Criminal No. 01-307 (JRT/FLN)
January 7, 2002
John R. Marti, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, 600 United States Courthouse, 300 South Fourth Street, Minneapolis, Minnesota 55415, for plaintiff.
Peter B. Wold, WOLD, JACOBS, JOHNSON, P.A., 247 Third Avenue South, Minneapolis, Minnesota 55415, for defendant.
ORDER REJECTING REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE
Defendant Michael Czichray ("Czichray") is charged with six counts of bank fraud in violation of 18 U.S.C. § 1001(a)(3), 1014, 1344, and 2. This matter is before the Court on Czichray's objections to the Report and Recommendation of United States Magistrate Judge Franklin L. Noel dated December 19, 2001.
The Court has conducted a de novo review of Czichray's objections pursuant to 28 U.S.C. § 636 (b)(1)(C) and D. Minn. LR 72.1(c)(2). For the reasons set forth below, the Court rejects the Report and Recommendation of the Magistrate Judge and grants defendant's motion to suppress statements.
Defendant Michael Czichray became a suspect in a long-running FBI investigation of health care billing fraud schemes in Minnesota. As part of this investigation, FBI Special Agents Michael Bisswurm and Sean Boylan ("the agents") interviewed Czichray at his home on February 16, 2001.
Czichray moved to suppress statements he made to the FBI, and the Magistrate Judge heard testimony at two hearings from the agents and from Czichray, which conflicted in material respects. The following findings of fact reflect the Magistrate Judge's credibility determinations and this Court's independent review of the record.
At approximately 4:30 a.m. on February 16, 2001, Agent Bisswurm called Czichray's home to determine whether Czichray was in the house. Agent Bisswurm did not identify himself, but rather said that he had the wrong number. At approximately 6:30 that morning, the agents arrived at Czichray's house, and either rang the doorbell or knocked on the door. There was no response, but the agents could see through a large bay window that the television and lights were on in the living room. The agents went back to their vehicle, and called Czichray's house from a cell phone. When Czichray answered the phone, Agent Boylan identified himself and told Czichray that he needed to come to his front door. Czichray, still in his underwear, opened the front door, where the agents were standing with their identification. Agent Boylan identified himself and Agent Bisswurm as FBI agents, and said that they would "like to take a few minutes of [Czichray's] time, like to give him some information, and he doesn't have to, if he doesn't want to, talk to [the agents], but we'd like to give him this information." November 14, 2001 Transcript at 16. The agents added that "when we're done, we're going to have to go on our way, and [Czichray has] other business of the day, that we're unaware of, that he's going to have to take care of." Id. Czichray let the agents in the house.
The agents directed Czichray to sit down in the living room. Agent Boylan again told Czichray that the interview was voluntary, and that when the interview was over, the agents would leave, and Czichray could go on with his day. Agent Boylan then launched into what the Magistrate Judge described as a "two hour monologue" about the ongoing health care fraud investigation, how it implicated Czichray, and the investigative power of the FBI. The agents did not consider Czichray to be in custody, so they did not advise him of his rights under Miranda v. Arizona, 384 U.S. 436 (1966).
Although the agents informed Czichray that the interview was voluntary, they also made threats about what would happen if he chose not to cooperate. The agents told Czichray that they knew his 75-year-old father lived next door, and that if Czichray did not cooperate, the agents would interview his father and others. Specifically, the agents threatened that the interviews would "light up his world," which apparently means that the interviews would enlighten Czichray's father and others to Czichray's allegedly fraudulent activities. The agents also threatened that if Czichray did not cooperate, they could use the power of the FBI to prevent insurance companies from making payments to his business. Czichray testified that he understood "cooperate" to mean that he "had to listen to what [the agents were] saying to [him]. Couldn't tell [the agents] to leave. [He] had to do what they said and agree to what they were telling [him]." December 13, 2001 Transcript at 44.
At approximately 9:30 a.m., Czichray, still in his underwear, told the agents that he was late for work. The Magistrate Judge determined that the agents directed Czichray to call in sick so that the interview could continue. Czichray called in sick, and at the agents' direction, did not inform his office that he was being questioned by the FBI. As the interview continued, Czichray's home phone and cell phone rang many times, but Czichray did not answer the phone. The Magistrate Judge concluded that Czichray was complying with the agents' instructions not to answer the phone. At some point during the nearly seven-hour interview, Czichray asked to use the restroom. One of the agents responded by asking if there was a phone in the restroom. An agent then accompanied Czichray to the restroom and checked it before allowing him to use the restroom. A similar procedure was followed when Czichray asked to put on some pants. At the conclusion of the interview, the agents left Czichray's residence. The agents never handcuffed Czichray, placed him under arrest, or displayed any weapons.
