Petition for Writ of Certiorari — Schlinsky v. United States

OFFICE OF THE CLERK

SUPREME COURT, US.

Supreme Conrt of the United States

-Ootosgs TzeM, 1967 iA ; | eee

ae Gourt, U.S.

— | FILED

| “43 6 : ‘Wut 29 1967

- LEO J. SCHLINSKY, - Un F. DAVE, GLERK

/ ss PETTTIONER,

v.

UNITED STATES OF AMERICA,

' «RESPONDENT. ie

PETITION FOR WRIT-OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Davi M. ScHerrer

Counsel for Petitioner

80 Federal Street .

Had - Boston, Massachusetts 02110: .

Benzamin ARAc

JzRnoME Gorxin 33

Srzpnen M. Honie,

Of Counsel

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Blanchard Press, Inc., Boston, Mass. — Law Printers

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INDEX ‘

° Page

Opinions Below *\........ #20920 ..00... ictowkeeres 1

Jurisdiction ...%............. Sis ces, betian tabeon ode, ae

Questions Presented Ned ad A GT 23 WP ser

Constitutional Provisions and Statute Involved’ , SEER, td a

, Btatemmeie? 25 A808 SO fe PESt BPA Ys EPS

A. Praceedings Below ebsites fe ee YEP. COM, wo @

B. Facts Material-to Questions land? 2). 7... °°8

C. ewianperbaiaer rts EG VN EO

‘Argument ...... wdeweced SOL Leer eh ®

As to Question 1 ................ Pda Bgperny

‘As to Question 2 ...... pas teen STSREE oT Oe 13

As to Question 3 .............. OREO TTR oF - 15

Conclusion ...... eek test us aebas OES ola oh Bs aha OF

_Appendix A: -Opinion of Court of’ Appeals JPCRESD, el yg

‘Appendix B J udgment of Court of Appeals NG DS 1b

_ Letter from United States. Attorney, Dis-

trict of Massachusetts, to Clerk of Court

aie of Appeals ....... Petts FSR PP: le

Appendix D Original judgment of Court of Appeals; ;

Petitioner’s motion to vacate such judg-

? ment; and order of Court of Appeals |

| i; vacating such judgment .............. 1d

- Appendix E Stenographic transcript of proceedings ee

Fic before District Court on remand ...... le_

Appendix F Memorandum and order of District bee.

‘ Court on remand ...... A ec SPR BS w |

_ Appendix G Letter from Chief Counsel, United States

G: Treasury Department, to: Petitioner’s — -

counsel Bg ere eta e a eee Sey ‘ Ig

_ Taste or Avrsonmms CrrED

ae :

es / *. Page

~ Dennis v. United stafes, 384 v. Ss. 855 Fag cien'a’ * 2,8, 16,17

—Es cobedo v. Tinois, 378 U.S. 478 suninreet a+ iis s vardihi 10

Johnson v. New J ersey, 384 U.S. 7 19, rehearing ‘denied, . oy

385 U.S. 890 ....... Eales ee EES RES ¢ Oe “9

". Johnson v. Zerbst, 304 U.S. 458 unk Labtadd sind «:- 13

Kohatsu v. United. States, 351 F.2d 898 (€. A. 9), 0 cer-

tiorari denied, 384 2” aay SoM, ,

Lenske v. United States, 18 AFTR 5815 (C. A. 9)... 15, 16

Miranda v. Arizona, 384 U.S. 436.... 2,9, 10, 12, 13, 15, 17

Rickey v. United States, 360 F.2d 32 C. A.9), certiorari’

+ Gemled, BIG UG. BBG... icc eect ee erin paste .: fi

. Thomas ¥ United States, 370 F.2d 96 (C.A. 5); certio- ee

rari denied, 386 U.S, 975......... fie ae ae See Fo

United States ‘v. Carlson, 260 F. Supp. 423 (E.D. N.Y.) 10.

United States v. Cianchettt, 315 F.2d 584 (0.A. 2) . 16

-. United States v. Como, 340 F.2d 891 (C.A.2) ...--... a - 13

‘United States v. Hensley, 374 F.2d 341.(C.A.6) -..... 16

United States v. Kingry, 19 AFTR 2d 762 (N.D. Fla.) 10

‘United States v. Maius, 19 AFTR 2d 1712 (C.A. 6) . 10

United States v. Schoenburg, 19 AFTR 2d 347 (D. )

eS >. sss. +) dedeabnd tiewh Aarbinediee © e+ +e 10

United States vy. Spomar, 339 F.2d 941 (CA. 7); certio-

rari Gentey, 380 US. 15, reheafing denied, 381 U. S.

| REECE RN ea sa as SR Meee YA < ga eee 14

United States v. Tureynski, 20 AFTR 2d. 5004 OND a

TB iaseiynints sloeene’)? ciertercneteeeege need 10

+

1h ‘Statutes |

United States Code, Title 26, See. 7201 | 2 gy eee 3,4 |

United States Code, Title 28, Sec. 1254(1) ........... a

‘ :

United States Constitution .

Bdeches trek ioe panies ea ‘Page

Fourth Améndment .,..........2......5../.... 8,18, 14.

. Fifth Amendment ..:.................45 i 8, 12, 13, 14, 15

| Sixth Amendment citeesvesetedhhes takin esl cedae ey 8, 12

Miscellaneous

Lipton, Constitutional Rights in Criminal Tow Investi-

gations, 53 ABA Journal 517...:.................

8 Moore, Federal Practice, Rules of Criminal Pro- |

sai bal Jeececestesceess were eee’s bevees Pero

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LEOJ.SCHLINSKY, . . : .

PETITIONER, . :

v.

‘UNITED STATES OF AMERICA,

RESPONDENT. .

,°

_ PETITION FOR WRIT OF CERTIORARI TO

., THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Opinions Below ¢

The opinion of the District-Court. (R. 77-82) is reported

in.261 F. Supp. 265. The opinion of the Court of Appeals

( maicapecie A hereto) is not me omctally reported. .

. 9

Jurisdigtion

mhe Jodgment of ‘the Court of ingjeate sought to i re

viewed (Asppendix B hereto) was dated and entered on July

5, 1967. The jurisdiction of thie Court is invoked under

28 U.S.C. papel: /

cease Presented

1. Whether petitioner tela trial commenced after

the date of thie Court’s decision in Miranddyv. Arizona, 384

U.S. 436), as the subject of a criminal investigation by the

Internal Revenue Service, was entitled to be given the

Miranda warnings by the Special Agents of the Internal

Revenue Service who interviewed him and asked him for,

and obtained, his books and records.

Petitioner believes that this is the first post-Miranda:

_ case to come before this Court, regarding the applicability

of the principles of Miranda to a criminal tax fraud investi-

gation, the trials in the three previous cases raising this

point (Kohatsu v. United States, 351 F.2d 898 (C.A..9),

" certiorari denied, 384 U.S. 1011; Rickey v. United States,

360 F.2d 32 (C.A. 9), certiorari ‘denied, 385 U.S. 835; and

Thomas v. United States, 370 F.2d 96. (C.A.. ), certiorari

denied, 386 U. §..975) having all commenced prior to the

date .of this Court’s decision in Miranda. Johnson v. New

Jersey, 384 U.S. 719, rehearing denied 385 'U. S. 890.

2. Whether petitioner was entitled to be informed by |

the Special Agents that he was the subject of a criminal

- investigation.

8. Whether, in the light of this Court’s decision in

Dennis v. United States, 384 U.S. 855, it was unfair of the

government not to have recorded the grand jury testimony

of its key trial witness, the Internal Revenue Agent who had

audited petitioner’s returns, when (except for the grand

3.

jury testimony of any other government investigatory

agent who may have testified before the grand jury) the

government recorded the grand jury testimony of all the

other grand jury witnesses.

Constitutional Provisions and Statute Involved

Thé Fourth Amendment to the United States Constitu-

tion provides, in relevant part;

The right of the people to be secure in their per-

sons, houses, papers and effects, against unreasonable

searches and scisures, shall not be violated. .

The Fifth prviete: Sie to the United States Constita

tion rernenn, | in relevant part:

No person . +. Shall be compelled in any criminal

* case to be a witnees against himself, nor be deprived

of — pret: or hectic without due pecetes of

law. .

