United States v. Weisman, Cr. No. 17966

• Decision Date: 20 July 1948
• Docket Number: Cr. No. 17966,17967.
• Parties: UNITED STATES v. WEISMAN. UNITED STATES v. COLONIAL RUBBER CO., Inc., et al.
• Court: U.S. District Court — District of Massachusetts

78 F. Supp. 979

UNITED STATES v. WEISMAN.

UNITED STATES v. COLONIAL RUBBER CO., Inc., et al.

Cr. Nos. 17966, 17967.

District Court, D. Massachusetts.

July 20, 1948.

William T. McCarthy, U. S. Atty. and Joseph M. Hargedon, Asst. U. S. Atty., both of Boston, Mass., and Arthur Garrity, Asst. U. S. Atty., of Worcester, Mass., for plaintiff.

Joseph J. Gottlieb and Sydney Berkman, both of Boston, Mass., for defendants.

FORD, District Judge.

The individual defendant Weisman and the corporate defendant were indicted March 15, 1948, for attempting to defeat and evade taxes due the United States. 26 U.S.C.A.Int.Rev.Code, § 145(b).

On April 23, 1948, the individual defendant and the corporation filed motions to suppress evidence obtained by the government from statements by defendant Weisman and from the books of the corporate defendant made available to the government by Weisman with respect to attempted tax evasion. The present indictments are based at least in part upon this evidence.

The contentions made to support the motions are as follows: (1) defendant Weisman contends he made a confession of attempted evasion that was induced by a promise of immunity by one Fred Pastore, Special Agent of the Bureau of Internal Revenue; and also by the general policy of the Treasury Department to grant immunity to those making a voluntary disclosure before investigation; (2) defendant corporation contends that the production of its corporate records to the agent was the result or fruits of a promise of immunity given to Weisman by Agent Pastore; and also by the general policy of the Treasury Department to grant immunity to those making a voluntary disclosure before investigation. No attack on the indictments is made in the proceeding. In other words, an evidential problem is presented here, not an immunity defense in bar of the indictments.

The contentions made are identical with those made on somewhat similar facts in the case of United States v. Lustig, 2 Cir., 163 F.2d 85.

A hearing on the motions was held on Wednesday, June 9, 1948, testimony was taken, and the following findings of fact are made by this court.

On or about August 29, 1945, Fred Pastore, Special Agent of the Bureau of Internal Revenue, visited the defendant at his corporate place of business in Cambridge, Massachusetts. For some time before that date a special agent of the Bureau of Internal Revenue in Florida was investigating a third party, one Max Leitman, and he discovered the fact that Leitman had paid more than $12,300 in checks to the defendant Benjamin Weisman and the Colonial Fabric Company, a dissolved corporation controlled by Weisman. A check payable to Colonial Fabric Company was in the amount of $12,300.

At the time Agent Pastore visited the defendant on August 29, the defendant stated at the outset that the checks represented payments of personal loans made by Weisman to Leitman. After a discussion lasting for about one-half hour, Weisman volunteered the statement that he could not tell a lie and admitted that the $12,300 check was in payment for the sale of tire reliners to Leitman. Subsequently, after a request from Pastore, Weisman turned over the cash receipt books and sales books of the Colonial Rubber Company to Pastore for examination. This was done voluntarily. The agent asked Weisman to write out an affidavit stating the nature of the transactions he had with Leitman. The affidavit was prepared by the agent, read by Weisman, and signed by him. Agent Pastore received information from Weisman as to the banks used by Weisman in making deposits. Weisman informed the agent that he had accounts in three banks and at that time stated he had no bank accounts other than those stated. After further investigation, Agent Pastore discovered that Weisman did have an account at the United States Trust Company, in which Weisman had deposited the proceeds of other unrecorded sales. At a later conference, after denying at first that this was the fact, Weisman admitted he had such an account in the United States Trust Company. Also later Weisman disclosed another account in the Harvard Trust Company.

After several weeks investigation of the books of the Colonial Rubber Company, defendant, many unrecorded sales were discovered which led to the indictments against Weisman and the corporation.

Weisman testified, in substance, that when the agent visited him, the latter told him he was investigating a third party and that if the defendant had any disclosure to make, he would take it, recompute the tax, assess the penalty, and that would end the matter; that there would be no criminal prosecution. Weisman testified that it was as a result of this promise of immunity and the general policy of the Treasury Department in granting immunity that he made a disclosure of tax delinquencies and produced the books of the corporation, of which he was treasurer and principal stockholder.

Weisman's wife testified that she assisted her husband and the defendant corporation in taking care of the checkbooks and that on or about September 2, 1945, she was present at the plant of the corporate defendant for the purpose of explaining certain bookkeeping entries to Special Agent Pastore and that at that time, upon being asked certain questions, Agent Pastore stated that he had made a deal with her husband and that nothing was going to happen to him.

One Sidney L. Kirshner, an accountant for Weisman, testified but did not give any testimony that Agent Pastore had promised immunity for Weisman's disclosure.

Agent Pastore denied categorically that he had at any time assured Weisman that if he disclosed all his dealings and irregularities, the result would be monetary penalties. He denied that he promised any immunity to the defendant or to the corporation through the defendant in return for any...