Bohrod v. United States

• Decision Date: 14 December 1965
• Docket Number: No. C-65-15.,C-65-15.
• Citation: 248 F. Supp. 559
• Parties: Aaron BOHROD, Petitioner, v. UNITED STATES of America and Michael J. Wyngaard, Acting United States Attorney for the Western District of Wisconsin, Respondents.
• Court: U.S. District Court — Western District of Wisconsin

248 F. Supp. 559

Aaron BOHROD, Petitioner, v. UNITED STATES of America and Michael J. Wyngaard, Acting United States Attorney for the Western District of Wisconsin, Respondents.

No. C-65-15.

United States District Court W. D. Wisconsin.

December 14, 1965.

John L. Palmer, of Whyte, Hirschboeck, Minahan, Harding & Harland, Milwaukee, Wis., for petitioner.

Michael J. Wyngaard, Asst. U. S. Atty., Madison, Wis., for respondents.

JAMES E. DOYLE, District Judge.

On April 4, 1963, petitioner was 55 years old, a member of the faculty of the University of Wisconsin known as its artist in residence, a native citizen of the United States, a high school graduate who had then attended a junior college for one year and had had about four years of professional art school training.

On about January 15, 1963, petitioner received a phone call from a revenue agent, John F. Suby. An appointment was made for a conference January 16, 1963, which was held. In the course of this phone call and initial conference, petitioner was informed that the Internal Revenue Service proposed to audit his federal income tax returns for certain years. Petitioner was cooperative. At the January 16 conference and on a number of occasions thereafter, prior to about February 10 (that is, "several days before" February 12), petitioner made available to Suby cancelled checks, checkstubs, some checking account statements from the bank, a so-called "investment book" containing information about purchases and sales of stocks, and some records concerning the cost of construction of a studio in his home. At the January 16 conference petitioner disclosed the identity of two of the galleries to or through which he had sold paintings during the years in question. (The identity of another party which had commissioned some paintings was disclosed some time between January 16 and April 4.) Petitioner afforded Suby considerable opportunity to examine these records and to make notes about them. Some of this work was done by Suby in an upstairs office of the studio, while petitioner worked in the studio below. Petitioner also gave Suby permission, without limitation, to examine the bank records of petitioner at the Madison Bank & Trust Company. During this period there were numerous conferences and phone conversations between Suby and petitioner.

On February 12, 1963, a conference occurred at which Suby and petitioner were present and, for the first time, petitioner's attorney, Joseph Goodman. Petitioner had called Goodman several days earlier, when petitioner had grown apprehensive about the extent and nature of Suby's investigation. From February 12 to March 7, 1963, the pattern of cooperation between petitioner (now represented by counsel) and Suby continued. At no time did Suby raise any question whether Goodman had a power of attorney or a "treasury card" then required of attorneys desiring to represent taxpayers in federal tax matters. Forms were executed extending the limitations period within which the government might act with respect to certain tax years. On February 26 Suby informed petitioner and Goodman that, applying the so-called "bank deposit method", he had found an apparent understatement of income. Thereafter: (a) petitioner arranged for Suby to check petitioner's account with his stock broker, and also arranged for Suby to check on a record of bonds which petitioner had sold through the First National Bank of Madison; and (b) Goodman volunteered information to Suby concerning three savings account deposit books not previously made available.

On March 7, 1963, Suby referred the case to the Intelligence Division of Internal Revenue Service because, having applied the bank deposit method, he had concluded that there had been substantial amounts of income unreported by petitioner and that these discrepancies indicated fraud. From March 7 to April 4 Suby consciously avoided communications from petitioner and Goodman without explaining his inaccessibility.

On March 28, 1963, Special Agent Robert E. Ristow of the Intelligence Division, to whom the case had been assigned, conferred with Suby about it; they met again April 3. Suby informed Ristow on March 28 that petitioner had retained Goodman in connection with the audit, and that Suby had been dealing with Goodman. On April 3 it was decided that the two agents would call on petitioner at his studio on April 4, unannounced. The explanation given by the agents at the hearing for not telephoning Goodman in advance was that Goodman had no power of attorney. They offered no intelligible explanation for their failure to telephone petitioner in advance.

