# Petition for Writ of Certiorari — Schipani v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1970
- **Citation:** 397 U.S. 922

## Text

- FILED
1- FE = |
ij PR iiMe GOuURT. WU. & . OCT 10 1969 ;
wma Ea DAVIS, CLERK
‘N

In THE

Supreme Court of the United States

- Obndbais TERM, 1969

Docket No. 795 | :

° JOSEPH F. SCHIPANI, - x
Petitioner,

Vs.

UNITED STATES OF AMERICA,
Respondent.

— —-

PETITION FOR WRIT ‘OF CERTIORARI TO THE .
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

!

Jacos P. LerKowrrz
150 Broadway
New York, Nv Y.

- ABRAHAM GLASSER :
: 52 Eighth Avenue
New York, N. Y. 10014

Attorneys for Petitioner

Joseph F. Schipam

4
TABLE OF CONTENTS
OPINIONS BELOW ........-.------ Acer bear ae ea Paige etig eases
J URISDICTION Ae Wat shentiate ee Dee MUA eer Malte ee A
; : Questions PRESENTED tease pioudeain Peer Mineo ae

‘tommateewes PROVISIONS AND STATUTES Tex OLVED..

STATEMENT OF THE CASE ...:.:.........--- SUES) | ERIE Re ole eg

x & Introductory ID Bards aoe RAD RE AT a TIER
2. “The Electronic Taint Factor And The See-

Ott “RIA =e saibiintiatiesrcinstaactnectae accent

3. The Second Trial Proofs As Such (Consist-
ing Of A Re-Incorporation Of The First-
Trial Proofs ‘Into The Second-Trial Record
Except For Proof Of Likely Source) ............

- l

‘REASONS FOR GRANTING THE WRIT .................c-ccc--cees-005

ee a. Rana ROS teh Ua PLO DOSNT ACHE TE bees ae

APPENDIX:

A—Opinion of the United States Court of Ap-
peals NS Seat RPA Ge MSS ene Ta :

/

5 Opinion of the United States District Court
(May 10, 1968, Weinstein, D.J.) ................-..--

C—Opinion of the United States District Court
(July 26, 1968, Weinstein, D.J.) -2.22...

D—Memorandum~ and Order of the United
States District Court ee 14, 1968,
Weinstein, Did.) 22... eee eeeeeeeeeeeeee

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in | _ TABLE OF CONTENTS
— PAGE
E_Opinion of the United States District Court
(November 8, 1968, Weinstein, ; SF a T4a -
F—Supplemental Memorandum for the United
States ..... 92a
G@—Memorandum of James D. O’Brien, Novem-
ber 18, 1966 Saati: PO
H—Judgment of Court of Appeals Sere
Conviction ...~ : (108a
I—Order of Court of nel Heavine Motion
Under 28 U.S.C. §1651 110a
Cases Cited |
Alderman v. United States, B04 U.S; LGB ..ecceeseseosns 8, 58
‘Black v. United States, 385 U. S. 26, decided Novem-
ber 7, 1966) 29, 30
Desist et al. v. United States” no. 12, Oct. Tenn 1968 57
j
Linkletter v. Walker, 381 U.S. 618, 629 ..... 27
Schipani v. United States, 385 U. S. 372, decided De-
cember 12, 1966) ............-.--- 10,12 .
- United States v. Massei, 355 U. S. 595 ..... 11
United States v. Ohio Power Co., 353 U. S. 98, 99 ...... 44
United States v. Schipani, 362 F. 2d 825 (C. A. 2, |
SG ke eeeiinneen y 10
eo Siates Constitution Cited
Fourth Amendment 9, 30
Fifth Amendment ........ ae sete 9
Sixth Amendment ........ eS ; 9 }
QZ
Ninth Amendment 2..2....0...2..0:.ccccccecseccsescorneseescccessoncceneqees 9
ae: | /

TABLE oF CONTENTS ©’. See
: PAGE
, _ _» Statutes Cited
SCT ee eee
28 U.S. C. $518 Neo CEES a 43
28 U.S.C. §1254(1) ..... , 4.
28 U.S.C. §1651 - 2, 4, 6, 9, 59, 60
_ Other Authorities Cited
. 19 A. L, B.3d 502 .... : 49
87 A. L. R. 2d: : a
, Page 271 ............ te 7 49
FIDO BIO wijessprccgoowsciseus 3 peduilees Goakewsiniantioceias 49
Page 280 ............- ; Re . 49
5 Am. Jur. od: a 3 a7 t
Sec. 744 oui... a a ceeeee eee 49.
BP I aca cernctenene 49
Pages 188 et seq...,.......-...1---+-+ 49
Pages 417-418 _0 i... 50
gz.
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- e : . =

In THE

| Sinrace Court uf the Med States.

OctoBER TERM 1969

Docket No.

—_
—>

JosePH F, ScHIPANI, . ;
: : Petitioner,

Unitep States oF AMERICA, ‘
Respondent. '

>.
—

PETITION. FOR A ‘WRIT OF CERTIORARI TO THE.
UNITED STATES COURT OF APPEALS FOR THE |
os SECOND CIRCUIT ©

Petitioner, Joseph F. Schipani, prays that a writ of
certiorari issue to review the judgment, and an accom-
panying order, of the United States. Court of Appeals
for the Second Circuit, hereinafter described. “i

~A

rae ; Opinions Below

The opinion of the Court of Appeals affirming petition-
er’s conviction (on this second triaf under the. same in-
dictment), printed as Appendix A hereto, infra, is not
yet reported. The Court of — did not write an-

tt

2 2 *%

a

opinion in connéction with its accompanying order deny-

ing relief against the District Judge under 28 U. S. C.
§1651 (the/*All Writs” statute).’ The opinion of ‘the Dis-
trict Court of May 10, 1968, denying the Government’s
motion to withdraw its consent to a trial without a jury,
printed as Appendix B hereto, infra, is reported in 44

‘F.R.D. 461. The opinion- of the District Court, of July 26,

1968, on the defense motion to suppress electronically ob-
tained evidence, printed as Appendix C hereto, infra, is
reported | in 289 F. Supp. 43°° The memorandum and_
order of ‘the District Court, of October 14, 1968, dispos-
ing of various defense motions to ‘strike or suppress evi-
dence, printed as Appendix D hereto, imfra, is not re-
ported. The opinion of the District Court, of November
8, 1968, finding the defendant guilty of tax evasion, print-
ed as Appendix E hereto, infra, is reported in 293 F.
Supp. 156. On the first’trial of this indictment an opin-
ion was written by the Court of Appeals, reported in, 362
F. 2d 825, reversed 385 U. S. 372; and by the District
Court, not reported; both of the latter opinions were

printed in the separately bound Appendix to the petition

or certiorari.in No. 504, Oct. Term 1966.

Jurisdiction
The judgment of the Court of Appeals affirming peti-
tioner’s conviction was entered on August 11, 1969. The

-time for filing this petition for Gertiorari_has heen ex-
tended, by order of Mr. Justice Harlan, to and including-————-___

October 10, 1969. At the oral argument in the Court of
Appeals on June 25, ‘1969 .the Court entertained a mo-

- tion by the appellant (the present petitioner) for relief

pufsuant to 28 U. S. C. §1651 (the “All Writs” statute),
which sought mandamus, prohibition or other appropri-
ate writ with reference to our contention that the Dis-

*
~

= @

trict Cotirt inal exceeded its jurisdiction in the manner in
which it dealt with an order of this Court which had re-
versed: Schipani’s first conviction on grounds of electronic
taint and had remanded the case to the District Court
_ “for a yew trial should the Government seek to prosecute
peititionér anew” (385 U. S. 372). Our latter motion in
the Court of Appeals for relief under 28 U. S. C. §1651
was ¢aptioned by-us under the same title and docket
number as the.appeal from Schipani’s second conviction.
At the conclusion of the oral argument on June 25, 1969
the Court of Appeals denied our said motion in open —
Court. Thereafter, on August 11, 1969 the Court of Ap- |
peals affirmed the second conviction, as above stated. We
(counsel herein) did not find out until October 9, 1969,
when’ we éxamined the certified recoril in the office of
the Clerk of the Court of Appeals, that our motion under
28 U.S. C. §1651 had been re-entitled ai id had been given
a new docket number by that Clerk, and that a separate
order denying the motion had- been ‘entered under that
new title and new docket number on June 25, 1969.* We
were under the impression that the Court of Appeals’
judgment of August 11, 1969 affirming the conviction
would also optrdte as the order denying our motion un-
der 78 U. S. C. §1651. Therefore, we have never filed a
separate petition for certiorari in connection with the
§1651 motion, nor have we applied for an extension of
time to file such a separate petition’ for certiorari; and
the ninety days allowed for certiorari to-weview a $1651
proceeding expired_herein n sc anced 23, 1969. When

~
mandate of this Court? If the Government thought the

Solicitor General had been “in error”, which necessarily .

must mean also that the Government thought this Court’s
own “independent examination of the case” was likewise
“in error”, was not the required procedure a petition by
the Government for re-hearing in this Court to-recon- .
sider the allegedly “erroneous” 1966 decision vacating the
first conviction? |

9 Was not the District Court’s function in applying
this Court’s 1966 mandate limited to conducting a second
trial, if the Government wanted one, in which the Gov-
ernment would either produce an entirely new body of
proof or at least some substantial new proof wholly un-
connected with the electronic-tainting activities con-
demned by this Court on the first-trial record? Did this
Court intend or contemplate that the District Court
would in effect collaterally review this Court’s 1966 find-
ing that the first-trial proofs were tainted? Again, should
not any such re-examination of this Court’s 1966 finding
have been made only by this Court itself, upon a proper
application by the Government for rehearing or other
reconsideration in this Court?

8 Should not the Court of Appeals have reversed the
second conviction and granted our motion for relief un-
der 28 U. S. C. §1651 for the reasons denoted in ques-
tions 1 and 2, supra? -

2. i
‘

4. In view of the District Court’s findmg that the
electronic taint did require suppression of all proof of
“likely source”, and in view of the fact that undisputedly
the Government’s attention became focused on -petitioner
Schipani as a tax-evasion defendant because of his al-

leged “organized crime” involvements and income sources, ..

and in view also of the fact that the Government’s undis-
puted electronic activities re Schipani and his alleged as-
sociates were part and parcel of me governmental pre-
occupation with “organized crime” in general and Schi-
pani in particular, and in view of the fact also that un-
disputedly the concededly crucial evidentiary leads (cer-
tain records of money orders) for Schipani’s conviction
herein were obtained by the Government after and dur-
ing the most intense portions of the electronic surveil-
lance, was it not error for the District Court to conclude
that the Government could re-try Schipani on the entirety
of the first-trial proofs except the proofs of “likely
source” of income, the District Court’s reasoning being
that the Government’s prosecutive attentions had not be-
eome “focused” on Schipani by reason of electronically
obtained information but that the Government had origi-
nally become interested in Schipani some time before
the electronic’ activity commenced? Can this kind» of

microscopic surgery of such massive and pervasive elec-

tronic cancer be countenanced as a fair and decent pro-
cedure in the administration of federal criminal justice?
Can it be countenanced either as a general precedent-
shaping activity by a Federal District Judge, or as a spe-
cific instance on the present record? Should not certio-
rari be granted here for the reason, without more, that
the exceeding peculiafity of the District Court’s miero-
surgery methods in this case call for a review by this
Court, for “test case” purposes, in this important area of
the law of governmental electromic activity—and a for-

RC

SOFT SRO NPE a Ne eS NES EN ROT TREN DRA RRO NT SpE HONE

ESAS PI

tiori, again, for the herein specifically further accompany-
ing reason that all this has taken place in the setting of
the very dubious and very disturbing way that the Dis-
trict Court has here construed and applied (and, we sub-

mit, tampered with and trampled upon) this Court’s
1966 mandate?

5. In any event, conceding arguendo that none of our
above questions have certiorari merit, should not_the case
be reviewed by this Court on the electronic issues, to ‘de-
- termine (a) whether the District Court’s entirely de novo.
formulations as to burden of proof of the Government
to negate electronic taint are sound—the District Court
here having accepted the test of “beyond a reasonable
doubt” on the question of whether specific items of evi-
dence were free of electronic taint, while at the same time
it accepted the test of merely “a preponderance of the
proofs” on the artificially separated question of whether
the Government’s “focusing” on Schipani was free of elec-
tronic taint; and (b) whether the District Court’s evalua-
tion of the evidence at the electronic-suppression hearing
was correct? That is, should not the case be reviewed for
these purposes, from the “test case” standpoint above sug-
gested, ‘and, again, from the standpoint of the confronta-
tion between what the District Court has here done and
what this Court ‘did in its 1966 decision?

6. Was petitioner denied his rights under Alderman v.
\ United States, 394 U. S. 165, as to the Tony Ricci tres-
passory bugging in Florida?

7. Is the evidence sufficient for conviction on the net
worth theory? This question is not argued in this
petition, we respectively preserve it in the event of
the grant of certiorari, and we ask leave to re-adopt here
our Questions Presented 1, 2 and 3 plus supporting pre-
sentation in our petition for certiorari in No. 504, Oct.
Term 1966.

| 9

8. Was petitioner denied a fair trial in violation of
due process of law and of his privilege against self in-
crimination, as well as his right to counsel and to be free

of unreasonable search and seizure, by the reception in ;

evidence, over defense objections, of a statement taken
from petitioner while he was under coercive authority in
a Federal prison, the statement being the indispensable
starting point of. the prosecution’s entire proof of open-

ing net worth in this case? (Not argued in this petition

but preserved in event of granting of certiorari.)

