People v. Laino

• Decision Date: 07 July 1961
• Citation: 218 N.Y.S.2d 647,10 N.Y.2d 161,176 N.E.2d 571
• Parties: , 176 N.E.2d 571 PEOPLE of the State of New York, Respondent, v. Frank LAINO, Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 647

218 N.Y.S.2d 647

10 N.Y.2d 161, 176 N.E.2d 571

PEOPLE of the State of New York, Respondent, v. Frank LAINO, Appellant.

Court of Appeals of New York.

July 7, 1961.

Edward H. Levine and Vernon C. Rossner, New York City, for appellant.

Louis J. Lefkowitz, Atty. Gen. (Robert E. Fischer, Moses Weintraub and Maxwell B. Spoont, Utica, of counsel), for respondent.

FOSTER, Judge.

Defendant was convicted after a nonjury ¹ trial at an Extraordinary Special and Trial Term of the Supreme Court, County of Oneida, of three counts of income tax evasion, in violation of sections 376 (subd. 4) and 386-j of the Tax Law of the State of New York. A sentence of nine months' imprisonment in Oneida County Jail was imposed on each count, the terms of imprisonment to run concurrently. The Appellate Division, Fourth Department, has unanimously affirmed the judgment of conviction, and defendant appeals pursuant to a certificate of a Judge of this court.

Defendant, questioning the validity of the underlying indictment, contends (1) that his privilege against self incrimination was violated, when, as a prospective defendant or target of the Extraordinary Grand Jury investigation, he testified before that body pursuant to subpoena (People v. Steuding, 6 N.Y.2d 214, 189 N.Y.S.2d 166), and (2) that immunity from prosecution had been conferred upon him as to any transaction, matter or thing revealed by his testimony.

In June, 1958 a Special Assistant Attorney General was appointed to conduct an investigation into various criminal enterprises in the County of Oneida. On September 25, 1958 the Department of Audit and Control of the State of New York (Division of Municipal Affairs) forwarded to the Special Prosecutor a report of the examination of the accounts and fiscal affairs of the City of Utica, County of Oneida, covering the period from January 1, 1954 through December 31, 1957. That report indicated that during the years in question, though 'Purchases of such items, in each year, were considerably in excess of the $500 limitation', competitive bids were not obtained by the City of Utica in connection with the purchase of fuel oil, gasoline, tires and tubes (Second Class Cities Law, Consol.Laws, c. 53, § 120). The foregoing report had been printed in the Utica Observer-Dispatch on September 24, 1958, and the contents thereof were a matter of record.

Thereafter, the Governor, in October, 1958, appointed an Extraordinary Special and Trial Term of the Supreme Court to preside over matters arising out of the investigation, and by executive order authorized the Special Assistant Attorney-General to attend an Extraordinary Grand Jury, to inquire into, inter alia, prostitution, gambling and official corruption in the County of Oneida.

Because of the apparent disregard of competitive bidding requirements, the Grand Jury desired to ascertain whether or not there had been any conspiracy or official corruption involved in the purchase of tires and other supplies by the City of Utica. On March 24, 1959 defendant, a partner in Laino-Fisk Tire Service one of two principal vendors of tires to the City of Utica, was served with a subpoena duces tecum, requiring that he appear before the Grand Jury on March 31, 1959, and that he bring 'All books and records, including but not limited to, cash receipts and disbursement books, sales records, purchase records, cancelled checks and bank statements, etc., for the period January 1, 1957 to date'. Pursuant to subponena served on March 19, 1959, defendant Laino had appeared with counsel at the Attorney-General's office on March 24, 1959, at which time he affirmatively had asserted his privilege against self incrimination as to various of his business records. All records were returned to him at that time.

Upon defendant's appearance before the Grand Jury on March 31, 1959, the following colloquy occurred:

'A. Before we start here, I brought my books consistent with the subpoena. I refuse to hand over my records as advised by counsel, unless I get full and complete immunity, not only as to my books, but as to each and every question. That's on the record.

'Q. That was taken down, of course, by the stenographer here present. Is there anything else you would like to state presently in that connection? Is there anything else your counsel would like to have you put on the record? A. Yes, one more thing. Before I testify for the purpose of the record, my counsel has advised me to request the following information from this body: Am I a defendant?