The Sixth Amendment to the United States Constitu- -

tion — in relevant part:

; he all criminal prosecutions the accused shall enjoy

the right to... have the Assistance of Counsel for his

defense.’ — : ; |

26 U.S.C. 7201 provides:

Any person who willfully attempts in any manner

to evade or defeat any tax imposed by this title or

the payment thereof: shall, in addition to other penal-

ties er by law, be guilty of a felony and, es

wh ts : 4

conviction thereof, shall be fined not more than $10,-

000, or imprisoned not more than 5 years, or both,

together with the costs of prosecution.

Statement

A. Proceedings Below

Petitioner was indicted of violating 26 U.8.C. 7201, The

three-count indictment charged that petitioner willfully

and knowingly attempted to evade and defeat a large part

of his and his wife’s income tax for the years 1958, 1959 and.

1960, by knowingly understating his and his wife’s tax-

’ gble income for such years (R. 4-6). Petitioner Pleated

not guilty (R. 1).

After a trial by jury, which commenced on Nentaabes 15,

1966, petitioner was found guilty on all three counts (R.

_ $2, 413). He was sentenced to five months’ imprisonment

and to pay a fine of $25,000 (R. 416).

An appeal was taken to the Court of Appeals, and on

July 5, 1967, the Court of — affirmed the judgment of

‘the District Court.

B. Facts Material to Questions 1 and 2

Petitioner is, and for 28 years ei been, a eiteiband

pharmacist. His educational. background consists. of three

" years, plus, of high school, and of attendance at the Boston

School of Pharmacy (R. 317).

In 1939, at the age of 22, petitioner purchased a atnall

drugstore in Easthampton, Massachusetts, which he owned

until May, 1966. From 1939 to May, 1966 it constituted the

principal source of his income. His other sources of income

consisted of rents, dividends and savings bank interest ium

318-319, wie : |

c

139).

5

Petitioner never had any accounting or bookkeeping.

courses and never did any bookkeeping, nor did he ever

‘ make out an income tax refurn, or any other type of tax

return. The income tax audit which resulted in this action

was his first audit (R. 318, 321-322). :

¢ That audit commenced on September 12, 1961 and ended

in November; 1961; when: Internal Revenue Agent Thomas

¥'. Murphy, who had conducted the audit, referred the mat-

ter to the Intelligence Division of the Internal Revenue .

Service, as a potential fraud case (R: 17-18, 22-24, 27-30, i

' Petitioner’s last contact with any agent of the Internal:

Revenue Service during the civil phase of the govern-

ment’s investigation was had on November 7, 1961, when

_ he was interviewed by Revenue Agent Murphy (BR. 18, 29.

(24, 116, 139).

Petitioner’s next contact. with any agent of the Inter-

‘nal Revenue Service occurred almost six months later on

April 24, 1962, at which time the government’s ‘invésti-

gation was in its criminal phase (R. 7-8, 37-38).

On that date, April 24, 1962, Special Agents. Maurice

Kirby and Join Manning met petitioner in his store. Nei-

ther of the Special Agents had ever mét or spoken to peti-

tioner before, and the meeting was not prearranged. The

Special Agents ‘‘just showed up”? without any prior no-

tice (R. 43-44, 78). - rf

Special Agent Kirby showed petitioner his credentials

and introdtced himself and Special Agent Manning as

Special Agents of the Intelligence Division, Internal Rev-

enue Service. He did not tell petitioner what a Special

Agent was, or what the Intelligence Division was (R.:

47, 51). 3 ) :

’ Special Agent Kirby then advised petitioner that he

need not answer any questions or produce any records

he félt might incriminate him, and that he (Special Agent

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Kirby) and Special Agent Mapning would leave if told |

to go. No other warnings were given (RB. 48-49, 52).

_ Petitioner thereupon asked Special Agent Kirby, ‘‘Where

is [Revenue Agent] Murphy”, ‘What is this all about?”’

@. 50).

In response, as Special. Agent Kirby testified: “T told

him that Mr. Murphy had referred the matter of his in-

come tax return to us and that we were going to conduct

@ preliminary investigation of his tax liabilities.’ Special

Agent Kirby did not téll petitioner that it was a ‘‘criminal

investigation.’’ And in interviewing petitioner, as was his

‘‘ practice,’ Special Agent Kirby avoided thé use. of termi-

" nology. such as ‘‘fraud,”’ ‘‘crime,’”’ ‘‘criminal,’’ ‘‘prose-

cute’’ and ‘‘fraudulent’’ (R. 48, 50-53).

In: addition to interviewing petitioner, Snesial Agent

Kirby obtained and took with him certain of petitioner’s

books and records, namely, petitioner’s cash receipts and

. disbursements. books. and petitioner’s bank statements,

cancelled checks and checkbook stubs, all for the indict-

ment years 1958, 1959 -and 1960 (R. 8,59).

‘The next day, April 25, 1962, Revenue Agent Murphy

was assigned to work with the Intelligence Division, and

the next time Special. Agent Kirby went to see petitioner,

on May 7, 1962, Revenue Agent Murphy — not Special

Agent Manning — was with him, May 7, 1962 was the first

time Revenue Agent ‘Murphy had had any contact with

petitioner since November 7, 1961 (R. 18, 22, 24, 28).

Special Agent Kirby testified that ‘‘It is very possible’’

that he.and Revenue Agent Murphy ‘‘just arrived’’ at

petitioner’s store for the May meeting, as he om Special

Agent Manning had in April (BR. 62).

No warnings whatever were giyen at this meat Nor.

was the nature: and purpose af the fprveetigation revealed ©

to petitioner (R. 62-63).

_ At the Mer meeting, to0, pr gave the Agents the

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records they requested, namely, his: bank statements, can-

celled checks, checkbooks and stubs for parts of the years

1956 and 1957 (B. 24, 59,62)... Yow

- At no time during these interviews was petitioner to

that he was the subject. of a criminal investigation, and |

at mo time was he warned that anything he said or pro-

duced could be used as evidence against him in a court of

law, or that he had the right to the assistance and pre-

sence of. counsel. Yet, Special Agent Kirby admitted that |

the investigation of. petitioner had heen-assigned to lim

“‘tofind out whether or not [petitioner] had committed a

_ eriminal offense’’ (R.-38), and that one of the reasons for

interviewing petitioner was to obtain ‘tincriminating state-

. Ments” (BR. 38,45), srisiteey Sod

Before his trial commenced, : petitioner moved for an -

order suppressing, among other evidence, the evidence

which had ‘been ‘obtained from him by the Special Agents

in April and May, 1962, together with the fruits there-

of (RB. 6). A hearing was held and the motion was denied —

: (R. 13-77). In its opinion, the District Court ruled (R.

80): , 1.8 |

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{fx East { yt

: - ++ no rights of defendant Schlinsky were violated,

under the decision of the Supreme Court in Miranda

v. Arizona, 384 U.S. 436 (1966). or Escobedo v. Il-

linots, 378 U.S, 478 (1964), it being clear that the de-

fendant was at no time when interviewed at his own |

store in custody or otherwise deprived of his freedom

in any significant way. _ Yous

Thereafter, for purposes of the trial, petitioner and the

government entered into a stipulation (R. 433-435) to the

effect that for each of the indictment years petitioner’s.

‘and Iris wife’s taxable income was understated as alleged

_, in the indictment. This stipulation was based on the evi-

8

‘tnins petitioner songht to suppress, ‘and. it was, therefore,

entered into subject to the express reservation (R. 435-

438) that such stipulation was to be rendered null and

void if it were determined on appeal’ that petitioner’s mo-

ent to meron should have been Aeagery ‘

? C Facts Material to Question 3

Since the allaid anderstatenaute of taxable income were :

‘stipulated, the only issue before the jury: was whether pe- :

titioner had acted willfully and knowingly.

The government ’s- chief trial witness on this issue was

Revenue Agent Murphy (see, Appendix A hereto, p. 8a).

va. At the conclusion of Revenue Agent ‘Murphy ’s direct |

‘examination, petitioner, citing this Court’s opinion in Den-

nis v. United States, 384 U.S. 855, moved for the produc-

- tion of Revenue Agent Murphy’s grand jury testimony

-(R. 120); The government remained wholly silent, and the

District Court denied petitioner’s motion (R. 120-121).

Petitioner then moved for an im camera inspection of such

testimony by the District Court in order to determine whe-

ther there were any inconsistencies with Revenue Agent

.Murphy’s testimony at trial (RB. 121). Again, the govern-

ment remained wholly silent, and again the District Court —

denied petitioner’s motion (R. 121).

