Petition for Writ of Certiorari — Bandy v. United States

TP otfiee-Supreme Court, Us. |

- FIEED

OCT 33 1967

[_<_J0HN F DAW, mERK |

OIBRARY |

| SUPREME COURT, U, B

No. 7 23

3

+ .

IN THE

; -. Supreme Court of the United States |

OcrosEr TERM, 1967

‘CLARENCE E. MANSFIELD, Sewer

Petitioner,

V.. * z ;

UNITED STATES OF AMERICA, ie

. : | Respondent.

I PETITION FOR A WRIT OF CERTIORARI TO THE

"ss "-"UNTTED STATES COURT OF APPEALS FOR =

THE SEVENTH OIROUIT

o

JULIUS LUCIUS ECHELES

30. North, La Salle Street

Chicago, Illinois 60602

MAX REINSTEIN .

110 South Dearborn Street _

Chicago, Illinois 60603 -

“WOODROW. WILSON HODGE

189 West Madison Street pe:

Chicago, Illinois 60602 . .

Attorneys for Petitioner

’ ° r ’ ° . : ‘

UNITED STATES LAW PRINTING CO., CHICAGO, Ii 6618 LA keview 5-6581

s

saranatieatin it schbiaha none ites Seeaeeite iat

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©

INDEX cua s

x | nl PAGE

J adgment and Opinion of the Sik Below . hieeaiadial - 2

Jurisdictional Statement. ............ ae ieialislasicio id oe 2

Questions Presented for Review .... f | 2

". Constitutional ‘Amendments Involved 3 = 4

Statement of the Case ............ 3 ad |

Evidence in aoe aye with the motion to sup- ¢>

press the evidence Sicilia 7 ee Te

Evidence on the ease in chief ia. een a ae

Reasons Relied on for ‘Allowance of Writ .

I. May deliberate Government deception be per-

mitted to frustrate necessity for peoper warning

of constitutional rights? Sallercaaieiea . 10

II. Does the holding in Miranda apply t to criminal

tax investigations? eceordiconveneans ‘ ~~ MM.

“Conclusion ons : ee Reeser: | " eS |

‘ Appendix en =“ ‘siete , | i App.1

a Appendix B—Order heii a Petition for Rehear-

_ ing -... oe seoeceeeeAPD. 10" -

iiss

. ii »

AUTHORITIES CITED

,

Cases—

“ad : . PAGE

Escobedo y. Bilinols, 378 ee emenne daasitendslnas 12

Kohatsu v. United.States, 351 F.2d 898 (9 Cir. 1965), :

_ cert. denied 384 U-S. 1011 } RES ‘cipasiieameeiens ’ 15fn

Mathis v. United: States, 5 Cir., 37 6 F.2d 595 (decided, ,

- April 28, 1967) seaienieeiaiene s. 16 .

Morgan v. United States, 1 Cir., 377 F.2d 507 (decided, :

May 16,1967) neccnveorncnetrrretrnnnnennneennn 16

Miranda v. Arizona, 384 U.S. 436 at [' 2: i csooee 1%, 18:

Rickey v. United States, per curiam, 360 F.2d 33 (9

Cir. 1966) CIES Retr .. 15fn

Stern v. Robinson, 67- 1 USC. 83,727 (W.D:Tenn. .

1966) neaere 15fn

_ United States v. Bachman, ¢ 67-1 U.S.T.C. 83,772 (W.D.

Pa. 1966) .. | 15fn

United States v. Carlson, 260 wi "Supp 423 (E.D. N.Y.

OE aesenwind ae titan o

United ee v. Fiore, sit F.Supp. 435 (W.D. ra. . :

1966): cciuciaiancsunienitiniannecinnactniacscttiaeear anal 15fn

United States v. Gleason, 265 F.Supp. 888 (S. DN. ¥.

ees sa we 15En

6

United States v. Hill, 260 F.Supp. 139 (8.D.Cal. 1966) 15fn

United States v. Kingrey, 19 AFTR 2d 762 @e Fla. |

RN ce 14

United States \ Vi: » Kingry, 61- 1 U. ST. C. 63,604 (N.D.

Fla. 1967) . 15fn :

United. States v. , Mains, 378 F. oa 719 . 16

‘ a baad

5

2 _s “i iii.

a. 3 te tee PAGE

United States v. Schoenburg, 1 19 AFTR 2d 347 (DC: |

. Ariz, 1966). .......... .14,15fn —

~ United States v. _ Shlinsky, 261 F. Supp. 265 (D. Mass. _

1966) nis: 15fn |

United States v. Silverstein, 2 Cir. 63, 314 F.2d 789, cs

790. - Giwees 12 ©

United States v. Spinney, 264 F. Supp. 174 (D. Mass. 3

1966) ) 15fn

United States v. eoomar, 339 F.2d.941 (7th Cir. 1965),

_ cert. denied. 380 U-S. 975 (1965) , /15fn .

United States v. Turzynsky 268 F.Supp. 847 (devided :

June 2, 1967) , ian ae

Constitutional Amendments | |

Fifth Amendment “ duiiosmieades

Sixth Amendment ie 14, 17

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oo IN THE -

"Supreme Court of the United States

OcTOBER Team, 1967

2, Petitioner, °

' UNITED STATES OF AMERICA, ss

Ka Peete katy ; Respondent.

| PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

‘THE SEVENTH, CIRCUIT

To: The Honorable Chief Justice and yen Justices

of the Supreme Court of the United States:

~ Your petitioner, Clarence E. Mansfield (hereafter called

defendant), respectfully prays that a Writ of Certiorari

“be issued to review the decision of the United States: ‘Court

of Appeals for the Seventh Cireuit. :

.

s

2

JUDGMENT AND OPINION OF THE COURT BELOW |

/ On July 26, 1967, the Court of Appeals for the Seventh.