'Q. All right, I'll answer that first. Mr. Laino, you are not a defendant presently before this Grand Jury. A. All right. And if I am not a defendant and I am a prospective witness, if I am a witness, what is the subject of the inquiry, what persons are involved and what charges are made against these persons?

'Q. The second question you asked, as I understand it, was if you are a witness, what is the subject of the inquiry. The subject of the inquiry, Mr. Laino, is the nature of the tire purchases undertaken by the city from your partnership, and this Grand Jury seeks to obtain the records presently as we understand it, in your custody to determine the nature of the purchases, the amount and whether or not, under the Governor's order impanelling his Grand Jury, there is any official corruption in that regard. Now, after you asked the subject of the inquiry, you asked something else. You said something A. What persons are involved and what charges are made against these persons?

'Q. There are no present charges against any particular person in this regard. No charges would be made unless it appeared that there is a violation of the law. That is what the Grand Jury is seeking to determine. Is there anything else? A. I am to understand that I am going to be granted full and complete immunity?

'Q. You, of course, Mr. Laino, have to understand whatever your counsel tells you. I am going to tell you this: You are not permitted under the law to demand immunity from a Grand Jury. If you feel that any testimony that you might give before the Grand Jury might tend to incriminate you, you are then entitled to claim that privilege. Is that clear to you? A. Clear.

'Q. Now if you claim that privilege, Mr. Laino, you must state that you claim your privilege not to testify on the ground that the answers that you might give might tend to incriminate you. Do you understand that, sir? A. I understand.

'Q. Now the Grand Jury, of course, cannot grant you immunity blanket immunity, unless you do claim your privilege. A. I want complete immunity on each and every question I am going to answer.

'Q. I must therefore direct questions to you, you see, and if you claim your privilege not to testify A. (Interposing) I will ask for immunity.

'Q. It isn't a matter of just asking for immunity. You have to claim the privilege on the ground that your answer may tend to incriminate you. A. Okay.

'Q. Then, Mr. Laino, to make sure that you understand, I am going to ask you questions that I feel are appropriate to the inquiry here before the Grand Jury. If you claim your privilege if you feel that you should claim your privilege, then you do so. All right, sir? A. Yes. (Emphasis supplied.)

Defendant then was interrogated concerning the operation of his tire business, and his books and records of sales made to various purchasers including the City of Utica. He did not interpose his privilege at any time. He testified, of course, that he was a partner in the Laino-Fisk Tire Service, and that the partnership in the past had sold tires to the City of Utica. Pursuant to the subpoena, defendant produced a control ledger, cancelled checks, bills, statements, purchase orders from the City of Utica, and sales slips. These records, however, with the exception of the control ledger and the cancelled checks, dealt with a period subsequent to June 30, 1958, and were not used in any way in the obtaining of the indictment for tax evasion. ²

The control ledger, on the other hand, contained a 'purchase-journal' which disclosed the name of the accountant used by the Laino-Fisk Tire Service during the period covered by the indictment, and the cancelled checks indicated payments to the accountant for his services. The control ledger also revealed in the 'cash receipts book' that Laino-Fisk, during the period covered by the indictment, had been dealing extensively with the City of Utica. When questioned concerning the whereabouts of various other of his business records, defendant disclosed that they were possessed by his accountant, Bill Stillman. Prior to the introduction of the records into evidence, defendant again carefully and fairly was advised of his privilege against self incrimination, but failed to avail himself thereof, and his books and records were received.

Subsequently, on April 1, 1959, defendant's accountant, William Stillman, was served with a subpoena for appearance before the Office of the Oneida County Investigation (Attorney-General's Office). On April 2, 1959 Stillman appeared and testified. He then was served with a subpoena duces tecum, returnable before the Oneida County Investigation on April 7, 1959, requiring that he furnish copies of the income tax returns of the Laino-Fisk Tire Service for the years 1956, 1957 and 1958, and his work sheets for the period January 1, 1957 to date, for the Laino-Fisk Tire Service. On the same date, April 2, 1959, defendant also was served with a subpoena duces tecum to bring with him to the Attorney-General's Office on April 7 the 'Accounts Receivable Ledger and Accounts Payable Ledger for the period January 1, 1957 to date' of the Laino-Fisk Tire Service, these being the records which defendant had not produced before the Grand Jury on March 31. Prior to the return date of the subpoena, William Stillman, by telephone, requested permission to bring with him those records required of defendant to obviate the necessity of an actual...