- On the appeal to the Court of Appeals, the government

‘disclosed for the first time that, in accordance with a long

established policy of the United States Attorney, District

of Massachusetts, the grand jury testimony of Revenue

Agent Murphy had not been recorded (see Appendix A

hereto, pp: 8a-9a, and a certain letter, : dated May 16,

1967, from the United States Attorney, District of Massa-

chusetts, to the Clerk of the Court of Appeals, Appendix

© hereto). ‘The Court of Appeals, noting that it does not

-aceept statements in briefs ‘‘as evidence,’’ remanded the

. case to the District Court for a hearing on the matter (Ap-

i

A héreto, .p. 9a, and’. see,’ the. original judgment

of the Court of Appeals, dated June 6, 1967, petitioner’s

motion, ‘dated June 13, 1967, to vacate such judgment, and

the order of the Court of Appeals, dated June 15, 1967, va-

cating such judgment, Appendix D hereto). | ,

The District Court held a hearing on June 28, 1967. (Ap-

pendix E hereto) and issued a Memorandum. dated June

_. 28, 1967 and an order dated June 30, 1967 (Appendix F

hereto), to the effect that, although Revenue Agent Mur-

phy had testified before the grand jury, no stenographic

‘record of his testimony had been made. At the hearing,

the Assistant United States Attorney who had presented

the case to the grand jury, testified (Anpentbix E. here-

to, pp. 2e-3e) that: —

Except. for the testimony of Goveiehenk inv estigative 3

mer other testimony was reported and tran-

scribed. 3

Argument

As to Question 1

The reported decisions on the, question of the appli- .

cability of the principles of Miranda to a’ criminal tax

fraud investigation (of which there appears to be an ever

increasing number) are by no means uniform. While most

of them hold that the type of warnings required by Miran-

-da need not be given during a criminal tax fraud inves-

tigation, at least three District Courts have held other-

wise (either on the basis of Miranda itself, or of this

Court’s earlier decision in. Escobedo v. Illinois; 378 U.S.

478) and-a fourth District Court and the Court of Appeals

- for the. Sixth Uienis have mbiean drome doubts: on the

notte : “

10

«fhe three District Court decisions holding otherwise are: ,

United States v. Schoenburg, 19 AFTR 2d 347 (D. Ariz.)

(not officially reported) ; United States v. Kingry; 19 AFTR

2a 762 (N.D: Fla.) ‘(not officially reported) ;..and . United

States v. Turzynski, 20: AFPTR 2d 5004 (N.D. Ill.) :(not offi-

cially reported). The last of these three deshsionis, Turzyn-

gk, was decided as recently as June 2, 1967.

~The District Court opinion expressing. some doubts is

United States 'v. ‘Carlson; 260 F. Supp. 428, wale (E.D. —

NY. ), where the mene ane

“Iti is logically difficult to determine. swhethit’ pris

: more is necessary to ripen the rights to the assist-

' ance of ‘counsel and to a warning to that. effect: than

the mere fact that the government is the interrogator

- in the perspective of criminal law enforcement, whe-

ther or not it has already resolved to go forward.

The Court of Appeals case in which doubt was expressed, . -

United States v. Maius, 19 AFTR 2d 1712, 1715 (C.A. 6)

(not yet officially. reported), was decided less than two

months ago on June 15, 1967. 7. Court of Appeals in

that case remarked:

Lite ce! JA doubt may: well omni us as to whether it is

fair to.a citizen to be summoned before the Internal

Revenue agents to be informed that anything he says

may be used against him, and then for the agents

_ of the Internal Revenue Service, personifying- the au-

@ thority and punitive nature inherent in the law en-.

forcement, to subject a man to questioning and to

extract possibly by threats, insinuations, or subtle

forms of suggestive coercion, the only evidence. on

which he can. be sent to prison, and to use this evi-

dence to send him to prison. It: would seem, in all

a eae

a

fairness, that before he answers such questions and: .

thereby directly incriminates himself, he should be

, advised of his right to have his lawyer present...

But whether fair or not, no court has-held that-a

man who is not advised of his right to have his at.

- torney present-when questioned by an Internal Rev-

enue agent, is thereby deprived of. his constitutional

Fights. A citizen summoned before such federal agents

has the option to refuse to answer their questions;

but there are few who have the toughness of fibre and -

the technical. knowledge of their ‘Tights, who would

decline to answer questions put to them in these cir- |

-. @umstances. Until we are told by superior authority -

. . that a citizen’s constitutional rights are imperiled by

‘such -procedure, we are constrained to hold that the

evidence thereby obtaitied is ‘admissible. in. the ensu- |

ing criminal trial. — "y fevmpag ee

Significantly, it would appear that the procedure of the

Internal Revenue Service itself has just changed. In a

speech delivered, June 8, 1967, the Chief Counsel, United

States Treasury Department, Internal Revenue Service,

while disclaiming that the Service. was required ‘to. do so,

stated that Special Agents have recently been instructed to

the following effect (Appendix G@ hereto) : ak

_ ++. at the outset of-his initial interview with the

subject of an investigation, a- Special Agent of the

Intelligence Division will produce his authorized cre-

dentials and state: ‘‘As a Special Agent, I have the

function of investigating ‘the possibility of criminal .

tax fraud.’’ Thereafter, should the stage be reached

where the possibility of criminal tax fraud has been

‘sufficiently indicated to warrant 4 fall scale investiga-

tion, the Special Agent must advise the subject on

=a

i 4 12 ; °

' -gontact of his constitutional rights to remain silent

- and to retain counsel. © = - ;

- The investigation of petitioner became a ‘*full scale in-

vestigation ”’ ou February 8, 1962 (R: 41-42), two and one-

half months-before petitioner was first interviewed by the

Special Agents. Thus, under the new instruction of the In-

- ternal Revenue Service, petitioner would have been en-

‘titled to the type of warnings required by Miranda.’ »

It is petitioner’s contention that the Internal Revenue

- §ervice’s new procedure is but a reflection of what is Con-

stitutionally required _of the government in order to safe-

guard the Fifth Amendment privilege against self-incrim-

ination.’ Not only is a suspected tax evader in the posi-

tion ofan accused from the very moment a Special Agent’s

investigation begins, but at the critical time of the inter-

view by the Special Agent, although the taxpayer is not

ordinarily in ‘‘custody”’ in the usual sense of thé word,

he is in a “‘setting’’. which is ‘‘likely to exert such pres-

sure upon the individual as to disable him from making a

free and ratiqnal choice” (384 U.S. at 464-465).

As noted in a recent article by Paul P. Lipton, Consti-. .

tutional Rights im Criminal Tax Investigations, 53 ABA

_, Journal 517: ‘ * :

a limited warnings petitioner was given did. not include either

the warning that anything he said’or produced could be used against

him in a court of law, or — most important of all — the warning

' of his Sixth .

gel. Even‘the limited warnings which he was given were not mean-

| Spreliminary investigation” °(R. 50-51). There was no indication

that their purpose was to. i i

tioner any. ‘indication’ (R. 48, 50-53).

&

Amendment right to the. ice and assistance of coun-—

’ Special. having represented to him, at the.time —

These fenjeed . .

Special Agents took pains to avoid giving peti-

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13

. +» Coercion . . . is inherent in all official question-

ing. During a tax investigation, the psychological -

pressures and mistaken beliefs inducing sacrifice of |

constitutional rights are as significant as the com-

pelling influences inherent in custodial interroga-

tion. sae, Soe ts

. As to Question 2

Apart ‘from the question of the applicability of the prin- i

‘ciples of Miranda, it is petitioner’s eontention that it can-

,not be said as a matter of law, as did the Courts below

(BR. 80 and Appendix A hereto; p. 5a), that petitioner acted

voluntarily in his dealings with the Special Agents, when

he did not know and was not informed that he was the sub- .

ject of a criminal investigation.. | ee

_ Retitioner acted voluntarily only in the sense that he

acted without any physical coergion and (it is assumed

solely for purposes of this question 2) without any psy-

' chological coercion such as that existing in custodial. situ-

ations. But he did not act voluntarily in the sense of acting

knowingly arid intelligently, and there cannot be any waiver

of constitutional rights.unless the same is done knowingly’

and intelligently, as well as without physical or psychologi-

cal coercion. See, Jéhnson v. Zerhst, 304 U.S. 458, 464; and

| Miranda, 384 U.Si.at 444. Mette) 3

' Petitioner contends that when the government sought his

consent to what, in effect, was a warrantless search and to

be a witness against himself, the Fourth and Fifth Amend-

ments required the government to apprise himi of th fact

that he was the subject of a criminal investigation,? -/

tential scope of the inquiry. In United States y. Como, 340 F.2d 8 ;