Circuit affirmed a judgment’ of conviction entered in the

"United States District Court for the Northern District of

Illinois, Eastern Division, sentencing the defendant to a

‘term of one year imprisonment for filing fraudulent, in-

come. tax returtis for the years 1957 through 1960.. The

Court of Appeals opinion has not as yet been reported ;

, it. is printed: herewith as Appendix '‘‘A’’.~

J URISDICTIONAL STATEMENT .

‘_Qn-a-trial-to the court without a jury, the defendant,

a practicing physician, was convicted on four counts charg- -

- ing wilful evasion of income tax for the years 1957, 1958

and 1960, in violation of Title 26, U.S. Code, Section 7201.

On appeal to the. Court of Appeals for the Seventh

Circuit, the judgment of conviction was-affirmed in an

opinion filed July 26, 1967. ‘(Appendix ‘‘A”’).

A petition for rehearing was timely filed; it was. denied

on September 8, 1967. (Appendix ‘‘B’’).

The jurisdiction of this court is invoked under the

pene of -Title 18, US. -Code,. 1264(1). . -

* QUESTIONS PRESENTED FOR REVIEW

1. Does a warning, that there was a possibility of a

criminal prosecution and that he did not have to talk to

the agents or show them any records, given on April 6,

1961 to a taxpayer by a®Special Internal Revenue Agent

while investigating 1959 tax returns stand as ffective

constitutional warning where a different tax aga

visited -

3

the taxpayer 15 months later in J uly 1962 for the purpose

of investigating the — s returns for 1957 through

1960? .

2. If a criminal ‘suspect is once warned of his consti-

tutional rights during an interrogation, does such warn--—

ing permit governmental interrogation without any other

warning by another agent 15 months later about other

possible crimes? 4 o

- 3. Can the holdings in Escobedo v. Illinois, 378 US. =

478 and Miranda v. Arizona, 384 U.S. 436, be deliberately

evaded and avoided by an affirmative Internal Revenue de-

partmental policy not to repeat the constitutional warnings

after a 15 month hiatus in an investigation because the .

warning might ‘‘frighten off cooperation which might-

‘otherwise be forthcoming”? |

4. Does a taxpayer under investigation have the same

right to réceive a. warning of his constitutional rights as

‘a suspect under investigation for murder, bank robbery,

kidnaping, rape, burglary, arson, etc? a

5. Within the’ spirit of this court’s recent pronounce-

_ ments on ‘the necessity of criminal interrogators to give

_ constitutional warnings to suspects, may a deliberate gov-

ermental policy to practice deceit on the suspect by failing

to warn him for fear his —— would be withheld

be ‘permitted to stand?» — * :

6. Was-the required.criminal intent to evade taxes

shown where the evidence demonstrated the doctor’s: for-

getfulness, his illnesses durin ing, the years in question, his

habitual lengthy workday running to 12 hours, his sloppy

bookk eping methods and.the fact that ,both his recep-

tionist-secretafy and the person who made out his re-

turns (who was 75 years old.and had only an 8th grade

‘

te

on

education) had little experience in. bookkeeping matters,

and the tax discrepancy as found by the government’s ac-

countant were disputed at trial by a competent and experi-

enced accountant on behalf of the defendant?

Y CONSTITUTIONAL AMENDMENTS INVOLVED

The Fifth Amendment to the Constitution of the United

States states, in pertinent part: !

**No person .. . shall be compelled in any criminal |

case to be a witness against himself .. .’’,

The Sixth Amendment to the Constitution of the United

States states, in pertinent part: |

_ “Tn all criminal prosecutions, the accused shall

enjoy the right .. . to have the assistance of counsel

for his defense.’”

. STATEMENT OF THE CASE.

“Evidence in connection with the motion to suppress

the evidence.

The ‘Siti appeared before the office andit section

of the Internal Revenue Department and spoke to Gertrude

Anderson, a tax technician in ‘the audit section, on No- .

‘vember 23, 1960 (A. 5).

Following this meeting, Miss sateen referred the

| ge “to the intelligence unit and subsequently, on April

, two special agents, John J. Creen and Ralph

pore ven visited the home of the defendant where he

pt his offices (A. 24).

Creen said they identified themselves as special agents

and told the doctor that ‘‘the special agent’s office looks

into these matters to see if there has been any wilful

Hy)

attempt to evade and defeat taxes, and that there was

a possible criminal prosecution, and he does not even have

to: talk to us or show-us any record.’’ (A. 24) Defendant

’ testified they did not (A. 20). They were given his log ~

books and other record’ for the year 1959, which they pro-—

ceeded to examine (A. 25).

Following that, defendant received a bill from the Inter-

nal Revenue Department for $10.00 for a deficiency for

the year 1959 which he paid (A. 21). He assumed that

the investigation which had been begun by. Gertrude An-

derson and carried forward. by special agents Creen and

Bergstrom had been concluded (A. 28).

From April-6, 1961, until July 2, 1962, nothing further

; appears to have been done in the case (A. 21).

On July 2, 1962, Russell Armstrong, an internal revenue

agent, was assigned to the case. He telephoned the de-

_ fendant te set up an appointment to exaniine the books for

the years 1957, 1958, 1959. He told defendant over the "

telephone that he was conducting a ‘‘joint investigation” .

for tliose years, but did not explain what a joint-investiga-_

tion was (A. 11). Defendant denied he was so told (A, 21).

