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United States v. Escobedo

United States District Court, D. Montana, Billings Division

December 2, 2019




         The Government charges Defendant Jose Antonio Escobedo with conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. (Doc. 7.) Before the Court is Escobedo's motion to suppress evidence. (Doc. 21.) The Government filed a response (Doc. 23), to which Escobedo filed a reply (Doc. 27). The Court held a hearing on the motion on November 8, 2019. For the following reasons, the Court denies Escobedo's motion to suppress.

         I. Background

         The Southwest Border Transaction Record Analysis Center (TRAC) is a web-accessible database law enforcement uses to monitor person-to-person money transfers concentrated in southwest border-states and Mexico. (Doc. 23 at 3.) It is available online at, but only law enforcement officers with a login and password may access it. (Doc. 27 at 2.)

         In 2014, Western Union-a prominent person-to-person money transfer corporation-and the Arizona Attorney General entered into an agreement to create TRAC. (Doc. 23 at 3.) Western Union agreed to provide the Government with transaction data for all money transfers of $500 or more that are sent or received in California, Arizona, New Mexico, Texas, and Mexico. Since that time, several other money transfer services, like RIA Financial, have also agreed to provide the Government with the same data. The TRAC system now provides law enforcement with the information an individual supplies a third-party money transfer service to execute a money transfer, including the individual's name, address, date of birth, and other identifying information; the transaction date and amount; the location the funds were sent to; and the name of the transfer recipient. Law enforcement uses TRAC to investigate money laundering related to human trafficking, human smuggling, narcotics trafficking, and terrorism. Officers can search the database for transactions originating from particular cities over certain timeframes.

         Sometime before August 2019, Border Patrol Agent Matt Henderson, who was assigned to the FBI Big Sky Transactional Organized Crime West Task Force (TFO Henderson), was monitoring TRAC for suspicious person-to-person transactions. (Doc. 23 at 2, 4.) He entered search criteria for recent money transfers sent from Billings, Montana. (Id.) TRAC returned Escobedo's name in a series of money transfers sent to McAllen, Texas-a border city known for importing methamphetamine. TFO Henderson noted the frequency and amount sent were suspicious. He passed this information to Detective Tanner Buechler of the Eastern Montana High Intensity Drug Task Force. (Id. at 4.)

         An investigation into Escobedo's criminal history showed he had been convicted for drug-related crimes in Texas. Therefore, Detective Beuchler began suspecting Escobedo was wiring money to McAllen in exchange for drugs sent through the mail. He identified Escobedo's physical address in Billings and contacted USPS Inspector Mike Smith. Inspector Smith discovered Escobedo had received several packages from McAllen, one of which was in USPS's possession and was scheduled to be delivered on August 12, 2019. (Id.) Investigators conducted a K9 sniff on the package, and the K9 alerted to the presence of narcotics. Inspector Smith obtained a search warrant based on this information and located 254.9 grams of a crystal substance later confirmed to be methamphetamine. Investigators replaced some of the substance with rock salt and prepared to conduct a controlled delivery. (Id.)

         Detective Buechler obtained an anticipatory search warrant for Escobedo's home. (Id.) On August 13, 2019, task force officers conducted a controlled delivery. (Id.) Escobedo retrieved the package and entered his home, after which officers executed the search warrant. (Id.)

         On August 29, 2019, law enforcement served Custom Summonses on Western Union and RIA Financial-both services Escobedo had used to transfer money. (Id. at 5.) TFO Michael Robinson received the records on September 10, 2019. The records showed Escobedo sent money six times to McAllen, Texas, from May 7, 2019, to July 6, 2019. (Id.)

         II. Discussion

         Escobedo argues law enforcement improperly gathered the information about his money transfers. He argues he had an expectation of privacy in the information and law enforcement received it in violation of his rights under the Fourth Amendment. Therefore, evidence gathered as a result of examining data from the TRAC system must be suppressed.

         Escobedo is incorrect; he did not have an expectation of privacy in the information. Western Union and RIA Financial-third parties-gave information about Escobedo's transactions to law enforcement. Escobedo lost any expectation of privacy he had in the information when he turned it over to the third parties. Moreover, it was non-content information-that is, the information did not contain the contents of a conversation or communication.

         In United States v. Miller, 425 U.S. 435 (1976), after a fire broke out in Miller's warehouse, authorities discovered an underground distilling operation. Id. at 437. ATF agents then presented grand jury subpoenas to two banks Miller held accounts with and asked the banks to produce "all records of accounts, i.e., savings checking, loan or otherwise," in Miller's name. Id. The banks complied, but Miller moved to suppress the records as illegally seized. Id. at 439. The Supreme Court held Miller's bank records contained information he had voluntarily disclosed to the banks and their employees "in the ordinary course of business." Id. at 442. Therefore, Miller had no expectation of privacy in the records because "[w]hat a person knowingly exposes to the public ... is not a subject of Fourth Amendment protection." Id. (quoting Katz v. United States, 389 U.S. 347, 351 (1967)). The Court continued,

The depositor takes the risk, in revealing his affairs to another, that the information will be conveyed by that person to the Government. This Court has held repeatedly that the Fourth Amendment does not prohibit the obtaining of information revealed to a third party and conveyed by him to Government authorities, even if the information is revealed on the assumption that it will be used ...

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