9. Was the petitioner denied a fair trial and a fair
and impartial tribunal by the Court’s taking over the
function of the prosecution in re-fashioning the whole ba-
sic prosecutive strategy for the express purpose of sav-
ing the prosecution from failure of such re-fashioning
were not done? (Not argued in this petition but pre-
served in event of granting of certiorari.) —

10. Was the petitioner denied a fair trial by the infec-
tion of the record with references to his alleged notori-

ous criminal background? (Not argued in this petition .

but preserved in event of grant ing of certiorari.)

11. Was the petitioner denied a fair trial and the
right of confrontation by the Court’s consideration of
non-proved “facts” concerning the petitioner’s personal-
ity, shrewdness, ete.? (Not argued in this penton. but
preserved in event of granting of certiorari.)

Constitutional Provisions and Statutes Involved
The case involves the Fourth and Ninth Amendments

(search and seizure, and privacy), the Fifth Amendment > |

(due process and self incrimination), and the Sixth
Amendment (right of counsel and confrontation) of the
United States Constitytion. It also involves 26 U. S. C.
§7201 and 28 U.S. C. §1651.

NTA RRO NII

10
7 \

Statement of the Case
1. Introductory eae:

Petitioner seeks review of a judgment of the United
States Court of Appeals for the Second Cireuit which af-
firmed a judgment of the United States District Court for
the Eastern District of New York (Weinstein, D.J.), after
a trial without a jury, convicting petitioner on five counts
of personal. income tax evasion through failure to file re-
turns for the years 1956-1960, in violation of 26 U. S. C.
§7201, and sentencing him to three years on each count
to run concurrently plus committed fines of $2500 on
each count totalling $12,500. a 3

This is the second time the case has been tried. The
first trial, before Judge Rosling, without a jury, resulted
- in a conviction and in imposition of the same sentence
now imposed; the Court of Appeals. affirmed the first-

trial conviction in United States v. Schipani, 362 F. od >

825 .(C. A. 2, 1966); but this Court reversed, on grounds
of electronic taint (Schipani v. United States, 385 U. S.
372, decided December 12, 1966). :

The case was tried in both trials on the “net wort ”
theory. The defendant introduced no proof .at either .

trial; he rested on the insufficiency. of the Government’s
proofs.

The Government’s proof of its “net worth” contentions
depended to an unusual degree—indeed, we think, to a
unique degree in this case as compared with any other
reported criminal prosecution in this country on the net
worth theory—on a voluminous and complex ‘process of
“inferences” claimed to ke derivable from “circumstantial
evidence”. There were no “leads” obtained from the de-
fendant. | |

BEER ROE IRL OHI ALS NT MDE DE

ae Rater "-
But now, in thege proceedings for review of the sedond ra wr
conviction there is an important difference concerning
the appellate. merits of those same net-worth-theory is-
sues, because Judge Weinstein found. it necessary to sup-
press a certain portion of the Government’s ‘ first-trial
proofs in view of: the circumstances of electronic taint
which led to the reversal by this Court in 1966 as above :
mentioned. Judge Weinstein suppressed: all proof of
“likely source” of taxable income during the prosecution
years (details infra). This meant that the Government
had to satisfy the test of United States v. Massei, 355
U. 8S. 595—“* * * shotld all possible sources of non-tax-
able income be negatived, there would he no necessity €or
proof of a likely source”’—and Judge Weinstein con-\
cluded the Government met this requirement.

‘This last makes it of next immediate pertinence to. men- .

tion that Judge, Weinstein decided this second trial solely ;
on the same proofs the Government introduced -in_ the
first trial* (minus the suppressed “likely source” proofs), ~__
The Government did introduce into evidence on this sec- : .
ond trial just one new item (testimony by FBI Agent ,
Shedd, infra), but Judge Weinstein expressly declined to
givé probative consideration to this single new item,
Thus, one new, issue is whether the first-trial proof with-
out more, is sufficient for this second conviction, since
the first-trial proof is now stripped ee any proof of
likely source.

The reason Saat this problem of the sufficiency of the
proof in this second’ trial is so acute, is that (1) the Gov-
ernment’s whole indispensable proof of “opening net
worth” (as of the beginning of the first indictment year,

* The entire first-trial record was received in evidence here as
an =

- 12

1956) entailed both negating a pre-indictment period cash
hoard and negating that such hoard would have been suffi-
cient to account for the expenditures or the alleged “net
worth inereases” durihg the indictment years, whereas
these proofs to negate eash hoard are- intrinsié
ally and notably insufficient, in this case; and (2)
since “likely source” is out of this case, the Government’s
burden of negating eash hoard, and of establishing “‘open-
ing net worth”,. became increased in this ease to the de-
gree of the Massez test, supra (“all possible sources of
‘non-taxable income be ions apie ate

2. The, Electronic Taint Factor And The Second Trial.

After Schipani lost his previous appeal in the Court
of Appeals (362 F. 9q 825—decided June 29, 1966) he
petitioned for certiorari, and on November 7, }966 the oS
petition was denied (385 U. S. 934). Schipani was ready-
ing himself to begin serving his jail sentence when, near oma
the end of November 1966, the Solicitor a eo ee
“Supplemental Memorandum For The United States”, a ot
copy of which is reproduced in ‘Appendix F hereto, infra. ae
The Solicitor General told this Court it had been dis-
covered that by reason of trespassory ‘electronié activity
which “provided investigatory leads and other informa-
tion used in proceeding against petitioner [Schipani]”,
“fhere was material evidence against petitioner which
was tainted, his conviction cannot stand, and no purpose
would be served here in having the District Court con-
duct a collateral hearing * * *” (p. 3 of the Solicitor
General’s supplemental memorandum). .

On Deceniber 12, 1966 this Court rendered the follow-
ing opinion per curiam (Schipani v. United States, 385
U. S. 372): : %

* As noted in our Questions Presented, we are preserving these
issues as to sufficiency of proof in the event of granting of
certiorari.

Sr

w..0

“Upon the ‘suggestion. of the: Solicitor General,
and upon an independent examination of the case,

the petition for a rehearing is granted, the ofder
of this Court denying certiorari is vacated, cer-
tiorari granted, the judgment of the United States
. Court of Appeals for the Second Circuit is vacated
“~and the case is remanded to the United States Dis-

trict Court for the Eastern District of New York .

for a new trial should the Government seek to
prosecute petitioner anew.” (Emphasis supplied.)

Barly in 1968 we were favored with word from the

* Government that they wanted to re-try Schipani because

a “Trial Attorney” in the Department of Justice in
Washington = convinced that the Solicitor General had
been “in error’. We quote from the affidavit of that
Washington Trial Attorney (dated May 1968) :

“The United States of America by Expon F.
Haw ey, ‘Trial Attorney, Criminal Section, Tax Di-
vision, Department of Justice represents - to the
Court as follows that:

(1) Upon information and belief the evidence in
the defendant’s prior trial, which will be used on a
re-trial, is not and was not tainted and should not
be suppressed; further analysis and examination
by the Government of the evidence establishes that
the Solicitor General was in error, when he in-
formed the United States Supreme Court that
‘Since there was material evidence against peti-

tioner which was_Afinted, his conviction cannot

» stand * * *? (SoliCitor’s General Supplemental Mem-
-orandum No. 504, October Term 1966). Although

- the Solicitor General stated to the Supreme Court
that conversations of the defendant were illegal-

AT ia
a

' -* ae , if ‘ Ae fi
ly and electronically monitored by the. FBI at a
place of business frequented by the defendant, none
of the conversations provided evidence or supplied
leads to evidence at defendant’s trial.” (Emphasis -

. in’original,) FF

Our aforesaid siaowal-idthte to suppress was set for ~.

hearing by Judge Weinstein. It was agr ed by all con-
cerned that, in wew of this Court’s ruling, the Govern-
ment had the burden “of proving that, its evidence is
not tainted” (Hawley affidavit, supra). Early in the re-
-‘newed suppression hearing it became apparent that fle
Washington trial attorney who wanted this case re-tried
(Mr. Hawley) was quite in earnest in his contention that.
the case should be re-tried because the Solicitor General’ -
was “in error”.* For, it appeared that Mr. Hawley want
to re-try this case not because he had found some new,
untainted evidence, independent of the first trial record |

-eontents which this Court had independently examined ©

and had unqualifiedly pronounced@tainted. Instead, it

,appeared that Mr. Hawley wanted to re-try this case

because that adjudicatedly tainted first trial record was

not tainted after all. At the outset of the new suppres-
sion hearing we pointed out to Judge Weinstein that the

Government was confronting the District Judge with. the

severe jurisdictional dilemma of in effect undertaking: a,
ae

* Phe Solicitor General himself has not been heard from con-
cerning any of this, neither the former Solicitor General (now

Mr. Justice Marshall) nor any suecessor. Even when the time

came to ‘‘proye’’ just/how such ‘‘error’’ inside the Department

of Justice had enmeshed the Solicitor General himself, the Gov-

ernment in the suppression hearing herein did not bother to call

even any junior employee of the Solicitor General’s offiee (de-

tails infra). - \ nes

-
. .
5 ar ee RR
.

15

collateral “review” of the Supreme Court ruling (Tr.
5/6/68, pp. 12, 43), but the Court said, “I am not con-
cerned with what was before the Solicitor General and
I. am not concerned with what the Supreme Court did”

“(id., p. 43). (Subsequently we briefed this same conten-
tion twice for the District Court, but without avail.)

In essence, the Government’s thrust, in the new suppres-
sion. hearing, was that each and every item of proof
needed to convict Schipani in the first trial could be traced
ultimately to a non-tainted source. An elaborate 31-page
chart entitled “Analysis Of The Sources Of The Proof”
(exhibit 1) had been prepared by I.R.S. agent Masetti,
the main investigative agent in the case, to substantiate
this contention. The Government also supplied the Dis-
trict Judge and defense counsel with copies of FBI logs
of trespassory buggings at a location in New York City
(Prisco’s Travel Agency) where Schipani frequently vis-
ited during the investigative period in 1961; nine of these
logs: contained conversations by Schipani (exhibit 2);

> twenty-seven other logs contained conversations of other
persons referring to Schipani (exhibits 1A to 1Z). The
electronic monitoring covered by these logs extended from |
January 16, 1961 to January 31, 1963. There had also
been electronic monitoring by the Alcohol and Tobacco
Tax Unit, but allegedly it produced no evidence (details
imfra).

The Government called Agent Masetti to the stand, —
several FBI agents, several agents of the Alcohol and
Tobacco Tax Unit who had participated in the Schipani
investigation, and two Department of Justice lawyers who
had worked on the case (details infra). The theme of
all this testimony was supposed to be that nobody who
ever actually got any of the first-trial proof against Schi-

16

pani had any knowledge of the massive electronic, moni-
toring. According to the Government; every single in-
vestigator and Government lawyer. who prosecuted Schi-
_pani just did not know anything about the whole elec-
tronic business. Let us see:

The Government’s first witness at the new’ suppression
hearing was I.R.S. Agent Masetti.* Masétti testified con-
cerning Exhibit 1, which he had prepared or had par-
ticipated in preparing (54 et seq.). He stated that he had
no contemporaneous knowledge of the electronic activity ~
of the F.B.1. (57-58), and that he had never seen the logs
and did not know their contents (112). He had “hear-
say” knowledge of the ATTU electronic surveillance (58) ;
he got no information from the ATTU electronic sur-
veillance concerning the Schipani case (112). It is. of
interest that Masetti also testified that the ATTU elec-
tronic surveillance “did not work”, according to his un-
derstanding (112). This is interesting because, as was
made perfectly clear by other witnesses (imfra), at least
one of the two ATTU electronic installations did work
quite well,ethe claim of those other witnesses being that
they got no significant information. (We contended in the
Courts below that Masetti’s overstatement of the situa-

tion, in claiming he understood the ATTU installations
~did not work at all, casts suspicion on the good faith of
either Masetti himself or of whichever Government of-
ficials supposedly told him this, or on both Masetti and
those other officials.)

Masetti then went on to testify extensively as to the
sources of the evidence listed in Exhibit 1 (59 et seq.). As

*In the following description of the hearing testimony. we
shall be referring to transcripts, numbered from pages 1 to 688,
dated respectively May 6, 7, 8 and 9, 1968.

17

was to be expected, there was no electronic surveillance.
source for any of this evidence, according to Masetti. ©

However, Masetti in several instances admitted he got
information from the F.B.I. and saw F.B.I. files (64, 77,
96, 102, 103, 106). (We urged in the Courts below that
it is of utmost importance that Masetti thus apparently
had access to the F.B.I. files, which of course were sat-
urated with electronically obtained information.)

Further as to Masetti’s dealings with ATTU, the Courts
below and the Government attached decisive importance

to certain alleged physical surveillance by ATTU which .

supplied the so-called “money orders” leads that are
clajmed to have “made” this case (details infra).* Maset-
ye testimony as to sources of his evidence in Exhibit 1 is
replete with such “money order” references (e.g., 66-75,
77, 84-86, 89-91, 94-102, 104-109, 114-122). We are not
overlooking that the ATTU witnesses (infra) denied in
the hearing that they got any significant information from
their own electronic installations. But, as we shall show
infra, the credibility of this testimony is poor, and the
record herein furthermore reveals strong likelihood that
the ATTU people got information from the F.B.I. in cir-
cumstances indicating taint. The Government never es-
tablished that the all-important “money order” leads are
free of electronic taint.

a

It is to be noted also in connection with Masetti’s testi-
mony that he said his “initial investigative materials in-
cluded a memorandum from an I.R.S. Intelligence Agent

€

- *“QATTU physical surveillance spotted Schipani buying money
orders at a bank on July 17 and September 25, 1961 (the FBI’s
trespasssory electronic bugging had started in January 1961).
The money order ‘‘leads’’ in turn produced a mass of proof of
expenditures, ‘‘net worth’’ increases and ‘‘wilfulness’*

v
‘

= SpA

18

named Tarangelo (125-130). (Where, we ask, was Mr.
Tarangelo during this hearing? Why did not the Govern-
ment produce Tarangelo? The absence of this witness
leaves a gaping hole in the Government’s “showing” in
this proceeding (imfra).)

Masetti also testified (136-137) (re Tarangelo) that,
‘ with a Department of Justice letter turned over to him by
Tarangelo at the commencement of his investigation in
1961, he also received “miscellaneous notes” which “in-
eluded handwritten notes relative to inspection of files
of the F.B.I., a note in connection with checking through
on the Narcotics Bureau”. The Government did not ne-
gate in the hearing that those latter papers, which came
to Masetti apparently in March 1961 or later, were taint-
ed. True, Masetti also said (138) that the F.B.I. notes
he received referred to a report of October 10, 1960* and
were made on March 22, 1961 (the notes were introduced
in evidence herein as Exhibit 4); but the total picture
in regard to Masetti and his F.B.I. materials remains ex-
tremely unsatisfying.**

Masetti also testified that subsequently he asked for
and received additional F.B.I. information, from F.B.I.
Agent McShayne (144, 168-174, 197-198).

Further as to Tarangelo—who did not testify—Masetti
said he “probably” had talked to Tarangelo about the lat-
ter’s activities and information in this case (149-150).

* Which antedates the within FBI ‘‘bug’’ that started in Jan-
uary 1961 (138). The Government also claims a ‘‘clean’’ 1959
' F.B.I. report (infra).

sie Unsatisfying is hardly the word; see the description infra
of the November 1966: memorandum by Department of Justice
attorney ‘‘Dewey’’ O’Brien.

(

aS Se
i N\A v

Masetti also testified that atghclo’s memorandum had
requested certain equipment which, it|appears, was so-
_phisticated electronic eavesdropping equipment; and that
these requests in Tarangelo’s memorandum had _ been
processed by two I.R.S. reviewing \officials—who were not
produced as witnesses in this proceeding (177-181). Ma-
setti was vague and unsure as to whether these Tarangelo
proposals had been earried into effect (180-181).

Masetti was also vague and apparently evasive about
his contacts with ATTU (192-196, 207).

ATTU Agent Wallace P. Hay -testified for the Govern-
ment (228 et seq.). He was assigned on March 3, 1961 to
investigate Schipani’s connection with three restaurants,
including the Casa Bianca (229-230); this assignment
came from Mr. Hundley of the Department of Justice*
(ibid.). Hay conferred with I.R.S. and 1.B.1. officials, but
he did not know of any Shor ernie activity by those agen-
cies (230-231). ATTU’s own*electronic installations re-
vealed nothing of significfénce (232, 234). These installa-
tions, at the Pierrepont Health Club in Brooklyn, were
run from August 21 to September 8, 1961 (237). We es-
pecially invite attention to pp. 276-284 of Hay’s testimony
where he testified with obvious evasiveness about his con-
tacts with F.B.I. and I.R.S. intelligence personnel, and
about his knowledge of the workings of the Justice De-
partment’s “organized crime” activities. Hay also testi-
fied about a meeting in Mr. Rogovin’s office in the De-
partment of Justice in Washington in November 1966
when the electronic problems, of this case were being re-
viewed; Hay ae Mr. Rogovin and Mr. O’Brien** that the

* Organized Crime Section.

“#* Mr. Rogovin was Assistant Attorney General, Tax Division;
Mr. O'Brien was one of his aides. They were reviewing the case
at request of then Solicitor General Marshall (infra).

20

ATTU electronic installations had produced nothing sig-
nificant, and that he had had no knowledge of the F.B.1.
electronic activities (289-297).

(On the basis of this last-mentioned testimony of Hay

we note that the Solicitor General’s office in November
1966 was fully aware of AT'TU’s claim that their elec-.
tronic installations had yielded nothing significant and of
-their claim also that they had not gotten anything from
the F.B.L. installations. This is important, we submit, as
indieating that the Solicitor General did not proceed on
any “error” supposedly consisting of any erroneous im-
pression as to taint on the part of A'T'TU.)
: We refer especially also’ to Ilay’s testimony at 302-306,
313-314 and 335-336 where he admitted that in September
1961 he had requested additional and better electronic
equipment, but claimed that although he received it he
never used it. in connection -with Schipani.

Important also is Hay’s testimony at 314-330, 336-337,
where he deseribed the activities of his assistant Busby.
Busby had a radio for contact with other agents while
he was monitoring the ATTU installation at the Health
Club. .Those other agents were engaged in surveillance of
Schipani, and it is manifest that Bushy’s monitoring at
the Health Club assisted him in coordinating with the
surveillance agents for the furtherance of the latter
agents’ activities. (Ilere, we submit, is direct and ineon-
trovertible proof from the Government’s own admissions
that the Health Club “bug” did play a tangible part in
the Schipani investigation which led to this prosecution."

*This Health Club bug and the attendant physical surveillance
were vital in the obtaining of the erucial ‘‘money order’’ leads.

2

ATTU Agent George I’. Busby testified for the Gov-
ernment (343 et seq.). He said that the AT'TU bugs pro-
duced nothing significant, and that a KEL installation
did not work (345). Ile claimed he had no contempora-
neous knowledge of the F.B.I. electronic activity (349).
Busby admitted that he conferred with F.B.I. Agent
McShayne in 1961 for “general liason” and to obtain in-
formation about Schipani, and that he did get “leads”
and “clues” from McShayne; also that he “undoubtedly”
had similar contacts with other F.B.I. officials or agents
(370- 374).

We argued below that this last Hiobe testimony of
the ATTU witness Busby is in itself enough, without
‘more, to defeat the Government’s showing of non- taint.
Busby apparently qualified his testimony under question-
ing by the Court at 373-374, but see the re-cross examina-
tion at 374-375.

ATTU Agent Pierre Rogers (376 et seq.) denied hav-
ing any electronically obtained information concerning

Schipani (377) or any contemporaneous knowledge of the

F.B.I. electronic activity (377-378). In connection with
Rogers’ testimony it should be especially noted that this
was one of the agents whose alleged physical surveillance
activities opened up for the Government the “money
orders” lead, which occurred on July 17 and September
95, 1961. It is eoneeded by the Gov ernment that its “satu-
rational” * foeus on Schipani began some months before
the earlier and the latter dates, and that during all of
that time and earlier the F.B.I. bug had been in use. We

Judge Weinstein treated the ‘ ‘saturation’’ issue (or ‘‘foeus-
sing’? of the 1961 Schipani investigation) as of prime importance
in determining the influence of the FBI bugging on the building
of this ease (infra).

.

22

also noted earlier that ATTU’s own physical surveillance
was aided by the Health Club bug. Is there then not the:
strongest circumstantial indication that the intense focus-
ing which resulted in the all-important money order leads
of July 17 and September 25, 1961 is integrally bound up °
with the antecedent electronic activity?

Former ATTU Agent Thomas H. Maher (382 et seq.)
denied obtaining any significant electronic information
from the ATTU bugs, and any contemporaneous knowl-
edge of the F.B.I. electronic activity (383). However, he
knew of AT'TU’s liason with*the F.B.I., and he had one
meeting himself with F.B.1. Agent McShayne, at Maher’s
own request, Maher stating that he was seeking leads as
to ownership of restaurants, labor jmion activities, gar-
bage disposal business, and “any leads” relating to Schi-
pani’s “activities”; and when asked whether he received
any such information from the F.B.I., he said “We must
have received something” (384-387). 7

On the basis of this last described testimony of Maher
we urged in the Courts below, as in regard to the similar
admissions of ATTU Agent Busby, that these disclosures,
without more, are sufficient to defeat the Government’s
showing of non-taint in this proceeding,

ATTU Agent Donald eagerness denied getting any
significant information from ATTU’s bugs or contempor-
aneous knowledge of the F.B.I.’s electronic activities

(389).*

F.B.I. Agent James T. McShayne deseribed the F.B.1.
electronic installations and the operations thereunder (401-
405). He never informed ATTU or LR.S. about these

* We are. aiming in this Statement of the Case to give a sum-
~ mary of the entire suppression-hearing testimony.

&

23

>

activities (405), and he made no “dissemination” of elec-
tronically obtained information to any other Federal
agency (405-406). McShayne said the F.B.I. had consider-
able information concerning Schipani prior to January
1961, when their bugging commenced (404-405). He was
shown Government’s ixhibit 9, an F.B.I. report or memo-
randum of October 10, 1960, which contained references
to Gurney’s Inn and to Schipani’s son’s wedding; t this ex-
hibit, MeShayne said, contained nothing derived from any
electronic source (407-409). He insisted that in-his con-

ferences with I.R.S. and ATTU representatives he gave

them only innocuous “background” information (409-410).
It was never made clear by McShayne just how he han-
dled the allegedly taint-free Exhibit 9 items as distinct
from subsequent F.B.I. information which was derived
from electronic sources, in his: dealings with the other
agencies. 4

McShayne testified that he was not assigned to the
Schipani matter until some two or three months after the ..
F’.B.I. electronic activities began in 1961 (416-419). We °

called the attention of the Courts below to this last item
as another indication of the way in which an intensify-
‘ing dynamic was apparently operating in this case ini
chronological and causative relation to the F.B.I. elee-

tronic activities. A similar item is MeShayne’s testimony |

that one reason he was assigned to the Schipani case was
that “I had current knowledge of Mr. Schipani’s activities
as a result of this electronic surveillance” (420-424): The
(lynamie was revealed also in MeShayne’s testimony that
- when he first. started the Clemente*-directed bugging at
Prisco’s Travel Agency he had never heard of Schipani;

*The original F.B.I. monitoring target at Prisco’s Travel
Agency was Michélino Clemente.

re)

(24

~ he first heard of Schipani from the results of that bug-
ging (441-442). And he said that the bugging, revealed in-
formation about the Casa Bianea restaurant, labor union
activities, and the garbage business (443-444.)*

While MeShayne was insistent, as above noted, that he
gave only innocuous “ba¢k-ground” information to other
agencies, he admitted on cross-examination. that he had
“cooperated” with other law enforcement agencies in the
Schipani investigation (454-435); and he had no knowl-
edge as to whether his superior officers in Washington
had given mformation to other agencies (449-454, 456).
He also admitted that he had conferred with ATTU Agent
Hay, and that another F.B.I. agent had done so, in the
Summer of 7961, concerning Sehipani (454-456).

Of foremost interest was MeShayne’s testimony at 458-
459 that neither he nor anyone else of whom he knows
in ‘the F.B.I. were consulted by Mr. Rogovin or the
Solicitor General at the time of the Schipani review dis-
eussions in November 1966. (Since it is inconceivable that
no one from, the office of Mr. Rogovin or of the Solicitor
General had° any communication at all with responsible
‘F.B.I. representatives at that juncture in 1966, the ree-
ord presents another gaping hole from the standpoint
of completeness of the Government’s showing. Where is
the F.B.I. functionary,-or functionaries, who must have
been consulted by Mr. Rogovin or the Solicitor General
or their representatives? The Government has not ne-
‘gated that there was such consultation.)

=

¥

. These were activities offered by the Government as s “likely
source’’ items ‘in this prosecution.

25

Philip Wilens, a Department of Justice attorney,* tes-
tified for the Government concerning the letters and mem-
oranda in the Department of Justice in early 1961 which
apparently initiated or helped to initiate the Schipanj in-
vestigation (473 e¢ seq.). He said he had no contempo-
raneous knowledge of the F.B.I. ‘electronic activity (483-
484); but he also said that he had been transferred to
another assignment early in the year 1961 (479, 487). He
testified also that his initial written recommendations
early in 1961 had been based on the F.B.I. report or mem-
orandum of October 10, 1960, Exhibit 9** (476-479). Mr.
Wilens also testified that he receiv ed voluminous and reg-
ular F.B.I. reports on the Schipani matter (485-486) ; and
he did not know whether he had seen the Exhibit 11
series of F.B.I. reports, which concededly were based on
the electronic .activity; he thought his successor, a Mr.
Gerald Shur would know about this (499- 508). (It is
therefore interesting that the Government did not see fit.
to produce Mr. Shur as a witness in this proceeding.) t

Mr. Wilens also said that Upon receiving the kind of in- |
formation contained in the F.B.I. reports here. in question
it would have been the regular practice in his office to
alert other law-enforcement agencies, but with use of eva-
sive tactics to conceal that the information was from elec-
tronic sources (499-508). (The Exhibit 11 series of F.B.I.
reports—the reports referred to by Mr. Wilens—are re-
plete with passages plainly stggesting on their face that
live human conversations had been audited.)

* Organized Crime Section.
** Which allegedly is untainted.

tShur’s name and activities become practically ubiquitous as
will soon appear—ubiquitous, that is, everywhere except in this
hearing record of governmental witnesses produced for ques-
tioning.

26
7] ,

Also interesting in Mr. Wilens’ testimony was that he
knew nothing of the review proce bding i in November 1966
by Mr. Rogovin and the Solicitor General (509-510). The
question therefore arises, did’ Mr. Wilens’ successor Mr.
Shur pafticipate in por latter discussions, and if so why
has the Government not produced, him; and if not, why
* has the Government not negated such role of Mr. Shur?

