# Petition — Leonard v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1593%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1976 - **Citation:** 425 U.S. 958 ## Text In THE Supreme Court of the United Staten OCTOBER TERM, 1975 wo. %@5-1016 Jackson D, Leonarn, Petitioner, against Unrrep States or AMERICA, Respondent. _ 7 SS eee, SN sa —— PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT James Scrremer 330 Madison Avenue New York, N.Y, 10017 Attorney for Jackson D. Leonard Aan KANnzer Of Counsel TABLE OF CONTENTS I EEE enh ndds duuceeeennnbdesecteessscecs GUPIEOUOM OF GES COUEE occ cc ccccccccccccccccnees ED IEE ccc ckccuccccedbanceteccesods Statutes, Regulations and News Releases Involved . . Btatement OF the Case ..cccccccccscccccccvccccccee The IRS Investigation of Leonard's Tax Affairs The Foreign Bank Account Project ............ The Audit and the Indietment ...........6.6444. The Swiss Bank Affidavit .......6. 66666 c eeu The Government's “proof” of the affidavit's ~~ aeierrervrTTTTTrerTrerrrrrrrrererrrrerTere bva Brooke's testimony ....... cece eeeeeeees The Decision of the Court of Appeals for the Second CUIOUNS cccccccccncccccccccceecccecccccccegecs Reasons for Granting Certiorari .......6. 666660005, I—This Court should resolve the conflict among the Circuits as to whether the [RS must comply with its own rules and give taxpayers suspected of criminal activities the constitutional warnings prescribed by IRS regulations .......... 6006. 14 ii TABLE OF CONTENTS Il—This Court should decide whether the Swiss mail WAGER WAS LOMB) oc ccccccccccccccccccecces ‘owe 111—The Court should resolve the conflict among the Circuits governing the admissibility of similar act evidence, and should insure that its decision in Bronston v, United States, 409 U.S, 352 (1973) is not undermined ........ 6660 0e cee eee 1V—This Court should exercise its power of super- vision of the federal administration of justice to condemn prosecutorial misconduct of a par- ticularly prejudicial nature oo... 66. cece eens 1, The Government improperly obstructed the defendant's interviews of ipehieet wit- WETTTTITETTLET Le TETTTTITINT TTT iii 2. The government improperly used a Letter Rogatory to obtain the presence and testi- mony of Eva Brooke, a British citizen, upon the false threat that she was otherwise sub- ject (in England) to “extradition and arrest” although she was completely innocent of any wrongdoing. In addition, the government improperly failed to disclose these circum. stances at trial, as required by this Court's decision in Brady v. Maryland, 373 U.S, 83 CRUD cccvccccesecccsccccececscccccesces ee eee cece bh dee eehh deka be PAGR 19 22 27 TABLE OF CONTENTS iii Arrenpix: PAGE Appendix A, Opinion, United States Court of Ap- peals For the Second Cireuit, August 28,1975... 1a Appendix B, Opinion, United States Court of Ap- peals For the Seeond Cireuit, November 18, 1975, Denial of Rehearing and Suggestion for En Bane SED. Sob badence chacucedcbeacescccce 30a Appendix C, United States Court of Appeals For the Second Circuit, December 4, 1975, Stay of Man- GD bhcvesnccecedcsccecccecssvecccseccascens 33a Appendix D, Title 26, U.S.C. § 7206 ........00ce00es 34a Appendix KE, United States Post Office Manual and ED 4.55 de Soncedueéonetceseseeccescécs 35a Appendix F, United States District Court For the Southern District of New York, Letter Rogatory to the Appropriate Judicial Authority in London, England, January 14, 1975 00.0.0... 666 c ccc Sla Appendix G, Internal Revenue Service News Releases A ry rer er rr Da Appendix H, Order United States Supreme Court, Extending Time To File Petition For Writ Of ED CANS cicees cobs cde cove decocecocseses 57a Tasue or Cases Beckwith v, United States, No, 74-1248 ............. 2,19 Brady v. Maryland, 873 U.S, 88 (1968) ........6. 05. 29, 32 Bronston v, United States, 409 U.S, 352 (1973) ..... 2, 4,24, 25, 26 Canaday v. United States, 354 F.2d 849 (8 Cir, 1966) 20 iv TABLE OF CONTENTS PAGE California Bankers Association v, Shultz, 416 U.S, 21 (2008) . coccccceeeceseocesseuubneeneenel 21 ee ee em 27, 28 Hammond vy. Lenfest, 398 F.2d 705 (2 Cir, 1968) .... 2 Kraft v, United States, 238 F.2d 794 (8 Cir. 1956) ... 2, 24 Mathis v. United States, 391 U.S. 1 (1968) ........5. 18 Michelson vy, United States, 335 U.S, 469 (1948) ..... 23 Service v, Dulles, 354 U.S. 363 (1957) . 0.0... c cece 2 Smith v. Resor, 406 F.2d 141 (2 Cir, 1969) 0.0.0.0... Spencer v. Texas, 385 U.S. 564 (1967) . 0.0.6. cece 23 U.S. ex rel. Accardi v. Shaugnessy, 347 U.S, 260 (1954) 2 United States v, Costello, 255 F.2d 876 (2 Cir, 1958)... 20 United States vy, Crisona, 416 F.2d 107 (2 Cir, 1969), cert, denied, 397 U.S. 961 (1970) occ ccc ees 22 United States v. Deaton, 381 F.2d 114 (2 Cir, 1967) .. 22 U.S. ex rel, Donham vy. Resor, 436 F.2d 751 (2 Cir. ADTA) nccccccccccccccccccccseeseccssceeseeees 2 United States v. Heffner, 420 F.2d 809 (4 Cir. | J MMETITITITITITIT TT 2, 14, 16, 19 United States vy, Isaacs, 3A7 F.Supp. 743 (N.D, Til. IDTS) acccccrccccccccccccovesesesesseseeeeeen 20 United States v. Lawrence, 480 F.2d 688 (5 Cir, 1973) 2, 24 United States v, Leahey, 434 F.2d 7 (1 Cir, 1970)... 2,14, 16,19 United States v. Matlock, 491 F.2d 504 (6 Cir, 1974), cert, denied, 419 U.S, 864 (1974) oo... cece aes 27 United States v. Reagan, 453 F.2d 165 (6 Cir, 1971), cert, dented, 406 U.S, 946 (1972) oo. cece aes 30 I TABLE OF CONTENTS Vv PAGE United States v. Sicilia, 475 F.2d 308 (7 Cir. 1973), cert. denied, 414 U.S. 865 (1973) ...........645: 17 United States v. Schwartz, 283 F.2d 107 (3 Cir. 1960), cert. denied, 364 U.S. 942 (1961) ............... 20 United States v. Sourapas, 515 F.2d 295 (9 Cir. 1975) 2, 14, 16, 19 United States v. White, 454 F.2d 437 (7 Cir. 1971), cert. denied, 406 U.S. 962 (1972) ............55. 27 Vitarelli v. Seaton, 359 U.S. 535 (1959) ............ 2 Volkswagenwerk A.G. v. The Superior Court of Sac- ramento County, 109 Cal. Rept. 219, 33 CA 3d 508 (#73) bin ee DER MMiAeadubeeceen eevee. 29 Wong Sun v. United States, 371 U.S. 471 (1963) .... 16 Yellin v. United States, 374 U.S. 109 (1963) ........ 2 Sratutes CITED EERE a ee 8 26 U.S.C es eee e es segesescoces 5 Eee cckebeceeeseecoecocccoses 4,5 28 U.S.C. ee icc cieseteseoccececcoes 3 EE ELI SIE OP PPP OPT ESTEE ETT Y 31 Ee eee cd cece sccecccccesocece 30, 31 31 U.S.C. ee ccc ceecdeceesecococcces 21 ESE SSE SLES SPIE PPP OTTETTTE TELL TY 21 Foreign Tribunals Evidence Act of 1856 ........... 31 i ce oc esas eeeccocececcoss 31 vi TABLE OF CONTENTS Oruer AUTHORITIES PAGF. Postal Manual of the Post Office Department, EEE 56-0 a0 h ¢00.a00 on becchdocn seme avetete tet 4 Pan EEE dncddununeChkeeeine ds cabndewinnane 15 Pe EE d.ducunddcavsdapdsodecenncesecdaeun 22 PRE seiveccdéddvusckddabeucdessiscwes 22 PS dahugascdedeccenedceadahesuenee 22 PEE A ivfeccicedwsndncuneaideteuryeiaeni 22 DR MED cu éuve'set cudxagauancevaunueeneeeas 22 PR TE 55 scxnncidicadnnnsccowssndtcneass 22 IRS News Releases Nos. 897 (issued October 3, 1967), and 949 (issued November 26, 1968) .... 4,14 ABA Standards Relating to the Administration of Criminal Justice, The Prosecution Function, 9 3.1(¢); Diseovery and Procedure before Trial, DE sevdéusbecnnudasesiasenasecebsdsaconiion 27 Kamisar, La Fave and Israel, Modern Criminal Pro- cedure 1236-37 (1974 ed.) ......cccccccsccccces 27 2 Wigmore, Evidence $§ 300-373 ...............005- 23 ee Gee WEE kno n0ecense dwaueusseseebonnseounns 28 Ballentine’s Law Dictionary (3d ed. 1969), pp. 726-727 29 Oh ot ennai a. = In THE Supreme Court of the United States OCTOBER TERM, 1975 No. , 7 Jackson D. Leonarp, Petitioner, against Unrrep States or AMERICA, Respondent. s. a PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Jackson D. Leonard (“Leonard”) petitions for a Writ of Certiorari to review the judgment of the United States Court of Appeals for the Second Circuit, entered on August 28, 1975, affirming a judgment of conviction entered in the United States District Court for the Southern District of New York on March 7, 1975, after a seven-day jury trial. In a decision of far-reaching importance, the Second Cireuit: (1) Created a confiiet with decisions of the First, Fourth and Ninth Cireuits, which all held that the Internal Revenue Service (“IRS”) must comply with its published 2 rules and regulations requiring its agents to give specified warnings to taxpayers suspected of criminal tax fraud.* (2) Sanctioned a massive and unprecedented mail watch which was virtually unlimited in scope and involved the interception of all mail from Switzerland arriving at John F. Kennedy airport in New York City during two entire four month periods in 1968 and 1969 and which vio- lated applicable Post Office Regulations and the United States Constitution. (3) Created a conflict with the decisions of the Fifth and Eighth Cireuits, United States v. Lawrence, 480 F.2d 688 (5 Cir. 1973) and Kraft v. United States, 238 F.2d 794 (8 Cir. 1956), by rejecting the “plain, clear and convincing’’ standard governing the admissibility of al- leged ‘‘similar ecrime’’ proof. Moreover, although this Court in Bronston v. United States, 409 U.S. 352 (1973), held that a defendant could not be prosecuted for making a statement, which although misleading, was not literally * The decisions of the First, Fourth and Ninth Cireuits to which reference is made are: United States v. Leahey, 434 F.2d 7 (1 Cir. 1970), United States v, Heffner, 420 F.2d 809 (4 Cir. 1969), and United States v. Sourapas, 515 ¥.2d 295 (9 Cir. 1975). This Court, on June 16, 1975, granted certiorari in Beckwith v. United States, No. 74-1243, in which the issue of the failure of the IRS to give taxpayers constitutional warnings is also raised. The Beckwith case, argued December 1, 1975, involved the ques- tion of whether Miranda warnings were constitutionally required in non-custodial interrogations by IRS agents. The instant case raises a different issue; namely, whether the IRS must comply with its published regulations governing the conduct of criminal tax investigations (requiring that specified warnings be given to taxpayers) as a matter of due process and equal protection. See Yellin v. United States, 374 U.S. 109 (1963). Vitarelli v. Seaton, 359 U.S. 535 (1959), Service v. Dulles, 354 U.S. 363 (1957) and U.S. ex rel. Accardi v. Shaughnessy, 347 U.S. 260 (1954), which prohibit arbitrary deviations by agencies from published regulations and procedures. See also U.S. ex rel. Donham v. Resor, 436 F.2d 751 (2 Cir. 1971), Smith v. Resor, 406 F.2d 141 (2 Cir. 1969) and Hammond v. Lenfast, 398 F.2d 705 (2 Cir. 1968). et ae ee ow ae alll PO 3 untrue, the decision below permitted a comparable state- ment to be used as ‘‘similar crime” proof relevant to wilfulness. (4) Sanctioned prosecutorial misconduct of a particu- larly prejudicial nature in which the prosecutor improp- erly obstructed defense counsel’s pretrial access to poten- tial witnesses and concealed the fact that (in order to ob- tain the presence and testimony at trial of a foreign witness) the prosecutor had, through the improper use of a Letter Rogatory, threatened such witness with “arrest and extradition’’, despite the fact that the witness was in- nocent of any wrongdoing. Opinions Below The opinions of the Court of Appeals are not yet re- ported but are set forth in full in Appendix A and B at la-32a.* Jurisdiction of this Court The judgment of the Court of Appeals was entered on August 28, 1975, and on November 18, 1975 the Court of Appeals denied Leonard’s petition for rehearing and his suggestion for rehearing in banc (Appendix A and B at la- 32a). On December 5, 1975, Mr. Justice Marshall extended Leonard’s time for filing a Petition for Certiorari to and in- cluding January 17, 1976 (Appendix H at 57a). The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). Questions Presented 1. Should the IRS be required to comply with its own regulations governing the conduct of criminal tax fraud * References to sections of the Appendix are by capital letter, followed by the page number and the letter ‘‘a’’. 4 investigations, as the First, Fourth and Ninth Circuits have held? 2. Did the massive and unprecedented IRS mail watch (which intercepted all mail arriving from Switzerland at Kennedy Airport during two entire four month periods in 1968 and 1969) violate applicable Post Office regulations and the United States Constitution, and should evidence ob- tained as a result of the illegal mail watch be suppressed? 3. Should the standard of proof governing the admis- sibility of alleged “similar crime evidence” be “plain, clear and convincing” as the Fifth and Eighth Circuits have held (because of the highly prejudicial nature of such proof), or merely a “preponderance of the evidence” as the Second Circuit held below? Further, does this Court’s decision in Bronston vy. United States, supra, bar proof of wilfulness (through alleged “similar crime evidence”) by means of an allegedly “false (but not literally untrue) statement” dictated by a government agent but signed by the defendant? 