Blue Sky L. Rep. P 71,752 United States of America v. David Israel Namer

III. aspects in all Wyatt’s appeal

Because jurisdic- within the exclusive issues

presents Emergency of Temporary Court of

tion jurisdic- for want of

Appeals, it is dismissed

tion.11 WANT OF JURIS- FOR

DISMISSED

DICTION. America, STATES

UNITED

Plaintiff-Appellee, NAMER, Israel

David

Defendant-Appellant.

No. 80-3611. Appeals, Court

United States

Fifth Circuit. 22,

July 1982. Rehearing

Opinion Denial

Oct. Supplemental strongly agreed-upon price by urged payment Brief at before buyer.” right The situation Citronelle this to “take a liberal Court view of its to analogous cannot, appeal,” to that which would exist on inter- is pretation this This decide id. Court 210.62(c)’s prohibition “a course, § jurisdiction beyond stretch its limits practice which constitutes a need obtain [an clearly Congress. set These limits are multi-step price,” to refer to a trans- excessive] action newly by our not delineated decision entirety, in its rather than discrete case; indeed, the need to ascertain the locus of step of that scheme. This Court in culmination appellate jurisdiction appar- should have been a “substantial held the Citronelle issue to be Wyatt ent to view of his reliance in his id., question,” which should have constitutional presentation original .of the merits of his case the district court been certified to TECA Gathering, on Citronelle-Mobil see note su- 211(c), (West under 12 U.S.C.A. note § § pra. 1980), supra, note and remanded the case see practical anticipating juris- difficulties of entry by the district court. of certification may by filing dictional decisions be avoided TECA, appeal on consideration of the later protective appeals in both the TECA and in the it, lodged the determination held “[as] appropriate appeals, circuit court of see price Citro- proper for crude oil in this case 716; Gathering, depends nelle-Mobil 591 F.2d at Coastal on the retroactive vei non controversy Marketing, may F.2d 186 of the EPAA amendments .. . this clearly Stаtes n.9. We is, therefore, Wyatt’s oversight: arises under the EPAA not now correct we are alone,” jurisdiction power within the of the TECA ap- without transfer TECA an Gathering, 591 F.2d at 791. Citronelle-Mobil peal lodged which should have been with it in Gathering, the first instance. Citronelle-Mobil brief, supplemental Wyatt In his character- 716; Cooper, 591 F.2d at United States v. possible appellate ized his loss of review as (Em.App.1973). 1398-1400 “simply affairs conducive to the state of proper justice,” Appellant’s administration of

I Hardin, Pauline then an Assistant Dis- Parish, Louisiana, trict in Orleans charge of an investigation took into the business affairs of David Namer in late early 1976or 1977. Hardin and her coinves- tigators, Assistant District Robert Barnard and New Orleans Police Officer Dali, James were members of the Economic Crime Unit of the Orleans Parish District Martzell, Reed, R. John Wilson New John Attorney’s company, office. Namer and his Orleans, La., defendant-appellant. for Services, Management National Financial Inc., general served in a financial advisory Boitmann, Hardin, F. Robert J. Pauline and, capacity particular, acted as loan Orleans, La., for Attys., Asst. U. S. New brokers and assisted businesses and individ- plaintiff-appellee. uals, engaged most of whom were in the business,

construction in obtaining loan commitments.

During the course their investigation, CLARK, Judge, Before Chief GEE and Hardin and members of her team contacted GARWOOD, Judges. Circuit Harry Stansbury, Deputy Commissioner of Louisiana, for the State

CLARK, Judge: Chief ascertain whether the loan commitments and loan applications commitment in which var- David Israel Namer was convicted of dealing Namer was were securities within arising ious federal crimes out of a fraudu- meaning of the Louisiana Blue brokerage prosecu- lent loan scheme. The Law, La.Rev.Stat.Ann. 51:701-720 §§ evidence used at his trial as a tion secured (West 1965 & Supp.1982). Stansbury West of a search and seizure of Namer’s result opined in investiga- conversations with the by records conducted Loui- complete office tion team that the proba- loan instruments pursuant siana officials to a broad search bly were securities meaning within the by magistrate. a Louisiana warrant issued law, they registered had not been motion The district court denied Namer’s Commission, with the and that Namer was during suppress evidence seized and derived registered as a broker-dealer with the appeal, argues the search. On from Stansbury’s opinion Commission. Based on thе warrant was invalid under the and on information from other sources that particularity cause and clauses of dealing commitments, Namer was in loan the fourth amendment.1 We reverse be- investigation team applied for a war- sup- cause there was not cause to rant to search Namer’s offices. issuance, port the warrant’s and remand with instructions to the district court to The search application,2 signed warrant hearing conduct a to determine whether Officer Dali and drafted Hardin and Barnard, conviction should be affirmed on explained generally Namer’s the course of error, grounds investigation, of harmless inevitable dis- specifically described source, covery, independent or attenuation. transactions one individual had named with IV, amendment, affirmation, particularly describing 1. The fourth ‍​​‌​​‌​​​​​‌​‌​‌​​​‌​​​‌​​​​‌​‌‌‌​​​‌​​​​​‌​‌‌‌​‍and U.S.Const.amend. searched, provides: place person to be and the or things to be seized. right people to be secure in their effects, houses, persons, papers, against and application’s 2. The search warrant statement seizures, unreasonable searches and shall not request[ed]” of “reasons and facts for violated, issue, and no shall but Warrants reproduced Appendix search warrant as A to cause, upon probable supported by Oath Infra, opinion. p. Namer, Namer, investigation joined com- at least one loan placed federal of- of Namer’s premises on the government mitment as an Assistant United States Furthermore, the stated fices. Attorney for the Eastern District of Louisi- Stansbury, Deputy Commis- Harry shortly ana after the search. Within three Securities Commis- sioner of Louisiana months, grand jury a -federal issued a sub- Dis- sion[,] the Orleans Parish has advised poena the state attorney’s district office offerings trict for the documents seized in the state are classified securi- being made ... Subsequently, search. Namer and two oth- [,] offerings ... these are not ties grand ers were indicted jury federal registered them and that David with charged conspiracy, fraud, wire broker-dealer as Namer is not a licensed inducing persons to travel in interstate required by law. purpose.6 commerce a fraudulent Pau- Namer’s in sell- application, conduct Hardin, others, among signed line the in- sell securi- ing offering unregistered or to dictment. provi- alleged is to violative of two ties indictment, essence, alleged in Blue that Sky of the Law. sions Louisiana un- provisions two make unlawful to sell acted criminally separate Namer in three securities, registered La.Rev.Stat.Ann. transactions which can most succinctly and 51:706(A),3and unlawful to sell securities § accurately be loan brokerage denoted as a with registering broker-dealer without transactions, In scams. those Namer al- Commission, the id. 51:710.4 § legedly secured loan commitments for three application, Based on the warrant search clients from an lending insolvent institu- n a search warrant. the issued Namer, tion. in concert his brother search sweeping The warrant authorized lending institution, and an officer of the variety Namer’s offices for a wide of allegedly knew the loan commitments were papers.5 Officer Dali and others business procured worthless when he them and ex- the warrant on the after- executed search brokerage tracted fees. They and noon of its issuance. seized pled guilty Namer to each count of away working all the current carried indictment and filed motion to sup- files, correspondence, corporate assorted press during the evidence seized and de- checkbooks, personal and bank and financial statements, rived from 1977 state search of and various other items. The his any does not that record indicate criminal offices. After a hearing, motion to brought by action has been the Orleans suppress was jury denied. A found Namer n ParishDistrict predicated guilty on four counts indictment. Sky Law alleged on Blue violations grant After of a trial ground new on a justifying cited as the search warrant. present unrelated to the proceeding, Namer Hardin, again At- convicted on the same Pauline the Assistant District four torney who led the Economic Crime Unit’s counts. 51:706(A) provides, pursuant provisions §

3. La.Rev.Stat.Ann. in sioner to the of this sec- securities, part, except “broker-dealer,” generally a class “[n]o A tion.” one en- exempt any provisions securities, gaged buying under of the of R.S. selling fully in or any exempt 51:704 by 51:701(4). or unless sold transaction id. § defined 51:705, provisions under shall R.S. be sold unless within this state such securities provision 5. The of the search warrant enumer- by registered qual- have been notification or ating reproduced the items to be seized as “security” ification.” The term is defined Appendix Infra, opinion. p. B to this 51:701(1). id. infra § See nоte 13. aiding 6. Namer was indicted under 51:710(A) provides § La.Rev.Stat.Ann. fraud, abetting, 18 U.S.C. wire id. § §§ 1341 person engage “[n]o shall business 1343, and inducement & of interstate travel agent-salesman state as a or un- broker-dealer fraud, 2314, provisions id. § execute registered less he has been as a broker-dealer United States Code. agent-salesman in the office of the commis- fairs, District suppres- of his Assistant Hardin appeals the denial Namer argues that collateral motion. He also sion colleagues theory and her settled on the presentation of estoppel should have barred that Namer had violated the Louisiana Blue evidence at his second trial. We certain by failing register Law the loan issue on only need reach first commitments by failing as securities and Because there was not appeal. register as a with the broker-dealer Securi- the search the issuance of support cause to theory ties That can be Commission. char- to which Namer’s office pursuant warrant acterized, best, novel, and, worst, at as we reverse. was searched frivolous.9 II applying warrant, for a search how- challenge Namer’s ever, to the Louisiana war- the District Attorney’s Office camou- pursuant rant to which his office was flaged the novelty legal theory under relies on searched both cause which it was proceeding. The affidavit particularity clauses of the fourth Deputy stated that Commissioner Stans- outset, amendment. At the we note that bury had advised the Economic Crime Unit striking aspects of the warrant are the most that- the offеrings being made premised alleged it was “are classified as securities.” Confronted legal theory under a novel violations with the offerings statement were it authorized a search and seizure of securities,” “classified as the magistrate virtually papers. all of Namer’s As the justified was in concluding that there was cautioned, First Circuit has since the demise probable cause to believe that a crime had of the mere evidence rule7 and the removal However, been committed. the truth of the of business records from self-incrimina- matter is that the Securities Commission amendment,8 protections tion of the fifth particularity probable procedure cause com- had no formal classifying for of- mands of the fourth amendment are “the ferings as securities Stansbury and that only protection against a citizen now has a gave the District Attorney’s only Office a general private papers.” search of his qualified opinion that the instruments in Abrams, 541, United States v. 615 F.2d 547 dealing which Namer was were securities. (1st 1980). suggest Cir. While we do not Our task is to determine whether the mis- papers criminal white-collar sus- representation of the offerings status of the pects greater are entitled to fourth amend- is material and reckless under the standards protection guns ment than the and knives Delaware, 154, of Franks v. 438 U.S. 98 criminals, of violent street we deny do not 2674, 57 (1978). S.Ct. L.Ed.2d 667 A conclu- application that of fourth amendment requires sion that is consideration of principles to the ferreting out of white-col- whether remainder of the search war- requires lar criminal conduct often uniquе a application provide rant alone would proba- approach by investigating Today’s officers. ble cause to believe that a ease, crime had been in which we hold that there was not probable support cause to the Louisiana committed.

warrant, graphically point. illustrates this B

A Supreme conducting After Court’s decision in approximately year- long investigation Delaware, into Namer’s business af- Franks v. supra, outlines the con- 294, Hayden, Perhaps telling 7. See Warden v. 387 U.S. 87 S.Ct. the most evidence of the lack 1642, (1967). theory 18 L.Ed.2d 782 of merit of the is that the Orleans Parish Office, “proof” District even with its 463, Maryland, 8. See hand, Andresen v. 427 U.S. firmly 96 brought charges never 2737, (1976); S.Ct. 49 L.Ed.2d 627 Fisher against premised on Blue Law vio- States, United 48 lations. States, (1976); L.Ed.2d 39 Couch v. United U.S. 34 L.Ed.2d S.Ct. that, A lot course, was securities. flowing misrepresentation from a sequences my application.10 at the search warrant time. in a Court the warrant ly if], with the affidavit’s false material set finding tionally, or with reckless a false statement the same extent as if cause, tent is insufficient to establish lacking on the face of the affidavit. ‍​​‌​​‌​​​​​‌​‌​‌​​​‌​​​‌​​​​‌​‌‌‌​​​‌​​​​​‌​‌‌‌​‍one false statement truth, there held that if the search warrant must side, fruits was included probable affidavit, of the search affidavit’s knowingly and inten- cause, and if the necessary by the affiant in remaining .. disregard excluded ., cause was [and alleged- to the voided that con- gage torney’s security. termining whether or not tions were classified as securities? Does Louisiana Securities Commissionen- was, the documents could be securities. A. There IA. Q. Is Q. ^{[******] [******]} Did a think I told them that I felt it there classification you is no ever tell the District At- a specific classification Mr. process? Namer’s transac- something process process? for de- 155-56, 57 L.Ed.2d at Id. at S.Ct. Q. you tell, Did way, yourself your Put if a ever another search warrant official as capacity director of

affidavit contains material misstatement Louisiana Commission, intentionally made reckless disre- Mr. Namer’s truth, for the the court transactions were gard should excise classified securities? language the offensive from the affidavit IA. can’t recall. I think I told them remaining por- determine whether the that I felt it was A securities. lot of it probable cause. tion establishes was opinion. office Our had not had lot particular contact with this element at difficulty determining We have no time, type of securities transac- the search warrant stating tion. Stansbury had told the Economic Stansbury’s offerings Crime Unit that were “classi admission that the Commission as securities” is a misstatement and a has no formal procedure fied classification and During suppres inability one that. his gave material the claim he the Dis- hearing, attorney questioned sion Namer’s trict Attorney’s Office more than a Stansbury qualified the of rep opinion on matter his actual that the offerings were resentations to the Economic Unit. Crime securities lead tous conclude that affi- exchanges went Those as follows: davit representations.11 misstated his Q. you Did ever tell the of Supreme Court has noted that: District for Parish New affidavits for search warrants . .. must . . . Orleans transactions were interpreted by tested and magistrates actually classified as securities? And I and courts in a commonsenseand rеalistic you very want to be specific about They fashion. are normally by drafted that. . . . nonlawyers in the midst and haste of a A. ques- I think I understand your investigation... criminal . courts [T]he .... did specifically say tion I should not by invalidate warrant in- transaction, elements securities terpreting the a hypertechni- affidavit in manner, know, you present; eal, were probably commonsense, and it a rather than opinion Marcello, F.Supp. Franks also dealt with the issue Cf. United States v. 508 hearing (E.D.La.1981)(representations of when a must be held a after chal- inaccu- lenge veracity to the of a search warrant affida- rate in did isolation not mislead they has placed vit whether a been made. We do not face the issue of because were accurate when hearing required context). was since Namer present was allowed to evidence on the issue at suppression hearing. See United States v. 615,F.2d Martin, (5th 1980). Cir. Ventresca, application The search warrant v. was United States 741, 746, 108-09, 13 L.Ed.2d 684 by drafted three members of the Economic us, In the case before the affidavit Crime Unit of the Orleans Parish District during attorneys two was drafted year-long Office after a investi investigation at a time lengthy of a course gation into Namer’s business affairs. The any exigent they were not beset when principal attorneys two were draftsmen con- The word “classified” circumstances. with at exposure legal least some to the result of ordered the authoritative Id. pertinent inquiry, ments. More to our ad hoc informal opinion, oral we would con possible the court noted that is “[i]t clude, below, for the reasons stated in II C when the facts omitted from the affidavit was an insufficient ba are clearly critical to a finding probable sis on which to rest a determination of cause the fact of may recklessness be in- probable cause. proof ferred from of the omission itself.” recognition Id. at 329. This that the ana- C

lytical concepts materiality and reckless- Our conclusion that the affidavit’s char- together significant ness are often bound . acterization Stansbury’s misrepresentation in this case. The was a views was a crucially reckless and material finding misrepresentation material one. From that re- quires of vital us materiality purge and other to the by excising circumstances affidavit surrounding investigation, misrepresentation the the we conclude and then to deter- made, misrepresentation the mine purged was at whether the affidavit would least, the disregard with reckless the support probable for sufficient to a cause truth. Farese, finding. See United v. States 612 denied, Cir.), (5th selling cert. statement securities the an 3019, 65 L.Ed.2d 1118 he paid ex-client of Namer that an advance U.S. appli- fee to Namer on a loan commitment approved cation that he an saw loan Thus, commitment Namer’s office. the case, In a search warrant the mag purged at best that Namer affidavit reveals istrate must probable have cause believe dealt in loan commitments two instances. that certain items evidence activity the crimes that the affidavit states Since and that those are presently items locatеd the sale require were committed Namer at a place. certain in the concern case securities, reading a common-sense of the at hand is magistrate, whether the review commit- affidavit discloses that loan affidavit, ing purged proba would have question. ments are the securities in ble cause believe that Namer’s loan probable cause issue is this: Whether a transactions activity.12 constituted criminal justified would be magistrate concluding of loan the sale commitments violates to believe cause probable On the issue of the Louisiana Blue Law. Sky Without committed, Supreme been a crime has classification, guidance anof official or the stated: Court has equivalent, by Sky the Deputy Blue Com- missioner, magistrate obliged would be of all the “The substance definitions” independently to a draw conclusion ground cause “is reasonable .of issue. guilt.” for And this “means less belief justify than evidence which would con- demnation” or conviction. Mar- Since magistrate presented We hold that a time, rate, come shall’s has to with purged would not have affidavit suspicion: mean more than bare Probable probable cause to believe that Namer was “the cause exists where facts ‍​​‌​​‌​​​​​‌​‌​‌​​​‌​​​‌​​​​‌​‌‌‌​​​‌​​​​​‌​‌‌‌​‍and circum- engaged activity. in criminal is so This within knowl- stances their [the officers’] legal because the District novel edge they and of which reasonably had theory that the loan were se commitments trustworthy information sufficient [are] Law curities under Louisiana Blue in themselves to warrant a man of rea- is simply purged untenable and because the sonable caution in the that” an belief expla provide adequate affidavit fails to being offense has been or is committed. description allegedly nation and ille gal discussing transactions. In the status Brinegar States, United securities, of the we loan commitments 175-76, 1310-11, S.Ct. 93 L.Ed. jurisprudence review the on the issue ex (1949) (citations omitted). Our tant the magistrate when would have been examination of the purged affidavit leads presented purged with the affidavit. us to conclude that the evidence We first turn to interpreting cases there is give insufficient reasonable definition “security” appearing in the grounds for a belief that en- law, federal securities and then discuss a gaged activity. in criminal unique aspect of the Louisiana Blue Sky Law. only The definition Purged improper passage, of a security in the Louisiana Blue Sky that Namer was Law13 was non-conclusory patterned averment considering purged profit sharing agreement, whether affidavit of interest in a cer- cause, proceeding deposit security, establishes we are tificate of collateral hypothetically. certificate, pre-organization certificate, somewhat Since the Louisiana trust purged never pre-organization considered the affida- subscription, voting trust vit, presumption validity certificate, the normal any share, attach- transferable invest- ing magistrate’s probable finding to a cause contract, ment or beneficial interest in title to apply. LaFave, does not See 2 W. Search property, profits earnings, general, or or in 4.4, (1978). Seizure at 68 § any commonly interest or instrument known 51:701(1) “security,” provides any as a La.Rev.Stat.Ann. that: or § certificate of interest participation in, temporary or note, “Security” stock, or any interim shall include bond, debenture, stock, bond, note, certificate, treasury debenture, receipt evidence or for, guarantee of, indebtedness, right receipt, or warrant or to sub- warehouse certificate participation, right purchase, any foregoing. interest or or scribe to or of the any foregoing, “Security” any subscribe to of the certificates does not include insurance or 1096 the federal nearly duplicates very a security after and commitment letter was not under security.14 definition of law federal securities law. Id. at 1190-91. securities Petroleum v. Trans-Gulf Savings in Nаvarro cited Bellah Caldwell The court See (La.1975). 171, 174-75 Hereford, 322 So.2d Corp., v. Bank of 495 First National reported cases the dearth of Considering Bellah, (5th 1974). 1109 Cir. 495 F.2d Law def- Sky Blue the Louisiana construing 1112-13, and McClure v. First Na security, Lyman, 490, see Lubbock, of a

inition tional Bank of 497 F.2d 494- Intro- Practical denied, 930, in Louisiana —A Regulation (5th 1974), 420 95 Cir. cert. U.S. Law, 16 La.B.J. Sky to the Blue 1132, (1975), duction 95 43 L.Ed.2d 402 this S.Ct. to cases inter- 327, (1969), we turn n.3 328 adopted circuit commercial/investment law definition securities the federal preting to determine whether a loan dichotomy security. security. of a is a transaction the issue of wheth- New decisions address fail to see how Namer’s transac We security. is a er a loan commitment investment- be characterized as tions could and cir- Tenth looked at the facts Circuit Bellah-McClure test. oriented under surrounding purchase of a cumstances to him with the inten-. Namer’s clients came developer by a real estate loan commitment deals, name structuring commercial tion of security. and concluded that it was not financing of construction ly, arrange Plaza Joint Venture v. First of McGovern came, expecta with the projects. They not Investors, 645, Mortgage 562 F.2d Denver Housing Founda profits, tion of see United 1977). in (10th The court McGo- 647 Cir. 837, 852-59, Forman, tion, 421 Inc. v. U.S. phrase noted that the “loan com- vern first 2051, 2060-63, L.Ed.2d 621 44 95 S.Ct. in either of the mitment” is not mentioned obtaining fixed (1975), hopes but with Id. at 646. statutory federal definitions.15 a transaction loan commitments. Such then turned to the catch-all stat- The court of the federal securi not within the ambit utory phrase “investment contract” and de- security. As this ties law definition of a terminеd that the transaction at issue was before, doubt that has stated court “[w]e purely commercial in character and securities Congress intended law] [the this, Id. at 647. From investment. of all judges guardians render federal court concluded that the loan commitment Bellah, or 495 beguiled payees.” makers security. transaction did not involve a Id. magis 1114. Had the Louisiana F.2d at at 648.16 purged with the affi trate been davit, in found no comfort he would have Association, Savings In Lee v. Navarro for a determina jurisprudence the federal (N.D.Tex.1976), rev’d on F.Supp. 416 1186 in criminal engaged tion that Namer was (5th 1979), F.2d 421 Cir. grounds, other 597 activity. 1779, 458, aff’d, 446 100 S.Ct. U.S. in circuit (1980), a court this Likewise, L.Ed.2d 425 Blue Law the Louisiana from the damages arising heard a claim for possibility of a undermines agreement. commitment breach of a loan the faсt cause determination. Aside from defendant’s loan interpret court held that would that a Louisiana “security”, any annuity or policy fixed certificate of contract interest or endowment or in, participation temporary variable, be written or is authorized to interim certifi- or which for, for, receipt of, guarantee cate pursuant Louisiana Revised or to Title 22 of the warrant right purchase, any or to subscribe to or amended. Statutes of foregoing. 2(1) Securities Act 14. Section security The definition of in'the Securities Ex- 77b(l), provides: § U.S.C. change 78c(a)(10), Act of § U.S.C. subchapter, in unless the essentially When used Housing the same. See United requires— Foundation, Forman, context otherwise Inc. v. note, (1) “security” n.12, n.12, The term means 44 L.Ed.2d 621 debenture, stock, stock, bond, treasury evi- indebtedness, оf interest dence of certificate agree- any profit-sharing participation or ment, 15. Nor is it mentioned in La.Rev.Stat.Ann. certificate, preorganiza- collateral-trust 51:701(1). supra § See note 13. subscription, transferable tion certificate or share, contract, voting-trust cer- investment The Tenth Circuit’s decision McGovern security, tificate, deposit substantially for a certificate of narrowed that court’s earlier deci oil, gas, Austin, fractional undivided interest sion in United 462 F.2d 724 States or, any denied, general, (10th 1048, rights, Cir.), cer- other mineral cert. 409 U.S. 93 S.Ct. 518, commonly (1972). a known as tificate or instrument 34 L.Ed.2d 501 of Sky of the Blue Law defini- sue whether a language the loan commitment ais security not, a held security of a not" to include loan have that it is tion commitment, and the sup- peculiar there also significant legislative history is of the Louisiana Sky the Blue legislative background in the of Law a port legislative evidences intent proposition that the that loan Sky brokerage Law the activities Blue not be cover- by ed that purged not intend loan brokers to be law. The legislature did affidavit of- loan brokers fered the covered that law. bald assertion that Namer’s loan regu- brokerage placed comprehensive were under the activities provisions violated of the Blue latory authority Sky of the Louisiana Law. That assertion was as specious 66. in 1977 as today.18 Commission. See 1969 La.Acts & it is amendments re- Sky The 1969 Blue Law Furthermore, even if status of the the quired register loan brokers to loan commitments as had securities been a fees, Commission, set in- registration question, closer purged the affidavit would prescribe structed the Commissioner to a given have the insufficient in accept- written examination and minimum formation ‍​​‌​​‌​​​​​‌​‌​‌​​​‌​​​‌​​​​‌​‌‌‌​​​‌​​​​​‌​‌‌‌​‍about the nature of the loan com ance standards for loan brokers. 1969 La. mitment to transactions make an indepen 66. “loan was Acts A broker” defined judgment dent on probable of existence “any person go-between, who ... acts as a Warden, cause. v. Whitely See 401 U.S. of agent finder or of a lender or borrower 560, 564, 1031, 1035, 91 S.Ct. 28 L.Ed.2d 306 of money purpose procuring for the a loan (1971). The a determination that transac ex- money.” securities, La.Acts Without tion involves is particularly de planation, legislature provi- deleted the pendent on the facts and circumstances of sions to loan brokers from the Blue relating purged transaction. The affidavit does 493; Sky Law in 1974. 1974 La.Acts See supply any not with respect details to Nam- Acts, Legislative Council, Louisiana Resolu- er’s loan transactions, commitment Bills, Reg. La.Legis., tions and Vetoed 37th hence, could not support probable cause Sess., (1974). at 140-41 In the Resume determination.19 Law, pre-1974 Sky Blue definitions sec- D separately tion defined “broker-dealer” and version, broker.” In “loan the amended is disposition The final case statutory loan broker was de- definition of not there reached the conclusion left leted broker-dealer intact. no to the search probable was cause issue legislature’s removing action in loan that, government argues warrant. regulatory jurisdiction brokers from the invalid, even if the search warrant was the Lоuisiana Securities Commission ren- discovery, indepen doctrines of inevitable it highly they ders doubtful remain attenuation, source, dent er and harmless general provisions implicitly covered ror be af require that Namer’s conviction Blue Law.17 firmed. court denied Since district summarize, compelling suppress, hearing To Namer’s motion to no we find two that, findings on purged under the held these issues and no factual reasons affidavit, conclude Thus, probable cause to were made. the record before us there was no inadequate determining as a basis for engaged believe that Namer had First, activity. is- whether error analyzing the cases these harmless doc- 17. One 19. Had Louisiana court has noted the the facts and absence circumstances of Namer’s similarity spelled aof loan loan between commitment transactions commitments and been out Jones, purged in the securities. See Talbot affidavit and had the So.2d law less clearly (La.App.1974). established that loan commitments are securities, finding not might cause brought At been least two civil actions have justified. Nothing have been in this against alleging law securities viola- require should construed to a war- court, McGovern, relying tions. One district rant-issuing magistrate engage in subtle le- ground loan commit- dismissed on gal analysis finding probable before cause. question not involve ment transaction did magistrate’s That is not the role and that usual- federal, Illinois, or Louisiana securities under ly necessary finding Int'l Ltd. v. Allied law. North American Dev. Williams, cause. Cf. Adams v. Inc., 77-C-3593, Consultants, slip op. at No. 1921, 1924-25, 32 L.Ed.2d 612 (N.D.I1I. 31, 1979). 5-6 Jan. The other court O’Riley issuing opinion. dismissed without Namer, Bros. No. Constr. Co. v. 78-3990 (E.D.La. Apr. 1979). Inc., Services, Namer’s conviction require Management trines Financial Hence, Services, this case to we remand at Management affirmed. d/b/a Financial findings appropriate which time the district court noon on October whether these doctrines conclusions on some of the personally and he observe did must be retried. including ap- whether Namer apply property described above or in these loan commitment on proved custody possession premises in the Ill Namer, Harry Stansbury, David and that war- that the search today only We hold of Louisiana Secu- Deputy Commissioner the Louisiana application rant rities has advised Orleans Commission material, reck- purged of when magistrate, Attorney’s Parish District Office provide would misrepresentations, less offerings being made National Finan- had cause to believe Inc., Services, d/b/a Fi- Management cial Accordingly, we reverse law.20 violated David Management Services and nancial with di- court to the district and remand transactions with Namer,'including con- proceedings further to conduct rections Heller, as securities Mitchell are classified opinion. with this sistent of the Louisiana and the official records these reveal Securities Commission REMANDED. AND REVERSED offerings registered are not with them David Namer is not licensed and that by law. required broker-dealer A APPENDIX application, signed The search warrant Department Dali of the New Orleans James APPENDIX B Police, following statement contained the magis- search warrant issued request[ed]” of “reasons and facts for trate authorized a search of Namer’s offices warrant: search for: An Assistant District At- investigation by All applications, loan commitment loan Hardin, District torney Pauline Assistant commitments, records, corporate records Barnard, New Orle- Attorney Robert minutes, corporate register of books, stock James Department Police Officer ans certificates, stock bank records of Dali of the Economic Crime Unit corporation personally, and David Namer Parish District Orleans telephone company period statements for Manage- reveal that National Financial September 3, 1977, 1976 to November Services, Inc., Financial Man- ment d/b/a audits, any financial records of all corre- Namer, did and David agement Services spondence clients, any to or from custom- selling of and offer to sell engage ers any prospective and investors or persons to various unregistered securities clients, investors, customers and records Louisiana, Parish, in willful in Orleans accounts, escrow all of the above of Louisiana Revised violation Statute of National Financial Management Serv- 51:706(A) Revised and Louisiana Statute ices, Inc., Management and/or Financial 51:710, and that in the course of this Services David Namer. Heller, Mitchell a client investigation one or customer of National Financial Man- Services, Inc., agement Financial d/b/a ON PETITION FOR REHEARING Namer, David Management Services and CLARK, Before Judge, Chief GEE and has informed the Orleans Parish District GARWOOD, Judges. Circuit gave twenty- he Attorney’s Office that ($25,000) by сheck five thousand dollars PER CURIAM: premises to David Namer on or in the Parish, Rehearing, Petition for Louisi- described above in Orleans 1088, on .ana, 12, 1977, behalf of the September as an ad- United States obvi- ously misses loan the thrust of vanced fee on an for a our asserting questioned that we requested by commitment as David Nam- the integrity of Assistant United er and that Mitchell Heller was in the States Pau- line Namer, Hardin. This is offices of David National incorrect. same Likewise, ground, fourth amendment. we defer consid- disposition we do Due to our on this estoppel eration of Namer’s collateral claim. not have to decide whether the war- occasion particularity also clause of the rant offends the phrase in the affidavit The crucial Deputy characterized Securities Com- issue hoc, Stansbury’s ad oral missioner as a “classification.” We held that this was improper Stansbury’s characterization an comments, vitally which was so material to misrep- of the affidavit that the substance resentation would amount reckless disre- alternative, truth. In the we held gard for that if the characterization was intended to convey Stansbury’s no more than informal feelings security about the status of loan commitments, legally the affidavit was in- Thus, support sufficient to the warrant. can be seen that we did not decide which had characterization neither would been intended since carry point. solely court writes further to make integrity

clear that Ms. Hardin’s necessarily implicated was not cast, in our decision was, Certainly as it in the alternative. her integrity impugned. was nоt Stuhff, Flagstaff, Ariz., Michael for de- America, UNITED STATES fendant-appellant. Plaintiff-Appellee, Powell, Sidney Asst. U. Atty., S. San Antonio, Tex., for plaintiff-appellee. Roy SCRIVNER, Defendant-Appellant. B.

No. 81-1561

Summary Calendar. Appeals, CLARK, United States Court of Before Judge, Chief GEE and GARZA, Fifth Circuit. Judges. Circuit July GEE, Circuit Judge:

Convicted of theft cigarettes from an shipment, interstate appeals. Scrivner His complaint sole is of asserted error in the refusal the trial court suppress fatally incriminating evidence discovered in a war- rantless search of certain trucks. The ground upon which the search was sus- tained is that of antecedent abandonment by Scrivner of the items and area searched. Though there can be scant doubt of his guilt, there can be even less that his fourth rights amendment were violated complаined search Controlling of. authori- notes factual intricacies often involved in detect methodologies, not an ad procedures and ing prosecuting white-collar It crime. qualified opinion single oral of a hoc and they not shown that acted in a hurried agency employee. The affidavit’s state- Rather, presume fashion. we pace from the misrepresentation ment is no less a because investigation and the frequency subtly. By using manipulates the facts Stansbury their conversations with “classified,” the affiant' inaccu- the word they deliberately they acted and that were ' transpired. rately what had described legal novelty theory. aware of the of their the instruments the statement Since strong opinion We also note that a from only as securities” was thе were “classified best, Stansbury was the if only, hope tending to item in the affidavit establish conferring an aura of legitimacy on criminally, that Namer had ‍​​‌​​‌​​​​​‌​‌​‌​​​‌​​​‌​​​​‌​‌‌‌​​​‌​​​​​‌​‌‌‌​‍acted we also legal their theory. Given all of the above— misrepresentation conclude that lengthy investigation, draftsmen trained in material. The more difficult issue is experience the law with in white-collar pre- whether Namer has established prosecution, exigency, lack of novel ponderance misrep- of the evidence that the legal theory, appreciation the importance intentionally resentation was made or with Stansbury’s opinion, understanding disregard reckless for the truth. process by informal which Stansbury progeny Franks and its lower court offer opinion reached and rendered his con —we guidance determining little to us in whether clude that the members of the Economic misrepresentation has been made inten- proceeded disregard Crime Unit in reckless tionally disregard or for the with reckless the' they truth when characterized Stans truth, hand, negligently, on the one hoc, bury’s ad oral as a “classifica Martin, the other. In United States tion.” The surrounding circumstances (5th 1980), this court was Cir. investigation application and warrant per from, faced with an opposed omission as to mit no other reasonable conclusion. Were in, misrepresentation an affidavit. The we to construe the warrant panel recognized that this circuit treats having used the words “classified as securi essentially omissions the same as misstate- merely ties” expression to refer to the of an

Case Details

Case Name: Blue Sky L. Rep. P 71,752 United States of America v. David Israel Namer

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Jul 22, 1982

Citation: 680 F.2d 1088

Docket Number: 80-3611

Court Abbreviation: 5th Cir.