A departmental decision was made not to advise defend-

ant of his rights. When the question came up whether or

not Armstrong should inform Dr. Mansfield of his rights

‘«., . we decided that since another special agent had in-

formed him on a previous occasion, it was not necessary

for me to inform Dr. Mansfield of his rights.’”’ (A. 19).

Armstrong visited the doctor’s residence and office on July -

6 or July 10, 1962, for the first time (A. 10) and continued

‘his examination until some time in October, 1962 (A. 6).

Armstrong took with him a large box containing all of the

_doctor’s log books, patient books and records (A. 12). He

~

6. =

-~-took down the names of attorneys who had appeared in.

the records as having paid the doctor certain fees (A. 14).

_. During the course ‘of Armstrong’ . investigation, he com-

. © Mmunicated with special agent William Sandroff at least

once every two weeks (A. 16). Armstrong testified that

. special agent Sandroff was in charge of, the investigation

and that he made reports of his findings at periodical in-

tervals to Sandroff (A. 17).

_ Armstrong never advised the defendant that he was

conducting an investigation which would lead to a criminal

prosecution, nor did he tell the doctor there was: a possibil-

ity of his being prosecuted for income tax evasion (A. 16).

- William Sandroff came to defendant’s home and office -

on October 8, 1962, identified himself as a special agent. in

- the Intelligence Unit and advised the doctor that ‘‘This

was a criminal investigation’’ (A. 7). He told the doctor.

«<* * * he did not have to say anything to me, if he chose ©

not to do so—anything he said to me could beyused in any

action, criminal action.’” (A. 7). Before he visited the doc-

tor, he was working on the-case in conjunction with Arm-

- strong (A. 10). He was assigned to the case on July 12;

" 3 (A. ©

The defendant testified he did not — the differences

between an internal revenué agent and a special. agent

and had no reason to believe that the information which

he furnished Armstrong was for the purpose of making

‘a criminal case (A.. 21-22). Armstrong visited his office

for about ten weeks, calling daily (A. °22).

‘It was on the basis of the books and: records mainly

obtained by Armstrong that the case was ‘made against

a defendant (A..10). .

——

——<——

7

.. Bvidencs. on t} ne case in chief, .

The government introduced evidence in the form: of

checks received by defendant from numerous attorneys. for

_., Medical services performed for their clients as follows:

1957 $8,280.00 ; 1958 $12,257.30; 1959 $17,345.50; 1960

$11,049.25 (A. 40). ve

The government also introduced evidence that the in-

come received by the doctor in his office was as follows:

1957 $4,637.75; 1958 $4,504.16; 1959 $3,980.63; 1960 -

$4,128.00 (E.A., G-42, 43)

' The government showed interest income received in 1960

was $209.97; income from welfare organizations was $327.50.

for’ 1959-and $1,265.00 for 1960; and income from the City

of Chicago per prerhnent exhibits 42 and 43 we were as

follows: | __ eee

gouscA

1957 $3,728, 90; 1958 $4,389.58; 1959 $4,325 82; 1960

$5,430.76 (E.A., G-42, 43).

The gross receipts per the government’s. tebelatinns’ for

the years: in question are as follows:

1957 $21,423.39; 1958 $24,567.48; 1959 $30,781.14;

1960 $25,532.32 (A. 41).

The government’s evidence showed an under reporting

of income in each of the respective years as follows:

1957 $10,247.62; 1958 $13,066.80; 1959 $17,061.14;

1960 $8,010.32 (A: 42).

*«*H.A.”’ refers to Exhibits Appendix..

as follows: PLES oe é a

¢

Defendant introduced evidence showing iticome, includ-

ing all of ‘the additions eae by the — as

follows :

1957 $17,083.77; 1958 $21, B56. 46; 1959 $26, 583. 63;

1960 $22,816.22 (A. 55).

The defendant also presented evidence showing aa |

- tures not deducted on the income tax returns as w reported

eee ne

en eh

1957 $8,628. 42; 1958 $8,195. 44; 1959 $15, 891.78; 1960

; $11,011.55 -(A. 3; total of defendant’s apyentiots

‘\ A & B).

‘Defendant’s expert witness William Corren, a certified

public accountent, testified that giving due regard for the

/ government’s computations and expenditures by the de-

/

fendant not deducted, the correct tax due for each year

“in question was as follows: :

1957 $1,118.16; 1958 $2,118.34; 1959 $2, 251.08; 1960

$1,274.16 (A. 55). |

Robert‘ N eal, who prepared defendant’s tax returns,

. testified he was 75 years of age and had an 8th grade edu-

cation. He made out returns for 21 years (A. 33-34).

Angeline Hardy kept the books for the doctor. Her

main function was that of a receptionist-secretary in the

doctor’s offices. She had no ‘training as a — and

never kept books before (A. 53). '

-. Dr. Mansfield testified that he was either 60 or 61 years

old; he did not recall the exact year of his birth (A. 48).

Neither did he recall the years in which he attended Brown

University (A. 48), nor the exact year in which he was

_ admitted to the practice of medicine in Illinois (A. 48).

3

His normal. workday was twelve hours a day (A. 48).

