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Friday, November 13, 2015

The Ethics of Deception Pretext Investigations in Trademark Cases; by Robert W. Sacoff Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP

The Ethics of Deception Pretext Investigations in Trademark Cases

Be Aware: How Identify Theft Led To The Wrongful Arrest for Child Porn by McGuire Coats LLP

Be Aware: How Identify Theft Led To The Wrongful Arrest for Child Porn

Chism v. Washington (10-35085) (Aug. 25, 2011, full opinion available here)

Why should you read this case? If you have ever heard a friend of a friend say, “OMG, did you hear . . .” and assumed that someone was guilty based on the “where there’s smoke there’s fire” theory, you should read this case. And if you’ve ever thought “the guy must be guilty or the police wouldn’t have gone through all the trouble,” you should read this case. It happened to Todd & Nicole Chism. If it could happen to them, it could happen to you, and as Todd Chism stated, “it could happen to any of us.” Here’s a link of Todd Chism speaking in 2008: Todd Chism Speaks Out Watch the video first, then read on. 
Todd & Nicole Chism are married. They’re parents. Before this, Todd worked as a firefighter with the Spokane Fire Department in Washington. The Chisms claimed that their civil rights were violated when Todd was investigated and arrested for child pornography. What you need to know right off the bat is that: “No child pornography was found, and criminal charges were never filed against Todd.”

The Chisms argue that their Fourth Amendment rights were violated through “judicial deception.” Basically, the Chisms argue that the officers lied to the magistrate judge in order to get a search warrant – – a really broad search warrant – – that included his home computer and his computer at work with the Spokane Fire Department. The Chisms also claim that the same false information used to support the search warrant was used to support the arrest warrant alleging Todd violated Washington’s child pornography laws. The officers executed both warrants. They arrested Todd. They searched his home. They searched his work. “The investigation did not reveal any evidence of child pornography.”

How did this happen?

First, Washington received a tip from the National Center for Missing and Exploited Children (NCMEC) that Yahoo! had archived images of child pornography on a website and provided an email address as the “suspect.” The address was: The tip stated that the IP address 68.113.115 was used to open the first user account on the website. And as the Ninth Circuit has explained, “[e]very computer or server connected to the Internet has a unique IP address.” United States v. Forrester, 512 F.3d 500, 510 n.5 (9th Cir. 2008). But, as the Ninth Circuit noted, the tip did not provide the time or date that the child pornographic images were uploaded to the website, nor did it provide the IP address from which the child pornographic images were uploaded.

Second, Washington received another tip from NCMEC similar to the first one, but with a different website name, a different email user account, and a different IP address. It also did not provide the time or date that the child pornographic images were uploaded to the website, nor did it provide the IP address from which the child pornographic images were uploaded.

Third, the detectives start investigating. As to the first tip, Yahoo!’s records indicated that the first user account listed the name, “Mr. Nicole Chism” with a birthday of May 20, 1966. Yahoo!’s records also indicated that “Mr. Nicole Chism” lived in Chile and showed the user logging into the account from a different IP address than the one listed in the tip that was used to create the website. Yahoo!’s records showed the billing information for the user account listed Nicole Chism, contained the Chism’s correct residential address, telephone number, and a credit card. Yahoo!’s records showed that two months of the website’s domain service was paid with the Chisms’ credit card and their credit card statements confirm that they were twice charged a monthly fee for domain service for the website.

As to the second tip, the same name, “Mr. Nicole Chism” was provided, but this time with the birthday March 11, 1977 and indicated that “Mr. Nicole Chism” lived in Chile. Yahoo!’s records showed that the second user had logged in twice since opening the account – once from the same IP address used by the first user in the first tip and once from a new IP address. There was no billing information, but again the Chism’s credit card statements showed them being charged for a hosting fee.

Fourth, the officers trace 2 of the IP addresses used to create the websites. One traced to Cheryl Corn of Walla Walla, Washington. Another traced to Vitina Pleasant of Federal Way, Washington. The officers had 4 IP addresses to work with, but only traced 2. 

Fifth, at this point Detectives Shelby Wilcox and Rachel Gardner notice that both accounts use “Mr. Nicole Chism” and both website were accessed at some point by IP address Note, this was one of the IP addresses that the officers DID NOT TRACE.

Sixth, Det. Gardner contact the Chisms bank regarding the credit card used to pay the hosting fees for the websites. Det. Gardner learned that the Chisms had reported a lost credit card and the card number in question was the replacement card. Det. Gardner was informed that the Chisms had no fraudulent activity on the card and confirmed that the Chisms had paid the bill with the website hosting charge fees. BIG FOOTNOTE: This information was, in fact, false. The Chisms reported fraudulent activity on their 6907 card in August 2007, roughly one month after Gardner received the NCMEC tips and roughly one month before Gardner spoke to Bank of America. Because the officers were not aware of this reported fraud at the time Gardner drafted her affidavit, we place no significance on the omission of this relevant information from the affidavit.