4. Did the prosecutor’s misconduct in obstructing Leon- ard’s access to prospective witnesses and in concealing from defendant’s trial counsel that the Government, through the improper use of a Letter Rogatory, threatened a key foreign witness (who was innocent of any wrongdo- ing) with arrest and extradition in order to obtain the witness’s presence and testimony at trial, deny Leonard a fair trial? Statutes, Regulations and News Releases Involved This case involves 26 U.S.C. § 7206(1), Part 861 of the Postal Manual of the Post Office Department, and IRS News Releases Nos. 897 (issued October 3, 1967) and 949 (issued November 26, 1968), the texts of which are set forth in pertinent part in Appendix D at 34a, E at 35a-44a, and G at 55a-56a. ele call Statement of the Case Jackson D. Leonard was convicted on March 7, 1975, after a seven-day jury trial before United States District Judge Richard Owen of the Southern District of New York, on two counts of subscribing income tax returns for 1967 and 1968 which omitted income from reported ad- justed gross income, in violation of 26 U.S.C. § 7206(1).° Judge Owen sentenced Leonard to eighteen months im- prisonment, but suspended execution of all but three months, and imposed the maximum fine of $10,000 ($5,000 on each count), plus the costs of prosecution. Execution of sentence has been stayed pendiag disposition of Leonard’s Petition for a Writ of Certiorari. The IRS Investigation of Leonard’s Tax Affairs The IRS investigation of Leonard’s tax returns was precipitated by two independent events which occurred almost simultaneously. The first was that an undisclosed informant, who was seeking a reward, claimed that Leonard had been receiving commercial bribes, i.e., illegal kick- backs.** The second was that a mail watch conducted by the IRS led the IRS to suspect that Leonard had a secret Swiss bank account. As a result, Leonard’s investigation * Leonard was not charged with tax evasion, a more serious violation. Compare 26 U.S.C. § 7201 with 26 U.S.C. 7206(1). The income which Leonard allegedly omitted from his adjusted gross income (“AGI”) was $24,168.09 in 1967 and $58,684.42 in 1968. His reported AGI was $259,051.97 in 1967 and $134,276 in 1968. The allegedly omitted income was received by Leonard from Tread- well Corporation (“Treadwell”), pursuant to a contractual over- ride between Union Carbide Corporation (“Union Carbide”) and Leonard, providing that Leonard was to supervise engineering work done by Treadwell for a chemical plant in Louisiana designed by Leonard for Union Carbide. ** This allegation was later proved to be untrue. was assigned to a highly unusual IRS program called the Foreign Bank Account Project (“FBA Project”), The Foreign Bank Account Project The Foreign Bank Account Project, instituted in 1968, was a major, clandestine program to identify and prosecute American taxpayers who had dealings with Swiss banks, The FBA Project was so highly secret that agents working on it were forbidden to discuss it even with other IRS personnel, A major aspect of the project was a mail watch conducted by Special Agents of the Intelligence Division® of the IRS who intercepted, inspected and photocopied mail coming into the United States from Switzerland, In order to obtain authority for the mail watch, the IRS (under then current Post Office regulations, pertinent portions of which are set forth in Appendix E at 35a-44a) was required to represent in writing te the Post Office that the mail watch was part of a criminal investigation. The mail watch involved an unprecedented effort by Special Agents of the IRS to intercept, handle and inspect all mail arriving at Kennedy Airport from Switzerland during two four month periods (January through April) of 1968 and 1969, Utilizing machines that microfilmed 3600 pieces of mail per hour, the IRS photocopied every envelope which lacked a return address, as the IRS sus- * Special Agents work in the Intelligence Division of the Inter- nal Revenue Service, They are the criminal investigators of the IRS and they have the right to carry guns and inake arrests, Revenue Agents (as op to Special Agents) are aney audi- tors, i.¢., accountants, w responsibility is to conduct civil audits in order to determine the correct income tax liability of a taxpayer. Revenue Agents occasionally work with Special Agents on fraud cases, i.¢., criminal investigations, but then only under the diree- tion of Special Agenta, 7 pected that the practice of Swiss banks was not to put their names or addresses on envelopes.* Since the micro- filming took a few hours at least, and in some cases when the mail was heavy a second machine was brought in, the number of envelopes which the Special Agents photo- graphed may have exceeded 100,000, As a result of the mail watch, the tax returns of untold numbers of American citizens who the IRS suspected were receiving mail from Swiss banks were examined to deter- mine whieh would be “good candidates”’ for audits, Selee- tions were thereafter made of 110 of them in the New York area alone, without regard to the normal criteria for determining which taxpayers should be audited, Leonard was one of the taxpayers selected for special investiga- tion, The investigations of these 110 were supervised by Special Agent Hyman Boller who was assisted by a Reve- nue Agent named Bernard Morris. Investigators were specially picked from a select fraud group in the Audit Division and given detailed lists of specific things they were expected to look for in the audits, These items, which included telephone records, cable and telex charges and backs of checks, were not normally reviewed in civil tax examinations, and their selection reflected techniques em- ployed in criminal investigations, Revenue Agents, who were trained or supervised by Special Agents, conducted the FBA Project audits, gave no constitutional warnings, and deliberately concealed that they were conducting criminal investigations, While the audits were in progress, Special Agents continued the * The LRS was able to identify envelopes sent by Swiss banks by comparing the postage meter numbers on the envelopes with the numbers on mail obtained by the IRS in response to earlier inquiries secretly sent to Swiss banks by IRS agents who pretended to be interested in opening Swiss acounts. mail watches, and envelopes from Switzerland to tax- payers under investigation were intercepted, inspected and photocopied, If the examination of the taxpayers’ records failed to disclose independent proof of Swiss bank accounts, the Revenue Agents were instructed by Special Agents how to obtain incriminating admissions from the taxpayers, Despite the fact that the IRS had documentary informa- tion that a taxpayer had contacts with a Swiss bank, the Revenue Agent was instructed to obtain a personal con- frontation and utilize a subtle ploy by asking the tax- payer whether he had any foreign (rather than Swiss) accounts.” If he denied having any, the Revenue Agent was directed then to dictate, for the taxpayer's signature, an affidavit confirming the denial, apparently to commit the taxpayer in writing to a false denial that could be utilized in subsequent prosecutions either as direct evi- dence of criminal activity (making false statements to government agents in violation of 18 U.S.C, § L001) or as circumstantial evidence of wilfulness (to be used in a sub- sequent prosecution for tax related violations as was done in the instant case). The Audit and the Indictment Leonard was informed that his returns had been selected for review by a standard audit notice sent to his home, It contained nothing to alert him of the criminal nature of the investigation. The audit was begun in June or July, 1968 by Revenue Agent Mortimer Laski (‘‘Laski’’) of the FBA Project. It *The Government conceded in its brief before the Court of Appeals below that the agents were specifically “instructed” to bypass the taxpayer's “accountants or attorneys” and “to directly ar the taxpayer” the foreign bank question, See page 17, fn., infra. was six years before the investigation was completed, dur- ing which time at least eight, and possibly as many as seventeen, IRS agents dealt directly with Leonard or his representative, The Swiss Bank Affidavit In August 1969, during the course of the audit, Agent Laski, who did not inform Leonard of the criminal nature of the investigation, and did not give Leonard the warnings required by IRS regulations governing the conduct of criminal tax investigations, asked Leonard, outside the presence of his attorney and accountant, whether he had a Swiss bank account. According to Agent Laski, Leonard denied that he presently (in August 1969) had a foreign account, Thereafter, at the direction of his IRS superiors, Laski dictated an affidavit which was substantially broader than Leonard's oral denial but which Leonard signed. It pro- vided, inter alia: (1) ‘*I do not now and I have not had any foreign bank accounts’’; and (2) ‘I have not had any transactions or dealings of any nature with any foreign banks or other repre- sentatives except for [specified loans in Australia and currency conversions ].’’ The Government's “proof” of the affidavit’s “falsity” The Government offered the Laski-dictated, Swiss bank affidavit as ‘‘similar act’’ evidence relevant to ‘wilful. ness’’, The Government sought to prove the falsity of the affi- davit through the testimony of Harris Egan, the manager of a branch office of Chase Manhattan Bank (‘‘Chase’’), He testified that between April and November of 1968 he Ee 10 delivered to Leonard, at the request of Chase's Interna- tional Office, a number of official Chase checks totalling $383,000, and that Chase had made these payments at the direction of a Swiss bank.* Despite the fact that the Swiss bank affidavit did not purport to address itself to indirect transactions and de- spite the fact that the IRS drafted the affidavit and thereby determined the seope and content of Leonard's denial, the Government contended that the payments by Chase con- stituted ‘‘indireet’’ dealings with a foreign bank which Leonard should have disclosed, In the Government's view, this rendered the affidavit false and made it proper evi- dence of a similiar crime relevant to wilfulnesa, Eva Brooke's testimony** iva Brooke, the widow of an employee of Kerr-MeGee Chemical Corporation, testified that in the summer of 1971 (three years after the last tax-return year in the indictment and two years after Leonard had signed the affidavit) she was present when Leonard had business discussions with her late husband, According to Mrs, Brooke, “Mr, Leon- -——e - ee ly irene ome es 7a Appendia A. profits, IRC $4 301(c), 316. He contends that it had none in the year beginning February 1, 1968, and that a prop- erly instructed jury could find that the failure to include the $6,229.20 for January, 1968, was not material. The Government introduced no evidence on the subject except to show that Leonard Inc. did not file a Subchapter S corporate tax return (Form 1120S) for 1968, 1969 or 1970. The defense offered an exhibit purporting to be a proposed corporate income tax return for the period Feb- ruary 1, 1968, to January 31, 1969, see note 2, showing a loss of $73,742.33. This form was subscribed by the ac- counting firm as preparer but bore no signature of any officer of Leonard Inc. The return was presented through a member of the accounting firm but without any testimony by any person who had prepared it; the judge admitted it only for the purpose of showing that such a return had been prepared but not as evidence of the truth of the matter asserted. The Government countered with another unfiled form showing a loss of only $29,017.77, for the year be- ginning February 1, 1968, which the judge admitted on the same limited basis. This latter form was of little weight since it was wholly unsigned and was marked ‘‘super- ceded.’” There is no doubt that if this had been a civil case, Leonard would have had the burden of showing ‘‘that the corporation did not have earnings and profits equal to the amount diverted,’’ DiZenzo v. C.I.R., supra, 348 F.2d at 126-27, and that he would not have met it. But he con- tends he had no such burden under the rules governing the burden of proof in criminal prosecutions. In prosecutions for income tax violations, production of a rather slight amount of evidence by the Government, here the proof of receipt of what are charitably character- > Neither draft return included the cashed Treadwell checks as income. Sa Appendiz A. ized as constructive dividends rather than embezzled funds, may transfer the burden of going forward to the defend- ant, see Holland