F.B.I. Agent James T. Mulroy testified for the Govern-
ment that he had dnade no diss¢mination of the Schipani
electronic information “to an ‘agency of the United
States Treasury Department” (515-516).

(We may here note that nowhere in the Government's
proof in this hearing was there any distinct, or even in-
distinct, showing as to the F.B.1.’s disclosures of its elec-.
tronic’ data to attorneys of the Department of Justice—
who would be the gentlemén/ ultimately responsible for
the actual institution of this /criminal prosecution. It is
* self evident that there must | have been such “dissen\na-
tion” to the Justice Department’ $s prosecuting Seca
See the multifarious instances in this record where wit-
nesses speaking for various Government agencies have
claimed that they did not know what: representatives of
other agencies were doing—f rom which the Government’s
attorneys who presented this matter in the Courts below
in effect asked those Courts to conclude that the Govern-
ment’s case is free of unconstitutional electronic taint
on this basis of the existence in the Government’s far«
flung law-enforcement’ establishment of any number of:
“Poohbalig” who function unto themselves alone. We
urged in the Courts below that the constitutional policy.
of “deterrence” of unconstitutional police conduct (¢.g.,

et
* One answer to\this mystery is probably attorney Shur (de-
tails infra).

Linkletter vy. Walker, 381 U. S. 618, 629) is hopeless when
even the most “saturational” illegal electronic eavesdrop-
ping by Federal police may be held to be of mo constitu-
tional significance on the mere claim of the various police
witnesses that each of them (or the enforcement agency .
which employed each of them) functioned “autonomously” .
and without, mutual knowledge of What the others were
doing.)

We interrupted. our description of the testimony of
F.B.1. Agent Mulroy, supra, to insert the above theme of
comment. Agent Mulroy further testified that, in regard
to the Exhibit 11 series of F.B.L. electronically obtained
reports, certain of the contents theresf* “could be dis:
closed” to other agencies but not the text thereof; and
that if L.R.S. Agent Masetti had asked for F.B.I. infor-
mation about “any restaurants” in which Schipani had
an interest, “and you looked at the report that had any-
thing to that effect, would you tell him about it?”, agent
Mulroy answered flatly “yes” (544-545).

F.B.1. agent Norman A. Murray-testified for the Gov-
ernment that there had been no “dissemination” by him
of the F.B.1.’s electronic information (565), and that he
knew of cooperation with-pther agencies (571).

F.B.I. agent Guy C. Berado testified that he had not
“disseminated’’ any of the F.B.I. electronic information .
(575).

F.B.I. agent Ralph Desena testified that he had no
contacts with Treasury Department personnel (577).
When it came to giving F.B.I. electronic information to
other agencies, he would find means of camouflagijg the
source but would, apparently, give the substance of the
information (580-581). (Here again we hea one of those

occasional narrow but very revealin ams of light af-

28

forded by this hearing record, to the effect that the F.B.I.
electronic information must in fact have got through to
the herein ultimately significant person, agent Masetti of
the I.R.S.)

F.B.I. supervisory official James Patrick Mansfield was
examined on direct examination by defense counsel in this
hearing (586 et seq.). Mansfield was agent MeShayne’s
supervisor, having taken over from a Mr. Emery (588,
591); Emery did not testify in this hearing. Mansfield
said he had no contemporaneous knowledge of the F.B.I.
electronic activity concerning Schipani (589). He did
know of the F.B.I. electronic surveillance directed at
Clemente (589-590, 594). At 596-612 Mansfield sparred
with defense counsel repeatedly as to what he had learned
from his subordinates about Schipani. At 612-613 Mans-
field similarly hedged as to what information would be
given by the F.B.I. to other agencies. He admitted, how-
ever, that Attorney General Kennedy’s directives at the
time in question ordered cooperation with other agencies
to the completest extent possible (613-614).*

F.B.I.agent MeShayne was recalled to the stand by the
Government (617 et seq.). MeShayne -had marked with
red and blue pencils the portions of the Exhibit 11 series
of the F.B.I. reports to indicate which items came from
the electronic surveillance (618-269). We invite this Court
to sean’ the impressive aggregation of these tainted items
thus marked by MeShayne in the F.B.I. reports covering
the two years’ electronic surveillance period (1961-1963).

* Agent Mansfield, evidently not an official overly burdened
with a sense of intra-agency reverence towards the superior
‘‘eivilian’’ echelons in the Department of Justice, unhesitatingly
gave it as his opinion that Solicitor General Marshall ‘had
‘‘erred’’ in this case (614).

ae reese neste

29

The last witness at the suppression hearing was De-
partment of Justice Attorney James D. “Dewey” O’Brien
(642 et seq.): Unlike all of the Government’s other wit-
nesses in this matter (supra), Mr. O’Brien was truly a
“key” witness on the issue of taint,* because Mr. O’Brien
is the official who made the initial study of the Schipani
ease late in 1966 which culminated.in the Solicitor Gen-
eral’s Supplemental Memorandum. to this Court ree-
ommending a vacating of the conviction for electronic
taint. The results of Mr. O’Brien’s study were written
up by him in a six-page typewritten memorandum dated
November 18, 1966 (Govt’s exhibit 15 in the suppression
hearing herein, printed as Appendix G hereto, infra).

It appears that Mr. O’Brien’s memorandum came about
as part of the Departmental program during the latter
part of 1966 for a thorough self-searching governmental
review of electronically tainted federal criminal prosecu-
tions, a program prompted by the happenings of the
Black case (Black v. United States, 385 U. S. 26, decided

_———

*Not even Agent Masetti was a key witness in any degree
comparable to Mr. O’Brien. For the ultimate question is not
_ whether Masetti, or any other I.R.S. or even Department of
Justice prosecutive officials actually consciously knew electronic
taint existed; the ultimate question is whether Masetti or any-
one else who helped to ‘‘make’’ this case had in some way re-
ceived or acted on information tainted by what the FBI had
done. This simple and realistic question was unfortunately ob-
scured by Judge Weinstein’s peculiarly formalistic method of
analyzing the issues and proofs in the suppression hearing, i.e.,
he formulatedea supposed differentiation between (a) whether
specific items of trial proof were tainted and (b) whether ‘‘focus-
ing’’ or intensification of the prosecutive effort as a whole in
the Schipani matter had been influenced by the electronic ac-
tivity. See further infra as to this ‘‘logical’’ approach of the
Court below.

a

November 7, 1966), where the Court threw out a criminal
conviction for electronic taint even though the Govern-
ment represented that its attorneys responsible for the -
prosecution got nothing of value from or had no con-
temporaneous knowledge of the electronic activity.

' (The now famous “Schipani review procedure” in which
the Solicitor General proposed and this Court adopted
a systematic program, post-Black, for reviewing cases
thus tainted, is a creation that came out of the deliberate
and careful efforts pressed by then Solicitor General
Marshall inside the Department of Justice in conjunction
with the Black case problem. And it is this creation, the
“Schipani review procedure”, which is, we surmise, the
Government’s real target in this present second trial of
Joseph Schipani. Far more is at stake here, then, than
the re-conviction of Joseph Schipani as an individual.
What we are having here is a flank attack on the whole
Fourth Amendment rampart against electronic abuses.
Utmost care is therefore needed in the judicial evaluation
of the record of the suppression hearing in this case, and
utmost scrutiny is needéd in reviewing just exactly what
Judgé Weinstein has done in this case. It is our position
that nothing in this suppression hearing record justifies
what Judge Weinstein has done in allowing this case to
be re-tried solely and exclusively on the first-trial record
which this Court adjudged to be tainted, and. that the
one item in this suppression hearing record which above
all imported into that record something of real signifi-
cance for the issue, the O’Brien memorandum (infra),
was utterly misapprehended by the Courts below. It is
also our position that items far more important than
even the O’Brien memorandum—the testimony of the’ sev-
eral other key Government officials in this matter who
were not brought to testify before Judge Weinstein—

31

will need to be known before the deliberate policy choice
of Solicitor General Marshall and the deliberate inde-
pendent adjudication of this Court, in November-Decem-
ber 1966, can ever ‘validly be judged to have been “in
error”.)

Let us return to the subject of the O’Brien memoran-
dum. The memorandum states that Mr. O’Brien had read
five volumes of relevant FBI electronic logs, the Criminal
Division’s effice files, the ATU case reports, and the trial
Court’s (Judge Rosling) findings of facets on Schipani.
Mr. O’Brien then noted how, in the nature of net worth
prosecutions, “everything which relates to the financial
condition or enterprises of the defendant during the pe-
riod under examination is material”. Ir. O’Brien then
referred to Judge Rosling’s finlings agd noted that the
Judge had discussed Various afleged bufiness interests of
Schipani including particulate the Casa Bianca restaur-
ant and labor unién services. “Mfr. O’Brien then noted
that Masetti on Febriiary 20, 1963 reported having com-

enced the Schipani income tax case as a result of a

Segre RIE EN in the Spring of 1961, in conjunction with
which Mr. O’Brien noted “the context” of an electronic
surveillance of Schipani from January 10, 1961 to Janu-
ary 31, 1963. The Masetti report of February 20, 1963
referred to various alleged illicit business activities of
Schipani, including activities as to which the F.B.I. elec-
tronic logs abound with detailed references.

Mr. O’Brien also stated that the Masetti report of Feb-
ruary 20, 1963 was by Masetti and another I.R.S. special
agent} Wynne. (We therefore ask, where was Agent
Wynne in this suppression hearing—another of the big
gaps in the Government’s ostensible plenary “showing”
to negate taint.) Farther on in his memorandum Mr. OBri-
en gives numerous details of how.the contents of the F.B.I.

32

logs. aebnioed to the contents of the Masetti-Wynne re-
port of February 20, 1963.

Then, examining the chronology of the Schipani matter
at the level of the Department of Justice Attorneys of
Organized Crime Section and the Criminal Division,
rien_lists happenings which reveal the time con-
junctions hetwed\ the F.B.I. monitoring and the inception
and intensificatiozh of ‘the efforts of the Government Attor-
neys, early in 1961. Mr. O’Brien then describes in detail
the further numerous coincidings of the leads produced by
the logs and of the spreading and intensifying investiga-
tions by both Department of Justice and Internal Reve-
nue personnel through the middle months of 1961 espe-
cially, when the F.B.I. monitoring was at its height and
was producing a spate of information about Schipani.

(It is hopelessly beyond the space confines of this pe-
tition for us to attempt even ‘the most superficial sum-
mary of the relevant contents of the thirty-six F.B.I. logs.
Asideefrom specific items in those logs which tie in so
acutely with the evolution of this prosecution in 1961-1963,
there is the perhaps more significant factor.that the logs
seethe with just the sort of raw, undigested “data” of no-
torious “organized crime” personages and activities that
would naturally appeal to the prosecutive mentality as of-
fering especially tempting avenues for sensationalistic
prosecution of a Joseph Schipani. If ever electronic
“data” spurred zealous prosecutors to pursue a particular
individual, it happened here. To anyone reading the full
text of these logs, it is simply preposterous to think that
this “data” had nothing to do with this income tax prose-
cution; or that this “data” did not filter through from the
F.B.I. to the LR.S. investigators. and the prosecuting
lawyers; or that somehow a “clean” case against Schipani
can be quarantined out of the infected totality. Thanks

33

to the apparently’ extraordinary degree of inter-agency
co-operation and unity of effort that Schipani inspired in
1961-1963, this is probably the last case in which any prop-
erly advised Court would conclude that such: quarantine
is possible here.)

Of special interest also in Mr. O’Brien’s memorandum
is his detailed reference to a report of Masetti dated May
14, 1962 relating his liaison with his predecessor I.R.S.
Agent Tarangelo—this Tarangelo is the I.R.S. agent of
whom we previously spoke as having avidly preoccupied
himself with means for improving additional electronic
surveillanee by /.R.S. itself in the Spring of 1961, and it
is this Tarangelo who is one of those important witnesses
that was never heard from in this suppression hearing. _
Mr. O’Brien, speaking of this Masetti-Tarangelo phase,
notes that Masetti apparently took over from Tarengelo
shortly before’ May 1, 1961 and that at that time Masetti
reported “that he had reviewed Tarengelo’s materials, in-
eluding transcripts of files of * ** F.B.L.” which revealed
some of Schipani’s “financial interests”. It will be re-.
called that by that time (May 1961) the F.B.E. ¢ad been
bugging the Schipani locale (Prisco’s Travel Agency) for
nearly four months.

Inconspicuously (but inconspicuous only to the unknow-
ing eye) nestled in Mr. O’Brien’s intriguing memorandum
is the following item, which is probably the single most
important specific factual revelation in that memorandum:

“* * * In a memo from Shur [a Department of Justice
Criminal Division attorney] to Silbering [Chief of
the Organized Crime Section] dated May 29, 1961,
Shur said the last FBI report was 10-10-60 but this
obviously referred only to a report on Schipani as
he also referred to an FBI report dated May 8,
1961, on Clemente the subject of the eleetronic sur-

34

veilance. Special agent Donovan (apparently of
the FBI), according to Shur, stated Shur would re-
ceive periodic intelligence reports and recommended
that the I.R.S. continue with the investigation of
the cartage association as it did not involve ecross-
ing State lines. Shur also referred to what Dono-
van told him concerning Schipani in the garbage
collecting business and that Schipani was a Profaci
man. He quoted the 5-3-61 report of the FBI on
Clemente.”