While being interviewed, Czichray made several incriminating statements that related to the health care fraud investigation. The agents drafted a handwritten statement summarizing this information ("the written statement"), which Czichray initialed on each page and signed. The government has stipulated that, pursuant to the Magistrate Judge's Order of December 19, 2001, it does not intend to offer the written statement into evidence. The agents later prepared a report of the interview, known as a "302." This report contained additional oral statements made by Czichray about his business, its employees, investors, and financing. The government now seeks to introduce these portions of the 302 report, which it claims do not relate to the material excluded by the Magistrate Judge's Order.
The questions before the Court, therefore, are: (1) whether Czichray was in custody during the interview at his home on February 16, 2001, and therefore should have received the Miranda warnings; and (2) whether Czichray's statements, as reported in the 302, were made voluntarily.
Czichray objects to the Magistrate Judge's finding that, under the totality of the circumstances, he was not subjected to custodial interrogation. Czichray argues that because he was in custody during the interview on February 16, 2001, his statements must be suppressed because he was not informed of his rights under Miranda.
Czichray has also objected to the Magistrate Judge's finding that the written statement was voluntary. Because the written statement will not be offered into evidence, this objection is moot and the Court will not address it. The Court must still determine, however, whether the oral statements recorded in the 302 were voluntary.
A suspect is "in custody" for purposes of Miranda upon arrest, or when the suspect is "deprived of his freedom of action in any significant way." Miranda, 384 U.S. at 444; United States v. Johnson, 64 F.3d 1120, 1125 (8th Cir. 1995). To make this determination, a court must consider whether a reasonable person in the suspect's position would have understood the situation to be one of custody. Berkemer v. McCarty, 468 U.S. 420, 442 (1984); Johnson, 64 F.3d at 1125. A court must make this objective determination by looking at the totality of the circumstances. United States v. Griffin, 922 F.2d 1343, 1347 (8th Cir. 1990).
The Eighth Circuit has identified six relevant factors for courts to consider when determining whether, under the totality of circumstances, a suspect is in custody. See id. at 1349. They are:
(1) whether the suspect was informed at the time of questioning that the questioning was voluntary, that the suspect was free to leave or request the officers to do so, or that the suspect was not considered under arrest;
(2) whether the suspect possessed unrestrained freedom of movement during questioning;
(3) whether the suspect initiated contact with authorities or voluntarily acquiesced to official requests to respond to questions;
(4) whether strong arm tactics or deceptive stratagems were employed during questioning;
(5) whether the atmosphere of the questioning was police dominated; [and],
(6) whether the suspect was placed under arrest at the termination of the questioning.
Id. Analysis of these factors leads the Court to conclude that Czichray was in custody during the interview at his home on February 16, 2001.
A. Advice Given by the Agents
The Magistrate Judge determined that the agents repeatedly told Czichray that he was free to refuse the interview, and that he could tell them to leave at any time. As the Magistrate Judge also noted, however, the agents' "conduct inside [Czichray's] house suggests [he] may not have been free to leave or to request the agents to do so." Rep. Rec. at 7. Although the agents may have told Czichray he could refuse to cooperate, they followed up such advice with the warning that if he did not cooperate, he would suffer harm. In particular, the agents threatened to involve Czichray's father in the investigation, and threatened to interfere with legitimate insurance payments to Czichray's business. If these verbal threats alone did not negate the agents' assurances that the interview was voluntary, their heavy-handed behavior must have delivered the message that cooperation was expected. As the Magistrate Judge determined, the agents directed Czichray to call in sick, and told him not to alert his office that he was being questioned by the FBI. The agents also controlled Czichray's movements in his own house, monitoring his efforts to use the restroom and to put on pants. Although, as the Magistrate Judge notes, Czichray never asked the agents to leave, the Court determines that the agents' behavior canceled out their verbal assurances that Czichray could refuse to cooperate.
B. Freedom of Movement
During the nearly seven-hour interview, Czichray was instructed to call in sick and to conceal the true reason for his absence from his co-workers. He was also prevented from using the restroom or from putting on pants without an agent accompanying him.
Finally, he was directed not to answer or use the telephone. It is clear from these circumstances that Czichray's freedom of movement was significantly restrained during the interview.
C. Who Initiated Contact
The agents first contacted Czichray at 4:30 a.m., when Agent Bisswurm called to see if Czichray was home. The agents rang his doorbell or knocked at 6:30 a.m. When Czichray did not answer, the agents called and instructed Czichray to answer the door. As the Magistrate Judge noted, this was "clearly an agent-initiated contact."