v. United States, 348 U.S. 121, 137-39 (1954); United States v. Vardime, 305 F.2d 60, 63 (2 Cir. 1962). Although the ultimate burden of persuasion re- mains with the Government, Leonard did not introduce sufficient evidence of an absence of earnings or profits to warrant submission to the jury of a claim that, except for January 1968 income, the assignment of the UCC contract to Leonard Ine. constituted an absolute defense. An un- filed tax return, signed only by the accounting firm and unexplained by any preparer, has little probative weight; indeed, the defense’s failure to call the preparer, whose testimony did not come under any privilege, could properly give rise to a negative inference as to whether Leonard Ine. had a loss. See 8 Wigmore, Evidence § 2273 (McNaughton rev. 1961). Moreover, the return introduced by the defend- ant was for the wrong year. Leonard Inc. had elected a tax year beginning January 1, 1968. The IRS Regula- tions are quite explicit that a Subchapter S corporation may change its tax year only with the prior approval of the Commissioner—Reg. 1.442-1(c)(4)—which is by no means routinely given—see Reg. 1.442-1(b)(1), especially examples ii and iii(a). See also 7 Mertens, Federal In- come Taxation § 41B.21 (1967). The only issue on which Leonard was entitled to have the jury consider the as- signment, and the unfiled return, was that of wilfulness, and it was clearly permissible for the jury to find that this evidence did not negate the other evidence bearing on that point. The only remaining point on this phase of the case is Leonard’s contention concerning the charge. Tria! coun. sel for Leonard had submitted a request to charge in re- gard to Leonard Inc., which sounded in terms uf an abso- 9a Appendia A. lute defense to Count Two rather than as bearing only upon wilfulness. Before instructing the jury, the judge informed counsel that he would not give the requested charge. The judge said nothing specific about the defend- ant’s contention relating to Leonard Inc., relying rather on his general remarks about wilfulness and burden of proof. After the charge Leonard’s counsel excepted gen- erally to the failure to give requested charges; he also asked that since the judge had outlined some of the Gov- ernment’s contentions, he should also outline the defend- ant’s. The court agreed to do this and mentioned several defense contentions, not including the one about Leonard Ine. Counsel expressed no further objections. The requested charge suffered from the usual defect of asking more than was deserved. For reasons already indicated, the judge was not required to, indeed could not correctly, charge that “|T]he proof in this case shows that in the first year of operation, the corporation sus- tained a loss of approximately $73,000.” Neither was Leonard entitled to have the jury instructed “as a mat- ter of law that the checks addressed to The Leonard Process Co., Inc., from the period February 1968 through November 1968 are returns of capital and are not tax- able ;’’ there was no evidence that this was so. Although lawyers seem never to learn the lesson, it is elementary that to put a trial court in error for declining to grant a requested charge, the proffered instructions must be ac- curate in every respect. Southern Ry. Co. vy. Jones, 228 F.2d 203, 213 (6 Cir. 1955); Shaw v. Lauritzen, 428 F.2d 247, 250 (3 Cir. 1970). The most to which Leonard was entitled was a charge that if the jury found he believed both that the undeposited checks beginning in February 1968 were the property of Leonard Inc., and that leonard Ine. had no earnings or profits, the jury could find a lack of wilfulness in failing to report theses payments in 10a Appendiz A. A a his personal income tax return. We have no reason to think that if counsel had requested such a charge, the judge would have refused to give it. Il. As so often happens, the prosecutor chose to imperil a good case by introducing a line of evidence that added little but was bound to be a prolific breeder of substan- tial claims of error—to which the remainder of this opin- ion must be devoted. In order to provide a basis for understanding these claims, we must back up a bit; if the reader wonders what all this will have to do with Leonard’s case, we must crave indulgence. The New York Regional Office of the IRS had become concerned over possible losses of United States income taxes through the use of secret Swiss bank accounts. It occurred to someone that taxpayers having such accounts might be identified by their receipt of statements from the banks. However, detection was impeded by the fact that, in the interest of secrecy, the Swiss banks used envelopes not bearing the banks’ names or return ad- dresses. Some agents penetrated this shield by writing various Swiss banks about establishing accounts and ob- serving the postal meter numbers on the answers. Armed with these numbers, IRS requested the Postal Service, in a communication not in the record, for permission to conduct a mail cover during the first four months of 1969. On the evenings of about 60 days during that period, a Postal Inspector and IRS Special Agents, working at the main New York City Post Office, photostated with high speed copiers the faces of all air mail envelopes without return addresses, mailed from Switzerland to New York.‘ *Two machine were employed each with a capacity of 3,600 envelopes per hour. The sorting and copying process usually took lla Appendiz A. Thereafter postage meter numbers on these photostats were examined to see if any matched those known to have been used by Swiss banks. This group, which amounted to thousands of envelopes, was converted into a print-out containing the recipients’ names, addresses, dates of en- velopes and the identities of the banks. From the several hundred names in the print-out, B. H. Morris, a Senior Regional Analyst in the office of the Assistant Regional Commissioner of Audit, and Special Agent Boller selected a group of 100 in the Manhattan and about 50 in the Brooklyn District. Leonard, whose name appeared in the larger sample and whose return had already been selected for audit because of a development described below, was added to the list, along with a few others similarly situ- ated. In 1969 the procedure was repeated. All this was known as the Foreign Bank Account (F BA) Project. We now turn to another development. In early 1968 the IRS had received an informer’s report that Leonard had been getting kickbacks from a subcontractor. Although the report came originally to the Intelligence Division, which handles criminal investigations, it was referred, in accordance with usual procedures, to the Audit Division, which it reached on April 16, 1968. On June 7th the Man- hattan District Director advised Leonard that his 1966 personal income tax return had been assigned for examina- tion to revenue agent Rothstein. Rothstein was not one of the special group of revenue agents who had been selected to pursue investigations emanating from the FBA project. On August 7, 1968, Leonard’s audit was reassigned to revenue agent Mortimer Laski. In accordance with normal procedures, Laski also only half an hour. The evidence was that delivery of the mail was not delayed since the mail arrived late in the afternoon or early in the evening and sorting for delivery would not begin until the next morning in any event. 12a Appendix A. audited Leonard’s 1965 return and, when the ordinary post- filing processing was completed, the 1967 return. The audit began in normal fashion with an examination of Leonard’s papers—including the UCC contract with the 10% override provision deleted by a hand inked line— at the office of his accountant. Sometime early in 1969, Laski met Leonard at the accountant’s office. Laski did not advise Leonard of his right to refrain from answering incriminating questions or to have counsel. Laski inquired about the UCC payments; Leonard claimed that the pro- visions of the contract relating to the $37,000 monthly pay- ments, and the 10% overrides, had been changed. When asked, in accordance with prescribed procedures in FBA investigations, whether he had foreign bank accounts, Leonard said he had none except for one in an Australian bank. Again in accordance with prescribed FBA pro- cedures, Laski furnished Leonard’s accountant a proposed affidavit which Leonard executed on August 27, 1969; we reproduce this in the margin.’ Agent Laski then continued his audit, particularly requesting more information from UCC. On the basis of this, Agent Laski and a successor revenue agent, on June 30, 1970, submitted a report recom- mending that the matter should be referred to the Intel- ligence Division for a fraud investigation. The recom- ° Jackson D. Leonarp, being duly sworn, deposes and says: 1. I make the following statements in connection with the examination of my U.S. Income Tax Returns for the years 1965, 1966 and 1967. 2. I do not now have and I have not had any foreign bank accounts. I have not had any transactions or dealings of any nature with any foreign banks or other representatives except for the following: (a) Nominal currency conversions for living expenses while I was travelling. (b) In 1968 I made use of Australian banking facilities to secure a loan which is directly related to an engineering project which I have completed in Australia. 13a Appendiz A. mendation was accepted, and a criminal investigation was begun with a Special Agent in charge. Thereafter Leonard was given warnings of his constitutional rights at the beginning of each interview. We can now satisfy the curiosity of anyone who has per- sisted in reading so far as to what these events had to do with the case. The Government sought to prove that the statements in the affidavits that Leonard had no foreign bank accounts and had no dealings with foreign banks, with two exceptions, were false. This was not for the purpose of showing that any of the unreported UCC payments got into foreign bank accounts but simply to bolster the proof that the omissions of the 10% override payments from Leonard’s 1967 and 1968 income tax returns were wilful. The evidence was of two sorts: Harris Egan, an official at the Chase Manhattan Bank (CMB) branch on United Nations Plaza, near Leonard’s apartment, testified that in April, 1968, he delivered to Leonard’s apartment three official CMB checks—two checks for $20,000 and $25,000 dated April 12th and a $120,000 check dated April 26th. Three other official CMB checks for $64,000, $16,000 and $138,000 were delivered to Leonard later in the year. In all, the checks totaled $383,000. All six checks were payable to Leonard on remittance instructions issued by Banque Cantonale de Zurich. Leonard used most of the checks to pay off a personal FNCB loan. Eva Brooke testified that in the summer of 1971, in the course of an endeavor to hire her now deceased husband, Jack Brooke, away from his then employer, Kerr-McGee Chemical Corporation, Leonard offered Brooke $100,000 a year, half to be paid in dollars and the other half to be deposited in a Swiss bank account. Later, in answer to an inquiry from Brooke, Leonard admitted to having such an account. Since this admission in 1971 was not necessarily 14a Appendiaz A. inconsistent with the affidavit executed in August 1969, the Government also put in evidence Leonard’s 1971 income tax return, executed April 10, 1972, which contained the follow- ing question and answer: Did you, at any time during the taxable year, have any interest in or signature or other authority over a bank, securities, or other financial account in a foreign country (except in a U.S. military banking facility operated by a US. financial institution) ? [ Answer:] No. Now for the flood of objections which the admission of this evidence has precipitated. (1) The broadest in scope is that the mail cover was an unreasonable search in violation of the Fourth Amendment; that the interrogation of Leonard about foreign bank accounts and the execution of the affidavit resulted from it; and that any false statement in the affidavit was, thus, the fruit of a poisonous tree. It has been settled since Ex parte Jackson, 96 U.S. 727 (1878), that ‘‘The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures’’ protects against a warrantless opening of sealed letters and packages, save insofar as may be needed in the case of incoming international mail for the enforcement of the customs laws. See United States v. Odland, 502 F.2d 148 (7 Cir.), cert. denied 419 U.S. 1088 (1974), and cases there cited. However, this court said in United States v. Costello, 255 F.2d 876, 881 (2 Cir. 1958) : We think the Jackson case necessarily implies that without offense to the Constitution or statute writing appearing on the outside of envelopes may be read and used. 15a Appendix A. Leonard counters by saying that “the mail watches which the courts have heretofore approved have all been quite limited in scope, and clearly restricted to the inspection of the mail sent to specific individuals who were reasonably suspected of having committed, or having attempted to commit, particular crimes.” It may well be that, in these days of increased concern for the protection of privacy, the statement in Costello should not be read as an absolute, permitting, for example, the Government to copy the outside of every envelope re- ceived by every citizen. But this case is an unattractive candidate for creating an exception. The IRS was con- fronted with a serious problem in the use of Swiss bank accounts to evade the revenue laws. Not too long after the mail covers here at issue, the House Report on the Bank Secrecy Act of 1970, quoted in California Bankers Ass’n v. Shultz, 416 U.S. 21, 28-29 (1974), was to state: One of the most damaging effects of an American’s use of secret foreign financial facilities is the under- mining of the fairness of our tax laws. and The former U.S. Attorney for the Southern District - of New York has characterized the secret foreign bank account as the largest single tax loophole permitted by American law. In 1968 and 1969 the IRS did not have the assistance now provided by the reporting requirements of Title II of the Bank Secrecy Act, 31 U.S.C. §§ 1101, 1121. Even if we assume that copying the outside of letters may in some circumstances be a “search,” the 1968-1969 project impro- vised by the IRS did not involve an unreasonable one; indeed it involved less in the way of disclosure than the l6a Appendiz A. foreign reporting requirements which the Supreme Court has sustained in the California Bankers Association case supra, 415 U.S. at 59-63. Moreover, if the test for applie- ability of the Fourth Amendment is a “reasonable expecta- tion of privacy,” Katz v. United States, 389 U.S. 347, 360 (1967) (concurring opinion of Mr. Justice Harlan), it is difficult to see how there can be any such reasonable ex- pectation with respect to the outsides of incoming inter- national mails which are subject to inspection and even in some cases to opening in aid of the enforcement of the customs laws. (2) A second attack against the mail cover is that it could not have been lawfully authorized under the appli- cable Postal Regulation. The Postal Manual then in effect provided in § 861.42,° A2 The Chief Postal Inspector, or his designee, may order mail covers under the following circumstances: b. When written request is received from any law enforcement agency wherein the requesting authority stipulates and specifies the reasonable grounds that exist which demonstrate the mail cover is necessary to (1) protect the national security, (2) locate a fugi- tive, or (3) obtain information regarding the commis- sion or attempted commission of a crime. Leonard argues that § 861.42b(3), the only provision that can he applicable, requires that the agency seeking per- mission must be engaged in the investigation of a specific crime which it has reason to think has been committed, or is about to be. Apart from the fact that the objection __* The applicable mail cover regulations have now been lished, with some changes, in the Federal Register. 40 Fed Rep, 11579 (1975), to be codified as 39 C.F.R. § 233.2(e). 17a Appendiz A. was not made below, we see no reason to read the regulation so narrowly. Apparently the Postal Service did not, and its interpretation of its internal regulations is entitled to weight. See 4 Davis, Administrative Law Treatise, $ 30.12 at 261 & n.12 (1958). (3) The objection most strongly pressed is this: Although this circuit and a majority of the others have held that Miranda v. Arizona, 384 U.S. 436 (1966) does not require the IRS to give the Miranda warnings to taxpayers not in custody, even in criminal tax fraud investigations, IRS has gone beyond its constitutional obligation. In In- ternal Revenue Service News Release No. 897, issued Octo- ber 3, 1967, it stated, so far as here pertinent: “In response to a number of inquiries the Internal Revenue Service today described its procedures for protecting the Constitutional rights of persons sus- pected of criminal tax fraud, during all phases of its investigations. “Investigation of suspected criminal tax fraud is con- ducted by Special Agents of the IRS Intelligence Divi- sion. This function differs from the work of Revenue Agents and Tax Technicians who examine returns to determine the correct tax liability. “Instructions issued to IRS Special Agents go beyond most legal requirements to assure that persons are advised of their Constitutional rights. “On initial contact with a taxpayer, IRS Special Agents are instructed to produce their credentials and state: ‘As a special agent, I have the function of investigating the possibility of criminal tax fraud.’”’ | 18a Appendiz A. In News Release No. 949, issue November 26, 1968, it further provided: “One function of a Special Agent is to investigate pos- sible criminal violations of Internal Revenue laws. At the initial meeting with a taxpayer, a Special Agent is now required to identify himself, describe his fune- tion, and advise the taxpayer that anything he says may be used against him. The Special Agent will also tell the taxpayer that he cannot be compelled to in- criminate himself by answering any questions or pro- ducing any documents, and that he has the right to seek the assistance of an attorney before responding.” Three circuits have held that when a special agent has failed to give the advice described in these Releases, in- criminating statements by the taxpayer will be suppressed. United States v. Heffner, 420 F.2d 809 (4th Cir. 1969) (one judge dissenting); United States yv. Leahey, 434 F.2d 7 (1 Cir. 1970); United States v. Sowrapas, 515 F.2d 295 (9 Cir. 1975). Leonard cites various reasons why the audit must be considered as having been one “of suspected criminal tax fraud” from the outset even though it was conducted by a revenue agent and not by a special agent. These include the fact that the mail cover could be justified under the Postal Regulations only if its purpose was to “obtain in- formation regarding the commission or attempted commis- sion of a crime’’; that special agents participated in the mail cover and in framing the instructions for the audits of the persons selected as a result; and that persons who are the subject of ordinary audits are not asked to sign affidavits as Leonard was.’ ’ The defendant also claims that he was the subject of a crimi- nal investigation quite apart from the FBA project, since IRS 19a Appendia A. We are not at all sure that we would follow the Heffner— Leahey—Sourapas doctrine in the case of an occasional and undeliberate departure from the procedure described in the News Releases if the issue were squarely before us. It is, of course, well established that when agency action “is based on a defined procedure, even though generous beyond the requirements that bind such agency, that pro- cedure must be scrupulously observed.” Vitarelli v. Seaton, 359 U.S. 535, 546-47 (1959) (concurring opinion of Mr. Justice Frankfurter). However, Vitarelli and almost all of the great number of cases that have applied the doctrine have concerned the validity of the agency’s own action in the face of a violation of its own regulations, see Note, Violations by Agencies of Their Own Regulations, 87 Harv. L.Rev. 629 (1974), rather than an invocation of the exclusionary rule. The latter, as Judge Clary said in a perceptive but seemingly neglected opinion many years ago, “represents an attempted accommodation of com- peting values.” United States v. Schwartz, 176 F.Supp. 613, 615 (E.D.Pa. 1959), aff’d on other grounds, 283 F.2d 107 (3 Cir. 1960), cert. denied 364 U.S. 942 (1961). Judge Clary thought that, while this accommodation required ex- clusion when the Constitution or a statute had been violated, the balance turned the other way when an official of an agency had simply violated the agency’s own regulation— something which the agency would presumably be inter- ested in correcting for the future, as it might not be when the Constitution or a statute imposed distasteful require- ments upon it. Despite persuasive contrary arguments in acticz. was precipitated by an informer’s tip made in the first in- stauce to the Intelligence Division. We do not think that this fact, by itself, makes the Audit Division’s work subject to the News Releases; despite defense counsel’s earnest efforts to distinguish the case, we find the reasoning of United States v. Robson, 477 F.2d 13, 16-17 (9 Cir. 1978), cert. denied 420 U.S. 927 (1975), per- suasive on this point. 20a Appendiz A. Judge Coffin’s opinion in United States v. Leahey, supra, a period of increasing disenchantment with the exclusion- ary rule, see Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 412-18 (1971) (dissenting opinion of the Chief Justice); Schneckloth v. Bustamonte, 412 U.S. 218, 266-69 (1973) (concurring opinion of Mr. Justice Powell, joined by the Chief Justice and Mr. Justice Rehn- quist); see also United States v. Burke, —— F.2d ——, (2 Cir. 1975), slip opinions 3571, 3588-90, would not seem to be a good time for us to embrace a rule that when an agency voluntarily publishes a press release announcing that it will extend to suspects more procedural protection than the Constitution or a statute demands, any violation, however unintentional or excusable, will lead to suppres- sion. We find it unnecessary, however, to decide whether we would follow the cited cases. For even if we were persuaded by them, we would not reach the result urged by Leonard. In the first place, we read the News Releases as out- lining the instructions which the IRS has given to Special Agents, something that Agent Laski was not. Leonard’s position thus must be that exclusion is required not only when a Special Agent fails to observe his instructions but also when IRS, mistakenly believing that the investigation has not yet become one “of suspected criminal tax fraud,’’ does not assign a Special Agent to conduct it, or at least fails to instruct an ordinary revenue agent to act as if he were a special agent. We think this goes beyond the bounds of good sense interpretation. A different case would be presented if IRS consistently assigned ordinary revenue agents to conduct what it knew to be criminal investiga- tions and they failed to give the warnings indicated in the News Releases, but there is no evidence of this. Second, we do not think the investigation had become one “of suspected criminal tax fraud’’ when Leonard 2la Appendiz A. executed the affidavit on August 27, 1969. To borrow Mr. Justice Frankfurter’s phrase, Universal Camera Corp. v. NLRB, 340 U.S. 474, 493 (1951), “we do not find ourselves pinioned between the horns of [counsel’s}] dilemma” that unless the mail cover was to unearth crime it was illegal under the Postal Regulations, and that if it was legal, the tax investigation of Leonard was criminal, The mail cover came within the Postal Regulations because IRS had rea- son to believe that crimes under the revenue laws were being committed by some taxpayers through the use of Swiss bank accounts. It does not follow that every per- son whose name turned up in the print-out as probably having a Swiss bank account was suspected of committing such a crime. In fact the audit disclosed no sufficient evi- dence that Leonard had committed a crime by having a Swiss bank account. What ultimately led Agent Laski to recommend a criminal investigation was the data furnished by UCC, which showed, not a “kick-back” as represented by the informer, but a failure to report the 10% overrides which Leonard had received. (4) Citing Bronston yv. United States, 409 U.S. 352 (1973), Leonard next claims that the Government did not produce sufficient proof of the falsity of his affidavit, see note 5, to justify its admission into evidence. The prosecu- tion did not offer evidence from the mail cover showing that Leonara had received communications from the People’s Bank in Switzerland, although, as will be seen, the defendant elicited some evidence that at least hinted as to his having a Swiss account; the Government relied rather on the testimony of the CMB branch manager deseribed above and, to a lesser degree, on that of Mrs. Brooke. Leonard claims that the manager’s testimony did not show that Leonard personally had any Swiss bank accounts, since the numbered account at the Banque Can- 22a Appendiz A. tonale de Zurich whence the remittance to CMB was made, might have belonged to a corporation owned by him or even to an outsider, and that Mrs. Brooke’s testimony to an admission in the summer of 1971 does not sufficiently show falsity in an affidavit made in the spring of 1969. We think that this contention is valid and that if Leonard’s trial counsel had requested an instruction that the jury could not find this portion of the affidavit to be false, he would have been entitled to it. However, no such request was made and the defendant is thus forced to show also that there was no falsity in the denial of “any transactions or dealings of any nature with any foreign banks or other representatives’ (emphasis supplied). He argues that the transactions to which the CMB manager testified were between Leonard and CMB, and that therefore there is no falsity. That argument, however, seems formal to an ex- treme; it is more reasonable to say that in fact Leonard had had such dealings with a Swiss bank, and that CMB had simply been a conduit for transmission of the funds from the Banque Cantonale de Zurich. The real question 1s whether there was sufficient proof that Leonard knew that the money had come from a foreign bank. Since the money came from a Swiss numbered account, it is understandable that there was no direct eviderce on this point; under a preponderance of the evidence standard, there was enough circumstantial evidence to entitle the jury to draw the required inference. In addition to the practical point stressed by the trial judge, that Leonard probably had a pretty fair general idea of how $383,000 was being trans- mitted to him, the jury could also consider the fact that Leonard had no account at CMB, the peculiar method chosen to deliver the CMB official checks to him, and the pains taken by Leonard to keep them out of his FNCB account. 