He saw three types of patients: those he determined to be

“welfare patients, sent to him by welfare organizations,

patients referred to him by attorneys, and those patients

whom he saw in connection with his duties as a. police

_ surgeon for the City of Chicago at the police lock-up at

1121 South State Street, Chicago (A. 47-48).

+ 1957, the doctor was under treatment by a ‘iene

for diabetes, hypertension, obesity, and sinusitis (A. 47).

In 1959, he had Bell’s fiilsy of the face and was both under -_

doctor’s.care and hospitalized (A. 47):

Oe .

10

REASONS RELIED ON FOR ALLOWANCE OF WRIT

AL

May deliberate Government deception be permitted to

- frustrate.necessity for proper warning of constitutional

rights? sa a peers, |

_ Dr. Mansfield who, the record shows, worked ‘about 12

hours a day at. his profession, was visited by Internal

Revenue Agent Russell Armstrong on either July 6 or

. July 10, 1962 (A. 10) for. the purpose of examining the

- doctor’s records for 1957, 1958 and 1959. Armstrong had.

been advised by' his superiors in the Internal Revenue De- .

partment not to warn the doctor of any constitutional

rights. (A. 19) Armstrong testified that when the ques-

tion whether or not he should inform the doctor of his

rights came up “‘ ... we decided that since another special

agent had informed him on a previous occasion, it was not

necessary for me to inform Dr. Mansfield of his rights’’.

But the record fairly shrieks that this departmental de- _

_ cision made in conference was deliberate deceit and fraudu-

lent ‘subterfuge.: The so called previous warning took

place some’ 15 months prior, in April 1961, when a spe-

cial agent, one Creen, interrogated Dr. Mansfield about

his 1959 tax return. Although the doctor denied that he

had been: so warned (A. 20), Creen testified that he told

the doctor in April 1961, that ‘‘the special agent’s -office —

looks into these matters'to see if there has been any wil-

ful attempt to evade and defeat taxes, and that there was a

possibility of criminal prosecution, and he does not even

- have to talk to us or show us any records. ’’ (A. 24).

11

But if Creen had so warned the doctor in April 1961, and

if because of that warning the Internal Revenue depart-

mental hierarchy ‘decided that Armstrong, who was an

ordinary, as distinguished from a special agent, should: -

not give the doctor any constitutional warnings about his

rights in July 1962 because of the previous Creen’s warn-

“ing, why then the wholly superfluous warning to the

- doctor when Special Agent. Sandroff showed up at the.

. doctor’s house to identify himself as a Special Agent .

from the Intelligence Unit? Sandroff testified he advised

the doctor that ‘this was a criminal investigation’’ and

that the doctor would not have to say anything to him, if

he chose not to do so and that, ‘‘anything he said to me

could be used in any action, criminal action.”” (A.7) -—

However, through the months of July, August, Sep-

tember up to the visit to the doctor in October 1962, Special _

Agent Sandroff was laying in the weeds. Ordinary Agent °)

Armstrong had access to all of the doctor’s books, logs, rec-

ords, receipts, memoranda, etc.. He would make photo-

- static copies of the documents at will. During these

months of investigation when Armstrong had -the use of

the doctor’s records (deliberately withholding any warn-

ing that information gleaned might be used against him

in a criminal prosecution) he was relaying all of the in-

formation to Sandroff, who had been assigned to the case

almost simultaneously with Armstrong. (A. 6; 10) It. |

was only when Sandroff had everything he needed to make

out what he believed to be a case against the doctor, that

he moved in.on the kill in October. 1962; and it, was only

then ‘that he gave the: wholly superfluous warning. ~

To be remembered is that after Special Agent Creen

had audited and inspected the doctor’s books and records

pertaining only to his 1959:tax returns, the doctor received

? 8

; |

- a tax bill for $10 from the Internal ieee Department.

and paid it. (A. 21). It was his belief that the matter

' _ with respect to the investigation of the 1959 tax return had

‘been completed. That would be any taxpayer’ s normal

belief. a :

The deliberate ‘subterfuge practiced nee the government

in derogation of the taxpayer’s rights under the Fifth and .

Sixth. Amendments4to the Constitution tainted the govern--

ment’s: evidence with illegality and fraud. Such practice -

and deliberate deceit ought. not to be sanctioned. ‘Although

the trial here was held in December: 1965, before the

holding in Miranda v. Arizona, 384 U.S. 436, but after’ the

holding in Escobedo-v. Hlinois, 378 U.S. 478, the- ‘question

_ is whether the ‘‘totality of circumstances’’ vitiated the

voluntariness of the taxpayer’s consent. It is clear that

attention focused on the doctor as a crimingl suspect at

the time when Armstrong came to his offices. Just as

_ ‘tan appearance before a special agent isin the nature of

‘an appearance in a criminal investigation . . :’? United

‘States v. Silverstein, 2 Cir. 68, 314 F.2d 789, 790, so the

appearance-of a special agent (or one working secretly

for him) is likewise. As investigation had focused on the

_ defendant as a criminal suspect, the requirements as laid

down in Escobedo v. ‘Minois, nish, should have been

followed. ; '

The opinion of ‘the Court of Appeals, if allowed to

-stand, will permit widespread governmental deception to .

avoid and frustrate the constitutional: commandment -as |

‘implemented in the Escobedo and Miranda holdings. The

Seventh Circuit, in justifying the confessed deception of

"the agents, stated: .

“Tn the course of oral arguments, counsel for the

government suggested frankly that agents must some

°

_ times decide whether unnecessary repetition of warn-

. ings will not frighten off cooperation which might

otherwise be forthcoming. We agree that in this case . ~

- the tactical decision not to. repeat full warnings al-

ready given would not: render the books and records

produced, subject to suppression as evidence.’’ (Opin-

ion, Appendix “A”, p. 4). ts

. How far removed from the spirit and the language of

the holding by this .court‘in Miranda v. Arizona, 384 U.S.