894 (C.A: 2), a case involving a search and seizure of narcotics, the —

Court held that the defendant had not intelligently waived his Consti-

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1“

An express holding by this Court, that the Fourth and

Fifth Amendments require.that every taxpayer under crimi-

nal investigation be informed of that fact before being -

questioned or asked for his books and records, would also

avoid the problem which troubled the Court of Appeals in

United States v. Spomar, 339 F.2d 941, 943 (C.A. 7), certio-

rari denied, 380 U.S. 975, rehearing denied, 381 U.S. 956,

namely, that a teat of voluntariness based on a suspect’s

knowledge would result in the government’s being bound

_ by the suspect’s ‘“snbjective state of mind which is not sub-

ject of proof.’’ As this Court stated in Miranda, in ad-

dressing itself. to a similar problem (384 U.S. at 468-469) :

(he Fifth Amendment privilege is so fundamental to

our system of constitutional rule and the expedient of

giving an adequate warning as to the availability of

the privilege so simple, we will not pause to inquire in

‘ndividual cases whether the defendant was aware of

- his rights without a warning being given. Assess-

ments of the knowledge the defendant possessed, based

on information as to his age, education, intelligence,

- or prior contact with authorities, can never be more’

than speculation; a warning is a clearcut fact.

tutional rights because the government agents had “camouflaged their

purpose of investigating Como’s personal criminal liability.” In peti-

tioner’s case, too, there appéats to have been ‘some such camouflage.

Special Agent Kirby not only failed directly to answer petitioner’s

questions, “Where is [Revenue Agent] Murphy?” and “What is this all

about?”, but told petitioner that he was going to conduct a “preliminary

investigation”, and avoided the use of terminology such. as “fraud,”

“crime,” “criminal,” “prosecute” and “fraudulent” (R. 48, 50-53).

Further, on the day after petitioner asked where Revenue Agent Mur-

phy was, the government assigned Revenue Agent Murphy to work

vith Special Agent Kirby on the matter, and when Special Agent

Kirby next visited petitioner he was accompanied by Revenue Agent

Murphy (R. 18, 22, 24, 28).

15

A mandatory statement as to the nature and purpose of

a Special Agent’s investigation: (similar to the statement

the Internal Revenue Service has just elected to instruct

its Special Agents to give ; Appendix G hereto) would like-

wise be a ‘‘cleareut fact.’

As fo Question 3

The holding of the Court of Appeals in this case, that

petitioner’s Constitutional right to due process of law under

the Fifth Amendment was not violated by the government’s

failure to record Revenue Agent Murphy’s grand jury testi-

mony (Appendix A hereto, pp. 8a-9a); appears to be in di-

rect conflict with the decision of the Court of Appeals for

the Ninth Circuit in Lenske v. United States, 18 AFTR

9815 (C.A. 9) (not yet officially reported).

In Lenske, as in petitioner’s case, the government failed

to record the grand j jury testimony of its principal.witness ;

in Lenske, as in petitioner’s case, that witness was a gov-

ernment investigatory agent; in Lenske, as in petitioner’s

case, thie grand jury testimony.of the agent was sought for

_ purposes of cross-examination ; ‘in enske, as in petitioner’s.

‘a

case, the government, while not recording the grand jury -

testimony of the agent, did record the grand jury testimony

of other grand jury witnesses.:

.. The only difference between the two cases is in their

holdings.

In petitioner’s case, while frowning on what the govern- Fe

ment had done (Appendix A hereto, p. 9a), the Court below

— that the government had not acted unfairly.‘

3 The Lenske case was brought to the attention of the Court below

before it rendered its judgment (Appendix C hereto).

4 The Courts of Appeals for the Second and Sixth Circuits have aleo

frowned on a related ‘situation, where the government did not record

the grand jury testimony of any grand jury witness. In both cases,

while refusing to hold that it was a Constitutional requirement, the

16

- In Lenske, on the other hand, the Court of Appeals for

the Ninth Circuit held that the government had acted un-

fairly, stating (18 AFTR at 5822) that the ‘‘incident’’

seenied to it ‘‘particularly offensive,”’ and that: st

- Whether government counsel meant that no short- —

hand notes had been made of the Special Agent’s

. Grand Jury testimony, or that such notes were taken

and had not been typed up, it is evident that the Gov-

_- ernment so arranged matters. that there would be

‘available transcripts by which neutral ‘witnesses could

be held to their.Grand Jury testimony gnd checked if

they -varied from it, while as to government partisan

witnesses, who presented no danger of their being

swayed from their recitals, there would be no writing.

which the taxpayer might use for cross-examination.

It was a clever scheme, but one-sided and unfair, and

in complete violation of the. teachings of Holland v.

United States, supra. <!

‘In addition to being in conflict with Lenske, the decision

of the Court below opens the door to an emasculation of

this Court’s decision in Denms v. United Siates, 384:U.S.

855.° Bae a’

Courts of Appeals stated that it would be “better procedure” to tran-

scribe grand jury testimony. United States v. Cianchetti, 315 F.2d

' 584, 591 (C.A. 2) and United States v. Hensley, 374 F.2d 341, 352

(C.A. 6). Professor Moore is of the opinion that, in “[f]airness to the

defendant”; grand jury testimony should be transcribed verbatim,

“particularly in view of the use of the [grand jury] minutes for pur-

_ poses of impeachment, assuming there are. inconsistencies with the

witness’s trial testimony.” 8 Moore, Federal Practice, Rules of Crimi:

nal Procedure (2d ed.) at pp. 6-10—6-11. .

_ §Preliminarily, before ruling that the government had not acted

unfairly, the Court below held that petitioner had successfully demon-

strated a “particularized need? under. Dennis and that, if Revenue

Agent Murphy’s grand jury testimony had been recorded, petitioner

would haye been entitled to it for use in cross-examination ( Appendix

A hereto, p. 8a).

Tae ata ed

7”

‘The underlying: oitiinite of Dennis’ is that grand jury

testimony, when used, for purposes of impeachment, is.a —

vital tool in the’ dearch for truth and one which may be in-

valuable in furthering the accused’s defense. Under the —

decision of ‘the Court below, however, this vital tool can

easily be denied:a defendant simply by the goverhmenit’s

not recording any grand jury testimony.

The decision below also gives the government the oppor-

tunity to pick and choose whose grand jury testimony

_ should be recorded and whose should not, thereby permit- -

ting the government to insulate certain of its: witnesses —

. from what might otherwise be a fuller, more complete and

more meaningful cross-examination, while making‘ sure

that other of its witnesses will be held to their = jury

testimony.

Conclusion

The questions presented by this petition concern basic

Constitutional rights, as to which not only persons sus-'

’ pected and accused of crimes, but the Courts and certain

_ agencies of the government, such as the Internal Revenue -

Service and the Department of Justice, need the —

of this Court. °

The first question, iia the applicability of the —

principles of Miranda to a criminal tax fraud investigation,

apart from being one as to which there are conflicts among

some of the Courts below, is recurring. The ever growing

number of reported opinions on the question speaks for

itself. :

The second questiqn, whether a taxpayer who is the sub-

ject of a criminal investigation is entitled to be so informed

before being questioned and asked for his books and records

by government agents, is one as to which the Internal Reve-

nue Service, itself has just changed its policy.

RO 8 eee Tre enemy oy

18

“The third question, regarding the government ’s practice

of not recording the grand jury testimony of certain wit-

nesses, presents a conflict between the Court of Appeals

- ° for the First. Circuit and the Court of Appeals for the

- Ninth Circuit, which conflict only this Court can resolve.

Petitioner, therefore, respectfully urges this Court. to

grant the instant petition.

July 28, 1967

Respectfully submitted,

Davin M. Scuerrzr

A Counsel for Petitioner

BENJAMIN ARAC \/.

Jerome GorTKIN

SrepHen M. Honic

Of Counsel

padre

No. 6864.

la

_ APPENDIX A

United States Court of Appeals

For the First Circuit

LEO J. SCHLINSKY,

DEFENDANT, APPELLANT,

v.

UNITED STATES OF ‘AMERICA,

APPELLEE, - aes

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

Before Aupricu, Chief Judge,

McEnrex and Corrin, Circuit Judges.

Jerome Gotkin, with whom Benjamin Arac, David M. Scheffer,

Stephen M. Honig and Widett & Kruger were on brief, for appellant.

