United States v. Costello, 338

• Citation: 247 F.2d 384
• Decision Date: 22 July 1957
• Docket Number: Docket 24470.,No. 338,338
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Frank COSTELLO, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

247 F.2d 384 (1957)

UNITED STATES of America, Plaintiff-Appellant, v. Frank COSTELLO, Defendant-Appellee.

No. 338, Docket 24470.

United States Court of Appeals Second Circuit.

Argued June 11, 1957.

Decided July 22, 1957.

Edwin J. Wesely, Asst. U. S. Atty., S. D. N. Y., New York City (Paul W. Williams, U. S. Atty., and Harold J. Raby, Asst. U. S. Atty., New York City, on the brief), for plaintiff-appellant.

Edward Bennett Williams, Washington, D. C. (Agnes A. Neill, Washington, D. C., and Morris Shilensky, of Hays, St. John, Abramson & Heilbron, New York City, on the brief), for defendant-appellee.

Before CLARK, Chief Judge, and CHASE and HINCKS, Circuit Judges.

CLARK, Chief Judge.

The United States of America appeals from a decision, D.C.S.D.N.Y., 145 F. Supp. 892, dismissing without prejudice its action for the denaturalization of defendant, Frank Costello, alleging fraud and illegality in its procurement in 1925. In taking this action during the course of the trial, Judge Palmieri found the government's case permeated with the fruit of illegal wire taps and held that it would not be feasible to attempt to separate the legal and illegal evidence so as possibly to save the case. Accordingly in the exercise of discretion and over plaintiff's objection, he dismissed the case without prejudice and upon the defendant's stipulating to waive the statute of limitations. We are constrained to hold that this summary step was not warranted by the state of the record and that the action must be remanded for the reaching of some more definite conclusion.

The complaint herein alleged that the defendant's petition for naturalization, filed May 1, 1925, was fraudulent in that it denied or concealed the facts that the applicant had violated the National Prohibition Act, failed to pay state and federal income tax due from him, conspired to bribe Coast Guard and Prohibition agents, engaged in large-scale gambling operations, used certain aliases, and been convicted in 1915 for carrying a concealed weapon. On the first day of trial the defendant moved to dismiss the affidavit of good cause, supplied by plaintiff to fulfill the requirement of 8 U.S.C. § 1451(a); and he submitted various papers to show that it was based on illegal wire taps. The moving papers included extracts from the defendant's testimony before a New York County Grand Jury in 1943; before a referee appointed by the New York State Appellate Division, First Department, in 1943 in regard to disciplinary proceedings against Attorney Thomas A. Aurelio; and before the Special (Kefauver) Committee of the United States Senate to Investigate Organized Crime, which held hearings in 1950 and 1951. These transcripts suggested that state officers had indeed tapped the defendant's phone in 1943, as a result of which he testified before the three bodies to facts which he might not otherwise have revealed. Also included in the moving papers was a deposition of Maurice A. Roberts, an attorney in the Department of Justice who had executed the government's affidavit of good cause, in which he stated that he had based the affidavit on parts of the three transcripts just described and also the central office file of the Immigration and Naturalization Service. Government counsel at that time refused to permit the court or defendant's counsel to see the fourth source on the ground that it was confidential.

The trial judge took the motion to dismiss the affidavit of good cause under advisement, adjuring government counsel to tell him whenever evidence was offered at trial which stemmed directly or indirectly from intercepted communications. While the judge was considering the motion, the trial went forward. The crisis came on the third day of trial when the defendant, who was being examined concerning a 1926 bootlegging prosecution, submitted an affidavit alleging that his phone had been tapped in 1925 and 1926, and that the 1926 proceedings were the result of those taps. The government attorney conceded that a witness had told him of having heard that there had been tapping of the defendant's telephone; but he denied the existence of taps in 1925 or 1926 and contended that neither the affidavit of good cause nor the government's proof was the fruit of such taps.

The judge suspended the trial and, in chambers with counsel, examined the three transcripts previously submitted. He found — as he explains, 145 F.Supp. 892, 895, 896, note 13 — that these contained indications of extensive use of wire taps covering a period of many years and beginning in the 1920's, a belief which he had confirmed through telephone conversations with two of the former participants in these matters. Accordingly the following morning he announced his decision that it was virtually impossible for him to determine what evidence was admissible and what was not, and that it was not feasible to take time to separate the...