436 at 467-8 where this. court announced strongly:

-

“At the outset, if a person in custody is to be sub-

jected to interrogation, he must first be informed in

clear and unequivocal terms that he-has the right to

remain silent. For those unaware of the- privilege,

the warning is needed simply to make them aware of

it—the threshold. requirement for an intelligent “de-

. Cision as-to its exercise. More important, such a -

warning is an absolute prerequisite in overcoming thé

» inherent pressures of the interrogation atmosphere. It.

is not’ just the subnormal or willfully ignorant who

saccumb -to an interrogator’ s imprecations, whether

implied as expressly stated, that the interrogation

will continue until a confession i is obtained where that

silence in the face of accusation is itself damning and

will bode ill when presented to a jury. Further, the

warning will show the individual that his interro-

gators are prepared to recognize his dares. should

he choose to exercise it.

“The Fifth Amendment privilege is so fundamental |

to our system of constitutional rule and the expedient...

of giving an adequate | watning as to the availability

of the privilege so simple, we will not pause to in- -

quire: in individual cases whether the defendant was

aware of his rights without a warning being given. -

Assessments of the knowledge the defendant pos-

. sessed, based on information as to his-age, education, |

intelligence, or prior contacts with authorities, can

_mever be more than speculation; a wornmng is a Gear

a

— on

cut fact. More important, whatever the backgrounde

of the person interrogated, a warning at the time of

the interrogation is indispensable to overcome its pres-

sures and to insure that the individual knows he is

free to exercise the privilege at that point in time.’’ - :

(Bmuphacts added)

II.

Does the holding in ‘Miranda apply to criminal -

, tax investigations?

There is a growing conflict amongst the courts as to

whether taxpayers have the same rights under the Con-

stitution as persons under suspicion of more serious, crimes

such as murder, bank robbery, rape or arson; ete. This .

court should issue , its Writ of Certiogari to resolve- that

question, which i is decided differently throughout the coun- .

try. | : ;

In United States v. ete 19 AFTR 2d 347 (DC .

Ariz. 1966) the court held that the conduct of the special

agent deprived the defendant of his. right to counsel under

the Sixth Améndment when the defendant was not advised

‘of his right to counsel before an interrogation took place

between the agent and the taxpayer, the court holding that

Escobedo applied because suspicion had begun to focus on

‘the taxpayer: An arrest was held not to be necessary for

the application of the Escobedo rule. The interrogation

in Schoenburg took place at the taxpayer’ s place’ of busi-~

ness, as in the case at bar.

In United States v. Kingrey, 19 AFTR 2d 762 (DC | Fla. }

1967) the court applied the holding in Miranda to a crim-

inal tax prosecution stating that, ‘‘.. . if this kind of warn-

ing is required for bank robbers, . senldie or arsonists, it

seems to me that-the taxpayer should have the same bene-

fit, and I ean see no possible way to distinguish in a crim-

inal ‘action that would subject one to possible confinement

Oe Paar

— =

in an institution, regardless what the nature df the crime

"may be.’? In Kingrey, the special agent identified himself

as such and advised the defendant of his constitutional

right to refuse to answer any questions; but he did not

state he was investigating a possible;criminal' violation -

of the tax law, and he never advised the ‘defendant of his

right to consult with or have a lawyer present. __ |

Similarly, in a case from the Northern District of Ilh-

nois from which District. this prosecution stems, District

Judge Hubert L. Will, held in United States v. Turzynsky,

268 F. Supp. 847 (decided, June 2, 1967) that evidence ob-

tained by agents from a doctor taxpayer should ‘be sup-

pressed because no warning was given prior to the in-

terrogation and investigation. The court stated that ‘‘to

hold otherwise would lead to the ae conclusion

~ Jes |

1 Judge Will noted the following in his gpinion:

Post-Escobedo, pre-Miranda cases holding Escobedo inapplicable

to the instant situation are United. States v. Spomar, 339 F.2d 941 |

(7th Cir. 1965), cert. denied 380 U.S. 975 (1965); Kohatsu v.

United States, 351 F.2d 898 (9 Cir. 1965), cert. denied 384 U.S. |

1011 (1966); and Rickey v. United States, per curiam, 360 F.2d

33 (9 Cir. -1966). ori

Post-Miranda cases figlding Miranda inapplicable to the instant

situation include: United >v. Fiore, 258 F.Supp. 435 (W.D.

Pa. 1966); United States V~Carlson, 260 F.Supp. 423 (E.D.N.Y.

1966) ; United States v. Hill, 260 F.Supp. 139 (S.D.Cal. 1966);

United States y. Shlinsky, 261 F.Supp. 265 (D.Mass. 1966) ;.

United States v. Spinney, 264 F.Supp. 774 (D.Mass. 1966) ;, United

States v. Gleason, 265 F.Supp. 888 (S.D.N.Y. 1967) ; Stern v. Rob-

‘inson, 67-1 U.S.T.C. 83,727 (W.D.Tenn. 1966) ;-United States v.

Bachman, 67-1 U.S.T.C. 83,772 (W.D. ‘Pa. 1966)...