Concerning the itcm just quoted we ask: (1) Again, where
was Attorney Shur in this suppression hearing; why was -
he not called by the Government (in pursuance of its sup-
posed discharge of its burden of proof to negate taint)?
(2) Where was, also, Donovan in this supprression hear-
ing—here we have an entirely new gap in the Govern-
ment’s “showing”. (3) Can there be any doubt, in view
of the above words of the knowledgable Mr. O’Brien—a
Department of Justice career attorney who was Assistant
Chief of the Criminal Section of the Tax Division in
Washington at the time he wrote the instant memoran-

*We speak of the ‘‘Muse’’ of the Prosecutors, rather than
» of the indiyvidua] prosecutive gentlemen themselves, because in
the bureaucratic maze it may well happen that a conscientious
Government lawyer like prosecutor Hawley in this ¢ase has him-
self not been able:to find out all the relevant facts about the
taint issue. Nevertheless, any such forgiveable failure on Mr.
Ilawley’s part individually, does not foreclose us from adducing
the demonstrable record indications that there is more to be known
and that somewhere within the four corners of the Government’s
total knowledge the full truth does exist and is available for judi-
cial disclosure, and has not thus far been disclosed.

36

other letter (10-19-61) to Alan Long [Director of
the 1.R.S. Intelligence Division] gave full report on
Schipani and said ‘the following information was
obtained from recent reports of the FBI’ * * *”,

Immediately following this last item in his memorandum
Mr. O’Brien states, “The FBI reports often parrot almost
verbatim what was overheard by means of the electronic
surveillance of Clementi and Schipani’”’,

In concluding his memorandum Mr. O’Brien said:

“From the foregoing, it can be seer that during
the period in which the Schipani tax: case was in-
vestigated the Government achieved the rare ob-
jective of complete interchange of information be-
tween three investigative agencies and the Depart-
ment of Justice.. Unfortunately, much of ‘it. was
tainted. |

“I do not see how we can support the conviction
thus obtained of Schipani on income tax: evasion
charges. The nature -of the proof is such that I
would have little hope of ever perfecting a taint-
free case. * * * [I]n view of the fact that three
Government agencies were, apparently keeping a
personal surveillance of the defendant, it would be
difficult to convince a Court that anything is free
from taint.”* (Italics in original.)

*In the omitted portion of the above quoted item from Mr.
O’Brien’s memorandum he referred to possibilities of tracing
prosecutive proofs to non-tainted sources, but all of - these non-
taint possibilities mentioned by Mr. O’Brien related solely to
‘likely source’? of income, not to the structure of the inter-

(Footnote continued .on following page)

37

As above mentioned, the Government called Mr. O’Brien
to testify in this suppression hearing (642 et seq.). The
prosecutor tried by various lines of questioning to get
Mr. O’Brien to repudiate his memorandum or at least to
palliate it—in short, to help the prosecutor’s theory that
the Solicitor General and this Court were “in error”. But
apparently in Mr. O’Brien the prosecutor had the wrong
man for any such purpose. The closest that the prosecu-
tor was able to come in getting any solace out of Mr.
O’Brien was in eliciting from him that (1) he did: not
think he had seen the entirety of the evidence and exhibits
of the first trial (648), (2) that he had not written the
Solictor General’s Supplemental Memorandum (657-658),
and (3) that as to the statement in said Supplemental
Memorandum that “Some of the materiz] in the F.B.I. re-
ports * * * provided investigatory leads; and other infor-
mation used in proceeding against petitioner” he (Mr.
O’Brien) would not have phrased it that way if he had
written it but would have said “may have provided” (660-
661).

The heart of Mr. O’Brien’s testimony is in the tran-
seript at pages 657-659 where, under questioning by the

(Footnote continued from preceding page) | ‘

joined several elements of the requisite net worth proofs as a
whole. Judge Weinstein has suppressed all procf of likely source
in this case anyhow, as earlier noted. The big question is, and it
is the question for which Mr. O’Brien’s memorandum offers no
hope of an answer favorable to the Government, can this net-
worth theory prosecution as a whole be maintained on a taint-
free basis in view of’ all of the foregoing circumstances of taint
depicted in Mr. O’Brien’s memorandum, thereafter solemnly
, recommended for reversal of the conviction in Solicitor General
Marshall’s Supplemental Memorandum to this Court, and then
acted upon by this Court via its own expressly announced
‘‘independent examination of the case’’. .

cae |

. ‘ , ad

38

4

™

Court, he confirmed ‘that, in contrast with the Black case, ,

“TI did recommend, of course, that we concede the necessity
of a new trial” and “because the investigation was contem-
_ poraneous with the intercepts and there had been ex-
changes of information between the investigative agencies
* * * [e]ssentially our position was, and’ think the key
part of this is that: ‘We cannot say in the instant case

that none of the evidence used was obtained directly or

indirectly from an improper source’” (657-658).

Nowhere in Mr. O’Brien’s testimony is there the remot-
est intimation that he would now change his mind, as the
prosecutor himself was apparently satisfied should be
done. The prosecutor did not get Mr. O’Brien to say
that he (or the Solicitor General) were now shown to have
been “in error”. The prosecutor, before calling Mr. O’Brien
to the stand, might have had Mr. O’Brien examine thor-
oughly Agent Masetti’s exhibit 1 in order that Mr. O’Brien
might decide whether in trith his original opinion: had
been wrong; but jt is evident that the prosecutor had not
fad Mr. O’Brien look into exhibtt 1. Is this ‘because the
‘ prosecutor feared Mr. O’Brien would not endorse Masetti’s
exhibit 1 or the prosecutor’s new-fangled theory of
“error”. It is extremely significant that Mr. O’Brien was
not put through a study of exhibit 1, and was apparently
not even asked by the prosecutor to read the testimony
of the agents and other Government officers who had pre-
ceded him on the stand in this suppression hearing. He
was not asked to study or to read any of that material
in preparation for taking the stand himself, and we say

that this is extremely significant. For, without Mr. .

O’Brien’s having gone into that material before taking
the stand, all that the Gov¢rnment was asking him (from
any meaningful probative standpoimt) was whether his
November 1966 memorandum was justified at the time it

9”

39
was written, and Mr. O’Brien said it was, as we have just
seen, The Government could not, and we suggest it dared
not, ask Mr. O’Brien whether he agreed with the prose-
cutor’s supposedly detailed “new” reasons for now urging
that there was “error” in 1966.

The record is clear (supra) from Masetti’s own testi-
mony that he was present at the largely attended confer-
ence in Mr. Rogovin’s oflice at the end of November 1966,
where Mr. O’Brien was also present. And the record
shows also that Mr. O’Brien had interviewed both Masetti
and the ATTU agents at a stage which evidently preceded
both the meeting in Mr. Rogovin’s office and, obviously,
the Solicitor General’s Supplemental Memorandum in the
Supreme Court (648). Thus Masetti, and the ATTU peo-
ple, were evidently interrogated in the intensest fashion
before Mr. Rogovin made his recommen lation to the Soli-
citor General—and before the Solicitor General announced
his position to this Court. ane

Had the Government. called as witnesses in the sup-
pression hearing, in a proper and meaningful descending
“echelon” series, the former Solictor General. himself and
thence all other persons having knowledge of the alleged

“error”, the picture might claim some pretense. towards.

probative rationality at least. But instead the Govern-
ment only made haphazard stabs at the problem, with the
result that the picture ends up probatively meaningless.
ha word, the Government has not revealifgly portrayed
at all just how it came about that the Rollcitoe General
“erred” in November-December 1966, « fortiari, the Gov-
érmment has not even touched at all the staggering prob-
liom of demonstrating: how the Supreme Court of the
United States “erred”. \

40

The above concludes our description of the proofs at
the suppression hearing. Judge Weinstein wrote a leng-
thy opinion, which is set forth in Appendix C hereto,
infra. His conclusion was that “All evidence relating to
the defendant’s likely sources of income which was intro-
duced at the first trial is suppressed. The motion is denied
in all other respects”. The net result of this ruling, taken
together with Judge Weinstein’s subsequent Memorandum
And Order of October 14, 1968 (printed as Appendix D
hereto, infra) which struck or suppressed all evidence as
to illicit income, and which ruled that the Court would
not rely on the only new evidence of “likely source” ad-
duced by the Government for the second trial (testimony
of F.B.I. Agent Shedd), was that the case went to the
trier of the facts in the second trial herein solely and
exclusively on the evidence in the first trial record (minus
all “likely source” evidence). But what Judge Weinstein’s
ruling on the motion to suppress (Appendix C hereto,
infra) also meant was that the Government: was allowed
to keep and t6 use again at the second trial the ‘entire

first-trial proof of income tax violation via the net worth

theory, omitting only the likely source items. That is,
despite the permeation of the whole investigation by, the
influence of the. F.B.I.. and ATTU electronic activities
which this ‘Court had inflependently adjudicated as taint-
ing the .case, Judge Weinstein permitted the Government

to salvage the case as a whole and, particularly, the

“money order” leads from which admittedly the Govern-

ment-had built the entirety of its net worth proofs as to
- the indispensable items of expenditures and net worth in-
creases in the’ indictment years. Judge Weinstein’s rea-
soning enabled him to arrive at this twofold conclusion—
suppress likply source and save everything else as un-
tained—by posing a distinction between (1) the influence

a

Ae Te mee + lint St Se ahs erp SD. cartes,

Aa

_of\the electronic activity on the obtaining of specific evi-.
dence, ahd (2) the influence of that activity on the Gov-
ernment’s overall decision in 1961 to “focus” on an income
tax prosecution of Schipani. This distinction artificialized
the whole actual reality of what had taken place in 1961,
it conferred on the unitary taint of the inter-agency con-
dict in 1961-1963 the benefit of an arbitrary judicial sur-
gery to amputate from the unitary corpus tainted sub-
stances which had already hopelessly infected the whole:
and it did not even consistently apply the idea of distin-
guishing between “focus” and specific items of proof, be-
cause, without justification (infra), it suppressed the likely
source items while salvaging the at least equally tainted
“money order” item.*

/ |
a. , «

ae
-

*The Government has insisted above all that its likely source
items are surely pure because they derive ultimately from pre-
’ taint FBI reports of 1959 and 1960. Yet Judge Weinstein sup-
pressed the likely source items. The Government has not even
tried to suggest that the ‘‘money order’’ leads pre-dated the
tainting electronic activity. Yet, these latter items Judge Wein-
stein declined to suppress. Is this because, under the law of net-
worthy:theory prosecution, the Government can convict a man
without showing ‘‘likely- source’’, but could never get a convie-
tion in a ease like this one without the money order leads that
made possible ‘the proof of expenditures and net worth increases?
Did the Courts below make a judicial judgment, or did they
make a“‘‘stragetic’’ one in disposing of our motion to suppress?

&

42

3. The Second-Trial Proofs As Such (Consisting Of A
Re-Incorporation Of The First-Trial Proofs Into The
Second-Trial Record Except For Proof Of Likely
Source )

At the second trial as such*—.e., the proceedings be-
fore Judge Weinstein following conclusion of the proceed-
ing on the motion to suppress (supra)—the proof con-
sisted solely of a stipulation (reserving various rights as
to admissibility of evidence) plus the entirety of the first-
trial reeord subject to the terms of the latter stipulation.
The defense rested without introducing any evidence (Tr.
9-16-68, p. 73). Judge Weinstein found Schipani guilty on
all counts (Appendix E hereto, infra).

* * *

The opinion of the Court of Appeals affirming the con-
viction (Appendix A hereto, infra) in essence approved
_ all of Judge Weinstein’s reasons and conclusions.

Reasons For Granting The Writ

1. The electronic-taint issues in this case are broader
than those of a mere issue of “suppression” of specific.
items.of illegally obtained evidence. The broader issue is
whether the Government may constitutionally re-try this
case at all, in view of the entire background situation,
z.€., the circumstances of this Court’s order in December
1966 vacating the judgment of the Court of Appeals and

[

* The stenographer’s transcript of what we have above termed
the second-trial proceedings as such consists of minutes for Sep-
tember 16; 1968 numbered pages 23-97, and minutes.for* November -
1, 1968 numbered pages 1-59a. The sentencing minutes (Decem-
ber 6, 1968) were not ordered to be typed.

43

remanding ‘the case, and the circumstances of the Solici-
tor General’s Supplemental Memorandum which resulted
in the latter order of this Court. The Government has
taken the position, now endorsed by both Courts below,
that, in effect, nothing which occurred in this Court’s
action of December 1966 has any binding foree here ‘be-
cause the Solicitor General was “in error.” But the
Government (and the Courts below) ignore the signifi-
eance of the words “and upon an independent examination
of the case”. in this Court’s per curiam order of December
12, 1966. Unless this last-quoted language in this Court’s
order is’ correctly understood and applied, there emerges
an indeed most peculiar cluster of procedural difficulties
of the most fundamental sort, difficulties touching pro-
found issues of federal jurisdiction as well as individ-
ual constitutional right, difficulties which we respectfully
think were not adequately considered by the Courts be-
low. For, when this Court expressly states in a formal
order or decision that such order. or decision bs made

“upon an independent, examination of the case,” does it:

not of necessity follow that, in any ‘subsequent proceed-
ing upon remand toa lower Court, such lower Court
is required to construe the mandate of this Court in the
light of the decisionally announced statement of this
Court that its order of remand is based upon such “inde-
pendent examination?”. That is, do we not have here

a difficulty far transcending even the difficulty posed by

a lower-echelon governmental claim of an alleged “error”
by the Solicitor General—the Federal officer designated by
Congress to represent the Government in the Supreme
Court of the United States (28 U.S.C. §518)?> Do we -not
have here, to speak bluntly, what amounts to an invita-
tion (“imposition upon” might be the truer phrase) by
Government attorneys to a lower Federal Court to en-
~A ; ’

44
9 > a

gage in a form of collateral review of a decision of the
Supreme Court of the United States?

