Fleming v. U.S., 76-3107

• Decision Date: 23 February 1977
• Docket Number: No. 76-3107,76-3107
• Citation: 547 F.2d 872
• Parties: 77-1 USTC P 16,254 John FLEMING, as Executor of the Estate of Robert W. Best, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee. Summary Calendar. *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 872

547 F.2d 872

77-1 USTC P 16,254

John FLEMING, as Executor of the Estate of Robert W. Best, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 76-3107

Summary Calendar. ^*

United States Court of Appeals, Fifth Circuit.

Feb. 23, 1977.

William J. Cooney, Augusta, Ga., A. Blenn Taylor, Jr., Brunswick, Ga., for plaintiff-appellant.

R. Jackson B. Smith, U. S. Atty., Edmund A. Booth, Jr., Asst. U. S. Atty., Augusta, Ga., Scott P. Crampton, Asst. Atty. Gen., Tax Div., Dept. of Justice, Gilbert E. Andrews Jr., Chief, Appellate Sect., Rodger M. Moore, Gary R. Allen, Charles E. Brookhart, Attys., Tax Div., Washington, D. C., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Georgia.

Before COLEMAN, GOLDBERG and GEE, Circuit Judges.

PER CURIAM:

The district court awarded the government $967,902.58 for taxes based on taxpayer Robert W. Best's wagering activities. On this appeal the taxpayer's sole basis for challenging the judgment below is that evidence of communications lawfully intercepted by agents of the Federal Bureau of Investigation during a duly authorized wiretap should not have been disclosed to revenue agents of the Internal Revenue Service and therefore was inadmissible in this civil action. We reject the taxpayer's argument and affirm the decision below.

I.

FBI agents were conducting an investigation of wagering operations in Richmond County, Georgia. The agents obtained authorization to intercept certain telephone conversations pursuant to the federal wiretap statute, 18 U.S.C. § 2510, et seq. The agents' actions concededly comported with all constitutional and statutory restrictions.

The investigation led to the indictment of the taxpayer and others for operating an illegal gambling business. In September 1973 the taxpayer pleaded guilty to two counts of the indictment. At the time the court accepted the pleas, testimony was given in open court concerning the contents of the intercepted telephone conversations.

Both before and after the guilty pleas and attendant testimony, FBI agents forwarded information developed from the intercepted communications to IRS special agents. The IRS special agents in turn disclosed the information, through channels, to IRS revenue agents. The revenue agents prepared the tax assessments on which the civil action at bar is based.

The taxpayer died, and his executor brought this action seeking a refund of wagering excise taxes already paid. The government counterclaimed, seeking the payment of additional taxes. The government introduced evidence of the intercepted communications. Absent that evidence, we would be unable to sustain the judgment given in the government's favor.

II.

The taxpayer argues, quite correctly, that the federal wiretap statute does not authorize the use of wiretapping to investigate civil tax liability. This argument, however, ignores the undisputed fact that the wiretaps here were part of the investigation of criminal wagering activities clearly among those crimes covered by the wiretap statute. See 18 U.S.C. § 2516. We do not understand the taxpayer to contend that the criminal investigation was merely a subterfuge to enable the agents to intercept communications for the purpose of bolstering their civil tax case. Indeed, in light of the criminal convictions of the taxpayer which resulted from the same wiretaps, the taxpayer would have a very difficult time substantiating such an argument.

The taxpayer argues further, however, that once having lawfully intercepted the telephone conversations as part of a criminal investigation, the government agents were not free to disclose the information they had obtained to IRS revenue agents. The taxpayer's argument rests on two premises: first, that the disclosures were not authorized by 18 U.S.C. § 2517, which places restrictions on the disclosure of information developed from wiretaps; and second, that the improper disclosure mandates exclusion of the evidence under 18 U.S.C. § 2515, which establishes the statutory exclusionary rule. Our analysis of the two statutory provisions makes us confident of only one conclusion: the statute is not a model of clarity. The statute provides no ready answer to the important issue of the extent to which information developed through wiretaps as part of criminal investigations can be disclosed to the Internal Revenue Service for use in civil tax proceedings. We decline to resolve the statutory ambiguities, for we find that whatever the exact scope of the statutory provisions, the evidence was properly admitted under the circumstances here.

III.

We perceive only two substantial purposes that might be pursued by preventing the admission in civil tax proceedings of evidence lawfully seized as part of a criminal investigation. First, preventing the IRS from using such information might prevent the government from using criminal investigations as a subterfuge for developing information for civil tax proceedings. As indicated above, however, in this case the government actually obtained two criminal convictions of the taxpayer; the criminal investigation was no pretext. ¹ The second possible purpose of excluding the evidence would be to prevent the government's law enforcement officers from disclosing lawfully seized evidence to Internal Revenue Service revenue agents. The rationale for such a limitation on the dissemination of lawfully seized evidence would be the privacy interest which a person retains in his or her communications even after they have been intercepted by a narrow category of government officials. But whatever the strength of that privacy interest in other circumstances, when the intercepted communications are already part of the public record of a criminal prosecution the privacy interest is weak and does not justify excluding the evidence.

We therefore perceive no reason to exclude the lawfully seized evidence here, and we would order its exclusion only if the statute clearly required that result. The statute, however, does not do so. The statutory provision which mandates exclusion of certain evidence of intercepted communications is18 U.S.C. § 2515:

Whenever any wire or oral communication has been intercepted, no part of the contents of such communication and no evidence derived therefrom may be received in evidence in any trial, hearing, or other proceeding in or before any court, grand jury, department, officer, agency, regulatory body, legislative committee, or other authority of the United States, a State, or a political subdivision thereof if...