- Herbert N. Goodwin, Assistant U. S. Attorney, with whom Paul F.

Markham, United States Attorney, was on brief, for, appellee.

3 ‘June 6, 1967. , os :

Aupricu, Chief Judge.. Defendant appeals from his con- }

viction, following a jury trial, of willful evasion of income

tax for the years 1958, 1959, and 1960. 1954 I.R.C. § 7201.

" Defendant was the sole proprietor, and principal operator,

of a drug store. His returns were prepared by an ac-

countant named Warrick. Warrick did not audit or, with

- one exception, examine any of defendant’s books, but simply

took the figures given him by defendant and, for a charge

of $55, prepared the return. The book which defendant did

_ supply contained the. receipts from defendant’s regular

sales, but did not contain the receipts from his ‘‘accomoda-:

tion,’’ or no-profit sales. Defendant retained .a notebook,

2a.

described by him as a “‘personal. memorandum,”’ that

showed hoth. He destroyed this after ‘Warrick told him

that the Internal Revenue Service audit of his returns was

revealing substantial discrepancies.’ |

"he discrepancies were in fact substantial. It was stipu-

lated at the trial that defendant’s net taxable income for

the three years, totaling approximately $117,000, was un-

derstated by some $37,000, or more than 30%, and that |

-savings bank interest of almost $10,000 was 507% underre-

. ported. Defendant avoided cross-examination upon what

might be thought sizable inadequacies on the face of the -

returns by testifying that he never. looked at them: His

explanation, while lengthier than this, amounted to little .

more than that he trusted Warrick. ;

Defendant testified that the book supplied to Warrick

contained proprietorship accounts showing how much

money he was taking out of the business. He now contends

that since these figures reflected his true income, an infer-

ence of good faith should be drawn. In fact, however, these

accounts accurately reflected neither his income from the

pharmacy. nor his. total income from all sources. It was

pure coincidence that the total corresponded closely with

what was eventually stipulated to be his true income. The

jury was not required to conclude good faith from this. It_

is true that Warrick might have learned from these figures.

_ that defendant was extracting from the business more than

it was earning, but, assuming he did so, Warrick was not

retained either to investigate, or to evaluate, defendant’s

‘ business judgment. ‘If the jury disbelieved defendant’s

statement that he never looked at his returns, as well it

‘- might, but credited his testimony that he: attached ‘‘bibli-

ae

1 Defendant also, on advice of counsél, purchased for $1 from War- .

_ rick certain work sheets. While the evidence is in dispute what sheets

were involved, we disagree with defendant that it was error to admit

testimony of the purchase. Bs

3a

cal’’ importance to the proprietorship figures, it could con-

clude that rather than trusting Warrick’s results to be

accurate defendant was well aware that they were not. ,

Before trial defendant filed what district judges are now

finding almost inevitable, a motion to dismiss and a motion —

to suppress. The former, based on.a delay in-the return of

the indictment, asserted a denial of his Sixth Amendment

right to a speedy trial. The investigation began in the late

summer of 1961; and the indictment was returned in Janu-

ary 1965. The defendant was interviewed by IRS personnel

in April and May of 1962. In May his attorney registered

his appearance with the IRS. In February 1964 defendant

was interviewed again, and in March the Service formally

advised him of the possibility of criminal proceedings. De-

fendant does not complain of the ten months delay after

‘March 1964 because during that period his counsel were

seeking to head off any indictment. Nor does he make any

showing that any delay prior to March caused him actual

prejudice, or was improperly motivated. Cf. Umted States

v. Ewell, 1966, 383 U.S. 116, 122-23. We do not agree with

the defendant’ that the burden was on the government to

‘‘explain.”’ .

It has generally been held that the right toa speedy trial

does not attach prior to indictment. E .g., Nickens v. United

States, D.C.Cir., 1963, 323 F.2d 808, cert: den, 379 U.S. 905 ;

Foley v. United States, 8 Cir., 1961, 290 F.2d 562, cert. den.

368 U.S. 888; Hoopengarner v. United States, 6 Cir., 1959,

270 F.2d 465. As the Supreme Court, has stated in a some-

what different context, ‘There is no constitutional right

to be arrested.’’ United States v. Hoffa, 1966, 385 U.S. 293,

* 310. While we are not prepared to. hold categorically that

the statute of limitations-is the only control on the length

of time permissible between the conclusion of the govern-

ment’s investigation of a crime and the bringing of an

indictment, cf. Ross v. United States, D.C.Cir., 1965, 349

<->

. 4a

F.2d 210, we do hold that a-claim of unconstitutional pre-.

indictment delay must be supported. by something much

more than ‘appears in the present case.

~The motion to suppress was directed to records that the

defendant had supplied to IRS agents and other evidence

obtained as ‘‘fruit’’ of examination of those records. This

motion was properly denied. The court found that in the

. initial civil audit no warnings were given to the defendant.

However, when the possibility of criminal liability ap-

peared, the case was turned over to a Special Agent who,

at his first meeting with the defendant, advised him that he

need not answer any questions, that he need not produce.

any records that might incriminate him, and that he could

terminate the interview at any time.? All interviews were

conducted on defendant’s premises. It is not contended

that there was any physical restraint, threats or promises.

The relation between a taxpayer’s obligation to supply

information to taxing authorities and his Fifth Amendment -

privilege is a compiex and unsettled one. Every person is |

- required to maintain records of all financial dealings that

bear on his tax liability, 1954 I-R.C. 4 6001 and Treas. Reg.

- 1.6001-1(a), and under some circumstances he may be re-

quired to produce them. 1954 I:R.C. § 7602. To what extent

the ‘‘required records doctrine’ of Shapiro v. Dnited ©

States, 1948, 335 U.S. 1, which denies the privilege to rec-

ords that the law properly requires certain classes of per-.

sons to keep, is applicable to tax records is uncertain. See

generally Meltzer, The Privilege Against Self-Incrimina-

tion and Required Income Tax Records, 30.Taxes 45 (1952).

We may assume for present purposes, however, that per-

sonal records, even though discoverable for civil purposes,

may be withheld by a defendant in a criminal case. See .

2 Nothing was said about a right to counsel. There was no require-

ment that this be done. Morgan v. United States, 1 Cir., 5/16/67,

-.F9d 3 Salinger. v. Bigler, 9 Cir., 4/27/67, F.2d.

CAPO RRIF ON BN Mr tee

ma

Scanlon v v. United States, 1 Cir., 1955, 293 F.2d 382; cf.

United States v Blue, 1966, 384 U. S. 251. The court’s find-

\ ing, -however, that defendant’s actions weré voluntary in

fact was manifestly correct. - It is apparent that defendant

produced what he wanted,’ and retained’ what he wanted.

The motions were properly denied. 261 F.Supp. 265. |

\ At the trial the defendant unsuccessfully sought a lengthy -

voir dire of prospective jurors. The court’s limitation was:.

within its discretion. Principally what it excluded were

questions purportedly designed to discover whether the

juror would accept various instructions of law favorable

' to the defendant that might be expected to be in the charge.

We have long viewed with disfavor the practice prevailing

in certain jurisdictions under which a party,” ostensibly

, engaged in exploring the jury’s qualifications, is in fact

exercising hopefully sophisticated advocacy upon jurors

whom it has no real intention of challenging. See Strick-

land v. Perry, 5 Cir., 1957, 244 F.2d 24, cert. den. 355 U.S.

847, disapprovng. This not only corrupts.the purpose of _

the voir dire, but places undue emphasis upon those points

_ the party so chooses to make.

_ With respect to the other inquiries which the court pre-

- Cluded, in our opinion the purpose of the voir dire is to

ascertain disqualifications, not to afford individual analysis

in depth to permit a party to choose a jury that fits into

some mold that he believes appropriate for his ‘case. Even \

.if a party has some special matter in mind, a broad dis-

cretion as to its appropriateness must be reposed in. the

- district court. Stephan v. Marlin Firearms Co., 2 Cir., 1965,

353 F.2d 819, cert: den. 384 U.S. 959; United States v.

Mackey, 7 Cir., 1965, 345 F.2d 499, cert. den. 382 U.S. 824;

Sellers v. United States, D.C.Cir., 1960, 271 F.2d 475. - .