Why, since the Government of necessity is accusing this
Court and not only the Solicitor General of “error”, did
not the Government go directly before this Court for con-
sideration of the Government’s instant We novo conten-
tions? What right has the Government instead, to de-
mand that a lower Federal Court should collaterally re-
view the Supreme Court of the United States, under the
form of “construing” or “applying” the mandate of the
Supreme Court. There was open to the Government at

all times herein since December, 1966, the conventional -
rehearing procedure in this Court—notwithstanding the -

lapse of tume-involved since the December, 1966 order
of ‘this Cert. Cf. United States v. Ohio Power
Co., 353 U. S. 98, 99, granting out of time a re-hearing
on the principle that “the interest in finality of litiga-
tion must vield where the interests of justice would make
unfair the strict application of our rules.” That is, if the
Government is convinced that the Solicitor General
“erred”: in the November-December, 1966 situation, such.
still does not excuse the Government from the duty of
any litigant to refrain from: collateral attack upon a
judgment until after first exhausting all avenues of direct,
review, and such an avenue (the re-hearing procedure in
this Court) has been and is open to the Government here.
The Government’s duty to resort first to this Supfeme
Court rehearing procedure is plain, for the reason, Again,
that the’ Court’s order of December 12, 1966, & based
“upon an independent examination of the case”, and not
. only “upon the suggestion of the Solicitor General” which
the Government now claims was “error”.

‘The impact of the incongruous procedural situation
which the Government has here created strikes still more

ER TOI AMM gs aR

45

acutely when one reflects that the instant suppression-
hearing record is totally devoid of any proof as to what
went into fis Court’s “independent examination of the
case”. To be sure, this last suggestion of ours embodies
a truism, for it goes.without saying there may searcely
ever be expected to arise an occasion when a party may
hope to be able to “prove” any such in camera contents
of the decisional deliberations of this Court. But by this
same token it follows that the Government was asking
a lower Federal Court to.do the impossible, namely, to
make a collateral judicial determination that when the
Supreme Court of the United States announced, without
stating reasons, a decision “upon an independent exam-
ination, of the’ case” that Court “erred”.

It is unthinkable that when this Court used the words
“upon an independent examination of the case”, it meant
to empower the Court below to find, upon its de novo re-
examination of the record or of any new showing by the
Government, that this case never really had to be vacated
and remanded by this Court in the first place. This case
is not like the Black case or other cases in which the So-
licitor General or this Court or both in conjunction saw
fit to favor a remand to a lower Court for a hearing to
determine whether there was taint via electronic activity.
To the contrary, this is one of those. cases in which both
the Solicitor Gencral and this Court, have already con-
cluded that constitutionally fatal taint does exist, on the
record as reviewed by both the Solicitor General and this
‘Court independently, and that all that remains is for the
Government to attempt if it can to re-try the defendant on
untainted evidence. i.e., on evidence free of the already ad-
judicated taint, which is to say that the-case may be re-
tried only on evidence other and separate from that which
has already been adjudicated as tainted.

s

46
(

‘

But that is not what the Government was asking the
Courts below to allow the Government to do. The Govern-
ment was not asking for retrial of this case on segregated-
ly “clean” evidence untouched by the previously adjudi-
cated taint. Instead, the Government was asking the
Courts below to adjudicate, collaterally, that the prior ev-
idence which has already been adjudicated as tainted
should now be re-adjudged as “clean”. It is not even clear
whether the Government was also asking the Courts below
to find certain portions of the Government’s evidence to
be separatedly or segregatedly “clean” in the sense of be-
ing untouched by this Court’s 1966 adjudication of eviden-
tiary taint. It is not clear whether this latter aspect was
included in what the Government was ‘asking the Courts
below to do because that aspect here became inextricably
intermingied with the other aspect, the jurisdictionally and
constitutionally forbidden aspect in which the Government
was asking these lower Courts to ‘undertake a collateral
review of the decision of this Court.

This intermingling was the inevitable result of the Gov-
ernment’s choice to press for a collateral rejection of this
Court’s 1966 decision. This. choice by the Government
brought about -an apparently hopeless obscuring of the
separate aspect or issue of whether the case ean be re-
tried on segregatedly clean evidence untouched by this
Court’s 1966 decision.

In all probability, it would have been impossible in any-
event for the Government to mount a constitutionally ac-
ceptable corpus of prosecutive proof for retrial of -this.
case, owing to the pervasiveness of the taint adjudicated
in 1966. Theoretically, wholly or partly new proof could
‘have been developed by the Government, but that is not
the course which the Government chose.

7

bo Se E SN RRS Rese

; 47

2. Furthermore, even if the Government might have
succeeded in achieving the theoretical possibility of de-
veloping “clean” new proof, there would persist the seri-
ous further probiem of the viability of the present indict-
ment, unless the Government could show that there was
no fatal taint in the proof on which the Grand Jury re-
turned this indictment. The Government made no showing
in the, instant hearing record, or anywhere else to our
knowledge, that the Grand Jury proofs were thus un-
tainted. This Grand Jury problem goes beyond the fa-
miliar problem of whether the Grand Jury proceedings
are vitiated by incompetent or constitutionally tainted
evidence when other evidence free of such defects was pre-
sented to the Graid Jury. Here, if we are correct in our
understanding of the meaning of this Court’s “independent
adjudication” of fatally pervasive taint in \this case, the
conventional saving factor of the Grand Jur\’s having re-
ceived additional legal evidence, could not cone into play,
“for here the whole of the Grand Jury evidence would
stand tainted. ;

Furthermore, here there is present an even more seri-
ous problem, now that Judge Weinstein has suppressed
all proof of likely source or of any illicit income, for \in

light of the latter ruling of Judge Weinstein it becomes”

necessary to confront the ultimately basic problem of
whether the Grand Jury in this case would have indicted
‘at all on an indictment theory that exctuded likely source

- and illicit income. That is, with likely source and illicit

income iaken out of this Grand Jury picture retrospec-
tively by virtue of Judge Weinstein’s ruling of electronic
taint, the question becomes, has Schipani even been af-
forded at all his constitutional right to indictment by a
Grand Jury? Given this radical change of the Grand
Jury posture (in light of Judge Weinstein’s ruling on
likely source and illicit income or activity), does the in-

ve

48

dictment vtself survive as being that particular indictment
which this particular Grand Jury thought it was handing
down?

Further, there is the problem of whether the Govern:
ment itself would have presented this case at all to a
Grand Jury if the likely source and illicit income items
had not been deemed available in the Grand Jury picture.
' This latter problem, as to the prosecution’s own position
vis-a-vis the Grand Jury (retrospectively viewed in light
of Judge Weinstein’s ruling), is admittedly of fesser con-
stitutional dimension than the companion problem affect-
ing the Grand Jury’s own province. But it all adds up to
showing just how grotesque the evolution of this prose-:
cution became, in point of both constitutional wrong and
of wrongful federal prosecutiye policy, in light of the elec-
tronic taint factors as they \ktand on the present record.
And this grotesqueness, in turn, but further bespeaks the’
fatal constitutional disorientation of ‘this remarkable fed-
‘eral prosecution, the disorientation caused by a Federal
District Court’s having undertaken in effect to pronounce
a collateral judgment. ef reversal against the Supreme
Court of the United States.

Further as regards our above remarks concerning the
theoretical possibility that the Government might have
developed totally new and “clean” proofs, we do not-mean
to imply that such new proofs would be literally the only
method of constitutionally retrying this case.* Theoretie-
ally also the Government might retry this case on the ba-
sis of such portions of the prior proofs which the Govern-
eee

* When we speak of ‘‘constitutionally’’ retrying this case on
totally new proofs we do not recede from the above suggested
qualification that such a course would raise its own grave con-
stitutional difficulty in connection with the Grand Jury problem.

49

ment might demonstrate are outside the area already ad-
judicated as being tainted. But, again this latter the-
oretical possibility does not seem to us realistic owing to
the pervasiveness of the adjudicatedly tainted items; and
again, the Government has not chosen to make a distinct
and clear demonstration along such lines.

The foregoing necessarily suggests, we realize, that it
is apparently impossible to retry this case at all under
any circumstances owing to the factor of the pervasive-
ness of the 1966 adjudicated taint—or owing to the sheer
impossibility of defining just what are the bounds and
contents of the adjudicatedly tainted area. This latter
suggested impossibility is the result of the Government’s
own fault in having tainted its case so pervasively, albeit
so undefinably, in the first place. And the task of trying
to define the bounds and contents of the adjudicatedly
tainted area was a task which the Government had to
undertake as part of its burden in the proceedings below,
but the Government avoided that task, choosing instead
to pitch its whole effort on the contention that the 1966
decision of this Court was “error”,

3. The conduct of the Courts below is in defiance, more-.
over of “the law of the case”. See 5 Am. Jur. 2d (“Appeal
and Error” §§ 744 et seq., 989 et seq.) pp.188 et seq.; 19
A. L. R. 3d 502 et seg.; 87 A. L. R. 2d 271 et seq., collect-
ing the familiar decisions for the axiomatic proposition
that a lower Court must obey the terms of the mandate
of an Appellate Court.. For example, ‘it’ is stated in 87
A. L. R. 2d at p. 276 that, “Obviously, a decision of a
higher appellate court is binding * * * whether the deci-.
sion is right or wrong”. It is stated at 87 A. L. R. 2d
p. 280 “* * * that the only remedy‘ available to correct
the error is a petition for a rehearing seasonably made
after the decision on the former appeal.” It is stated in

- fe Seay eae

) Am. Jur. 2d at pp. 417-418 that “It is the duty of the
trial court, on remand, to comply strictly with the man- ©
date of the appellate court according to its true intent
and meaning, as determined by the directions given by the
reviewing court. No judgment other than that directed by
the reviewing court may be entered, even though it may
. be one that the appellate court ougyt to have directed.”
' * * * ;
- (In our closing presentation to the District Court, after
the ‘Court had announced its tentative opinion and *order
and before pronouncement of verdict, we moved (Novem-
ber 1, 1968) for a continuance of the: cause pending op-
portunity to apply to this Court for a correction
of Judge Weinstein’s interpretation of this Court’s order:
of remand. It was not until the latter stage of the pro-
ceedings below that the situation became ripe for such
a motion on our part, because we had to await the un-
folding of the Government’s proof in this second trial and
the District Court’s manifestation of its views in regard
thereto—that is, until the stage just mentioned we were
not in a position.to pursue our “collateral review” objec-
tions because down to that moment it had remained pos-
sible that the Government would try to free the case of
taint by bringing in new untainted evidence, or that the
Court below would acquiesce in our “collateral review”
objections in light of the Government’s failure to adduce
any such new untainted evidence. Our request for continu-
ance was denied.)

4. The Courts below erred in ruling that the Govern-
ment successfully negated electronic taint with respect to
all of the first-trial proofs except likely souree. Much of
the argumentative presentation peztinent to the latter
contentions has crept, we fear, into our recitals concern-
ing this topic in the Statement of the Cage, supra, where

51 ane \ 5
(we realize) our factual recitals frequently crossed over ,
into the area of “argument”.

In the Statement of the Case, supra, we petereea to
_ Judge- Weinstein’s distinction between the “focusing”
_ phase. and the phase of specific items of evidence, in re-
gard to the electronic-taint issues. It was’ not written in
the Stars of the judicially objective issue-framework of
this case, on the electronic aspect, that this peculiarly
logicalized formulary distinction proposed by Judge Wein-
stein had to be the only or the right way of judicially
_approaching the eléctronic issues. It is familiar to, all
“of us, from the time of our sophomore-year course in ¢ol-
lege Logie, that one should: never let :the other fellow
formulate the issue, lest the eneounter be lost then and
there. Judge Weinstein formulated the issue framework
here. Before this Court we are free to urge that he be

ruled wrong in that formulation. :

Accordingly, we respectfully contend that the realistic
and fair formulation of the electronic-taint issues is the
one found in Mr. O’Brien’s memorandum of November 18,
1966 described supra (Appendix G hereto, infra). Mr.
O’Brien, an experienced Government lawyer in this field
of criminal income tax prosecutions on the net worth
theory, knew that the issue of electronic taint in this case
was not one of “focusing” versus “specific items” or any-
. thing of that sort. Mr. O’Brien knew that the only proper
issue was whether, fairly and candidly, the Federal Gov-
ernment lawyers in this case were going to be able to
go before a Court and assure that their investigative-
prosecutive totality was salvageably free of electronic taint
in view of all of the circumstances. Mr. O’Brien knew
that that was the only acceptable way to put the issue.
And evidently Solicitor General Marshall knew this also.
What was not to be expected was that eager-beaver junior

02

officials of the Department of Justice and the LR.S. would
later presume to foist on a Court their Masetti “exhibit 1”
theory—or perhaps this was to be expected in view of the
enormous temptation that must lure the prosecutive bu-
reaucratic mentality in situations of this kind, especially
in this situation where a prime stake in contemporary con-
stitutional history is involved, the stake of the survival or
destruction of the whole “Schipani reyiew proceure”. But ‘
what was surely never to be expected was that a Federal
Court would facilitate such pretensions of career prosecu-
tors. 3