23a Appendiz A, Leonard further argues that the preponderance standard is not high enough for “similar act” evidence and points to statements that such evidence must be ‘‘plain, clear and conclusive” to be admissible. Kraft v. United States, 238 F.2d 794, 802 (8 Cir. 1956) ; United States v. Broadway, 477 F.2d 991, 995 (5 Cir. 1973). This view appears to rest on a misconception. Similar act evidence is admitted to show wilfulness and for other purposes, not because it may indi- cate the commission of crime but in spite of that. 2 Wig- more, Evidence § 305 (3d ed. 1940). Insufficiency of the evidence to support submission to the jury of an indictment charging that the August, 1969, affidavit was a false state- ment in violation of 18 U.S.C. § 1001, does not mean that the evidence could not be received to prove wilfulness with respect to a different crime if other evidentiary rules were satisfied. While “the Due Process Clause protects the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged,” Jn re Winship, 397 U.S. 358, 364 (1970), the “fact” here is wilfulness, not each subsidiary fact offered to establish it. United States v. Taylor, 464 F.2d 240, 244 (2 Cir. 1972), compare Lego v. Twomey, 404 U.S. 477 (1972). A preponderance standard is sufficient for such facts if the aggregate of the evidence on the issue of wilfulness meets the Winship requirement, as it plainly does here. (5) Leonard also claims that the whole line of proof regarding Swiss banks and statements he made about them should have been excluded on the basis that the small probative value of the evidence was outwieighed by its prejudicial potential. United States v. Deaton, 381 F.2d 114 (2 Cir. 1967); Fed. Rules Evid. Rule 403. The probative value of similar acts used to prove wilfulness or intent is dependent on the existence of a close parallel between the 24a Appendiz A. crime charged and the acts shown, 2 Wigmore, Evidence § 302 at 200-01 (3 ed. 1940). The crime here charged is the wilful subscribing of a false document under I.R.C. § 7206 (1), a seetion of the Code which, both in its language, see note 1, and in its history, makes knowing falsity the grav- amen of the offense. Kolashi v. United States, 362 F.2d 847, 848 (5 Cir. 1966); 10 Mertens, Federal Income Taxation §55A.13 at 65-69 (1970). If the jury, crediting the testi- mony that was offered, found that the 1969 affidavit and the statement on the 1971 tax return were false, they could properly use that conclusion to help them “in determining whether the defendant had a wilful intent to sign here a false return,” as the trial judge charged. Although the fit between the similar acts and the crime for which Leonard was convicted is not so close as it has been in cases where identical forms for immediately preceding years have been introduced, e.g., United States v. Coblentz, 453 F.2d 503 (2 Cir.), cert. denied 406 U.S. 917 (1972), it is within the bounds established by some of the decided cases, e.g., our own United States v. Kaufman, 453 F.2d 306 (2d Cir. 1971).° There remains, however, the question whether the value of the evidence is “worth what it costs.” McCormick, Evi- dence § 185 at 438 (2 ed. 1972). It is true that transacting business with Swiss banks, or lying about not having done so, is rather more likely to “arouse the irrational passions of the jury” than was evidence of the claiming of an im- proper deduction in an income tax return in United States v. Kaufman, swpra. At the same time, we think that the defendant has overstated the case in claiming that this line _*The Government’s brief chides Leonard for having “utterl failed even to inform this Court of the District Court’s stated, independent ground of admissibility—that both the 1969 affidavit and the 1971 return are false exculpatory statements—and of the authorities supporting that ground, which were cited and relied upon below.” We agree with counsel for Leonard that this claim is frivolous and that the cases are not in point. 258 Appendiz A. of proof was “highly inflammatory.” The evidence was hardly the equivalent of a bloody shirt, compare State v. Goebel, 36 Wash. 2d 367, 379, 218 P.2d 300, 306 (1950), a dying accusation of poisoning, Shepard v. United States, 290 U.S. 96, 104 (1933), or a claim of homosexuality, United States v. Provo, 215 F.2d 531, 537 (2 Cir. 1954). Moreover, defendant’s counsel at trial must not have considered it to be that damaging, for he was willing to bring out additional allegations of foreign bank connections if they could be used for his own purposes. The prosecution did not introduce evidence that Leonard had been identified for investigation as part of the FBA project and indeed, objected to the introduction of that information. Never- theless defense counsel went into the matter, apparently attempting to show, as he later argued to the jury, that Leonard was the victim of a bureaucratic steam-roller. Indeed, our impression is that in fact the defense weleomed the Government’s resort to similar act testimony since this tended to distract the jury from an issue on which the prosecution’s case was exceedingly strong to one on which it was considerably weaker, and also offered abundant opportunities for objection and possible reversal. In any case, the weighing of the probative value of the evidence against its potentially prejudicial effect is pri- marily for the trial judge who has a feel for the effect of the introduction of this type of evidence that an appellate court, working from a written record, simply cannot obtain. We said in United States v. Ravich, 421 F.2d 1196, 1203-04 (2 Cir.), cert. denied, 400 U.S. 834 (1970), citing Cotton v. United States, 361 F.2d 673, 676 (8 Cir. 1966), and Wan- grow v. United States, 399 F.2d 106, 115 (8 Cir.), cert. denied 393 U.S. 933 (1968), that “his determination will rarely be reversed on appeal.’’ It would doubtless have been wiser for the judge to have excluded the evidence or, at the least, to have excluded it until after the presentation 26a Appendiz A. of the defendant’s case when there would have been a better opportunity to appraise the prosecution’s need for it. Cf. United States v. Kaufman, supra, 453 F.2d at 311. We do not think, however, that the trial judge’s admission of this evidence was beyond the bounds of |: > legitimate discretion, although it may have been close to the edge. . (6) Even this does not exhaust the claims of error aris- ing from the course adopted by the prosecutor. Defendant raises a number of other points, with which we must deal more briefly. (a) Relying on United States v. Baum, 482 F.2d 1325, 1331-32 (2 Cir. 1973), Leonard claims to have been the victim of unfair surprise with respect to the ‘‘similar act” evidence. Baum differs in several respects: The trial court had erroneously denied a request that would have disclosed the name of the surprise witness, Greenhalgh, id. at 1329, 1331, and had refused any continuance at all when he was called, td. at 1330. Here Leonard’s counsel was on notice as to the Laski-Egan evidence and had obtained dis- covery of the CMB checks six days before they were put into evidence, Counsel had enough knowledge of Mrs. Brooke’s prospective appearance to have served a subpoena duces tecum on the preparer of an affidavit she had signed. He also interviewed her and obtained copies of prior state- ments during a recess and evening after her direct testi- mony. Counsel’s only substantial complaint is the denial of a two weeks continuance, not clearly sought until the day before the trial ended, in order to make a trip to Switzer- land, Australia, or both, in an endeavor to develop proof that the $383,000 paid through CMB to Leonard might have come from the Australian bank which constituted an exception in the August, 1969, affidavit. The request was unaccompanied by any showing that this travel would be 27a Appendiz A. productive and the court was justified in rejecting it as a ploy. (b) Many pages of the briefs are devoted to the de- fense’s claim that the Government improperly obstructed its interviews of several IRS employees. After defense counsel had written to them, the employees apparently referred the letters to the Assistant United States Attor- ney who was to prosecute the case. When the employees appeared for the taking of depositions, the prosecutor and defense counsel were in agreement that the interviews should be reported and that the witnesses should have an opportunity to read the daily copy and make appro- priate corrections; however, defense counsel noted his dis- like of the prosecutor’s presence and particularly of his instructing the witnesses not to answer some of the ques- tions. Defense counsel orally moved the court that the prosecutor be excluded or, in the alternative, be directed not to tell the witnesses not to answer questions. The court denied the motion; the Government later supplied, as promised, affidavits by the agents in which they dutifully stated that they “would have declined the interview unless permitted to be counseled, advised and guided by the As- sistant United States Attorney assigned this case.” The question how far the prosecution may go in dis- couraging witnesses from being interviewed by defense counsel has received increasing attention since the decision in Gregory v. United States, 369 F.2d 185, 187-89 (D. C. Cir. 1966), although this circuit does not seem to have dealt with the issue. See United States v. White, 454 F.2d 435, 438-39 (7 Cir. 1971), cert. denied 406 U.S. 962 (1972); United States v. Matlock, 491 F.2d 504, 506 (6 Cir. 1974), cert. denied 419 U.S. 864 (1974); ABA Standards Relating to the Administration of Criminal Justice, The Prosecution Function, § 3.1(¢); Discovery and Procedure before Trial, 28a Appendiz A. § 4.1; Kamisar, LaFave and Israel, Modern Criminal Pro- cedure 1236-37 (1974 ed.). None of these discussions, how- ever, has focused on a situation like that here presented, where the persons sought to be interviewed are government employees who in some sense are part of the prosecutorial team; where most of the disclosure sought relates to the internal workings of a government agency; and where the agency has established procedures in regard to disclosure, 26 C.F.R. § 301.9000-1(c) and (d), which have apparently been ignored. Indeed the method devised by Leonard’s trial counsel] seems more like an ingenious way for getting around the limitation of discovery in the last sentence of F.R.Cr.P. 16(b). This case does not require us to decide issues of such importance, for on this record we fail to see how the defendant has been prejudiced in any significant degree. The prosecutor intervened primarily to prevent answers being given to questions directed to what the judge called “talks between the agents themselves, ‘What did you say to each other about the Leonard case?’” Such relevance as there might be in such answers would relate mainly to the suppression hearing, as to which the need for interviews beforehand is much less than in the case of a jury trial. The prime example of obstruction cited by Leonard’s coun- sel consists of the prosecutor’s instructing Special Agent Shulman not to answer broad questions concerning what he had done in “the investigation” from March or April, 1972, until June, 1972, and what further steps he had taken after July, 1972. The relevance of this is not self-evident, and the defendant has not clarified the matter for us. The interview with revenue agent Laski, the only agent who testified at trial, runs over fifty-seven typewritten pages and was relatively free of interruptions by the prosecutor; Leonard has not shown how the few negative instructions 29a Appendiz A. given by the prosecutor impeded effective cross-exami- nation. (c) Counsel makes a variety of attacks, unnecessary to detail, on the methods by which the prosecution secured the presence of Mrs. Brooke. Apart from the fact that it is not clear that these objections were raised below and that they are of doubtful merit, the short answer is that impro- priety in the method by which the prosecution has obtained the attendance of a witness, while a proper subject for cross-examination or proof insofar as the impropriety may go to the weight of the witness’ testimony, is not of itself a ground for reversal. ; . * * We have considered the other arguments made by Leon- ard’s indefatigable appellate counsel but do not believe they warrant prolongation of this opinion. The judgment of conviction is affirmed. 