-Post-Miranda cases where Miranda was applied to non-custodial

<7,

criminal tax: investigations include United States v. Kingry, 67-1 ©

U.S.T.C. 83,604 (N.D. Fla: 1967), and United States v..Schoen-

burg, 19 AFTR 2d 347 (D.Ariz. 1966). 3 Pa genes

< ™:

“

16

that a person suspected of bank robbery, sale of narcotics,

- murder, rape or other serious crime is-entitled to the

greater protection of his constitutional rights than a per-

son suspected of violating the Interna] Revenue laws.”’

Morgan v. United States, 1-Cir., 377 F.2d 507 (decided,

May 16, 1967) and Mathis v. United States, 5 Cir., 376

F.2d 595 (decided, Ape 28, 1967) seem to hold bo the

contrary. | |

A recent case decided by the Sixth Circuit on J une 15,

1967, suggests strongly that this question is ripe for con-

sideration by this court. United States v. Maius, 378 F.2d

719. There also a defendant was interrogated with respect

to.the proper reporting of income taxes, and although the

agent advised the defendant of his rights under the Fifth

Amendment, the agent did not inform the taxpayer that

he could have an attorney present during the interview.

The court stated:

‘* Appellant was not under arrest or under duress in

the legal sense of the term when he made the state-

_ments ‘in question. A doubt may well assail us as to

whether it is fair to a citizen to be summoned before

the Inteffial Revenue agents to be informed that any-

thing he says may be used against him, and then for

the agents of the Internal Revenue Service, personify-

ing the authority and punitive nature inherent in law

- enforcement, to subject a man to questioning and to

extract possibly by threats, insinuations, or subtle

forms of suggestive coereion, the , only evidence on

which he ean be sent to prison, and to'use this evidence

' to send him to prison. It would-seem, in all fairness;

that before he answers such questions ‘and’ thereby di-

rectly incriminates himself, he should be advised of his

right to have his lawyer present. The Internal Revenue

Service has lately been subjected to. widespread

criticism, because of trickery® of some of its agents in

* As in the case at bar.

17

unconstitutional invasion of a citizen’s rights by the

use of tapped telephone wires, or ‘¢bugging’’; and the

Commissioner has repudiated and castigated such con-

duct... No one would believe, however, that a man .

would appear hefore the government agents, and an-

swer their questions, if he knew that the effect of his

answers would be to send him straight to the penitenti-

ary. 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 Reve-

nue agent is thereby deprived of his constitutional .

rights. A citizen summoned before such federal agents

« had the option to refuse to answer their questions; but

there are few who have the toughness of fibre and the

technical knowledge of: their rights, who would decline _

to. answer quesfions put to them in these circum-

stances. Until we.are told by supertor authority that

a citizen’s constitutional rights are.imperiled by such

procedure, we are constrained to hold that the evidencé”

thereby obtained is admissible in the ensuing criminal

trial.’’ (Emphasis added). .

It is thus demonstrated that the lower courts are needful

of further guidance from this court in this area.

CONCLUSION

If the Internal Revenue departmental penaiion as sanc-

| tioned by the Seventh Circuit Court of Appeals is per-

mitted ‘to stand, new and creative methods fdr avoiding -

the direct and positive pronouncements of the holdings in

_ Escobedo and Miranda will be attempted in derogation

of the Fifth and Sixth Amendments. This court ought

- not to sanction a procedure, deliberately engaged in by

government agents, which seek to frustrate and avoid the

. plain holdings of the aforesaid cases.

. ** But see cases ein

18

Considering the growing body of conflict amongst the

various courts in determining whether. Escobedo and

Miranda are applicable to non-custodial criminal tax in-

vestigations, we respectfully submit the time is ripe for _ |

this court to make known its views for the guidance of all -- ‘|

‘of the courts which have this recurring problem. ;

Respectfully submitted,

Juuius Lucius EcHELEs

- Max Rerstein

Woovrow Wison Honce

Attorneys for aac ed

APPENDIX “A”

, : in the pihieve 3 |

United States Court of Appeals

Bor the Seventh Circuit

SepremBer TERM, 1966 . Apri Session, 1967

No. 15802 | ) Appeal from the

Unrrep States or AMERICA, United States Dis-

Plaintiff-Appellee, ’ trict Court for the

v. | Northern District

Cuarence E. MANSFIELD, of Illinois, Eastern

Defendant- Appellant. Division.

July 26, 1967

Before Knocu, SwYGERT and Farrcuip, Circuit Judges. .

Kno yu, Circuit Judge. Dr. Clarence E. Mansfield, the

defendint-appellant, was found guilty in a trial by the

Court sitting without a jury on a four-count indictment

charging wilful evasion of income tax through filing false

and fraudulent returns for 1957, 1958, 1959 and 1960, in

violation of Title 26, U.S.C. §7201. He was sentenced

to serve one year on each count, the sentences to run

concurrently.

Dr. Mansfield contends that:

1, the Court erred in denying his mation to. suppress

“yoxs and records made available to Russell Armstrong,

App. 2 -

an internal revenue agent, who did not advise Dr. Mans-

field that he was conducting an investigation which could

lead to criminal prosecution for income tax evasion;

2. giving due regard to the defendant’s age, long

hours of work, inept bookkeeping methods, and forget-

fulness, the government did not prove the element of’ wil-

fulness;

8. the computftions of the government were in error

and duplicated some figures;

4. recognition was not;given to certain allowable ‘de-

ductions which would decrease the amount of tax:

- In November, 1960, Dr. Mansfield had spoken to |

» Gertrude Anderson, a tax technician in the Audit Section

of the Internal Revenue Department, respecting his 1959

return. She had warned Dr. Mansfield that an agent

might visit. him. — ce a

John Creen testified that he was a special agent of the

Internal Revenue Service; that he and Special Agent

Ralph Bergstrom visited the defendant at his combined

office ‘and residence in Chicago; that they identified them-

selves and told him they wanted to speak to him about

- his income tax return. Dr. Mansfield had replied that

he thought the matter was closed. at the office, but the

agents informed him that the matter had been referred

“to the special agents’ office which leoked into these mat-

- ters to see whether there had been any wilful attempt

to evade and defeat taxes, that there was a possibility

of criminal prosecution and that Dr. Mansfield did not

have to talk to the agents or show them any records.

