Griffin v. U.S.

Citation588 F.2d 521
Decision Date26 January 1979
Docket NumberNo. 76-3633,76-3633
Parties79-1 USTC P 16,310 Marion D. GRIFFIN, and Madelyn Youngblood Simpkins, Executrix of the Estate of John H. Simpkins, Deceased, Plaintiffs-Appellees-Cross Appellants, v. UNITED STATES of America, Defendant-Appellant-Cross Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

R. Jackson B. Smith, U. S. Atty., Edmund A. Booth, Jr., Asst. U. S. Atty., Augusta, Ga., Myron C. Baum, Acting Asst. Atty. Gen., Gilbert E. Andrews, Acting Chief, Appellate Section, Gary R. Allen, John G. Manning, Atty., Dept. of Justice, Tax. Div., Washington, D. C., for the U. S.

William J. Cooney, William C. Calhoun, Augusta, Ga., for plaintiffs-appellees.

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

Before WISDOM, GODBOLD and TJOFLAT, Circuit Judges.

GODBOLD, Circuit Judge:

Taxpayers Griffin and Simpkins participated in a "numbers" gambling operation centered in Augusta, Georgia. During federal law enforcement raids that ended the operation, the FBI seized.$10,918.32 in cash from Griffin's home and $24,719.00 in cash from Simpkins' home. Law enforcement officers had used properly authorized wiretaps in obtaining information about the gambling ring. After the raids information about the gambling operation, including information about the money seized, was furnished by the Department of Justice to the Internal Revenue Service. On the basis of this information IRS determined that Griffin and Simpkins were liable for unpaid wagering excise taxes. Jeopardy assessments of $12,452.11 (Griffin) and $27,749.01 (Simpkins) were levied and the seized money applied in partial payment.

Simpkins and Griffin pleaded guilty to criminal charges arising from their participation in the gambling ring. When the pleas were taken testimony was given in open court disclosing the contents of the intercepted telephone conversations.

After conclusion of the criminal cases IRS was given the physical evidence that had been seized by the FBI, including transcripts of the wiretapped telephone communications. Upon receiving this evidence IRS calculated that Griffin's unpaid wagering taxes, with interest, were $208,570.17 and that Simpkins' unpaid taxes, with interest, totaled $73,656.75.

Griffin and Simpkins, after filing claims with IRS for refund of the cash seized from them, filed this suit seeking refund of the money. The United States counterclaimed for the portion of the assessments remaining unpaid. 1

At trial the government attempted to establish the basis for its assessments through agent testimony and physical evidence, including transcripts of wiretapped conversations. The jury found that Griffin was not a principal in the gambling ring and was therefore not liable for any wagering taxes. The district court accordingly ordered that he recover the cash seized from him, with interest, and dismissed the government's cross-claim against him. The jury found Simpkins liable for unpaid wagering taxes, but only $14,675.30, rather than the $73,656.75 claimed by the government. The trial judge ordered refund of the money seized in excess of Simpkins' liability, and dismissed the government's counterclaim against Simpkins.

All parties have appealed. 2 Taxpayers contend that the trial judge erred in admitting the transcripts of wiretapped conversations and evidence derived therefrom. The government asserts that the trial court erred in submitting to the jury whether Griffin was liable for unpaid wagering taxes, contending that he was liable as a matter of law and that the only jury issue was the extent of his liability. The government argues that the jury's assessment of Simpkins' tax liability must be set aside because Simpkins allegedly introduced no evidence other than his own uncorroborated testimony supporting an estimate of tax liability lower than the government's, thus failing in his burden of rebutting the government's estimate of liability. Finally, the government argues that the jury finding of Simpkins' tax liability should be set aside because of alleged inconsistencies in the jury's special verdicts.

I. Disclosure of wiretap evidence

Taxpayers concede that the FBI was properly authorized, pursuant to the federal wiretap statute, 18 U.S.C. § 2516, to intercept telephone communications of the numbers operation in order to ascertain whether violations of federal gambling criminal statutes had occurred. They contend, however, that 18 U.S.C. § 2515 bars the admission into evidence, at a civil or criminal trial, of any intercepted wire communication, or evidence derived therefrom, that has been improperly disclosed to one department of the government by another. They argue that interdepartmental disclosures within the federal government are barred by the wiretap statute unless specifically authorized by the wiretap statute. They contend that the FBI's disclosure of the wiretap evidence to IRS for use in civil tax proceedings is not specifically authorized by any provision of the statute, therefore, all wiretap evidence and evidence derived from it should have been excluded, and without this evidence there could have been no judgment in the government's favor.