30a Appendix B, Opinion, United States Court of Ap- peals for the Second Circuit, November 18, 1975, Denial of Rehearing and Suggestion for En Banc Consideration. UNITED STATES COURT OF APPEALS For tHe Seconp Cincurr No. 1176—September Term, 1974. Docket No. 75-1153 Filed: November 18, 1975 sé 4 Unitep States or Amenica, Appellee, v. Jackson D. Leonarp, Defendant-A ppellant. ° Before: Moore, Frienpiy and Van GraareiLanp, Circuit Judges. , vr On Petition ror REHEARING -. . Per Curiam: In a petition for rehearing Leonard raised, inter alia, a claim that our discussion of the omission of income from his 1968 tax return, slip opinion at 5847-52, was incomplete in one respect. Our opinion assumed, on pp. 5849-50, that the only evidence of the alleged $73,742.33 loss of Leonard Inc., for the period February 1, 1968 through January 31, 1969, was ‘‘an unfiled tax return, signed only by the account- ing firm and unexplained by any preparer . .”—in fact a copy of the unfiled return—whereas the defense had 3la Appendiz B. also introduced a copy of the same unfiled return signed by Leonard, and the Government had introduced the orig- inal financial books and records and cancelled checks of Leonard Ine., which allegedly “fully corroborate these losses.” We called upon the Government to answer, and Leonard has replied. While the opinion should be cor- rected as hereafter set forth, our conclusion is not af- fected. It is therefore ordered that: (1) The second and third sentences of the first full para- graph on p. 5849 be changed to read: The defense offered two exhibits purporting to be copies of a proposed corporate income tax return for the period February 1, 1968 to January 31, 1969, see note 2, showing a loss of $73,742.33; both copies were subscribed by the accounting firm, and one was also signed “Jackson D. Leonard.” (2) The second and third sentences on p. 5850 are stricken and the following is substituted therefor: The corporate tax return was never filed. Even if the copies of the proposed return were admissible at all as proof of the facts stated in the absence of testimony by the preparer, which seems doubtful, see Standard Oil Co. of California v. Moore, 251 F.2d 188, 222-23 (9 Cir. 1957), cert. denied, 356 U.S. 975 (1958), the mere existence of copies of an unfiled return carries little weight; indeed, the defense’s failure to call the preparer could properly give rise to a negative in- ference whether Leonard Ine. had a loss. See 8 Wig- more, Evidence § 2273 (MeNaughion rev. i961). The books and records were apparently “corrected” in several respects, including the moving of a $40,000 item from an income to a joan column; the “uncor- 32a Appendix B. rected” sheets would support the unsigned form show- ing a loss of only $29,017.77—not enough to counter- balance the $58,684.12 of undeposited Treadwell checks. If these changes could be explained, defendant had the burden of going forward and doing so by calling the preparer or some other witness. Moreover, the books were not closed on December 31, 1968, and the pro- posed return was for the wrong year. (3) Inall other respects the petition for rehearing by the panel is denied. 33a Appendix C, United States Court of Appeals for the Second Circuit, December 4, 1975, Stay of Mandate. 75-1153 A 36 UNITED STATES COURT OF APPEALS Second Circuit At a Stated Term of the United States Court of Appeals, in and for the Second Circuit, held at the United States Court House, in the City of New York, on the 4th day of Decem- ber, one thousand nine hundred and sev- enty-five. > sy United States of America, Plaintiff-A ppellee, v. Jackson D. Leonard, Defendant-Appellant. % 4 It is hereby ordered that the motion made herein by counsel for the appellant by notice of motion dated Novem- ber 18, 1975 to stay issuance of the mandate pending appli- cation to the Supreme Court of the United States for a writ of certiorari pursuant to Rule 41(b) of the Federal Rules of Appellate Procedure be and it hereby is granted. Lzonarp P. Moorg Henry J. FRrenviy E. A. Van GRAAFEILAND Cireuit Judges 34a Appendix D, Title 26, U.S.C. Sec. 7206. “26 U.S.C. § 7206. Fraud and false statements Any person who— (1) Deciaration under penalties of perjury.—Will- fully makes and subscribes any return, statement, or other document, which contains or is verified by a writ- ten declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter; or (2) Aid or assistance.—Willfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document .. . shall be guilty of a felony.” 35a Appendix E, United States Post Office Manual and Pepulations. arrs ros ‘4, + UNITED 5s, * tenuis CHIEF POSTAL INSPECTOR Washington, OC 20260 May 5, 1975 Mr. Alan Kanzer, Esq. Walter, Conston, Schurtman and Gumpel, P. C. Attorneys at Law 330 Madison Avenue New York, New York 10C17 Dear Mr. Kanzer: Your letter of April 18, 1975, to the U. S. Postal Service, Attention: General Counsel, has been referred to me for reply. In your letter you requested, pursuant to the Freedom of Information Act, copies of Postal Service regulations, postal bulletins, and any other material relevant, during 1968 and 1969, to the initiation of a mail cover at the request of another agency. On June 17, 1965, the Post Office Department published new regulations governing the use of mail covers in Postal Bulletin No. 20478, a copy of which is enclosed. These regulations are still in effect today. These requla- ticnB were subsequently published in Part 861 of the Postal Manual of the old Post Office Department, supplemented by section 233.2 of the Postal Service Manual. tLnclosed are copies of these regulations. Also enclosed is a copy of the mail cover regulations which were recently republished in the Federal Register. This republication makes no sub- stantive changes in mail cover procedures or safequards, but it updates the provisions dealing with the delegation of mail cover authority to reflect the present organizational structure of the Postal Inspection Service. Sincerely, { S Grse0 cue wigdli J. Cotter Ch Inspector Enc ]Osures 36a Appendix E, 661.1 | Mail Covers: Administration Subchapter 869 MAIL COVERS Part 861 ADMINISTRATION 861.1 POLICY The Post Office Department has ostablished rigid controls and supervision = — to the use of mail covers as investigative or law enforcement 861.2 SCOPE These regulations establish the sole authority and procedure for ini processing, placing and sing mail covers. Any other regulations pend ad or in conilict with these regulations are of no effect for postal ces. 861.3 DEFINITIONS For purposes of these regulations, the following terms : a. “Mall cover” js the process by which a record is made bey A + oe ing on the outside cover of nny class of mail matter, including checking the contents of uny second-, third- or fourth-class mail matter as now sanc- tioned by law, in order to obtain information in the interest of (1) protect- ing the national security, (2) locating a fugitive, or (3) obtali.ing evidence of conunission or attempted commission of a crime. b. “Fugitive” is uny person who has ficd from the United States or any State Kivitery, the istrict of Columide ov possession of the United States to avoid prosecution for @ criine, to avoid punishment for a crime or to avoid giving ~y~y~ in a crimJnal proceeding. | c. “Crime,” for purposes of these regulations, is any commission an act or the atlemmpled comsnission of an act ti rent torn twee a pa wat ils punishabiec by law L, imprison- . “Law enforcciment agency” is any authority of the Fede or any eulhority of a Biate or local guvernment one of — ly Sete cern to Investigate the commission or atte: a crime. or attempted cuinmission of acts constituting 861.4 AUTHORIZATIONS-—CHIEF POSTAL INSPECTOR 41 The Chief Postal In:pector is the principal oM Office Departarcint in the edininistretion of oll seromy SSA. bn A Ile may Celegute by written ord c pny or Pll author ity in this 1egard to not ‘more bog Pe ae pr oliicials within his Nureay. . 2 ef Postal Jiuupect FMR nb wpb - . wv, or his designee, may order mall covers under &. When he bas rcasun to believe the subsect or Bro Che sged nanny wettvity vieletive of = nd Bs Ay sealant b. When wrilicn request is iscelved from ny law enforcement agency wherein the reque:thig out) ortty stipulates and specifies the reasonable grounds that cxint which «cmonstrete the mall cover is hutensacy to 11) Protect the nutional sceurity, (2) luce te a fumitive, or (3) obtain informa- Hon begurding the coamisson or att mpd commincton of a crime. Orgenisat!-+ ond Administution 11-199, 9-13 46—teewe 1114 37a Appendix E. Mall Cevers: Administration U61 46 — _———— a + — c. Where time ta of the ersence the Cutef Vostal Tnepector. or tin denmnece, may act upon an oral request Wo be contiimed by the requesting authority ta writing within 2 business days However, no tiformintion shall be released until an approprince written request is received 861.5 POSTAL INSPECTORS IN CHARGE 51 All Postal Inspectors in Charge, and not more than three desimners pur- suant to deicgations in writing, may order mail covers under the follow ti circumstances: a. Where he has reason to believe the subject or subjects are engaged in an activity violative of any postal statute. b. Where written request ts received from any law enforcement agency of the Federal, Siate, or luce! yovernments, wherein the requesting authority stipulates and specifics the reasonable viounds that exist which drinon- strate the mail cover wow ald in the location of a fueitive, or thet It would assist in obtaining information concerning the commission or at- tempted corumission of a crime. FExceytitus fusilive cases, any requent from a Federal agency for a mail cover and the determination made si.all promptly be transmitted to the Chicf Postal Inspector for review .$2 Except where mail covers are ordered by the Chicf lostal Inspector, or his designee, request for mail covers must be approved by the Postal Inspector in Charge, or his designee, in each district in which the mat! cover is to operate. 533 Where time is of the essence, the ostal Inspector In Charge, or his designee, may act upon an oral request to be confirmed by the requesting authority in writing within 2 business days. However, no information shall be released until an appropriate written order is received. 861.6 LIMITATIONS 61 No persons in the postal service, except those employed for that purpore in dead-mail offices, may break or permit breeking of the seal of any mater mailed as first-class mail without a search warrant, even though (t may con- tain crimin*] or otherwise unmriiable metier, or furnish evidence of the * commission of a crime. 62 No mail covers shall include rnatter matied between the mail cover sub- ject and his known attorney-at-law. 63 No officer or employee of the postal service other than the Chief Postal Inspector, or Pustal Inspectors in Charee, and their desusnees, are authorized to order mail covers. 4 Excepting mail covers ordered upon subjicts ergaged, or suspreted to ‘be engaged, in any activity asainst the national :ccurity, or activity vicl..vive of any postal law, no mail cover order :)all teimain in force and ehect for moie than 30 days. At the expiration of such period, or prior thereto, the requesting authoiity may be granted edditional 30-day periods under the same conditions and procedures applicable to the or'vinal request 6$ No mall cover shall remain tn force lor.gver than 120 days unless por- tonally approved for further c:tension by the Chief Postal Inspector 46 Excepting fugilive cases, no mall cover shall remain tn force when the bject has been indicted for any cause If the subject ts under investipation = further criminal violations, a new mail cover order must be requested consistent with these regulations. Orvganizetion ond Administration TL —125, 1! 18 46~—teswe 1017 38a Appendix E. 861.7 Mall Covers: Administration 861.7 RECORDS 71 ~All requests for mail covers, with records of action ordered thereon, and all reports issued pursuant theroto, shall be deemed within the custody of the Clief Postal Incspectur. WUowever, the physical housing of this data shall be at the diserction of the Chief Postal inspector 72 «The Postal Inspectors Iu Charge shall submit copies of all requests for mail covers to the Chief Postal Inspector, together with reports of the action ordered thereon. 73> «If the Chicf Postal Inspector determines a mail cover was improperly ordered by a Postal Inspector in Charge or his designee all data acquired while the cover was in force shall be destroyed, and the requesting authority notified of the discontinuance of the mail cover and the reasons therefor. 74 Any data concerning mail covers shal] be made available to any mail cover subject in any legal proceeding through appropriate discovery procedures. .75 The retention period for files and records pertaining to mall covers shall be 8 years. 851.68 REPORTING TO REQUESTING AUTHORITY Once a mail cover has been duly ordered, authorization may be delegated to any officer in the postal service to transmit mail] cover reports direotly to the requesting authority. Where at all possible, the transmitting officer should be a Postal Inspector. , 861.9 REVIEW 91 The Chief Postal Inspector, or his designee, sha!) review al) actions taken by Postal Inspectors in Charge or their designees upon initial submission of a report on a request for mail cover. 92 The Chief Postal Inspector's determination in all matters concerning mail] covers shall be final and conclusive and not subject to further adminis- trative revicw. Orgenisetion end Administration Th=-1 25, 19-18-46—issue 1002 * US Government PRINTING OFFICE t969 O— 336-030 39a ‘ Appendix E. 933.2 MAIL COVERS 21 DETINITION fe aS A mail cover is the process yr whieh a record is Senge oe ae —_ my gos | on the outside cover of any Class of mat mvsebter, fine eg = ~ hor Priog tents of any second-, third- or fourth -chess mail matt ve — As bert by Jaw, to obtain information in the interest of a) = pov chey ages security (2) locating a fucitive or (3) obtaining evidenre : : sttempicod commission of acrime. 22 AUTKORITY Only the Chief Post) Inspector > his Under no circumstances shall a postr stor or po mition as defined in 233.21 to any person except Postal Inspecior or his desigiice. or his designee nay order mail cuvers. stal employee furnish infor- as authorized by the Chief Appendix vad aa oe Oe sae: 40a All Postal Insiallations 5-Cent Dante | Alighieri Commemorative Postage Stamp The 5-cent stamp commemorating the 700th anniversary of the birth of the great Italian , Dante - 3 Doel u Franci a on July 17, 1965.” aes POSTMASTERS SHALL NOT PLACE THIS STAMP ON SALE BEFORE JULY 18, 1965 yen rg ee wf e- . 2 ee awe hie) ALES. s) . 5: - ty at rae Aa kie als: _ i etnaarer Size: 0.81" x 1.44" (vertical) SSSVED IN PANES OF 50 Color: nn aon mage ion - Initial printing: 112 Douglas Gorsline’s design simulates the style of carly Florentine allegori- cal paintings. Dante is shown wear- ing a laurel wreath, symbolic of etry, against a background related to the pocm “Fhe Divine Comedy.” 4la Appendix E,. All Postal Personnel MAIL COVERS Effective immediately, the following regulations govern procedures concerning mail covers. Policy: - It is hercby declared to be the policy of the Post Office Departinent that rigid controls and supervision be established with respect to the use of mail covers as investigative or law enforcement techniques. In order that this policy be effectively promul- gated, implemcnted and enforced, the following regulations are adopted. Scope: The following regulations hereby establish the sole authority and pro- cedure for the initiating, precessing, placing and using of mail covers. Any other regulations inconsistent or To obtain first-day cancellations, collectors may submit requests to the Postmaster, San Francisco, Calif. 94101. See Postal Manual, section 145.3. Selected mint stamps will be available at the Philatclic Sales Agen- cy, Post Office Department, Wash- ington, D.C. 20260, on and after July 19, 1965. All classes of post offices will re- ceive an initial supply of the stamps under the automatic distribution schedule. First- and sccond-class post offices requiring additional bulk quantities may submit a scparate requisition (Form 3356) to the Bureau of En- graving and Printing (Item 456) with memorandum, POD 31, stating that the stamps are required in addi- tion to those automatically furnished. All post offices requiring less than bulk quantities in addition to the automatic dist:ibution may sulnit a separate requisition (Form 17) to their RDPO and endorse at top “Ad- ditional.” All requisitions not so en- dorsed will be returned.—-Office of the Special Assistant to the Postmas- ter General, 6-17-65. in conflict with these regulations are of no effect for postal employces. For purposes of these regulations, a following terms are hereby de- ned: “Mail cover” is the process by which a record is made of any data appearing on the outside cover of any class of mail matter, including check- ing the contents of any second, third or fourth class mail matter as now sanctioned by Jaw, in order to obtain information in the interest of (a) protecting the national security, (b) locating a fugitive, or (c) obtaining evidencc of commission or atiempted commission of a crime. “Fugitive” is any person who has fled from the United States or any State, territory, the District of Co- lumbia or possession of the United States, to avoid prosecution for a crime, to avoid punishment for a crime or to avoid giving testimony in a criminal proceeding. “Crime,” for purposes of these reg- ulations, is any commission of an act or the attempted commission of an act that is punishable by Jaw by im- prisonment for a term exceeding one year. “Law enforcement agency” is any authority of the Federal Government or any authority of a State or local government one of whose functions is to investigate the commission or attempted comunission of acts consti- tuting a crime. Authorizations—Chief Postal Inspector: The Chief Postal Inspector is the principal ofliccr of the Post Office De- putment in the administration of all nuatters governing mail covers. And Appendix E, MAIL COVERS (Continued from p. 1) he may delegate by written order any or all authority in this regard to not more than four subordinate officials within his Burcau. The Chief Postal Inspector, or his designee, may order mail covers under the following circuinstances: 1, Where he has reason to believe the subject or subjects of the mail cover are engaged in any activity violative of any postal statute. 2. Where written request is re- ceived from any law enforcement agency whercin the requesting au- thority stipulates and specifies the reasonable grounds that exist which demonstrate thesmail cover is neces- sary to (a) protect the nationai secu- rity, (b) locate a fugitive, or (c) obtain infonnation regarding the commission or attempted commission of a crime. 3. Wherc time is of the essence, the Chief Postal Inspector, or his desig- nee, may act upon an oral requesi to be confirrned by the requesting au- thority in writing within two busi- ness days. However. no information shall be releneed until an appropriate written request is received. Postal Inspectors in Charge: All Postal Inspectors in Charge, and not more than three designees pursuant to deicgations in writing, may order inail covers under the fol- lowing circumstances: 1. Where he has reason to believe the subject or subjects are engaged in an activity violative of any postal statute. 2. Where written request is re- ceived from any law enforcement agency of the Federal, State, or local governments, whercin the request- ing authority stipulates and specifics the reasonable prounds that exist which demonstrate the mail cover would aid in the location of a fugi- tive, or that it would assist in obtain- ing information concerning the com- Inission or attempted commission of 42a a crime. Excepting fugitive ca any request from a Federal agency a mail cover and the determina inade shall promptly be transmit to the Chief Postal Inspector for re view. 3. Except where mail covers ; ordered by the Chief Postal Inspec tor, or his designee, request for mail : in cach district in which themail cov. cr is to operate. 4. Where time is of the essence, t Postal Inspector in Charge, or his des- ignec, May act upon an oral request to be confinned by the requesting au- thority in writing within two business days. However, no information shall be released until an appropriate writ- ten order is received. Limitations: _ 1. No persons in the Postal Serv- icc, except those employed for that — in dead-mail offices, may reak or permit breaking of the seal of any matter mailed as first-class mail without a search warrant, even though it may contain criminal or otherwise unmailable matter, or fur- nish evidence of the commission of a crime. 2. No mail covers shall include mattcr mailed between the mail cover subject and his known attorncy-at- law. ; 3. No officer or employce of the Posta! Service other than the Chief Postal Inspector, or Postal Inspectors in Charge, and their designees, are authorized to order maii covers. 4. Excepting mail covers ordered upon subjects engaged, or suspected to be engaged, in any activity against the national security, or activity vio- lative of any postal Jaw, no mail cover order shall remain in force and effect for more than 30 days. At the ex- piration of such period, or prior thercto, the meeeing authority may be granted additional 30-day periods under the same conditions and proce- dures applicable to the original re- quest. 44a Appendix E. 5. No mail cover shali remain in force longer than 120 days unless personally approv tension by the Chicf Postal Inspector. for further ex- 6. Excepting fugitive cases, no mail cover shal} remain in force when the subject has been indicted for any cause. If the subject is under in- vestigation for further criminal vie- jations, 2 new mail cover order must be requested consisicnt with these regulations. Records: 1, All requests for mail covers, with rec. rds of action ordered thereon, and all reports issued shall raced within the custody of ursuant thereto, the Chief Postal Inspector. However, the ical housing of this data oo the discretion of the Chicf Postal Inspector. 2. The Postal Inspectors in Charge shall submit copies of all requests for mail covers to the Chief Postal Inspec- tor, together with reports of the ac- tion ordered thereon. 3. If the Chief Postal Inspector determines a mail cover was improp- erly ordered by a Postal Inspector in Charge or his designee all data ac- uired while the cover was in force shall be destroyed, and the requesting authority notificd of the discontinu- ance of the mail cover and the rea- sons therefor. ; 4. Any data concerning mail covers shall be sade available to any mail cover subject in any legal proceeding through appropriate discovery pro- cedures. : 5. The retention period for files and records pertaining to mail covers shall be 8 years. Reporting to Requesting Authority: Once a mail cover has been duly ordered, authorization may be dele- gated to any officer in the Postal Serv- ice to transmit mail cover reports di- rest to the recs ing avihen si Where at all possible, the iransimuit- ting officer should be a Postal In- spector. Review: 1. The Chief Postal Inspector, or his designee, shall review all actions taken by Postal Inspectors in Charge (Continued on p. 3) CONTENTS Page Col. 5-Cent Dante Alichicri Com- memorative Stamp ..-.-.. 1 1 Arrest of Postal Offenders..... 3 1 Bulk Stamp Requisitioning . - aay l Ficld Printing and Duplicating. 3 2 Forcicn Fraud Order. ..------ 4 1 Form 4541...-----. atin _ - Former Peace Corps Volunteers, Finployment of... -. ..--- 6 1 Heltiday Service Independence ES ceaesiliiatatiatiina se Jet Airtnail Service AM -9...- 3 J OS Se Moncey Order Forms, Canadian, 7 1 Moncy Order Forms, U.S...-.- 8 1 Post Office Changes ....----- —— Postal Manual Issue 854, Cor- COUR ec cccceccce) When written request is rece!ved fron any lew enforcement caxcnry wherein the requestin« authority «‘t:c- istes «and oapecifics the resso me creudes tnat exist which domen-ircte the mat! cover fe necessney te OA) tone tect the national security, (5) locets a fugitive, or (C) obtuis: mformation ree Gording the commission of attempted commission of a crime. itil) Where time is of the essence. the Chief Postal Inspector, or his dus!since, may ACL UPON AN ore] reeucst te be rons. firmed by the requesting authorit: -o writing within 2 business days. Bi-wener, no information rhall be released uni! an appropriate written request is rece! ved. (ce) Postel Inspectors in Charoc. (1) All Postal Laspecters in Charge. and nos more than three dezizuecs pursuant to dvicgations in writing, mav order mel covers within their districts uacker the following circumstances: | Where he has reason to b-licve are emnircd in on activity violat've of any postal si:.:ute, . . — ‘ ~ ~ _e ~ -—. a — 48a = apniicahiea t th. erlsine) request. in or his dextruee, iu each uts- trict in the mail cover is to oy~-rats. (3) Where tiene ts of the exsencc. off i ! i i | H H E conditions and proce- ti 49a Appendix E,. (6) Excepting fucitive crses, no meil shall remain in force when te subject has been indicted for any cause. If tne subject ts under investigator tor further criminal violations, a new mall cover order raust be requcsicd coisistent with these regulations. (g) Records. (1) All renquccts for mall covers, with records of ection ordercd thereon, and all reports issued pursvant thercto, ah-!] be decined v.ithin the cus- tody of the Chief Fostal Inspector. How- ever, the physical housing of this data Shall be at the discretion of the Chicf Postal Inspector. (2) The Postal Luspectors in Charge * shall promptly submit copics of all re- quests for mil covers and Lhe determira- tion made thercon to the Chief Postal Inspector, or to his desirnece for review. (3) If the Chicf Postal Inspector, or his designee, determines a mail cover was Improperly ordcred by oa Posial In- spector in Charre or lus designee all Gata acquircd wulile the cover was in force shall be destroyed, and the re- questing authority notified of the discon- tinurnce of the mail cover and the rea- eons therefor. (4) Any-data concernin« mall covers shall be made available to any mall cover subject in any ieral provccding Uhrouch appropriate discovery procedures. 3) The re'ention period for files and recurds pertalu'ng to mall covers shall be & years. th) keperting to Requestina Author- ity. Once a mail cover bos becn culy or- dered, authorization may be delerated to any oilicer in the I’ustal Sorvice to transmit mail cover reports dircetly to the requesting suthority. Where at all possibie, the transmitting officer should be a Po: tai inspector. (i) Review. 1) The Chief Postal In- spector, or his cesignec, shall review all actions taken by Postal Inspectors in Charge or their cesitnecs upon initial submission of a report on a request for mail cover. (2) The Chief Postal Insrector’s de- termination in all matters conecrning mail covers shall be final and conclusive and not subjcct to further administrative review. 2. In the table of sections of 39 CFR Part 233 the folluwing entries are re- vised to read as follows: fee. 233.1 Circulars aid rewards. 233.2 Mall covers. 2333 Withdra~al of mall privileges. (39 U B.C. 401, 404. 410) Rocra P. Crete, Deputy General Cui neel. [PR Doc.75-6320 Filed 3-11-75;6:45 arn] Tithe £1—Pubhe Contracts and frcporty Management CHAPIER 1-—-FEDERAL PROCUSL* ENT REGULATIONS {: Tt Amdt. 140) PART 1-—7-—-CONITRACT CLAUSES Subcontracts This amend.nent of the Fedral Pro- eurement Pecvu'lations prescribes a new Subcontracts clo use for use In fi-:ced-price supnly and construction controcts. The cliuse requires tive contractor tu obtain the contracting officer's vrittcn consent prior to entcrin, into certain tyvpecs and dollar values of subcontracts. The clause becomes operative only with re.cet to urpriced modifications undcr fi :ccd-nrice contracts. Adopticn of the clause rcilects an significant pert of Recommendation A-37 of the Comimi:srion on Government Procurement. Th‘s amendment alio adds a requirciacnt for the submission ef cost accounting stunmdards infortnation in connection with subcontracts under cost- reimbursement type supply contracts, and incorporat- contract” Includes pure! oe orders (b>) ‘The Contractor shall notify the Con- tracting Officer reason.sls im advance of entering; Into anv subcontract ff the Cc... tractor’s procurement ry.tem has not been approved by the Contracting Oficor and :! Bulbs oniracc: > Ie te Ge @ sort retmSurscncnt, tla. end materials, or isbor-hour coutract > ict. it is erfimated will invotve an amornt ta eicerts of ten thousand dollars ($10,000) ia- cluding any fee: (11) Is proposed to exceed one hundred thousand doltara (8100°60): or (11) Is one of @ numer of subcontract«, under this contract. itn a single swocon- tractor for the same cr related trpplics or services which, in the ornreracte, are exnocte”d to exered ome hundred thousand dollars ($109.90). (¢) The advence not'fcation required by Pararranh (b) above ehatl include: (1) A dereription of the sumpties or rerv- lees to be calied for hy the subcontract: (it) Identification of the propored rucor- tractor and an expisaration of why and how the propoied subcontra tor was selected, in- cliutng the competition obtsined: (11) The proposed sutcontract price, to- fether with the Contractor's cost or price analysis thereof; (iv) ‘the subcontractors current, cs:ante'e. and necurale cost or pricine data and Certif- lcate of Current Cont of I’ricring Data when Buch dot. and certiicates are requizcd by other provisions of chit contract to ve oD- tatned from the subeontractor: (Vv) Identitiention of the type of subcon- tract to be used; (vl) A memorandum of necotiation «hich Bets forth the princij st coments of the sub- Contract price nepotiati na. A copy of tts Menawrandum shall be rm tained in the Cone trector’s Me for use of Government res lev ing authorities, The menerandum thal be in sulictont detail to retiert the meast:' atl cant conetcderationn cootreiling the « t*t- Hethinent of initial or reviced Prices, ‘Who memorandum showld tuctude an explanation of why covt oF pricing duta was, or was net Sila UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA, Appendix F, United States District Court For the Southern District of New York, Letter Rogatory to the Appropriate Judical Authority in London, England, January 14, 1975. 74 Cr. 599 (R<) ' 1, Jackson [, Leonard is presently on trial before : rand Jury sitting in the Southern District of New York. charges he faces 411 arise from the making of allegedly alse and perjurious statements, in violation of United States —- ee ——e - 2. Specifically, he is charged, in two counts, wit Section 7206(1) of Title 26 of the United States Gi BL Ne WSONDIY 52a Appendix F, (ode, which provides, in pertinent part, that: "Any person who wilf eee ull make subscribes any return, proe Mres t —_ other document, which contains or is = by a written declaration that — made under the penalties of perjury and which he does mt believe to be true and correct as to every material matter; +++ Shall be guilty of a felony and, upon conviction thereof, shall be fined not more than $5,000, or imprisoned not more than 3 years, or both, toget costs of prosecution," ae as Ge of proviges, in pertinent part, that: "Whoever, in any matter wi the jurisdiction of any on or gency of the United States knowing ly P wilfully ... makes any false itious, or fraudulent statements or Tepresentations, or makes or uses lse writing or document shall be fimed not more | $10,000 imprisoned not more wa then 3. As the result of the testimony and documents | before me in this case and the representations made by the United States Government, I have determined that one EVA BROOKE, whom the United States seeks to call as a witness this case, is likely to be able to provide the Gourt and jury with ¢ estimony having « material bearing on the instent case |jas construed in terms of the Extradition Act of 1870, or pur- 53a Appendix F. Specifically, I am informed by the United States that the defendant Leonard made materially incriminating statements to Ms, Brooke and that Ms. Brooke has previously admitted as much in conversations with representatives of the United States, 4, Further, I am informed by the United States oe Ms, Brooke is a British citizen, but that she has resided in the United States for most of the past two or three years and has a house in Oklahoma, However, I am informed that, even though she was previously served with a subpoena soqaets her attendance as a witness before this Court in this —— criminal case, she is presently residing in London at an ddress now known to the United States Government and has resisted coming to New York in compliance with the subpoena, ven though the United States has agreed to bear all her = reasonable travel expenses, 5. Accordingly, it is hereby requested, if appro- priate pursuant to the Foreign Tribunals Evidence Act of 1856 suant to other pertinent laws of the United Kingdom, that the appropriate judicial authority in London, England enter such orders as British law permits, directing EVA BROOKE to appear as sonn as physically possible before the undersigned in Room 518 of ‘the United States Courthouse, 40 Centre Street, New 54a Appendix F, York, New York to give evidence in the criminel triel now pending before-this Court, and directing euch other steps (such 48 arrest and extradition) that may be necessary in order to secure compliance with such orders, 6. This Court expresses its appreciation to the appropriate judicial authority in London, England for its courtesy and assistance in this matter. Dated: New York, New York January 14, 1975 RICHARD OWEN United States District Judge 55a Appendix G, Internal Revenue Service News Release No. 897. Internal Revenue Service News Release No. 897, issued October 3, 1967, provides: “In response to a number of inquiries the Internal Revenue Service today described its procedures for protecting the Constitutional rights of persons sus- pected of criminal tax fraud, during all phases of its investigations. Investigation of suspected criminal tax fraud is con- ducted by Special Agents of the IRS Intelligence Divi- sion. This function differs from the work of Revenue Agents and Tax Technicians who examine returns to determine the correct tax liability. Instructions issued to IRS Special Agents go beyond most legal requirements to assure that persons are ad- vised of their Constitutional rights. On initial contact with a taxpayer, IRS Special Agents are instructed to produce their credentials and state: ‘As a special agent, I have the function of investi- gating the possibility of criminal tax fraud.’ If the potential criminal aspects of the matter are not resolved by preliminary inquiries and further investi- gations become necessary, the Special Agent is re- quired to advise the taxpayer of his Constitutional rights to remain silent and to retain counsel. If it becomes necessary to take a person into custody, Special Agents must give a comprehensive statement of rights before any interrogation. This statement warns a person in custody that he may remain silent and that anything he says may be used against him. He is also told that he has the right to consult or have present his own counsel before making 4 statement or answering any questions and that if he cannot afford counsel he can have oue appointed by the U.S. Com- missioner. 56a Appendiz G. IRS said although many Special Agents had in the past advised persons, not in custody, of their privilege to remain silent and retain counsel, the recently adopted procedures insure uniformity in protecting the Con- stitutional rights of all persons.” \reprinted in 1967 CCH Fed. Tax Rep. { 6832). Internal Revenue Service News Release No. 949, issued November 26, 1968, further provides: ‘One function of a Special Agent is to investigate pos- sible criminal violations of Internal Revenue laws. At the initial meeting with a taxpayer, a Special Agent is now required to identify himself, describe his function, and advise the taxpayer that anything he says may be used against him. The Special Agent will also tell the taxpayer that he cannot be compelled to incriminate himself by answering any questions or producing any documents, and that he has the right to seek the as- sistance of an attorney before responding.’’ (reprinted in 1968 CCH Fed. Tax Rep. J 6946 and 1969 P-H Taxes, {| 55, 467). 57a Appendix H, Order United States Supreme Court, Extending Time to File Petition for Writ of Certiorari. SUPREME COURT OF THE UNITED STATES No. A-516 a. - Jackson D. LEonaARD, Petitioner V. Unirep States Orper Extenpinec Time To Frve PETITION FOR Writ or CERTIORARI +. — Uron Consmeration of the application of counsel for petitioner, Ir Is Orperep that the time for filing a petition for writ of certiorari in the above-entitled cause be, and the same is hereby, extended to and including January 17, 1976. /s/ Thurgood Marshall Associate Justice of the Supreme Court of the United States Dated this 5th day of December, 1975. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1593%3A1. Public record. Not legal advice.