Read Carefully Here: It was on this information above that Detective Gardner concluded that there was probable cause to believe that Todd Chism had committed a crime, specifically “[s]ending, bringing into the state depictions of minor engaged in sexually explicit conduct and [p]ossession of depictions of [m]inor engaged in sexually explicit conduct.”

Todd was arrested, detained, and interrogated. Agents scoured Todd & Nicole’s home. Agents seized the Chisms’ computers. NO CHILD PORNOGRAPHY WAS FOUND.

You don’t need a law degree to be confused here. Common sense should make this case a head scratcher. Really? This was enough information to arrest someone and seize their personal and work computers?

The Chisms’ Law Suit Against Washington, the Washington State Police, and Detectives Gardner and Sager

Well here’s what happened and why the Chisms are suing on the theory that the police lied and duped the magistrate judge into signing off on the search and arrest warrants.

As part of the application to support the finding of probable cause, Detective Gardner submitted an affidavit. The Ninth Circuit began its analysis with: “We first observe that Gardner’s affidavit contained several false statements and omissions.”

#1: Detective Gardner’s affidavit said: “[b]ased on the information received from NCMEC about the images downloaded by Todd M. Chism, it is likely to believe he was using internet service at his residence and/or his business office.”

Incorrect: The Ninth Circuit noted that when the detective drafted the affidavit, she possessed no information that Todd ever accessed any child pornography, let alone the specific images uploaded to the websites. And there was no evidence that the images were ever downloaded by anyone. The only evidence linking Todd to the websites was the fact that a credit card he shared with his wife was used to pay the hosting fees for the site. Writes the circuit, “Thus, Gardner’s assertion that Todd downloaded images of child pornography was not a truthful representation of the evidence she had gathered.”

#2: Detective Gardner’s affidavit sad that the Chisms’ credit card was “used to purchase the images of child pornography from the website.”

Incorrect: The Ninth Circuit called this “patently false” as there was apparently no evidence that the Chisms’ credit card was used to buy images of child pornography. 

Addressing the lies directly, the Ninth Circuit writes:

A truthful version of Gardner’s affidavit would have indicated that the sole evidence connecting Todd Chism to the child pornographic images was the fact that the credit card he shared with Nicole was charged three times for hosting the websites that contained child pornographic images.

The Ninth Circuit noted that looking at the evidence Detective Gardner knew that the IP addresses used to register the accounts and websites were traced to other people – – not Todd & Nicole Chism. Detective Gardner knew that the identifying information for the Yahoo! accounts was “nonsensical” but her affidavit did not include any of this information. The Ninth Circuit concluded that a reasonable fact finder could find that the officers acted with at least “reckless disregard for the truth.” Additionally, the Ninth Circuit held that a reasonable fact finder could find that the officers acted recklessly or intentionally because the false statements or omissions contained in the affidavit “all bolster the case for probable cause which were not the product of mere negligence.” 

Basically, Detective Gardner’s affidavit was “purged” of any (and there was a lot) of evidence referencing the possibility that it was someone other than Todd Chism who was responsible for the child pornography websites. 

The Ninth Circuit reversed the district court’s grant of immunity. Specifically, it noted that government employees are not entitled to qualified immunity on judicial deception claims. Specifically it stated that: 

if an officer submitted an affidavit that contained statements he knew to be false or would have known were false had he not recklessly disregarded the truthand no accurate information sufficient to constitute probable cause attended the false statements, . . . he cannot be said to have acted in a reasonable manner,and the shield of qualified immunity is lost.

Branch v. Tunnell, 937 F.2d 1382, 1387 (9th Cir. 1991) (overruled on other grounds by Galbraith v. City and Cnty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002) (quoting Olson v. Tyler, 771 F.2d 277, 281 (7th Cir. 1985).

The majority (Judges Fletcher and Paez) reversed the district court’s grant of immunity and remanded the case for trial.

Judge Ikuta dissented:

Judge Ikuta writes: In United States v. Gourde, we endorsed this maxim, holding that payment of subscription fees to a site on which child pornography is available was sufficient to support probable cause for a search warrant. 440 F.3d 1065, 1071 (9th Cir. 2006) (en banc). Despite the fact that this case involved a direct connection between the Chisms’ credit card and two websites populated with child pornography, the majority holds that the evidence was insufficient to support probable cause, and therefore the district court erred in granting summary judgment to the police on the basis of qualified immunity. In doing so, the majority tramples on controlling precedent and defies common sense. I respectfully dissent.

