Defendant was a chiropractor being investigated for health fraud, and the investigators procured a search warrant for records. Defendant was the target of an administrative investigation that produced a settlement, an Admonition Letter, with no finding of fault or fraud. The investigator reviewed the Admonition Letter, and he concluded that it did not matter. The court finds it highly material to the investigation and that it was critical to the probable cause finding against defendant–that the USMJ would not have issued this search warrant knowing that. Critically, the search warrant was for health care and tax fraud, but the health care fraud should have been out of the case. Franks is satisfied, and severability does not apply to a Franks violation. United States v. Gehrmann, 2016 U.S. Dist. LEXIS 76120 (D.Colo. April 25, 2016) (just added to Lexis):
Regarding Agent Rutkowski’s second explanation for not including the Admonition Letter in the affidavit, the Court recognizes that in some sense the Admonition Letter is a “settlement letter.” The letter states, “Pursuant to agreement with the Board, you have agreed to waive the right provided by § 12-33-119(a), C.R.S., to contest this Letter of Admonition through a formal disciplinary proceeding and appeal.” ECF No. 34-5. However, in simply concluding that a settlement letter would not be material to the magistrate judge’s probable cause determination, Agent Rutkowski recklessly disregarded the fact that in settling this case, DORA did not sustain the health care fraud charges that it investigated.
Finally, the Court finds that Agent Rutkowski’s third justification for not including the Admonition Letter in the affidavit—that it had no bearing on his criminal investigation—also lacks credibility. In support of this justification, Agent Rutkowski testified,
So to me this is akin to what happened to us in—let’s just say we were doing just a traditional IRS investigation. It’s not at all uncommon for the civil side of IRS to make a decision about particular parties that the criminal investigation side of the IRS decides in a contrary manner. We have different information. We have access to different pieces of evidence.
ECF No. 73 at 57:9-15. However, in this case, Agent Rutkowski did not have different information. The health care fraud allegations in the search warrant affidavit—with the exception of Agent Rutkowski’s verification of “dates of service and types of treatment and things of that nature”—were available to, and in fact acquired from, DORA. Therefore, it is pertinent that DORA examined and investigated those allegations and did not sustain the health care fraud charges.
Agent Rutkowski knew that the information he received from Investigator Galeassi and subsequently included in the affidavit related to health care fraud came from DORA’s investigation. Defendants’ Exhibit D; ECF No. 73 at 5:1-3. Additionally, Agent Rutkowski made a calculated decision not to include the Admonition Letter, in which DORA fully and finally resolved its case against Dr. Carlson, in the affidavit. ECF No. 73 at 41:5-17. And, as discussed above, the Court finds that his justifications for doing so are not credible. The Court therefore concludes that Agent Rutkowski misrepresented the health care fraud allegations as though they had not yet been resolved and omitted the Admonition Letter with the intent to mislead—or, at the very least, with a reckless disregard of whether it would mislead—the magistrate judge.
b. Probable Cause
Furthermore, defendants have established by a preponderance of the evidence that the magistrate judge would not have issued the search warrants had Agent Rutkowski faithfully represented the facts in his affidavit. Where a search warrant affidavit contains intentional, knowing, or reckless misstatements, the court must strike the misstatements “and assess the affidavit without them.” United States v. Herrera, 782 F.3d 571, 575 (10th Cir. 2015). Alternatively, where an “affidavit contains intentional, knowing, or reckless omissions, a court must add in the omitted facts and assess the affidavit in that light.” Id. However, the Tenth Circuit has recognized that
acts and omissions are often but two sides of the same coin and the one can be (re)cast as the other. But whether we’re talking about acts or omissions the judge’s job is much the same—we must ask whether a warrant would have issued in a but-for world where the attesting officer faithfully represented the facts. If so, the contested misstatement or omission can be dismissed as immaterial. If not, a Fourth Amendment violation has occurred and the question turns to remedy.
Id. (internal citations omitted).
. . .
After performing the Franks analysis, the Court is left with an affidavit that sets forth facts establishing probable cause of tax evasion, but not health care fraud, and a warrant that authorizes a search for evidence of both. The next question facing the Court then is whether complete or partial suppression is the appropriate remedy. The government asserts that partial suppression is appropriate because of the severability doctrine set out in United States v. Sells, 463 F.3d 1148 (10th Cir. 2006). ECF No. 73 at 93:24-94:5. On the other hand, defendants argue that the Sells severability doctrine applies only to general probable cause or particularity challenges, but not to a Franks challenge involving government misconduct. Id. at 99:13-18. As far as this Court can ascertain, the Tenth Circuit has not addressed this issue.
However, there are several reasons to believe that the severability doctrine does not apply to a Franks challenge. First, several circuits, including the Tenth Circuit, have recognized that the severability doctrine does not apply when police act in bad faith. United States v. Pitts, 173 F.3d 677, 681 n.5 (8th Cir. 1999) (“the doctrine of severability does not apply when police act in bad faith or add locations to a warrant as a pretext to conduct otherwise impermissible searches”); United States v. Freeman, 685 F.2d 942, 952 (5th Cir. 1982) (“a use of severance to work ‘an abuse of the warrant procedure, of course, could not be tolerated'”); Sells, 463 F.3d at 1162 (citing Pitts, 173 F.3d at 681 n.5 for the proposition that severability does not apply when police act in bad faith). Courts have equated an affiant’s misconduct in knowingly or recklessly misstating or omitting material information in a search warrant affidavit to “bad faith.” United States v. Carrillo, 123 F. Supp. 2d 1223, 1252 (D. Colo. 2000), aff’d sub nom. United States v. Hinojosa Gonzalez, 68 F. App’x 918 (10th Cir. 2003). Second, the Sells court recognized that
[p]artial suppression pursuant to the severance doctrine is more consistent with the purposes of the exclusionary rule than total suppression because “[t]he cost of suppressing all the evidence seized, including that seized pursuant to the valid portions of the warrant, is so great that the lesser benefits accruing to the interests served by the Fourth Amendment cannot justify complete suppression.” … (“[I]t would be harsh medicine indeed if a warrant which was issued on probable cause and which did particularly describe certain items were to be invalidated in toto merely because the affiant and magistrate erred in seeking and permitting a search for other items as well.”).
463 F.3d at 1155 n.3. The Sells court was describing cases where there was no evidence suggesting that “any of the officers’ actions constituted the sort of ‘flagrant disregard’ for the Fourth Amendment or the permissible scope, duration, and intensity of the search under the redacted warrant that would require the ‘extreme remedy’ of total suppression.” Id. at 1162. At least in this Court’s view, where the affiant misrepresented or omitted material information from the search warrant affidavit with the intent to mislead the magistrate judge or in reckless disregard of the risk of misleading the magistrate judge, the “harsh medicine” of total suppression is deserved.