In his amended petition, petitioner alleges that at the opening of the April 4 conference at his studio, Ristow was introduced by Suby as a Special Agent; that Ristow repeated that he was a Special Agent and stated that his role in the audit was to investigate and determine whether certain of petitioner's returns were fraudulent and whether criminal prosecution appeared to be warranted. At the hearing on the amended petition, petitioner testified that after having asked three or four questions of no critical importance, Ristow said: "By the way, if any of these questions tend to discriminate against you, you need not answer them", and "You may take the Fifth Amendment." The latter statement, according to petitioner, was made with "a conspiratorial sneer", apparently intended to discourage petitioner from availing himself of the Fifth Amendment. Except for the matter of Ristow's "sneer", there is no significant dispute as to the propositions stated in this paragraph.

There is sharp dispute as to two points in connection with the April 4 conference:

First, as to the absence of a lawyer. Petitioner contends: that following the introductions and Ristow's explanation of his purpose, petitioner stated that he felt that his lawyer should be present; that Ristow expressed surprise that petitioner had a lawyer; that Ristow said it wasn't important to have a lawyer present because Ristow intended to ask only questions of "historical" background as to which a lawyer could be of no assistance; that Goodman specifically could be of no assistance to petitioner because Goodman lacked a power of attorney or a treasury card; and that "if I did have my lawyer at my side, I might be subject to a kind of injury which might come about from a widespread knowledge of the fact that I was being investigated, and that I wouldn't be the beneficiary of such publicity." Ristow, corroborated by Suby, generally denies petitioner's version and contends: that after having presented his written credentials for petitioner's inspection and after having stated the warnings described in the preceding paragraph, Ristow said that he was aware of Goodman's participation in the audit and that petitioner could inform Goodman of Ristow's appearance in the case if petitioner wished; that petitioner said it would not be necessary to call Goodman; that the discussion about a power of attorney or treasury card for Goodman did not occur until after the question and answer period had been concluded; that, also following the questioning, it was petitioner who raised the question about publicity, but not in relation to the presence or absence of a lawyer. It is uncontradicted that petitioner had a telephone in his studio.

Second, as to allegedly incriminating statements made by petitioner. Petitioner contends: that he relied on the representation by Ristow that the questions would be "historical"; that he had no reason to think the questions actually asked (including questions about the names of galleries to which or through which he had sold paintings or about the names of parties which had commissioned paintings) were other than "historical" or that the answers to such questions would later be considered incriminating; that Ristow was working from several typewritten sheets of questions; and that he had felt at the time that he had no choice other than to proceed with the interview. Ristow, again corroborated by Suby, generally denies petitioner's version and testifies: that he told petitioner that he proposed to question him on "historical" matters and other matters; that he worked from four typewritten pages of questions covering both "historical" matters and other matters; and that in the course of the questioning he had not advised petitioner when the questions changed from an "historical" to a non-"historical" nature. The typewritten questions or points, received in evidence, number 48. Points 1 through 3 are: "purpose of visit; advise taxpayer of constitutional rights; determine if cooperation will be furnished during the investigation." Items 4 through 16 may be considered "historical" or biographical. Question 17 is: "What books and records maintained in connection with business?" Items 18 through 48 (to all of which petitioner responded) are clearly non-"historical" and non-biographical and include such points as: what does petitioner do with receipts from paintings; names of banks and savings and loan associations with which petitioner had done business; loans received and made; gifts or inheritances received; real estate purchases and investments; safety deposit boxes; life insurance; living expenses; method of preparation of tax returns; and similar topics. The length of the conference was about two hours and fifteen minutes.

On April 8, Ristow phoned petitioner and arranged another conference at petitioner's studio for April 9. Ristow and petitioner agree that in this phone conference, petitioner said that Goodman had complained about the failure to notify him of the April 4 conference. Petitioner alleges that Ristow then repeated "that if my lawyer were there with me it would open the way for broader knowledge of this investigation and I might not enjoy the ensuing publicity." Ristow denies this, and alleges that he told petitioner that Goodman could be present April 9 but,...