrants, [2] administrative notice of forfeiture, the report of investigation from the United States Department of Homeland Security debriefing confidential source one (“CS-1”), and search warrants issued by a magistrate judge for the New Market Way and Glenwood Avenue properties.[3]

         Following hearing on April 24, 2019, the magistrate judge issued M&R, recommending the court deny defendant's motion in its entirety, except for release of defendant's jewelry, which had already been released May 8, 2019, by order of the court. After a delay caused by withdrawal of defense counsel, defendant's newly retained counsel timely filed objections to the M&R.

         STATEMENT OF FACTS

         The court recites the facts as summarized in the affidavits supporting the warrants for seizure of defendant's bank accounts and motor vehicles. From approximately February 2007 to November 2012, Anatoliy Serdyukov (“Serdyukov”) served as Russian Minister of Defense. (Officer's Aff. (DE 182-1) ¶ 62.b.). During that time, the company Voentorg became the primary contractor and private supplier to the Russian military. (Id.). Between 2010 and 2012, defendant served as Deputy Director of Voentorg, and he awarded contracts to subcontractors that fulfilled the government contracts. (Id.).

         CS-1 provided security to defendant while in Russia and acted as a go-between for defendant and business associates. (Id. ¶ 62.a.). CS-1 overheard conversations between defendant and subcontractors discussing a “kickback” as a “percentage” of the contract to be paid by the subcontractors to defendant. (Id. ¶ 62.c.). CS-1 was also present for multiple conversations between defendant and Andrei Shokin (“Shokin”), who defendant hired to manage his companies. (Id. ¶ 62.d.). The focus of these conversations was on how to transfer the kickback proceeds. (Id.). Defendant also hired Yelena Zelenova (“Zelenova”), an accountant who maintained records of defendant's companies, including any kickbacks received. (Id.).

         While the scheme was being perpetrated, defendant instructed CS-1 to meet couriers at various locations around Russia to receive large sums of cash. (Id. ¶ 62.e.). CS-1 opened the packages to ensure money was enclosed but never counted the cash due to the significant amounts involved. (Id.). Upon receipt, defendant would call CS-1 and tell the source where to deliver the proceeds; CS-1 took the cash to the particular accountant as instructed. (Id.). The accountants were coordinated by Zelenova but did not work directly for her. (Id.).

         Most of the kickback proceeds were paid by defendant to Serdyukov, with defendant retaining the next largest share, and any remaining amount paid to other co-conspirators. (Id. ¶ 62.f.). CS-1 made three deliveries of large amounts of cash to Serdyukov through Serdyukov's son-in-law “Puzikov.” (Id.). CS-1 estimated the cash to be in the amounts of $70, 000, 000.00, $30, 000, 000.00, and $50, 000, 000.00. (Id.). Sometime in or about 2013, defendant's scheme became public. (Id. ¶ 62.g.). An investigation was initiated by Russian authorities. (Id.). At defendant's direction, $400, 000.00 was delivered to an associate of the chief prosecutor in order to end the investigation. (Id.).

         CS-1 would take money for defendant or sometimes provide escorts for others taking money on behalf of defendant to Alfa Bank in Russia. (Id. ¶ 62.h.). While handling defendant's emails, CS-1 saw documents showing defendant transferred some of the money internationally. (Id.).

         In the meantime, defendant made arrangements to move to the United States. In 2010, John P. Cotter (“Cotter”), as shareholder of Delta Plus, LLC, sponsored defendant to receive a United States visa. (Id. ¶ 6). Delta Plus, LLC, is a controlled subsidiary of FG Delta Plus, with FG Delta Plus contributing 80% of the capital or $480, 000.00 to Delta Plus, LLC. (Id. ¶¶ 11, 67). On or about December 28, 2010, Cotter testified under oath in a Form I-140[4] that defendant was seeking status as an alien worker in the United States to permanently assume the position of President of Delta Plus, LLC with an annual salary of $110, 000.00. (Id. ¶ 66.a.). Defendant signed Forms I-134[5] on or about December 28, 2010. (Id. ¶ 4). He declared that he was president of Delta Plus, LLC, effective May 2010, and had previously served as president of FG Delta Plus from April 2005 to May 2010. (Id. ¶ 4.c.).

         Between January 18, 2011 and October 2, 2013, defendant and co-defendant Tatyana Teyf received approximately $39, 500, 000.00 through close to 300 wires into four domestic bank accounts controlled by them. (Id. ¶¶ 31, 71). The money wires originated from bank accounts held by numerous businesses in countries denominated by the United States Department of State as “jurisdictions of concern” and “jurisdictions of primary concern” for money laundering. (Id. ¶ 73). Some of wire instructions accompanying the transfers appear inconsistent with defendant's representations in his tax returns and immigration applications. (See id. ¶ 72 n.2, 3, 4, 5). Since January 19, 2011, defendant and his associates made over 575 transfers between the accounts used to receive the international wires and other bank accounts under their control. (Id. ¶ 74).

         Subsequent to moving to the United States, defendant entered into other ventures with co-defendants Alexey Timofeev, Alexei Polyakov, and others, including CTK Transportation, Inc. (2012); Carolina Transport Group, Inc. (2014); and Lank Ventures, LLC (2017). (See id. ¶¶ 13-15). For calendar years 2011 through 2013, defendant and co-defendant Tatyana Teyf filed joint income tax returns. (Id. ¶ 77). These defendants reported total household income of $53, 155.00 in 2011, $99, 106.00 in 2012, and $59, 296.00 in 2013. (See id. ¶ 77.a.). Defendants reported during those years that they had no financial interest in or signatory authority over a financial account located in a foreign country. (Id. ¶ 77.b.). In addition, CTK Transportation reported no net receipts in 2012 and $432, 548.00 in 2013. (Id. ¶ 78).

         Additional facts pertinent to the instant motion will be discussed below.

         DISCUSSION

         A. Standard of Review

         The district court reviews de novo those portions of a magistrate judge's M&R to which specific objections are filed. 28 U.S.C. § 636(b). The court does not perform a de novo review where a party makes only “general and conclusory objections that do not direct the court to a specific error in the magistrate's proposed findings and recommendations.” Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982). Absent a specific and timely filed objection, the court reviews only for “clear error, ” and need not give any explanation for adopting the M&R. Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005); Camby v. Davis, 718 F.2d 198, 200 (4th Cir. 1983). Upon careful ...


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