Later in the same visit, when they asked to see his

medical records, the agents again informed the Doctor

_ that he did not have to talk to them or submit any rec-

a ueneuEnanereneeeneeneneneae mamas

App.3

ords to’ them. When asked whether repeated warnings

were not unusual, Agent Creen said that the. practice

varied from time to timé ‘pursuant to current court rul-

ings. He testified that Dr. Mansfield said that he under-

stood and that he had nothing to hide; that the Doctor .

had then instructed an employee of his to give the agents °

two record books for 1959 which they were allowed to

examine. in his absence: and made available to them an

adding machine.

When Dr. Mansfield testified concerning this visit, he

said he thought it occurred in January 1961. He also

described ‘the records given to the agents as more ex-

tensive than the two volumes described by the agents.

He testified further that he was given no warnings, that

the agents showed’ him cards identifying them. only as

- from ‘Internat Revenue”’ and asked to see his office rec-

ords, that he had to go out and he had left them at work

in his office with his records. He said he later received

a bill from Internal Revenue for $10, which he paid, and

he considered the matter closed. -

On July 2, 1962, Russell Armstrong, an internal revenue

agent in the Audit division, was assigned to this case

to make the field investigation which was a ‘‘joint” in-

vestigation for 1957, 1958 and 1959, as he advised Dr.

Mansfield when he telephone him to make an appoint-.

ment. Dr. Mansfield denied that he’ was told even that.

much. Agent Armstrong said he did not explain what

a ‘‘joint’’ investigation was, state that he was, conducting

a criminal investigation in conjunction with the Intelli-

genve Unit of the Bureau of. Internal Revenue, or repeat

: the warnings to whith’ Agent Creen testified.

@

App. 4

In a joint investigation a special agent is in charge

of the investigation, and some time after the assignment

. of Agent Armstrong, Special Agent William Sandroff

of. the Intelligence Unit was also assigned to this in-

vestigation.

During July, August and Beptenbes, 1962, Aisi Arm- °

strong made periodic visits to the Doctor’s office where

he examined a cardboard box of cancelled checks, bank ©

statements, e ete., and ‘log books showing income for daily

walk-in, patients. From time to time he discussed the

_. investigation with Special Agent Sandroff.

At a conference with. the special agent assigned to the

case prior’ to William Sandroff, Agent Armstrong said

it was decided that it was unnecessary for him to advise

' Dr. Mansfield of his rights beéause he had already been

so advised by another agent. Dr. Mansfield argues that

this was deliberate deceit amounting to subterfuge and

misrepresentation and that all evidence obtained by nom

’ Armstrong ought to have been suppressed.

In the course of or al argument, counsel.for the govern-

- ment suggested frankly that agents must sometimes de-

cide whether unnecessary repetition of warnings will not

frighten off co-operation. which might otherwise be forth-

coming. . We agree that in this case the tactical decision

not to’ repeat full warnings ‘already given did’not render

the books and records produced subject to ssi

as evidence,

The government observes that: Dr. Mansfield sisi no

'- change in his continued. permission for examination of

his records even after Agent Sandroff did Tepeat the

prior warnings at the time of his own first’ interview

with Dr. Mansfield in October 1962. This fact is at least

oO

App. 5

canaily .persuasive- ‘of the government’s contention, that ,

the Doctor was never misled, as of the defendant’$ own”

assertion that the damage was already dorfe and revoca-

tion of the permission would have served little purpose.’

In any event, during the entire investigation, Dr. Mans-,”

field withheld his record regarding personal injury

patients with claims for damages. The District Court

. did not err in denying the ‘motion to suppress. U:S. v.

Spomar, 7 Cir., 1964, 339 F.2d 941, 943, cert. den. 380

’ iP

f

so"

U.S. 975, reh. den. 381 U.S..956; U.S. v. Achilli, 7 Cir., yh

1956, 234 F.2d 797, 805-6, afd. 353 US. 373.0 yA

oJ”

The defense points | out ‘such circumstances ‘as the fol-

lowing:

1. the Doctor’s forgetfulness: he: couldn * say when

testifying whether he was 60. or 61 years old, because

he didn’t recall the exact year of his birth, and he couldn’t

remember in which years he attended Brown University _

or the year he was admitted to practice medicine in

Tllinois ; “ )

2. the lengthy workday he habitually followed, raqang

to twelve hours; ;

3. ._he was under treatment for diabetes, hypertension,

obesity and sinusitis in 1957 and for Bell’s palsy i in 1959;

4. his records were kept by a receptionist-secretary

who had neither training nor experience in bookkeeping;

‘5. hisYax returns were made out by Robert Neal, who

had only an eighth grade education and wae was 75 —

old at the time of the trial;

6. he saw three types of patients: (a) those sent ih

welfare EIN, (b) those. referred - to im by

App. 6

° 9

‘attorneys, and (c) those he saw in connection’ with his

duties as’ police surgeon fog the City of Chicago at the

lockup at 11th and State Streets in Chicago;

7. he did make his books and .regords available for

examination.