Next, we find entirely eithent: merit. defendant’s exten-

sive argument that the evidence did not warrant conviction. -

Even if, which we in/no wWgy grant, all of the damaging

| ‘i

testimony te which the witness Warrick is criticized were

to be disregarded, there was ample evidence to support a

convietion. We recognize that counsel are, and should be,

zealous advocates, and that guilty as well as innocent de-

fendants are entitled to full representation. We have said *

‘before, however, Stack v. United States, 1 Cir., 1966, 368

‘F.2d 788, 790, cf. White v. Hancock,.1 Cir., 1966, 355 F.2d

- 962, 263 n.2, and-we repeat, that full representation does

not include the making of points which are clearly frivo- -

lous. Cf. Anders v. Califorma, 5/8/67, ... U.S. .... We so

regard this one. Even today, defendant has been unable to .

_ suggest a reason, other than that he never studied bookkeep-

ing, why a man capable of running his own business for

twenty-two years, a business grossingpwell over $100,000 an-

nually by the time in question, could think that he should not

account either in gross receipts or elsewhere, for the pro-'

ceeds of substantial sales just because they were made at

cost. Other matters, independently causing. us’ to believe

. defendant’s motion for acquittal frivolous, we will not

pause to discuss. - ae

Only a few of defendant’s évidentiary complaints require —

consideration. Warrick testified that defendant gave him,

each year, his total savings bank interest. Defendant testi-

fied that he gave Warrick the amounts he had on deposit,

and the rates of interest each bank paid, and that Warrick

calculated the interest. Why. defendant should adopt so

complicated a procedure, let alone how he could innocently

have given figures causing a 50% -understatement, was

never.explained. Nonetheless, we will assume that defend-

ant was entitled to prove his version to the limit. |

In 1962, because’ of his tax difficulties, defendant em-

- ployed an accountant, one Myers. Myers con erred with

Warrick, following which an affidavit was ‘prepared, ap-

parently by Myers, which he asked Warrick to sign: War-

rick refused. Defendant made three unsuccessful attempts |

-~

Ta

_to introduce this’ paper in evidence. The court was clearly

- correct as to two. There is a considerable burden to show

adoption of a statement or document prepared by someone

else. The mere assertion of one reason or excuse for not

‘signing is not to be equated with waiver, or taken as an.

acknowledgement that there was no other reason. War-

_ Yick’s saying that he wanted to consult counsel, and, on -

another occasion, referring to one specific error, was not

- to be construed as even partial adoption. Fmally, whether

- or not Myer’s‘proposed testimony showed a more specific

"adoption, cf. Asaro v. Parisi, 1 Cir., 1962, 297 F.2d-859, it

was not prejudicial érror to enstade: it. Myers had already

testified that Warrick .told him everything that was in the

affidavit. For Myers to say that Warrick thereafter con-

firmed it would have added nothing of substance. |

With respect to the nonexistenee of Form 1099 on which

savings banks are now required te report interest, 26 )

U.S.C. § 6049(c) (1962), conceivably it might have been

_ better under the circumstances of this‘case ‘if the court

had reminded the jury that in the years in question this

‘form had not been devised However, : we find no error.

Defendant’s backing and filling never succeeded i in articu-

lating exactly what he wanted to prove with respect to

Form 1099, or what he expected this proof to demonstrate.

At least most of the time he substantially overstated its

legal consequences and relevancy, which quite apparently

' caused the court to conclude that the slight possible -rele-

vancy was more than overshadowed by the confusion it

might cause the jury. :

The defendant makes-a number of complaints, about the

_ charge, none of which we sustain. The court instructed the

jury that accident or carelessness was not willful intent.

Defendant requested that the court add “‘gross’’ careless-

?

ness. While to have done so would not have been error, see

— Gaunt v. iacanaan eats, 1960, 184 F.2d 284, cert. oo.

*

8a

e 340 U. s. 917, the court might properly feel 1 (as it said it

did) that it would then have to define gross carelessness,

It would not be improper for a court to suggest that, if

.. earelessness appeared: sufficiently gross, there might come

‘a time when the jury might ask itself if the defendant was

‘ truly careless, or something worse. We hold that it was not

error for the court to simplify bas matter, as it did, in

limine. |

It is true that i in another connection there was one sen-

.~ tence in. the charge, which the court apparently took out of

ee: compendium.of nationally published charges, and which,

standing alone, was possibly: misleading.* However, there

were other statements. which were full and correct. The

' defendant did not call théegurt? s attention to the possible

ant cannot invoke the ‘plain error” rule. E.g., Conley v.

United States, 6 Cir., 1958, 257 F.2d 141;-cf. Dichner v.

United States, 1 Cir., 1965, 348 F.2d 167.

There is. one matter on which we do agree with the ds-

fendant. The witness Murphy, the original IRS agent, gave

very damaging evidence against the defendant. The de-

fendant called for his grand jury testimony for. use in

cross-examination. Without hearing argument, the court

refused. Under certain. earlier cases decided by this court

and others, this ruling was proper. Under Denmis v. United

States, 1966, 384 U.S. 855, we believe it was not. * In the

- light of that opinion the requirement of ‘‘particularized

-need”’ is very easily met. Here, as in+Dennis, it was for

eross-examination.* However, the government now informs

_® us, by brief, that the ‘‘long established policy of the United

States Riboreey s Office, District of Massachusetts, [is]

3 We. have more than once had occasion to regret” the publication of

. charges that exceed routine “boiler-plate” because of just this danger.

But cf. Walsh v. United States, 1 Cir.,; 1967, 371 F.2d 436,

to which we adhere. |

inconsistency. This is the classic. situation where a defend- |

9a

not’ to record the Grand Jury testimony of Government

employees.’* The defendant’s. contention that this is an ©

unconstitutional practice in the light of Dennis is without

merit. McGaffrey v. United States, 10 Cir., 1967, 372 F.2d

482. Whether, under our supervisory power, cf. Mallory v.

United States, 1957, 354 U.S. 449, we should now, in the -

light of Dennis, condemn it for the future, is not presented, -

and in view of the lack of argument on the subject we will

not decide it. Possibly the United States Attorney will

+ voluntarily reconsider this practice, if it be his practice.

We added the last five words, amd we remand the case,

‘ for precisely the same reason.* We do not accept state-

ments in briefs as evidence.. If the district court finds, after

_ hearing, that the grand jury testimony of Murphy was not’

- taken, the judgments will be affirmed. If the testimony was

taken, defendant will be entitled to a new trial unless there

appears no slightest inconsistency between Murphy’s grand

jury testimony and his testimony ‘at the trial.®

' The case is remanded to the district court for further

proceedings consistent herewith.

A

5 The government, after argument, reduced this to mean “Govern-

ment investigative agents,” because such individuals file “reports.”

The government added that these reports “are available to the defend-

ant under the Jencks Act.” We note this for what little it is worth,

at the same time observing that .the government disclaimed at the

trial having any such report from Murphy. .

® We recognize that this ruling falls somewhat short of certain state-

ments in Dennis. See 384 U.S. at 873-75. ‘However, Murphy was

extensively cross-examined, and at this stage of the case we would :

find no prejudicial error if his grand jury testimony suggested no

inconsistency whatever. A

“

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APPENDIX B

. Unrrep States Court or APPEALS |

For Tue Fimst Crrocurr

No. 6864.

: Leo J. Scuuisky,

Defendant, Appellant,

a °

Unirep States or AMERICA,

Appellee. -

JUDGMENT

This cause came on to be heard on appeal from the

United States District Court for the District of Massachu-

‘setts, and was argued by counsel. = =i Ct” |

Upon consideration whereof, an opinion of the Court

- was filed on June 6, 1967, and an order was entered on

June 15, 1967, remanding the case to said District Court

for further proceedings consistent with said opinion.

_ Upon receipt of the memorandum of the District Court .

dated June 28, 1967, and the order dated June 30, 1967, in

accordance with the.opinion of this Court dated J une 6,

1967, : vans

The judgment of the District Court is affirmed.

. ‘By the Court:

/s/ Rocer A. Stincurreip

Clerk

[cc. Messrs. Gotkin and Goodwin. ]

hich ete eh oiled

a

~

le

APPENDIX 0

[Lerrznnzan — Unrrep States ArrorNzy

District or MassacHusetts }

Bias of! spe May 16, 1967 .

Mr. Roger: A. Stinchfield, Clerk |

. United States Court of Appeals .

U.S. Post Office and Courthouse Building

' ‘Room 1602

Boston, Massachusetts 02109

Dear Mr. Stinchfield:

- Re: Schiineky v.U. 9. of A. —C.A. 1st —-No. 6864

% Footnote 2, page 11, of Appellee ’s Brief, as well as in

oral argument, counsel for the Government stated that it

has been a long established policy of the United States .