After the initial briefs were filed in this case, this court decided Fleming v. U. S., 547 F.2d 872 (CA5), Cert. denied, 434 U.S. 831, 98 S.Ct. 113, 54 L.Ed.2d 90 (1977). In that civil wagering tax assessment suit, the government used information derived from the same wiretaps as those in the present case against another member of the numbers operation. The same argument as in this case that interdepartmental transfers are barred by the wiretap statute was presented to this court in Fleming and was rejected on the basis of the facts of Fleming. The court reached the conclusion that § 2515 did not bar admission at trial of wiretap evidence improperly disclosed from one federal agency to another, so long as the initial wiretap was lawfully authorized. Moreover, the court suggested that FBI disclosure of wiretap information gathered in the course of a criminal investigation of a gambling ring to IRS for purposes of assessing civil wagering tax liability is specifically authorized by either § 2517(2) 3 or § 2517(3) 4, or both. The Court, however, did not hold that its reading of the wiretap statute to allow free inter-agency disclosures of wiretap information was applicable to all conceivable cases. Instead it limited its construction of the statute to the specific facts before it, concluding that no statutory purpose would be served by a more restrictive interpretation of the government's authority to allow inter-agency disclosures of wiretap information where (1) there is no showing that the original criminal investigation was a "subterfuge for developing information for civil tax proceedings," and (2) there is no infringement on any privacy interest caused by disclosure of the conversations from one agency to another. We held that there had been no "subterfuge" because the wiretaps had resulted in criminal convictions and that the privacy interest infringed by the disclosure was "weak" because the intercepted communications were "already part of the public record of a criminal prosecution." The Fleming court concluded that it would not make greater efforts to resolve any possible ambiguities in the statute until a stronger showing of infringement upon privacy interests or a showing of subterfuge was made in a subsequent case.

On first impression Fleming is controlling. Taxpayers attempt to deal with it in three ways. First, they suggest that it is simply wrong and should be overruled. One Fifth Circuit panel does not overrule another. Robinson v. Parsons, 560 F.2d 720 (CA5, 1977).

Second, they contend that their privacy interests were significantly infringed since the first jeopardy assessment, based on information derived from the FBI wiretaps, was made before the wiretap information had been placed in the public record of any criminal proceedings. Their argument apparently is that they retained a privacy interest in the intercepted conversations at the time these conversations (or information derived from them) was disclosed to IRS. Thus, they say, Fleming is not controlling because of the lesser privacy interest implicated in that case and this panel is free to independently construe the wiretap statute and to reassess the arguments that the statute bars introduction of these wiretaps at trial.

Whatever the merits of this argument based on the sequence in which disclosures, jeopardy assessments, criminal trials, and civil trials occurred, we need not consider it here because the sequence of events relevant to the taxpayers' privacy interests conforms exactly to the sequence of events in Fleming, as taxpayers' counsel conceded in brief and oral argument. In both cases the sequence of events was (1) lawful interception of telephone communications by the FBI; (2) FBI briefing of IRS civil agents on the contents of wiretapped communications; (3) initial IRS calculation of unpaid wagering tax liability based on information given by the FBI, with subsequent jeopardy assessments; (4) placing of contents of wiretaps on public record in criminal proceedings; (5) FBI transmittal to IRS of additional evidence derived from the wiretapped communications; (6) second IRS calculation of unpaid wagering tax liability based on the additional evidence; and (7) filing of refund suit by plaintiffs, with a subsequent IRS counterclaim for the remainder of the unpaid tax. The privacy interests implicated in Fleming and those in the present case do not differ in any significant respect. 5 The wiretap statute must be construed here as it was in Fleming. 6

Taxpayers' third argument is that one of the factual premises of Fleming, not relevant to the strength of the privacy interests implicated, is not present in the instant case. In Fleming the court stated that the parties had stipulated that a district judge had...

To continue reading

Request your trial
43 cases
  • London v. Commissioner
    • United States
    • U.S. Tax Court
    • 29 Septiembre 1998
    ...v. United States [85-1 USTC ¶ 16,426], 752 F.2d 415, 417-418 (9th Cir. 1985); Griffin v. United States [79-1 USTC ¶ 16,310], 588 F.2d 521, 524-526 (5th Cir. 1979); Estate of Best v. Commissioner [Dec. 37,628], 76 T.C. 122, 141-142 In these cases, like Fleming v. United States, supra, the su......
  • U.S. v. Tinoco
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • 4 Septiembre 2002
    ...issue, however, since we conclude that the government has met the higher standard of proof in this case. See Griffin v. United States, 588 F.2d 521, 530 n. 19 (5th Cir.1979) (choosing not to resolve issue concerning the burden of proof that should apply when the party carrying the burden ha......
  • World Fuel Servs. Trading, DMCC v. M/V Hebei Shijiazhuang
    • United States
    • U.S. District Court — Eastern District of Virginia
    • 3 Abril 2014
    ...parties.” Allianz Ins. Co. v. Cho Yang Shipping Co., Ltd., 131 F.Supp.2d 787, 792 n. 1 (E.D.Va.2000) (citing Griffin v. United States, 588 F.2d 521, 528–29 (5th Cir.1979) ). For example, United States agency law recognizes that “[a]n agent can have actual authority, meaning explicit permiss......
  • United States v. Batamula
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • 3 Mayo 2016
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT