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United States v. Koutromanos

United States District Court, E.D. Wisconsin

April 27, 2016

UNITED STATES OF AMERICA, Plaintiff,
v.
GUS KOUTROMANOS, Defendant.

DECISION AND ORDER

LYNN ADELMAN, District Judge.

The government charged defendant Gus Koutromanos with tax evasion. Defendant moved to suppress business records taken by his partner, Konstantinos Maltezos, from the restaurant they co-owned (“Omega”) and later provided to the IRS by Maltezos’s friend, John Bouikidis. Defendant argued that Maltezos lacked authority to take the records, and that Bouikidis and Maltezos acted as government agents in turning them over to the IRS. The magistrate judge handling pre-trial proceedings in this case held an evidentiary hearing, then issued a recommendation that the motion be denied. Defendant objects, requiring me to review the matter de novo. See Fed. R. Crim. P. 59(b).

I. FACTS

Neither side objects to the magistrate judge’s recitation of the facts. I therefore adopt that portion of the magistrate judge’s report (R. 33 at 2-10) and present an abbreviated version of events herein.

In 2005, Bouikidis sold the Dynasty Restaurant to Abigail and Norberto Rapeta. In late 2011, Bouikidis learned that the Rapetas were under investigation, and that IRS Agent David Klingbeil wanted to talk to him. Bouikidis, concerned about his own tax problems at the time, called Klingbeil, who set up a meeting at IRS offices in January 2012. At that meeting, Klingbeil and a DEA agent asked Bouikidis about the Rapetas and the sale of Dynasty.

Bouikidis also told the agents that he had information on another person the IRS might be interested in, Paul Bouraxis; Klingbeil knew the name because the IRS was already investigating Bouraxis, although that investigation was being handled by a different agent, Zachary Stegenga. Bouraxis held a mortgage on the Omega Restaurant, owned by Bouikidis’s friend, Maltezos. In April 2012, defendant was brought into the business as 50% owner and took control of Omega’s financial affairs.

In June or July 2012, Bouikidis asked Maltezos to provide him with information about Omega, and Maltezos told Bouikidis that he would try to get Omega’s financial records. Bouikidis told the agents that Maltezos might provide the records, but the agents did not ask him to obtain the records. Klingbeil asked Bouikidis to provide his personal business records for Dynasty, but he did not ask Bouikidis to obtain records from third parties.

In August 2012, Maltezos copied Omega’s records and gave them to Bouikidis. Later that month, Bouikidis met with Klingbeil and Stegenga about the Dynasty and Bouraxis investigations, turning over the Omega paperwork he had received from Maltezos.

In April 2013, Bouikidis submitted a request to the IRS to obtain a reward for the information he had provided on Bouraxis and Omega. Bouikidis learned of the possibility of a reward from a friend, not the agents. Klingbeil testified that he never offered Bouikidis a reward or discussed with him the idea of obtaining a reward, never paid Bouikidis any money or offered him anything of value, and never threatened to charge Bouikidis or suggested that he could be charged unless he cooperated. Nor did Klingbeil ask or encourage Bouikidis to obtain Omega’s records. He considered Bouikidis to be a citizen witness. Klingbeil did not meet Maltezos until August 2015, three years after Bouikidis had turned over the Omega records.[1]

Agent Stegenga likewise denied that he ever asked Bouikidis to obtain Omega’s records; nor did he suggest that, or try to induce Bouikidis to, obtain the records. Indeed, Stegenga testified that he was surprised when Bouikidis turned them over. Stegenga further testified that he never threatened Bouikidis with prosecution, never offered him any type of consideration to provide the records, and never paid him for his assistance; he also considered Bouikidis to be citizen a witness voluntarily providing information. Stegenga’s first contact with Maltezos came in September 2012, after Bouikidis had turned over the Omega records. Stegenga testified that he never asked Maltezos to obtain Omega’s records, and he considered Maltezos to also be a citizen witness voluntarily providing information.

Bouikidis testified that the agents never promised that he would not be charged with a crime if he provided information, never promised him money for his cooperation, and did not instruct him to get the records from Omega. Bouikidis further testified that he brought up Bouraxis and the Omega restaurant to the agents for his “own reasons, ” to “protect, to support the thing [he] started with IRS.” (Evid. Hr’g Tr. [R. 28] at 45.)

Finally, Maltezos testified that he had no contact with federal agents before he gave the records to Bouikidis. No one ever threatened him with criminal prosecution or told him he would not be prosecuted if he cooperated; he was never paid anything by a federal agent for the assistance he provided in this matter; and no federal agent ever directed him to obtain the records. He said he copied the records for his “own personal reasons.” (Tr. at 80.)

II. DISCUSSION

Purely private searches are not subject to constitutional restrictions. United States v. Feffer, 831 ...


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