When one reads Judge Weinstein’s opinion on the elec-
tronic issue which is printed in Appendix C hereto, infra
one soon finds oneself in a world of verbal and logical un- -
reality. Judge Weinstein’s.“foeus versus specific-item” dis-
tinction bears no relation to the actual chronological de-
velopment of the real-world happenings that were taking
place among the several agencies during the Schipani in-
vestigatidn, especially during 1961. The participants in
that inter-agency activity were not sitting around contem-
plating their logical navels to trace out the distinct con-
‘volutions of :“focus”- or of “specific items”. Those partici-
pants were involved together with each other in an or-
ganic, real-life Action or “gestalt” (to use one of Judge
Weinstein’s ofvn words). Those participants were all
unitedly in pursuit of Joseph Schipani. It is as though .
one were to inquire of a pack of foxhounds whether, at
any moment, they were devoting their pursuit energies to
“focusing” on the fox ‘or to “specific-itemizing” on the fox.
It is as though one were to inquire of Victor Hugo’s Javert
whether, in Les Miserables, at any one moment he was
“focusing” or “specific-item” questing after Valjean. Logic
and good disciplined analytical thinking Have ‘their place
in the law, to be sure. But surely the “logic” and the “ana-

4

53 is

lysis” with which we have all been favored by the learned °
District Judge below are not helpful to the proper conduct
of the judicial process in this case. Mr. O’Brien, Solicitor
General Marshall, the unanimous Justices of this Court, all
of those legal thinkers in 1966.discerned the organic or
unitary nature of the electronic taint problem in this ease.
The learned Courts below should have profited by their
example. |

Actually, the Government’s only “showing” with respect
to the specifies of the supposedly taint-free evidence under
Exhibit 1 consists of the testimony of I.R/S. Agent Masetti,
supra. But in thus relying on Masetti the Government is
relying on a blend of bootstrap-levitation and petitio prin-
_cipwu. The Government is defying the laws of legal gravity
and the logical law which forbids the begging of questions.
The bootstrap-levitation aspect is revealed in the fact that
Masetti has done noting more than sel-servingly testify
that he did not know that any of his information had an
electronic source. This is unavailing for the Government.
The essential question is not what Masetti knows as to
wtimate sources of evidence, but what the entire herein
involved Federal Law Enforcement Establishment knows
er is chargeable with knowing as to such sources. The
begging of the question by Masetti’s testimony and by his
Exhibt 1 is expressed likewise in. what we have. just said.
The Government cannot lift its tainted case out of the
tainted level by the self-serving testimony of Masetti when
the Government’s showing fails to negate taint through the
activities of the overall Law Enforcement Establishment
herein, any more than the Government can successfully
~ meet the ultimate question of taint known to or reason-
' ably attributable to that overall Establishment, by plac-
' ing on stage the single underling Masetti with his claim
of “autonomous” ignorance of the obviously universal elec-

o4

*

tronic taint which surrounds this ease like the “Ocean” of
classic, Greek mythology which encompassed the known
world of finite Man.

A comparable fundamentally disturbing item in the
Government’s case on the electronic issues is the follow-
ing: The testimony of the ATTU Chief Agent Hay is:
that his agency was embarked upon a “saturation” focus
upon Schipani (228 et seq., passim).* ATTU has admitted
electronic surveillance at the Pierrepont Health Club in
Brooklyn commencing in August 1961. It is perfectly evi-
dent from the testimony of Hay and the other ATTU
agents that, thanks to their claimedly massive physical -
surveillance of Schipani during 1961, they must: have
known that Schipani was frequenting Prisco’s Travel
Agency, where the F.B.I. had its electronic installation.
The immediate and urgent question arises, then, why did
not ATTU: itself try to conduct electronic surveillance of
Prisco’s? ATTU’s readiness, indéed its’ardor, to devote
its electronic attentions to Schipani during the times in
question speaks out boldly from: page after page of the
present hearing record, as we have seen. What is the
answer to the mystery of why ATTU did not—if, indeed,
it did not—install an electronic device at this place,
Prisco’s Travel Agency, which the physical surveillance
must have revealed to ATTU as being a place of such
frequent resort by Schipani? The answer to this mys-
tery is, we respectfully suggest, that. ATTU knew that
the F'.B.I. was already taking care of the electronic job at
Prisco’s. This inference which we are suggesting seems
to us to be so unavoidable-in point of the factual logic
of the present situation, that we believe we are justified
in arguing that it is incredible, practically as a matter of

* This refers to the transcripts cited in the footnote on p 16,
supra. i

59

law, that ATTU did not: know of the F.B.I.’s electronic
activity at Prisco’s Travel Agency. And if we are cor-
rect in this seemingly inescapable inference, what is left
of even the fragments of believability of the Govern-
ment’s entire “showing” in the present hearing record?
The credibility of the Government’s entire evidentiary
showing in this hearing must be concluded to be worth-
less, for as seen, both the F.B.I. witnesses and the ATTU
. witnesses were bold enough to swear in this hearing that
* ATTU had no knowledge of the F.B.I.’s electronic bug-
ging at Prisco’s.

e

Further as to the “focusing” aspect, as record of the
suppression proceedings herein cannot support the deter-
mination that unconstitutional “focusing” was negated
by the Government by “a preponderance of the proof”.
In that suppression hearing—where the Government had
the burden—persons whose testimony was indispensably
needed (on the “focusing” issue) were not brought in as
witnesses. Where was the First Assistant to the Solicitor
General mentionad by Mr. O’Brien as the official who evi-
dently carried forward the November 1966 Departmental
Review after Mr. O’Brien’s paper was finished? Where,
in our suppression hearing, was anyone from the Solici-
tor General’s office? The District Court noted in its opin-
ion printel in Appendix C hereto, znfra, that Mr. O’Brien
“did not know if the Solicitor General had additional in-
formation or had @onducted an independent review. There
is no indication in the record that such a review had taken
place”. We must respectfully ask, whose fault is it that
there is no such “indication in the record”? Was it not
‘part of the Government’s burden to meet one way or
the other, the lack of such “indication in the record”?
And where, likewise, were all of the other absent Govern-
ment-employee witnesses mentioned supra whose testi-

56

mony was needed to fill gaps not only as to the con-.
temporaneous “focusing”, but as to the 1966 Depart-
mental review? :

5. We submit also that the District Court’s enunciation
of the “preponderance” test for the “focusing” issue, as
distinct from the “reasonable doubt” test (Appendix C,
hereto, infra) is unsound., An important consideration,
mentioned by that Court as favoring the “preponderance”
eanon for this branch of the case, is comity owed by the
Judicial to the Executive Department.- We must ask,
“since when has the Judicial Branch under our Constitu-
tion felt itself under comity restraint in enforcing the
Constitution against Executive violation?* The whole
history of the contemporary rulings of this Court in this
electronic monitoring field eschews any such comity con-
siderations.

6. As to the aspects of the District Court’s opinion
(Appendix C hercto, infra) in which taint is found only
as to items of “likely source”, the very.items of adminis-
_ trative chronology and unfolding administrative activity

-which the Court itself so exhaustively marshaled, the
very items which caused the Court to conclude that taint
of the “likely source” items had not been negated by the

* Incidentally, when the District Court evidently gave decisional
weight in its opinion (Apendix C hereto, infra) to Mr. O’Brien’s
testimony that he would not have phrased the Solicitor General’s
previously quoted positive and unequivocal statement in the way
the Solicitor General did, the Court was putting a strange gloss
on its own ‘‘comity’’ reasoning. It does not seem wise for a Court
to pit Executive subordinates against their superior officers (who
have not even been heard from on the record), in a setting of
judicial reasoning which also posits that the Court is reluctant
to intrude itself into the Departmental inner privacies of the co-
equal Executive Department.

57

?

Government beyond a reasonable doubt—this reasonable
doubt test was found applicable by the District Court to
this branch of the case, i.e., the branch involving specific
evidentiary. items as distinct from the “focusing” prob-
- Jem—require equally the copenaeien: that the Government
did not carry beyond a reasonable doubt. the burden of —
negating taint as ‘to the ATTU surveillance which re-
sulted above all in what the Court below repeatedly re-
ferred to as the “crucial” money order leads. ~

7. Referring to our Question Presented no. 6, supra,
it came out in. the “3500” material of F.B.I. agent Shedd
in this second trial that the agent had\questioned Schip-
“ani about one Tony Ricci and that Schipani knew Ricci
in Florida. We informed Judge Weinstein (in our paper
entitled “Defendant’s Statement Of Objections, Motions |
And Requests After Conclusion Of The Proof At 1968
Re-trial,” pp. 17-19) that, from the record on file in this
‘Court in-Desist et al. v. United States, no. 12, Oct. Term ~
-1968, it was’ known that the name of this same Tony Ricci
figured importantly in certain ‘admitted trespassory elec- :
tronic eavesdropping by the F.B.I. in a Miami, Florida
restaurant, where Ricci was the direct target of the F.B.I.
bugging over a period which included the herein relevant
period from ‘April 1962 to May 1963. We therefore
urged Judge Weinstein, in our aforesaid “Statement of
Objections” ete. “to compel the Government to make
plenary disclosure concerning the Florida bugging of
Tony Ric¢ei’’ (id., p. 19). And we further move@ as fol-
lows before Judge Weinstein (cbid.):

«* * * Kor, if Tony Ricci was bugged prior to
Agent Shedd’s interview with Schipani on May 19,
-1959, and if that bugging of, Ricci turned up the
name of Schipani or any lead to- Schipani, such
would have an obvious vital bearing on the elec-

s

. 08

tronic issues of this case. In the first place, it
would go to the question of whether Agent Shedd’s
allegedly pre-electronic information is actually pre-
electronic. Second, it would be one further impor-
tant item going to the fundamental due process-
Fourth Amendment question of the Government’s
overall behavior in regard to its duty of full dis:
closure of its electronic activities affecting this case
of Schipani. We therefore move for an order re-
quiring the Government to make a plenary report
to the Court and to the defendant concerning the
Tony Ricci electronic bugging in Florida.”

However, all that Judge Weinstein did concerning this.
was that he directed the Government to report to him '
about the Tony Ricci bugging, and he then announced as
follows in the opinion printed in Appendix D hereto; infra
(p. 72a-73a) : “ :

“Electronic eavesdropping involving one Tony Ricci
has no bearing in the instant case. At the Court’s
request, the logs relating to that surveillance were
examined by the government. The government has
represented that the defendant’s name was not men-
tioned, none of his activities were mentioned, and —
the defendant’s voice was not picked up. Based
upon the suppression hearing already had in this
case, it .1s clear that no leads to evidence used
. ./ against the defendant were obtained as a result of
electronic eavesdropping involving Tony Ricci.”

The above procedure followed by Judge Weinstein. de-
- prived petitioner Schipani. of his rights under Alderman
v. United States, 349 U. 8. 165. It'was not enough forghe
Court to aecept the Government’s unilateral representa-
tion. Schipani’s counsel should have been given the op-

' 59

‘

portunity to examine the Tony Ricci logs to make sure, on
his own judgment as defense counsel, that no evidentiary
leads to Schipani had resulted from that surveillance. In
the massive and intricate picture of electronic activity pre-
sented by this case, Schipani and his attorney should have -
‘ben given that right and opportunity. (We neglected to
argue this point before the Court of Appeals, but pre-
served it before the District Court, as seen from the °
above quotation.)

8: As regards cur motion in the Court of Appeals un-
der the “All Writs” statute (see our heading “Jurisdic-
- tion”, p. 2, supra, and our Question Presented. no. 3,
supra), we submit it was*the duty of the Court of Ap-
peals to guard the integrity of this Court’s mandate.
‘against the ‘impositions of the Government and District
-Court, that is, to guard the mandate against ultra tires
collateral review by a lower Federal Court bent upon help-
_ Ing the Government show that the Supreme Court of the
United States was “in error” in having laid down “the
law of the case” (in this very same case). In any event,
this Court’s own original jurisdictoin under,28 U. S. C.
§1651 may be invoked in such a situation. The Court will
please note that the certified record pertaining to our
“All Writs” motion in the Court of Appeals is under a
separate title and docket number (No. 33753, Joseph F.
Schipani, Petitioner, v. Hon. Jack B. Weinstein, United
States District Judge for the Eastern District of New
York, Respondent). . Our “All Writs” motion presented
the issue to the’ Court of Appeals via an adoption or an
incorporation by reference of our presentation on the
same subject'in our appeal brief in ‘that Court, the es-
sence of which has been heretofore set forth in this peti-
tion for certiorari where we have discussed the Govern-
ment’s and Judge Weipstein’s a of going about
declaring this Court “in error”

b= “

60

CONCLUSION

It is respectfully submitted that this petition for a
writ of certiorari should be granted, both as to the
judgment affirming the conviction, and as to the order
denyimg the motion for relief under 28 U.S.C. §1651.

