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United States v. Vallerius

United States District Court, S.D. Florida

May 1, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
GAL VALLERIUS, Defendant.

          REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION TO SUPPRESS

          EDWIN G. TORRES United States Magistrate Judge.

         This matter comes before the Court on a Motion to Suppress Statements and Physical Evidence filed by Defendant GAL VALLERIUS (“Defendant” or “Vallerius”) on March 19, 2018. [D.E. 23');">23]. The Government filed a Response in Opposition to the Motion on April 2, 2018 [D.E. 29], and an evidentiary hearing took place on April 18, 2018. Having carefully considered the motion and the opposition thereto, the arguments of counsel, the testimony of the witnesses at the hearing, the exhibits admitted into evidence and the legal authorities relevant to the dispute, the Court concludes that Defendant's Motion should be DENIED.

         I. FACTUAL BACKGROUND

         The events giving rise to Defendant's arrest and the underlying criminal complaint involve Defendant's alleged use of the “dark web” to facilitate international narcotics transactions. An extensive discussion of what, exactly, the dark web is and who uses it is unnecessary for purposes of this Report; stated as simply as possible, however, it is a means by which individuals use special programs to effectively “hide” their unique internet protocol (“IP”) address and obtain two-way anonymity to conceal one's browsing activity. According to the Government, individuals utilize the two-way anonymity the dark web affords to create online marketplaces dedicated to various illicit activities, including the purchase and sale of controlled substances.

         One of the websites being investigated by authorities is known as the “Dream Market.” The website allows individuals to create online advertisements offering various narcotics for sale, to which other members can respond and seek to purchase the drugs for a price set by the offering member. Payment for the illicit purchases are made through the use of Bitcoin and other cryptocurrencies, which add an additional layer of anonymity to the transaction and conceal the identities of the accounts from which the cryptocurrency payments originate.

         Vallerius came to the Government's attention because of his active role within the Dream Market. The Government alleges that Defendant frequented the site using the moniker “OxyMonster, ” where he was listed as a controlling administrator. The Government claims that Vallerius moderated the forums and provided advice to other members about the online drug trade. In connection with his role as a “senior moderator, ” Defendant also sold controlled substances to other members using the website, receiving payment for these sales through the use of a Bitcoin “tip jar, ” or electronic depository.

         It was through this tip jar that law enforcement officials became aware of Vallerius' true identity. After locating the Bitcoin depository allegedly belonging to the user “OxyMonster, ” agents tracked several incoming payments and outgoing deposits from the tip jar to various “wallets” controlled by Vallerius. Agents also cross-checked posts made by OxyMonster on the Dream Market forum with social media accounts belonging to Vallerius. Authorities determined that the writing style and syntax of the Dream Market posts made by OxyMonster matched those written by Defendant on his social media accounts and, equipped with this information, connected Defendant to his dark web persona.

         Special Agent Lilita Infante of the United States Drug Enforcement Agency (“DEA”) assisted in the investigation of Defendant's online activities and testified at the hearing in support of the Government's opposition to the Motion to Suppress. According to Infante, after the DEA linked the online persona of “OxyMonster” to Vallerius, she contacted members from Homeland Security Investigations (“HSI”) to determine whether Vallerius might be travelling to the United States. HSI informed Infante that Defendant would be entering the country on August 31, 2017, roughly one week from the date she requested the information from HSI. Based on this information, Infante asked that Vallerius be “flagged” and pulled aside at the airport upon his arrival to customs.[1]

         On August 31, 2017, Mr. Vallerius arrived in Atlanta from Paris, France on Delta Flight 83. Defendant entered the customs area and approached the “primary” inspector, who is tasked with examining passports and checking entrants' customs forms. HSI Special Agent Stephen Lewis, the duty agent assigned to the airport at that time, instructed the primary inspector to notify Defendant he had been picked for secondary inspection in accordance with Agent Infante's request the week prior. The primary inspector referred Defendant to secondary inspection, which Lewis described as a “working area” that allows Custom and Border Patrol (“CBP”) officers to conduct “more detailed and thorough” examinations of a passenger's bags. Defendant and his wife were then asked to remove their baggage from the secondary carousel and “claim ownership” of their belongings, which they did without issue.

         The officers on scene then requested that the bags be opened, and Lewis asked if Vallerius had been traveling with any electronic devices. Defendant acknowledged he possessed a laptop computer, a cell phone, and an iPad tablet. Agent Lewis asked whether the electronic devices were password-protected and Defendant answered in the affirmative. Lewis told Defendant that he would need the passwords to the electronics because the devices were subject to routine inspection at the border. Lewis testified that he told Defendant that border patrol agents would be searching for “contraband [and other] evidence of criminal activity, ” which included child pornography. According to Lewis, Defendant provided his passwords “without hesitation, ” and the electronic devices were removed from Defendant's possession. Lewis took the computer, tablet and phones to DEA agents from the Miami field office who were waiting in what he described as a “seizure room.” The agents used the passwords to gain access to the computer and conduct a search of its contents. While this occurred, Lewis engaged in “small talk” with Defendant.

         According to Lewis, the DEA agents notified him that they had found information on the laptop that linked Vallerius to the Dream Market.[2] Specifically, the agents located a Bitcoin “wallet” on the laptop that purportedly could be traced to the OxyMonster account. The agents on scene believed the wallet required a password, so Lewis returned and requested that information from Vallerius. Defendant informed Lewis that the wallet did not require a password.[3] Lewis then moved Vallerius to a conference room within his office, and informed Defendant that he was being placed under arrest.[4] Lewis and the DEA agents advised Defendant of his Miranda rights and attempted to question him about the information obtained during the search of his laptop. Vallerius indicated he wished to consult with an attorney and at that point agents stopped the interview.

         Based on the information obtained in the search of Defendant's computer in Atlanta, a search warrant was sought by prosecutors that would allow the agents to conduct a complete examination of Vallerius' computer. Magistrate Judge Jonathan Goodman granted the Government's request for a search warrant on September 1, 2017, after which a forensic examination of the computer took place. Defendant now argues that the initial questioning by Lewis, whereby he requested the computer password and cell phone personal identification codes, failed to comport with the Fifth Amendment, and that any information obtained as a result of that conversation should be suppressed. [D.E. 23');">23]. Accordingly, Vallerius moves to suppress the contents and any information obtained from the search of his laptop computer, his cell phone and that of his wife and the contents of the tablet taken from his possession at the airport. Id.

         II. ANALYSIS

         Defendant's Motion raises two issues: first, whether Agent Lewis needed to provide Miranda warnings before asking Vallerius for the passwords and personal identification codes necessary to open his laptop computer and cell phone; and second, whether the search of the computer for evidence of Vallerius' connection to the ...


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