Centracchio v. Garrity

• Citation: 198 F.2d 382
• Decision Date: 27 October 1952
• Docket Number: No. 4633.,4633.
• Parties: CENTRACCHIO v. GARRITY.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

198 F.2d 382 (1952)

CENTRACCHIO v. GARRITY.

No. 4633.

United States Court of Appeals, First Circuit.

July 25, 1952.

Writ of Certiorari Denied October 27, 1952.

Joseph J. Gottlieb, Boston, Mass. (Lawrence E. Cooke, Boston, Mass., on the brief), for appellant.

Meyer Rothwacks, Sp. Asst. to Atty. Gen. (Ellis N. Slack, Acting Asst. Atty. Gen., Ben Kohler, Jr., Sp. Asst. to Atty. Gen., and George F. Garrity, U. S. Atty., and Edward D. Hassan, Asst. U. S. Atty., Boston, Mass., on the brief), for appellee.

Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.

Writ of Certiorari Denied October 27, 1952. See 73 S.Ct. 108.

MAGRUDER, Chief Judge.

We have here an appeal from an order denying on the merits a Petition and Motion to Suppress Evidence filed in the court below prior to indictment.

The petition alleged that the United States attorney for the District of Massachusetts "has given notice of intention to present evidence to the Grand Jury to obtain an indictment of your petitioner for violation of the Internal Revenue Code in filing of income tax returns by your petitioner for the years 1945 to 1949 inclusive. The evidence which the United States Attorney intends to present to the Grand Jury was given by your petitioner to Agents of the Bureau of Internal Revenue upon the promise of the United States Secretary of the Treasury that your petitioner would not be prosecuted, which promise was contained in the Secretary of the Treasury's public statement of its policy to grant immunity to taxpayers making voluntary disclosures * * *." This statement, issued by Secretary of the Treasury Vinson on August 21, 1945, was as follows:

"The Commissioner of Internal Revenue does not recommend criminal prosecution in the case of any taxpayer who makes a voluntary disclosure of omission or other misstatement in his tax return. Monetary penalties may be imposed for delinquency, for negligence and for fraud, but the man who makes a disclosure before an investigation is under way protects himself and his family from the stigma of a felony conviction. And there is nothing complicated about going to a collector or other revenue officer and simply saying, `There is something wrong with my return and I want to straighten it out\'."

It was further alleged in the petition that independent of the "promise" of the Secretary of the Treasury aforesaid, "the Agents of the Bureau of Internal Revenue by express and implied promises of immunity made by them to the petitioner obtained from him the evidence sought to be suppressed"; that at a conference on May 22, 1950, agents of the Treasury Department agreed to accept petitioner's case as one of voluntary disclosure, and petitioner was induced by such agents to believe "that no prosecution would result from his disclosures relating to his income tax liability"; that on said date petitioner did not know and had no reason to believe that his income tax returns for 1945 to 1949 were under investigation or examination; that petitioner, fully cooperating with the said agents, submitted to them all necessary information, records and files in his possession and made a sworn statement at their request, thus enabling the agents fully to determine petitioner's income tax deficiency; that petitioner on April 12, 1951, "learned for the first time that his case was not being accepted by the Treasury Department as a civil matter and that on the following day he learned that his case had been recommended for criminal prosecution on the grounds that income had been fraudulently omitted from his income tax returns" for the taxable years in question. The petition further alleged that the agents of the Bureau of Internal Revenue, in obtaining the evidence from him, did not advise petitioner of his constitutional rights against self-incrimination; and averred, as a conclusion of law, that the evidence given by the petitioner to said agents was obtained from petitioner "in violation of his rights guaranteed under the Fifth Amendment to the Constitution of the United States, and may not be used against him in any criminal prosecution."

The petition prayed for an order (1) restraining the United States attorney from using before the grand jury or in any criminal prosecution the evidence so obtained from petitioner, including his sworn statement aforesaid, and (2) directing the suppression of said evidence in any criminal prosecution of the petitioner.

The petition came on to be heard before Judge Wyzanski. Petitioner, and one Francis H. Sloan, an accountant who had participated in the negotiations with the Treasury agents on behalf of petitioner, testified in support of the petition. The United States attorney stated that he had several witnesses to call, but the district judge, after hearing petitioner's case, indicated that it was not necessary to hear testimony on the part of respondent, and no such testimony was offered.