Under all these circunistances, the defense feels that

the Doctor was admittedly careless, but that there is no

showing of intentional evasion. : ae

On the other hand, the government has shown a sub- |

stantial understatement of gross income for a number

. of years, which has been held to be evidence of wilful

intent to evade. Epstein v. U..8.,.6 Cir., 1967, 246 F.2d

563, 566, and cases there cited, cert. den. 355 US. 868.

‘The returns were prepired from ‘documents’ and papers

supplied by the defendant; some of the figures given -

Mr. Neal were’only estimated. In two of the years, in .

question, ‘Dr. Mansfield’s expenses as provided for prep- '

aration of his returns exceeded the income figures pro-

vided. Mr. Neal testified that in preparing the returns:

‘he reduced the amount. of. these expense deductions be- -

' cause he did not-want the Doctor to get into any-trouble,

_; and when he told the ‘defendant about: that, the defendant

“was agreeable to the changes. In going through the de-

fendant’s records, Agent Armstrong. came upon an un-

signed, unfiled tax return for 1958 which showed sub-

' ‘stantially higher gross receipts than’ the return which

was actually filed for that year.. The defendant objected

- to the fact that -a photocopy was made of this return

form without his knowledge, -but Agent Armstrong tes-

tified only from his own recollection as refréshed from

his own notes. The photocopy was not offered in evidence

or otherwise used during the trial. |

App. 7

- Although the, sole oieeeanaail of taxes was ‘made on

his wages from the Police Department;. which represented

only one: of the three sources of his income, the defendant _

secured annual refunds of several: hundreds of dollars

in the years in question. He could not have believed that

he was entitled to these substantial refunds when no taxes

were being prepaid on his private medical practice.

- full disclosure of income records was not made to

the examining’ agents. The defendant told Special Agent

‘Sandroff in October 1962 that he had five or six personal

injury ‘patients per month, which was markedly. lower

than the actual figure. In November 1960 when visiting

_ the Internal Revenue office he made no mention of his

personal injury patients. He told Mrs. Anderson that he ©

had not reported some income from welfare patients, but.

he always withheld the receipts from the personal injury

claimant patients. As this was one of the most lucrative |

aspects of his practice, withholding these records was

inconsistent with his assertions that he put his books and-

records at the agents’ - disposal. Conduct, the effect of’:

which i is to conceal or mislead, suggests wilfulness. Spies

v. U.S., 317 U.S. 492, 499 (1943).

oxi hve unt evidenee from which the Trial Judge

could: have decided beyond a reasonable doubt that. de-

fendant wilfully attempted evasion.’ U. S. v. Peterson, 7

Cir., 1964, 388 F. all 595, 598, cert. den. 380 U.S. 911

. (1965).

In computing the correct income and deductions, the

government produced in evidence cancelled checks paid

‘to the Doctor by some thirty attorneys for services to

clients with claims for person&l injury. Also introduced

“~~ “

3 App. 8

in evidence were cancelled checks from theyIllinois Public

Aid Commission and the Treasurer of Cook County for -

-” services to individuals on public relief, in addition to pay-

roll checks from the-City of Chicago for services as public

surgeon. These were checked as to date and amount against

defendant’s deposit slips. A number of checks listed on

’ these slips running to total sums in excess of $14,000

for each of the years involvéd were not in evidence.

Many of the checks in évidence had not, been deposited

but had been cashed or-negotiated to others. as .shown.

by. endorsements. The total cash deposits listed in the

deposit slips were not included in gross income because

the income Yecorded in the defendant’s daily log books

was included as ‘a result of a conference in May 1963, in

the Intelligence Division’s offices, where Dr. Mansfield, in.

‘the presence of his attorney, said that the amounts in his

daily log books represented cash receipts which he used

to pay expenses. The log books were considered to be a

more accurate record than the cash deposits. The compu-

tations. did include cash retained by the defendant when

he deposited only a part of one of the checks in evidence.

Interest earried on savings for 1960 were included and

consideration. given to amounts withheld from the Police

Department pay checks. Nontaxable deposits such as tax

‘refund checks, loans, anda check from an attorney which

was not considered to be for medical service income, were:

eliminated.

-. This method of reconstruction was properly applied.

Beard v. U. S., 4 Cir., 1955, 222 F.2d 84, cert. den. 350

U.S. 846; Percifield v. U. 8., 9 Cir., 1957, 241 F.2d 225,

229.

C a7 App.9

The defendant’s accountant disputed the government’s

‘analysis of allowable deductions by sums which would

have made littlé/inroad op the indisputable fact that

there was highly Substantial unreported income. The Trial -

Court which gave due consideration to all of the testi-

mony accepted the government’s analysis of the allowable

deductions. On this record we are not disposed to disturb

the Trial Judge’s findings. Glasser v. U. S. (1942) 315

U.S. 60, 80.

The judgment of the District Court is affirmed.

_ . AFFIRMED.

App. 10

APPENDIX “B”

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH C

Friday, September 8, 1967.

2 a «

Unirep States oF AMERICA,

a

Appeal fromthe

United ‘States

District Court

> for the Northern

District of Illinois,

_ Plaintiff-Appellee, .

No. 15802 °“~ - vs.

CLarence E. MansFIELp, |

’ _Defendant-Appellant. )

‘Bastern Division.

IT IS ORDERED by the Court that the petition for a

DENIED.

rehearing en banc of this cause be, and the same is hereby,

&

*