D. Tactics Used by the Agents
The Magistrate Judge determined that the agents did not use "strong arm tactics or deceptive stratagems." The Court concedes that it is a close question whether or not threats to "light up" the life of Czichray's father and interfere with his business constitute strong arm tactics. Although the agents did not threaten Czichray with force, strong-arm tactics need not be limited to threats of force. See, e.g., Griffin, 922 F.2d at 1351. Clearly, the agents threatened and pressured Czichray to cooperate. This pressure, combined with the strange and unorthodox way that Czichray was treated during the interview, leads the Court to conclude that the agents did use strong arm tactics.
E. Domination of the Interview
"An interrogation which occurs in an atmosphere dominated by the police . . . is more likely to be viewed as custodial than one which is not." Id. at 1351-52. Although the interview was conducted in Czichray's home, nearly every other aspect of the situation was controlled by the FBI agents. The interview lasted for seven hours, during a significant portion of which Czichray was still in his underwear. The agents dictated everything, from where Czichray could sit to the manner in which he used the restroom. It is worth noting that the "Miranda court was deeply concerned with the effect of an incommunicado, police dominated atmosphere on a criminal suspect's will to resist self-incrimination during interrogation." Id. at 1352. The record in this case demonstrates that the interview of Czichray on February 16, 2001, was precisely such a situation.
Czichray was not placed under arrest after the interview. After obtaining Czichray's signature on the written statement, the agents left his house.
G. Totality of the Circumstances
The Magistrate Judge thoroughly analyzed the six Griffin factors. He concluded that although the evidence showed an "arrogant and obnoxious" display of power by the FBI agents, the totality of the circumstances indicated that their behavior was "not sufficiently overbearing to persuade the Court that [Czichray] was in custody or that his will to resist was overborne."
This determination rested principally on the Magistrate Judge's conclusion that Czichray read and signed the written statement. Czichray claims that he never read the document. The Magistrate Judge did not believe his claim, and found that Czichray did, in fact, read the statement. The Court believes, however, that even if this is true, the statement should not negate the improper treatment that Czichray received at the hands of Agents Bisswurm and Boylan.
The Magistrate Judge determined that nearly every action Czichray took during the interview was directed and controlled by the FBI agents: calling in sick, letting the phone go unanswered, lying to his co-workers, and not being able to wander freely in his own home, even to use the restroom or to put on pants. In each of these instances, the Magistrate Judge accepted Czichray's account over that of the agents. The only instance in which the Magistrate Judge expressly disbelieved Czichray was his claim that he did not read the statement. Just because Czichray may have read the statement, however, does not mean that he signed the statement freely. Indeed, the Magistrate Judge concluded that, in the above-mentioned incidents, Czichray was coerced to take several actions he likely did not want to take. Therefore, the Court need not speculate to determine that Czichray was also forced to falsely attest that he was not coerced or threatened.
Although the written statement is not directly at issue here, Czichray's attestation that he was not coerced goes directly to the question of whether he was in custody. Because the Court believes that this attestation was itself coerced, the Court can only conclude, based on the totality of the circumstances, that Czichray was in custody, and should have received Miranda warnings.
It should be reiterated that the evidence at issue here is not the written statement, but the oral statements included in the FBI's 302 report. Although the coerced nature of Czichray's signature on the written statement helps prove that Czichray was in custody, it does not bear on whether the oral statements were also involuntary. These statements comprise at most nine paragraphs of a twelve page report, and deal only with Czichray's background, the finances of his business, his employees, and some of his associates.
No evidence has been presented that these particular statements were coerced. They seem to be mere background, and were not included by the agents in the "incriminating" written statement. Therefore, the Court can only conclude that these particular statements were voluntary.
Because these statements are voluntary, they are admissible for impeachment purposes against Czichray, even though they were obtained in violation of Miranda. See Oregon v. Hass, 420 U.S. 714, 722-23 (1975); Mincey v. Arizona, 437 U.S. 385, 397-98 (1987); Houston v. Lockhart, 866 F.2d 264, 266-67 (8th Cir. 1989).
Based on the above findings, the Court determines that Czichray was in custody during the interview at his home on February 16, 2001. Because he was not advised of his Miranda rights, his statements to the FBI agents must be suppressed. Accordingly, Czichray's objections to the Report and Recommendation will be sustained, and his motion to suppress will be granted.
Based on the foregoing of all the records, files, and proceedings herein, the Court SUSTAINS defendant's objection [Docket No. 50] and REJECTS the Magistrate Judge's Report and Recommendation [Docket No. 49].
Accordingly, IT IS HEREBY ORDERED that defendant's motion to suppress statements [Docket No. 34] is GRANTED.