The testimony on behalf of petitioner was to the effect that upon learning of the Treasury's voluntary disclosure policy, and upon being assured by the Treasury agents that his case would be accepted on that basis, petitioner told revenue agents that his returns were not in order, and supplied them with all of the necessary data to enable them to compute his deficiencies. He gave the revenue agents access to his safe deposit box and turned over to them his cancelled checks, his bank statements, and his check books; also the records of a bank account in his wife's name and of a joint account in the name of petitioner and his wife. In addition, he made available to the Treasury agents his case files as an attorney at law, turned over to them the diaries which he used for filing interrogatories and listing his appointments, and gave them information on his dividends, a rent analysis for his office, a statement of the interest he had received on his deposits, and copies of his earlier tax returns. Finally, he furnished them a sworn statement with respect to the expenses or disbursements incurred in connection with the cases listed in his case files. Neither the testimony of petitioner nor that of Sloan suggested that the representations made to petitioner by the Treasury agents were in the nature of a ruse or scheme designed to induce him to incriminate himself so that he might be prosecuted. The thrust of the testimony was that in ultimately recommending criminal prosecution the Treasury agents failed to comply with the announced voluntary disclosure policy, not that they never intended so to comply.

On February 20, 1952, the district court entered its order now appealed from denying the Petition and Motion to Suppress Evidence. In a memorandum the district judge found that petitioner, being aware of the announced voluntary disclosure policy of the Treasury Department, turned over the evidence in question, and made the sworn statement aforesaid, to agents of the Treasury Department. The district judge also found that there was no evidence that at the time these disclosures were made the Treasury officials did in fact contemplate any criminal prosecution of petitioner, and that therefore there was no basis for a finding that the Treasury agents intended all along to break some promise or declaration of policy, and obtained from petitioner the evidence in question by fraudulent misrepresentation of their intention in that regard. This finding that there was no evidence of any such fraud on the part of agents of the Treasury was fully warranted by the testimony. Further, the district judge found that there was no evidence that the intention of the Treasury agents at the time of receiving the evidence from petitioner was the slightest bit different from that declared in the statement of August 21, 1945, by the Secretary of the Treasury; that such published statement was no more than a declaration of policy as to what would be recommended by the Department and was in no sense a promise that there would be no criminal prosecution.

We are informed that on February 21, 1952, one day after the entry of the order now on appeal, a grand jury in the District of Massachusetts handed down an indictment against Centracchio, charging that he filed false and fraudulent income tax returns, understating his income and the tax due thereon in the years 1945, 1946, 1947 and 1948, in violation of 26 U.S.C. § 145 (b). Whether the handing down of this indictment has any effect upon the present appeal we reserve for later consideration.

There is no doubt that the order under review was a "final decision", appealable to this court under 28 U.S.C. § 1291. It was not an interlocutory order in the course of a criminal proceeding. No such proceeding was pending before the district court. The filing of the Petition and Motion to Suppress Evidence was the initiation of an independent proceeding of a summary character against the United States attorney as an officer of the court. The order of the district court denying the petition finally disposed of this proceeding, and was therefore an appealable "final decision". Perlman v. United States, 1918, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950; Burdeau v. McDowell, 1921, 256 U.S. 465, 41 S.Ct. 574, 65 L.Ed. 1048; Turner v. Camp, 5 Cir., 1941, 123 F.2d 840; In re Fried, 2 Cir., 1947, 161 F.2d 453. See Cogen v. United States, 1929, 278 U.S. 221, 225, 49 S.Ct. 118, 73 L.Ed. 275.

The basis of the district court's jurisdiction to entertain the petition in such independent proceeding warrants passing comment. It is not suggested that the district court had jurisdiction under any of the jurisdictional grants in 28 U.S.C. §§ 1331-1358. But it has long been accepted that where evidence, obtained by an unconstitutional search and seizure in violation of the Fourth Amendment, is in the hands of a United States attorney, a federal district court may entertain and grant relief on a petition, filed even prior to any indictment, seeking a return of the papers or...