Respectfully snbmitted,
/

Jacosp P. Lerxowitz
ABRAHAM GLASSER
Attorneys for Petitioner
Joseph F. Schipani

oS

os ‘APPENDIX A f

UNITED STATES COURT OF APPEALS ©

‘
~ For THE Spconp Circuit

o_—
No. 692—September Term 1968 |
(Argued June 25, 1969 Decided August 11, 1969.)
Docket No. 33157
»

Unitrep States or AMERICA,

Appellee,

—V.-—

JosepH F. Scuipani,
Appellant.
> =

- Before:
Hays and Fernserc, Circuit Judges,
and Jameson, District Judge.*

_'

__-~ Appeal from a judgment’ of the United States District
Z Court for the Eastern District of New York, Jack Wein-
stein, Judge, convicting appellant, upon a trial without a
jury, on five counts of willful income tax evasion, in viola-
tion of 26 U.S.C., 7201. |

Affirmed. h Bk
——— oe ve -

a

Jacop F. Lerkowirz, New York,- New York
(Abraham Glasser, of counsel), for Appel-
lant. ea

° Senior District Judge of the District of Montana, sitting by desig-

nation.
\

[1a]

:
f
b

ey, ape

AE EIEIO TE RE

cue Ye,

; : 2a:

JOHNNIE M. Watters, Assistant Attorney Gen-
eral, Lee A. Jackson, Joseph Howard, Cono
R. Namorato, Janet-R.: Spragens, Attorneys,
Department of Justice, Washington, D. (.
(Vincent T. McCarthy, United States At.
torney, for the Eastern District of New
York, Jerome C. Ditore, Assistant United
States Attorney, of counsel), for Appellee.

—o—

>

Jameson, District Judge:

This is an appeal from a Judgment of conviction entered
December 6, 1968, after trial without a jury, on five counts
of willful income tax evasion through failure to file returns
~ for the years 1956-1960 inclusive, in violation of 26 U.S.C.
7201. ;
| Appellant was first found guilty of the same offenses,
after a non-jury trial,? on October 15, 1965, and was sen-
tenced on December 3, 1965. This conviction was affirmed
by this court on June 29, 1966. United States v. Schipani,
2 Cir. 1966, 362 F. 2d 825. Certiorari was denied on No-
vember 7, 1966. 385 U.S. 934, 87 S. Ct. 001, 17 L. Ed. 2d
431, :

On November 30, 1966, the Solicitor General filed a sup-
plemental memorandum in the Supreme Court advising

1 26 U.S.C. 7201 provides in pertinent part:

“Any person who willfully attempts in any manner to evade or

defeat se Sic Saal by this title or the payment thereof shall,

_-in addition to other penalties provided by law, be guilty of a
iceay * °° »

2 Prior to the first trial the parties had waived a jury. Before the
second trial the Government moved to withdraw its consent to trial
without jury. The motion was resisted and denied, the court holding
that the Government’s waiver covered “the above entitled case” rather
than a particular ‘trial. United States vy. Schipani, E.D.N.Y. 1968,
44 F.R.D. 461. :

°

3168

3a

the Court that material evidence against appellant was
based in part on electronic surveillance and suggesting that
by’ reason of this taint the “Court vacate its order denying
certiorari, grant certiorari, vacate the judgment of the
court of appeals, and remand the cause to the district
court for a new trial, should the government seek to prose-
cute the petitioner anew.” * On December 12, 1966, acting
“(u)pon the suggestion of the Solicitor General and upon
an independent examination of the case,” the Supreme
Court remanded to the district court “for a new trial
should the Government seek to prosecute petitioner anew.”
385 U.S. 372, 87 8S. Ct. 533, 17 L. Ed. 2d 428.

Following remand, appellant filed a motion to suppress
all evidence obtained as a result of any electronic surveil-
lance. A full evidentiary hearing on the motion com-
menced May 6, 1968, and continued: for five days. The
Government made full disclosure of all available informa-
tion relating to electronic surveillance of any conversations
in which appellant had participated.‘ In a thorough and

3 The memorandum set forth that it had eome to the attention of the
Solicitor General that appeliant had been a participant in a number of
conversations which had been electronically monitored as a result of
trespass. The Solicitor General was unable on the basis of information
then available to “say * * * that none of the evidence used by the gov-
ernment at petitioner’s trial was obtained, either directly or indirectly,
from an improper source.”

4 With respect to the evidence presented at the hearing, the court said
in part:

“The Government has freely revealed all data available to it. It
has presented all the surveillance logs of conversations in which the
defendant participated or was mentioned, the files of the Federal
Bureau of Investigation, the Alcohol and Tobacco Tax Division of °
the Treasury Department, the Intelligence Division of the Internal
Revenue Service, and the Department of Justice, and the testimony
of the many agents and attorneys in the 1961-1963 investigations of
the defendant and the 1966 review of their work by the Department
of*Justice. In addition, the Federal Bureau of Investigation ‘case

3169

Aa

well-reasoned opinion, Judge Weinstein suppressed all
evidence introduced at the first trial relating to appellant's
“likely sourees of income” * and otherwise denied the mo-'.
tion. United States y. Schipani, E.D.N.Y. 1968, 289 F,
Supp. 43.

At the second trial, the entire record of the first trial
was received in evidence as an exhibit, pursuant to a
stipulation entered into by the Government, appellant, and
appellant’s trial counsel. Since “likely source” evidence
had been excluded, the Government's case rested solely
on a negation of all non-taxable sources of income, a
theory approved in United States v. Massei, 1958, 355 US.
095, 78 S. Ct. 495, 2 L. Ed. 2d O17.

Following detailed findings, the court concluded: *Dur-
ing each of the years charged in. the indictment the de-
fendant had substantial taxable income greatly in excess
of six hundred dollars. During each of these years he
should have paid a substantial income tax. He failed to
file income tax returns: and concealed his income wilfully
in order to defraud the sovernment of income taxes due
by him to the government. The government has proved
beyond a reasonable doubt all the elements of the crime
charged for each of ‘the years charged in the indictment.
The defendant is guilty as charged on all counts.” United
States v. Schipani, ..D.N.Y. 1968, 253 F, Supp. 156, 163,
164. .

agent’ assigned to the Schipani investigation reviewed all the Fed-
eral Bureau of Investigation reports relating to the defendant and
underlined all information obtained as a result of electronic sur-
veillance” (289 F. Supp. at p. 45).

5 Each time the case was tried on the “net worth” theory. At the first
trial the Government offered evidence of “likely sources” of income, as
well as negating all non-taxable sources of income.

3170

5a

I.

Appellant first questions the propriety of the proceed-
ings upon remand and contends that the Government could
not constitutionally retry the case on the basis of “first-
trial proofs.” He argues that the ruling of the district
court that there was sufficient taint-free evidence to per-
mit a retrial on the same evidence constituted 4 “collateral
finding” that “the Supreme Court of the United States
was ‘in error’ in having ' adjudicated to the contrary in
deciding the same electronic issues in December, 1966, on
the qnerits and ‘upon an independent examination of the
case.’ ”’ 5 Ah
- We'do not so read the Court’s opinion. It is significant
that the Supreme Court, after its “independent examina-
tion of the case,” did not’ order a dismissal. Appellant
had petitioned for a “remand with direction to vacate the
judgment of conviction and to dismiss the indictment.”
The Court did not grant the petition but instead provided
expressly for a “new trial should the Government seek
to prosecute anew.” ° Had the Court intended the
construction placed upon its order by appellant, it would
have granted his motion.

* *« *

Clearly it was necessary to determine in some manner
what evidence was tainted. This the district court did in
an extended suppression hearing, with complete disclo-
sure to appellant by the Government of all available in-
formation in the Government’s files and with an oppor-

.

a
? :
6 A similar proceedure of remand for an exclusionary hearing was. fol-
lowed. in United States v. Wade, 1967, 388 U.S. 218, 87 8S. Ct. 1926,
18 L. Ed. 2d 1149; Gilbert v. California, 1967, 388 U.S. 263, 87 S. Ct.

1951, 18 L. Ed. 2d 1178.

3171

6a

tunity to cross-examine the key agents and investigators
who had any knowledge of the electronic surveillance.’

The per curiam opinion of the Supreme Court did not
hold or even suggest that all evidence at the first trial was
tainted by electronic surveillance. The Court had been
advised by the Solicitor General that some of the leads
and evidence were tainted. Neither the Solicitor Genera}
nor the Supreme Court had the benefit of the careful
analysis and testimony with respect to the sources of all
evidence which were available to the district court as a
result of the suppression hearing.’

The evidence at the suppression hearing disclosed that
the F.B.I. had been compiling information on appellant
since 1958. In a report dated October 10, 1960, the defen-
dant was described by one source as “one of the most in-
fluential and most powerful figures in New. York under-
world” and “considered to be associated with several of
New York’s top hoodlums” (289 F, Supp. at p. 46). The
first information obtained by electronic surveillance was in
1961 through an investigation of Michael Clemente and
covered the “Prisco Travel Bureau, a ‘front’ for Clemente’s
criminal activities and a meeting place for many of New
York’s top mobsters.” Although appellant was not the
subject of that electronic surveillance, nine conversations
in which he participated and 27 others in which he ‘was

7 The evidence adduced at the Suppression hearing included “a pain- -
staking analysis of all the evidence introduced” in the first trial, pre-
pared by the Special Agent of Intelligence in charge of the Schipani
investigation, with a member of the staff of the United States Attorney.
“The products of their labors was a comprehensive chart which denotes
a specific source or sources for each witness and piece of evidence (in-
cluding 292 exhibits) introduced at the trial” (289 F. Supp. at p. 49).

8 The same is true of the memorandum prepared by James Dewey
O’Brien, then the Assistant Chief of the Criminal Section of the Tax
Division, upon which appellant heavily relies in support of his conten-
tion that all first trial proofs were tainted.

e

3172

7a oa

discussed or his name was 1::entioned were electronically
monitored (p. 47). 3

The district court properly examined all of the evidence
in the first trial to determine whether all or only a part
was tainted by the electronic surveillance, and whether any
untainted portion was independent of and distinguishable
from that which was tainted. After a full hearing the
‘court, in a careful opinion, first recognized that “evidence
is admitted if it is obtained from an untainted ‘indepen-
dent source’ but excluded if it is obtained as a result of
the illegality”; that evidence discovered “as a result of
both legal and illegal leads” is inadmissible, even though
“the legal lead would itself probably have sufficed to un-
cover the evidence” (289 F’. Supp. at p. 54); and that the
Government is required to “prove beyond a reasonable
doubt that the evidence it introduces was legally obtained”
(at p. 59).

Applying the foregoing rules, the court found, inter alia,
that the only tainted evidence was that relating to a likely
source of income; that the “(o)ther evidence of the clefen-
dant’s net worth was proved beyond a reasonable doubt to
be untainted” (at p. 61); that the investigation was not
intensified by reason of any tainted information,” and that

9 The proper test is: “(Wyhether, granting establishment of the pri-
mary illegality, the evidence to which instant objection is made has been
come at by exploitation of that illegality or instead by means suffi-
ciently distinguishable to be purged of the primary taint.” Wong Sun
v. United States, 1963, 371 U.S. 471, 488, 83 S. Ct. 407, 9 L. Ed. 2d 441;
Hoffa v. United States, 1966, 385 US. 293, 309, 87 S. Ct. 408, 17 L. Ed.
2d 374; United States v. Wade, 1967, 388 U.S. 218, 241, 87 8. Ct. 1926,
18 L. Ea. 2d 1149.

10 “The government has established by a preponderance of evidence and
possibly by clear and convincing proof—though not beyond a reasonable
doubt—that the intensity of its investigation by Intelligence and the
Alcohol Tax Division was not affected by tainted information.” 289
F. Supp. at p. 64.

(footnote continued on next page)

3173

8a fi

it was “highly likely that the government would have
launched a saturation investigation * * * even if no in-
formation had been received from electronic surveillance of
the Priseo Travel Bureau” ™ (at p. 64).

We approve the legal principles applied. The findings
were not clearly erroneous. They were supported by sub-
stantial evidence. BO

II.

£P

Appellant’s next contention that the evidence was insufh-
cient to sustain a conviction was considered by this court
on the appeal from the first conviction.’ As noted supra,
at each trial the Government relied on the “net worth”
theory. The evidence of “likely source” income accepted

The court had previously concluded that proof showing that the in-
tensity of the investigation was not the result of tainted infermation
was satisfied by a preponderance of the evidence.

11 In reaching this conclusion the court relied in part upon the untainted
F.B.I. report: of October 10, 1960, supra, and “additional leads * * *
through acceptable investigative techniques. Defendant had never filed
an income tax return althoygh he obviously enjoyed a high standard of
living. Immediately after the investigation began, the defendant ap-
peared so vulnerable and the likelihood that an income tax investigation
would prove fruitful was so great, that government agents would-natu-
rally focus on him?’ (289 F. Supp. at p. 64).

12 In view of the factual background contained ii the prior opinion of
this court (362 F.-2d 825) and the detailed findings of Judge Weinstein
in his order following the suppression hearing (289 F. Supp. 43) and
in his opinion following trial (293 F. Supp. 156), we do not deem it
necessary to set forth the evidence in detail in this opinion.

13 In a net worth ease, the Government “attempts to establish an ‘opening
net worth’ or total net value of the taxpayer’s assets at the beginning of
a given year. It then proves increases in the taxpayer’s net worth for
each succeeding year during the period under examination and calculates
the difference between the adjusted net values of the taxpayer’s assets ©
at the beginning and end of each of the years involved. The taxpayer’s
non-deductible expenditures, including living expenses, are added to these
increases, and if the resulting figure for any year is substantially greater
than the taxable incom? reported by the taxpayer for that year, the

‘

3174

: - = Oe.

at the first trial was excluded at the second trial. The evi-
dence negating non-taxable income, however, was identical
at the two trials. i

In affirraing the first conviction, this court found that the
“totality of circumstances shown by the evidence” sup-
ported the conclusion that no “eash hoard” ever existed;
that the “absence of such a reserve fund was established
as part of the Government’s prima facie case” and appel-
lant “remained quiet

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385604_1252%3A1. Public record. Not legal advice.