' Attorney, District of Massachusetts, not to record the

Grand Jury testimony of ‘‘Government employees”’.

We believe, upon reflection, that the phrase ‘‘Govern-

ment employees”’ is a bit. too inclusive and apt, therefore,

_ to mislead the Court. The policy, in fact, has been not to’

record the testimony of Government investigative agents

only for the reason that the reports of these agents, which

are at all times available to the United States Attorney,

normally contain the substance of their testimony before

the Grand Jury. Moreover; substantial portions of these

reports are available to the defendant under the Jenks

Act should the Government agent testify.

Two cases brought to our notice since oral argument

and which. we belipve should be called to the Court’s at- .

me neeniemaennie meme cemented temiomenn Tua iedaeimmeminesbaicametneenteeintines wher intents intact inet aera eer a

2c

tention‘are (1) Lenske v. United States, 66-2 U.S.T.C.,

par. 9686 (9 Cir. 1966) petition for rehearing en banc filed ~

November 23,.1966 and still pending, which contains lan-—

guage contrary to the Government’s position that it is not

required to record Grand Jury testimony ; and (2) Selinger

v. Bigler, (9 Cir., April 27, 1967) in which the Ninth Cir-

cuit reaffirmed its earlier decision in Kohatsu v. United

States, 351 F.2d 898.

Very truly yours,

Paut F. M .

; United States Attorney

_. By /s/ Hersert N. Goopwix

| Hersert N. Goopwin

Assistant U. 8S. Attorney

Jerome Gotkin, Esquire

of Widett & Kruger

On

1d

APPENDIX D

JUDGMENT |

June 6, 1967. | 7

This ‘cause came on to be heard on appeal from the

United States District Court for the District of Massachu-

setts, and was argued by counsel. _ i 4

Upon consideration whereof, It is now here ordered, ad-

judged and decreed’ as follows: The case is remanded

to the District Court for further proceedings consistent |

with the opinion filed today. rk |

| By the Court:

/8/ Roger A. StincHFreip

| | Clerk :

[ec. Messrs. Gotkin and Goodwin.]

MOTION OF APPELLANT TO VACATE JUDGMENT

DATED AND ENTERED JUNE 6, 1967 AND TO «

MAKE AN ORDER IN LIEU THEREOF

Now comes Leo Schlinsky, appellant’ in the above-en-

titled case, and moves that the judgment. herein dated

and entered June 6, 1967 be vacated and that an order be

made providing for a partial remand to the District Court

for further proceedings consistent with the opinion of this

Court dated June 6; 1967, for the District Court to report

back to this Court upon the conclusion of such further pro-

ceedings and for this Court thereupon to enter the appro- |

priate judgment herein. - aes

The reason appellant is making this motion is that ap-

pellant otherwise is faced with the following dilemma:

Appellant intends to file a petition in the Supreme Court

of the United States for a Writ of Certiorari and intends

to present in such Writ the question whether the failure

2d

of the Government to record the Grand Jury testimony

_ of Revenue’ Agent Murphy in the within case,, if such be

- the fact, constituted a denial of Due Process under the

Fifth Amendment. The determination of whether or not

a record of. Agent Murphy’s Grand Jury testimony exists,

therefore, would appear to be an essential prerequisite to -

the presentation of such question and to action by. the.

Supreme Court on it, because if such record does exist, the

question proposed to be presented by ap ellant would be

moot. Yet, the District Court might not be able to make

the required finding before appellant’s time, to petition

the Supreme Court expires (which time runs. from last |

Tuesday, June 6, 1967), or even before the Supreme Court

acts.: : ’

Appellant, therefore, ‘respectfully requests that that

judgment be vacated and that an order be made as afore-

said, in order to resolve such dilemma. 7 :

. Respectfully submitted,

,Wiett & KRuGEE .

By /s/ Jendms GorKin

_ Jsrzome GoTKIN

Attorney for Defendant-

Appellant al

80 Federal Street

Boston, Massachusetts

ORDER OF COURT

| ‘ June 15, 1967.’

Upon motion of appellant, and without objection,

It is ordered that the judgment herein dated June 6,

-. 1967, be,, and the same hereby is, vacated ; and further.

It is ordered that this case be, and the same hereby

is, remanded .to the District Court for further: proceedings-

| ican inal . : 4 ‘ ‘ :

d é 34 :

consistent with the opinion of this Court of June 6, 1967,

and said District Court shall report back to this Court.

upon the conclusion of such further proceedings, where- fed

upon this Court will enter an appropriate judgment.

| By the Court:

[sf Roczs A. SqincHFIELD ;

. Clerk

[Cert. ec: Clerk, U.S.D.C., Mass., with certified copy of .

_ opinion of June 6, 1967, and the original record on ap-

peal which is to be returned to this Court upon report

back ; and cc: Messrs. Gotkin and Goodwin. J

———_ . a3

asl

e

!

*

le

‘APPENDIX E

S‘TENOGRAPHIC TRANSCRIPT OF -

PROCEEDINGS ON REMAND

(1) A as Courtroom ‘No. 1

U.S. Post Office and Court House

Boston, Massachusetts

June 28,1967

Mr. Gotkin: Mr. Goodwin said he would be right up;

he just went downstairs, to his office. While —s I will

thank you for the rescheduling. :

. The Court: Allright.

Mr. Goodwin: Your. Honor, this matter is eafinbe the

court this morning, as you know, in order to determine

whether the testimony of Revenue Agent ow was taken

before the grand jury.

ara

Before beginning, I would like to state on the iad

have examined the files and books of the United States —

Attorney’s Office; I have ‘spoken to the former Assistant

‘who handled this case; I have spoken to the reporter as- .

signed to this case as well as Mr. Elliott of the. firm, .

which is our contract firm. I have spoken to Miss Ferrigno,

Administrative Assistant—

~The Court: What was that name, eanest

: Mr. Goodwin: Miss Ferrigno. On the basis of the ex-

‘amination and conversations, I should at this time like to

_ represent to the court, that the grand jury testimony [2] .

of Revenue Agent Murphy was neither recorded or trans-

cribed, there being no reporter present at that time. We

do have a witness. We can proceed.

The Court: Go ahead. |

— Qe

Murray Fatx, Sworn

sated Psa Direct Examination

Q. (By Mr. Goodwin) May I have ‘your name, sir?

A: Murray Falk. pay

Q. Your occupation? A.lamanattorney. . °

- ‘Q. With whom are’ you affiliated? A. A member of the °°

_ firm of Moulton, Looney, Mazzone and Falk.

Q. Where were you employed before then? A. L was

Assistant United States Attorney in the office of.the United.

States Attorney, for the District of Massachusetts. 7

Q: Tell me, sir, did there come @ time in the course of

your duties as Assistant United States Attorney, when

you presented evidence to the grand jury, in the case of

United States vs. Schlinsky? A. There did, sir, yes.

“ [3]- Q. Do yon-.recall approximately ‘when that was?

A. Yes, it was at the end ‘of 1964, I believe, December, ©

- 1964, January, 1965.) - tweak | '

-*Q, Will you tell me, sir, in the course of presenting evi-

dence to the grand jury in the matter of United. States vs.

Schlinsky, did you interrogate Revenue Agent Thomas

Murphy? A. Yeas: *:.:

} Q. Will you tell us, Mr. Falk, if you know, whether or

, ot there was a reporter present when Mr. Murphy testi-

? A. There was no reporter present.

- Mr. Goodwin: Thank you, no further questions. |”

, . Cgoss Examination

XQ. (By Mr. Gotkin) Mr. Falk, was. there a reporter,

present when- the other witnesses before the grand jury

testified? ; e ultoah | .

Mr. Goodwin: Objection, it is irrelevant to ‘this pro-

ceeding. » 7 o ar Ape

The Court: I will let him answer that, one question,

mene The Witness: Except for the testimony of Government |

3e

investigative agents, other. salle was reported’ and

_ transcribed. 7

' [4] Mr. Gotkin: No further questions.

The Court: All right, you are excused, Mr. Falk, thank

you. ; |

Mr. Goodwin: I would like to call Robert J. Elliott.

Rosert J. Exuiort, Sworn,”

Direct Examination \

° - Q. (By Mr. Goodwin) Your name, sir.. A. Robert J.

Elliott..

Q. Your address? A. 8 Whittier nen Boston. \

Q. Tell me your occupation. A. I am in the court re-

porting business.