Judge Ikuta’s 9 page dissent discusses Gourde in depth and is the type of dissent likely to grab the attention of other circuit judges if a call is made to rehear this case en banc. Notably, the case Judge Ikuta considers directly on point and controlling the outcome of this case in the other direction is a en banc decision. In sum, Judge Ikuta places little emphasis on the “patently false” information the detective provided in the affidavit, and the conspicuously missing information about other people, and instead focuses almost completely on the fact that the Chisms’ credit card was used to pay for the websites. The fact that the credit card was used and the billing information for the credit card was correct carries the day for Judge Ikuta regardless of the information pointing to the fact that the card was likely stolen and used by people hundreds of miles away. Judge Ikuta goes so far as to say that she believes that the evidence supported probable cause to arrest either Todd or Nicole Chism.

And there’s more to the story!

Todd Chism has now filed another civil action against the Washington State Patrol arising out of an incident in April 2010 where Chism claims that two WSP troopers used excessive force. 

The complaint includes claims for harassment, false imprisonment, malicious prosecution, intentional infliction of emotional distress and retaliation, and others. The incident with the troopers occurred in the morning outside Chism’s Nine Mile Falls home after troopers received reports of a fight. They arrived at the location and only found Chism trying to remove

Chism claims that the SWP troopers assaulted him and used a Taser on his seven times. Said his attorney, “I would have never guessed that [Mr. Chism] would have been stopped by the State Patrol and have the State Patrol announce ‘We know who you are; we’re going to arrest you . . . You’ve got to believe there’s some element of retaliation here.”

Using Children's Welfare Charity to Turn a Profit by Thomas Hedges

Using Children's Welfare Charity to Turn a Profit
 by Thomas Hedges

The National Center for Missing and Exploited Children (NCMEC) has, ironically, found that exploiting children turns a profit. It has been doing so since its creation in 1984 under Ronald Reagan, who created the quasi-governmental agency. It enjoys liberal funding from the Department of Justice and a level of privacy other non-profits don’t have.

The horrifying subject of missing children often obscures questions of budget allocation, employee compensation, and the accuracy of statements the organization releases.

NCMEC, for example, exaggerates its figures, saying that over 2,000 children go missing every day, almost 800,000 every year. More than 95% of those cases, however, are run-aways. Another 4 to 5% are abducted by family members, usually a parent who was denied joint custody. In the end, the number dwindles down to 115 "stranger" abductions.

The foundation doesn’t ignore these cases. They’ve helped many times to reunite missing children with their families by featuring their portraits on milk cartons and the IRS website. There is a level of care at the foundation that must be acknowledged.

But it capitalizes on the process. It paid its longtime CEO, Ernie Allen, some $1.3 million last year while eleven other top executives were paid over $150,000. NCMEC also spends more than $700,000 on travel expenses each year.

Allen’s pay has surpassed that of the top executives at the American Red Cross and the Smithsonian Institution, which also get funding from the government. Both have bigger budgets than that of NCMEC.

This moneymaking organizational structure has influenced the creation of similar groups, many of which focus on children’s welfare, like Operation Lookout, which was started two years after the creation of NCMEC and does the same kind of work. Over the past decade or so, solicitors at Operation Outlook have held on to 82% of the $19.6 million raised, according to data compiled by the Tampa Bay Times in 2011.

In the past 15 years, there has been a surge in these sorts of organizations that exploit the public’s emotions for profit. They couple this scheme with a demand for funding from the government.

In the case of NCMEC, the government has not only appropriated funding to the group but has approved it for exemption from Freedom of Information Act requests.

NCMEC also enjoys free advertising space on the blank pages of the annual IRS manual, both online and in print. It used to be that Citizens’ Utility Boards (CUB) had rights protected by the government to the empty spaces on billings mailed to ratepayers – CUBs kept a check on utility companies and kept them from scamming their customers – but the government struck down that provision and instead given priority to organizations that use the language of the public’s interest to turn a profit.

Watchdog groups say that no more than 35% of donations should go to fundraising costs. Operation Outlook has faced fines and penalties for this in Florida and Iowa, where callers soliciting donations lied about how much of the money goes to the charity. 

There are tens more groups that use the image of children to rake in donations. Others, identified in the Tampa Bay Times’ compilation of America’s Worst Charities, include Kids Wish Network, Children’s Wish Foundation International, Children’s Cancer Fund of America, Children’s Cancer Recovery Foundation, Youth Development Fund, all of which are top twelve out of a total of fifty organizations on the list.

There needs to be more oversight of the organizations like these, which – along with 501(c)(4) social welfare groups – are exploiting their tax-exempt statuses and putting a strain on the economy.

The Prevention of Childhood Sexual Abuse by David Finkelhor

The Prevention of Childhood Sexual Abuse by David Finkelhor