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Making Sense of the Michael Ritacco Raid April 30, 2010

Posted by jefhenninger in News.
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Outside of New Jersey, you may never hear about the story.  In Ocean County, New Jersey it is major news and everyone is talking about it.   What everyone is talking about is the raid on Toms River School District Superintendent Michale Ritacco.  Complicating the conversation is that Ritacco is a well known and polarizing figure.  You either love him or hate him.  To be honest, I’m on the other side of the local political spectrum but I’ll do my best to be objective here.  Most people don’t fully understand what is going on so I thought I’d break it down and give you my opinion on it.

Let’s start with what we know.  On April 22, 2010, Federal Law Enforcement agents (FBI and IRS Criminal Division) raided the Ritacco’s Seaside Park house, offices at the Board of Education in Toms River and the house of Donna Mansfield who manages some type of cafe at the Board of Education.  Subpoenas were also issued and Ritacco’s Mercedes was towed away.  According to sources, the raid is connected to corruption and an insurance contract with Federal Hill Risk Management of South Amboy, New Jersey.

At this point, Ritacco is not under arrest and neither is anyone else that we know of.  There are no criminal or civil charges and there may never be.  He may get his car back tomorrow or he may never get it back.  While I’m sure his lawyers have an idea as to where this case may go, I don’t think anyone, even the FBI know for sure exactly what will happen yet.  So, we will have to speculate.

I think I have a good idea as to what is going on based upon the information available and my experience in white collar crime investigations.  Let’s first understand what a search warrant is and why its important. 

Law enforcement cannot just kick down your door and start looking for evidence.  The Fourth Amendment guarantees the right of persons to be secure from “unreasonable searches and seizures” and provides that “no warrants shall issue, but upon probable cause.” U.S. Const. amend. IV.  A warrant may be issued based on a “totality-of-the-circumstances” test, which requires a reasonable likelihood that the search will uncover evidence of criminal acts. Illinois v. Gates, 462 U.S. 213, 238 (1983).  A reviewing court must uphold the determination of probable cause by the Magistrate
Judge who issued the warrant if there was a “substantial basis” for concluding that a search would uncover evidence of wrongdoing. United States v. Deaner, 1 F.3d 192, 196 (3d Cir. 1993).

Besides the legal issues, there are some practical issues that must be considered here as well.  Executing a search warrant (aka raiding someplace) is not only dangerous, but it requires a lot of time, effort and people.  When it comes to white collar crime, law enforcement rarely need to rush right into an arrest since most suspects will not flee and are not a danger to society.  A subpoena, which is a demand to produce documents and other items, can be used to gather the same evidence that will be found during the raid.  However, you have to hope that the person receiving the subpoena does not destroy some of the documents you are looking for.

While a search warrant does not always mean that the person whose office or house is raided will eventually be arrested, it is often a good sign of eventual disaster.  Why?  Well first, there was clearly an investigation that took some man-hours.  That investigation eventually turned up enough evidence where law enforcement sought a warrant from a judge.  The judge reviewed the affidavit and decided that there was enough evidence of criminal activity that he or she signed off on the warrant which allows law enforcement to invade the target’s privacy. 

Judges, especially on the federal level, do not just rubber stamp warrant applications and while the FBI is not perfect, they are a very professional organization.  So, the judge will really take this job seriously.  Thus, a judge is not going to allow law enforcement to just go anywhere.  The judge must believe that evidence of criminal activity will be found at that location. 

Thus, I think Ritacco’s days may be numbered. The fact that the FBI executed a search warrant at his house shows that both the FBI and a judge believed that evidence of criminal activity would be found there.  Clearly, there would be various records at an office building that could implicate any number of people; even people that do not work there.  However, the only records that would be expected to be found at a house would be personal records such as bank statements, emails, etc. 

On top of that, his car was seized.  Clearly, his car does not contain any evidence.  However, it may be proceeds of criminal activity and thus subject to forfeiture.  When you add it all up, it appears that there is at least an allegation or suspicion that Federal Hill Risk Management or someone working for them gave kick backs to Ritacco either directly or indirectly.

So why wasn’t he arrested?  A search warrant is used to gather evidence of criminal activity.  You can have documents or records at your house, office, etc even if you did not actually commit a crime.  In addition, the Federal Government likes to have an air-tight case before an arrest is made.  That is how now Governor Christie was able to brag about his great prosecution record.  When you cherry-pick cases, you increase your chances of winning.  Thus, they have plenty of time to make sure they have everything they need to successfully prosecute everyone involved.  It could take days, months or years to figure out what they will do. 

Since Ritacco is not even charged, he is clearly presumed innocent until  proven otherwise.  Love him or hate him, he does have rights and the FBI does make mistakes.  Once they sort through the evidence, they may find out that he has nothing to do with any criminal activity.  While it is impossible to determine when and if he will be arrested, I think we will know sooner rather than later.  If his lawyers press the Government, they will have to at show enough evidence to allow them to keep the car.  I don’t see the Government entering into a forfeiture proceeding which will force them to show their hand before anyone is arrested. 

Ritacco’s lawyers are at a disadvantage because the documents seized are gone and there may be no duplicates.  By looking at what was taken and speaking to the prosecutors on the case, they should have a good idea as to where this case is going.  His lawyers also need to reach out to the insurance company’s lawyers to get any and all information out of them.  I am also a big fan of hiring a private investigator to interview as many people as possible but I am in the minority as many lawyers tend to do nothing as they wait for the Government to make the next move.  However, I think my track record shows that I know what I’m doing.

So while I might not be a huge Ritacco fan, I don’t think that having the Government search your house and offices should require you to be removed from your job.  You may have problems with his actions relating to other issues, but that does not mean that you should be treated differently than anyone else.   

Some news articles about this story are at:

http://www.nj.com/news/index.ssf/2010/04/insurance_contract_is_focus_of.html

http://www.nj.com/news/index.ssf/2010/04/tom_river_school_chiefs_office.html

http://wcbstv.com/topstories/fbi.raid.toms.2.1650808.html

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