Q. With whom are you afiiliated? A. The firm of ‘Me- “

noogian and Elliott.

Q. Are you the Elliott? A. Yes.

_ Q. You are part owner of the firm? A. That i is right.

[5] Q. You are here today in response to a subpoena?

A. Yes. -

' Q. That subpoens asks you to bring in the documents

‘ and records with you? A. Yes, it did. ,

Q. Do you have those? A. Ihave two diaries.

_ Mr, Goodwin: I would like to have this marked as —

Government’s Exhibit 1 for identification.

(Records of. Witness Elliott marked Government’s

Exhibit 1 for identification. )

Q. Sir, can you tell me if you know what this document -

ist A. Yes. This is the Department of Justice contract

‘that we had in the fiscal year—-

The Court: I don ’t think there is any question, he had

the contract.

Mr. Gotkin: I don’t see where it is relevant.

‘The Court: This isa contract he had, to take testimony.

Q. Did there come a time as part owner in the firm of

4e

Manoogian and Elliott, you assigned a reporter to record

proceedings before a grand jury in the ease of [6] United

States vs. Schlinsky? A. Yes. | :

Q. Approximately what date? A. December 28 or 29

of 1964.

Q. Tell me'the name of the reporter. A. Yes. The name

of the reporter was Ruth Chiarino.

Q. Was there anyone else assigned from your. office to

take testimony, éxcept Miss'Chiarino? A.-In that par-

ticular case,no. : , 7 “are

Mr. Goodwin: I have nothing further.

Mr. Gotkin: No questions. . | | |

The Court: Thank you, Mr. Elliott, you are excused. —_

Ruts G. Curarino, Sworn

Direct Examination

Q. (By Mr. Goodwin) Miss Ruth Chiarino, please. Tell

me your name, please. A. Ruth G. Chiarino.

*. Q. Do you recall, Mam, that you were the one assigned

by Mr. Elliott to take court proceedings in the grand jury

in the case of United States vs. Schlinsky? A. Yes, sir. .,

[7] .Q. You are here today in response to a subpoena?

A. Yes.

Q. ‘The subpoena asked you to bring certain records and

documents with you? A. Yes. : :

Q. Did’you bring them? A. Yes, I did.

Q. Will you tell us what these are? A. These are the

stenotype notes taken in the case of United States vs.

Schlinsky. on Tuesday, December 29, 1964 and Tuesday,

January 5, 1965. | :

- Q. Have you reviewed these notes? A. Yes, I have.

Q. You looked at them? A. Yes. | +

- Q, Do you know, Mam, can you tell us if the testimony

of Revenue Agent Murphy was recorded by yout A. It

was.not. ;

; ® | . 5e

Mr. Gotkin: I object to the question. I will withdraw

the objection. .

(The question and answer were read.)

Q. Is the testimony of Revenue Agent Murphy included

in your notes? A. No, it is not.

‘Mr. Goodwin: I have no further questions.

[8] | Crose Examination.

XQ. (By Mr. Gotkin) Do your notes include the testi-

mony of other witnesses before that.grand jury? A. Yes,

- they do. ° :

XQ. Is Revenue Agent Murphy the only witness whose

testimony you do not have a record of ?

. Mr. Goodwin: I object to that, as not being diipoesis to

the purpose of this proceeding.

The Court:. If she knows, she can answer.

The Witness: His testimony was not taken on the pr

of Tuesday, December 29, 1964 and ear January 5,

1965.

XQ. You do not know whether it was taken on any other

day, is that what you are saying? A, I was here these

two days, these are the only days I éan testify to.

XQ. As to those two days, did you take the > of

all witnesses other than Agent Murphy?

Mr. Goodwin: Again, I object to it. ?

Mr. Gotkin: I believe it is the same question I asked

before. *

The Court: I will hear the answer.

[9] A. I took the testimony of all witnesses who appeared

on those two days. The witness you are asking about i is not.

in my notes. I did not take his testimony.

XQ. But you took everybody else’s testimony, other than -

this one we are talking about? A. Yes.

6e

. Redirect Examination

Q. (By Mr. Goodwin) You took the testimony of every

- witness who appeared on those days? A. I took every

witness who appeared on these days. ae

Q. You would have no way of knowing, unless you were

assigned to come here on a certain day, whether there was

testimony taken on other days or not? A. I do not know,

no. ya

Mr. Goodwin: No further questions.

The Court: All right.

Mr. Goodwin: The Government rests.

Mr. Gotkin: Ihave no witnésses, your Honor. |

The Court: I am prepared to find no transcript was

made of Revenue Agent Murphy’s testimony. |

Mr. Gotkin: Could I request that the finding include |

also a finding that the other witnesses before that grand

jury, did have their testimony transcribed?

[10] The Court: No, I will make only the finding Iam -

directed to make. They say in the Remand, if the District ©

Court finds, after hearing, the grand jury testimony of

Murphy was not taken, judgment affirmed; if it was taken,

new trial. It is the only-issue before me. I will report this

in due course to the Court of Appeals. Pee sae

1f

APPENDIX F

Unrrep States Disraror Covurr: —

District or MassacHusETts

Criminal No. i ; ;

65-2-C

| Untrep States or AMERICA

s .

' Leo J. Soutrsxy

MEMORANDUM

June 28, 1967.

_Carrrey, D.J. i

This matter came on for hearing -pursuant to the direc-

tions contained in the Opinion of-the Court of Appeals

handed down June 6, 1967, that a hearing be held to de-

termine whether or not the testimony of Revenue Agent —

Thomas F. Murphy was stenographically recorded during

the presentation to the grand jury of the evidence which

culminated in the return of the indictment in the instant

case. thet. |

At the hearing, held this date, the Government called

three witnesses. The first witness was Murray Falk, Esq.,

an attorney now engaged in private practice, who was

the Assistant United States Attorney who presented the

Schlinsky case to the grand jury. He testified that no re-

porter was present while. Agent Murphy ‘testified before

the grand jury. The Government next called Mr. Robert

J. Elliott, a partner in the court-reporting firm which at

the time in question had a contract with the Department

‘of Justice to provide stenographic service as needed in

the course of presentments to the grand jury. Mr. El-

, liott testified that on the basis of his firm’s records, Miss ,

«Of

Ruth G. Chiarino was the only reporter assigned to take

testimony during the presentation of the Schlinsky case.

Miss Chiarino then testified that she had with her and had

examined all stenotype notes taken by her during the pre-

sentation of the Schlinsky case to the grand jury and that

she did not take, and consequently there is not included

in her stenotype notes, any testimony’ from Agent Mur-

phy. . | um see. 8! :

On the basis of the testimony of the above three wit-

nesses, each of whom I believe, I find that no stenographic

record was made of the testimony of Agent Murphy during

- the presentation of this case to the grand jury.

_./s/ Anprew A. CaFFREY

U. S. District Judge

an

ORDER

June 30, 1967.

In accordance with Memorandum of the Court dated

> June 28, 1967, it is |

ORDERED: 5 :

-I find that no stenographic record was made of the

testimony of Revenue Agent Thomas F. Murphy during

the presentation of this case to the grand jury. |

/s/ Anprew A. CaFFREY

U.S. District Judge

|

’ dg | |

APPENDIXG

[Lerrerneap — U.S. Treasury DePaRtTMENT]

July 6, 1967

_ Jerome Gotkin, Esquire &

Widett & Kruger :

Eighty Federal Street

| Boston, Massachusetts 02110

Dear Mr. Gotkin;

This is in response to your recent i inquiry regarding the *

speech I delivered June 8, 1967 at the ‘Practising Law In-.

stitute program on ‘‘How To Handle Tax. Fraud —

You asked for the text of ‘the portion of -my speech con’ ©

cerning the ‘‘two new instructions”’ to ‘special agents re-

-Zarding statenients to be made by oom to a aaa under

-investigation”’. .

»-:

/ In my speech I stated that at the outset of his iziitial

; _ interview with the subject of an investigation, a Special

_ Agent .of the Intelligence Division will produce his au-

= thorized credentials and state: ‘As a Special Agent, I have

} the function of. investigating the possibility: of criminal. -

tax fraud.’ Thereafter, should the stage be reached where ©

the possibility of criminal tax fraud has been sufficiently ~

indicated to warrant a full scale investigation, the Spe-.

cial Agent must advise the subject on contact of his con-

stitutional rights to remain silent and to retain counsel.”’

You may ™ from my speech.

Sincerely yours,

/s/ Lester R. Uretz

Lester R. Unerz

‘Chief Counsel