United States v. Cedrone, 74-CR-75
| Decision Date | 15 September 1975 |
| Docket Number | 74-CR-76 and 74-CR-77.,No. 74-CR-75,74-CR-75 |
| Parties | UNITED STATES of America v. Frank CEDRONE and Lenora Cedrone, Defendants. UNITED STATES of America v. Vito M. PASTORE, Defendant. UNITED STATES of America v. Dominick J. GALONI, Defendant. |
| Court | U.S. District Court — Northern District of New York |
John E. Shaffer, Syracuse, N.Y., for Frank Cedrone, Lenora Cedrone and Dominick J. Galoni.
Norman A. Palmiere, Rochester, N.Y., for Vito M. Pastore.
James M. Sullivan, Jr., U.S. Atty., N. D.N.Y., for United States of America; George H. Lowe, Asst. U.S. Atty., Syracuse, N.Y., of counsel.
Defendants, indicted for violations of the income tax laws,1 move to suppress evidence obtained by the Internal Revenue Service (IRS) from the New York Organized Crime Task Force (OCTF). Decision of the motions requires familiarity with the following factual background.
A sewer district was created in the Town of Fleming, Cayuga County, New York, in February 1969. Bids initially received for the construction of the sewer were in excess of authorization. Second call for bids was, therefore, issued by the Town, and a contract was granted on the second bid to Kenneth C. Marshall, d/b/a J & K Pipe Company. Marshall later filed an assumed name certificate of Ron-Ore Soil Systems, which was then incorporated under the name of Ron-Ore Soil Systems, Ltd. (Ron-Ore) in December 1970. Defendant, Frank Cedrone, was project manager for the construction. In August 1972, Ron-Ore was removed from the project, at which time an alleged forged performance bond was discovered. Subsequently, OCTF commenced an investigation, pursuant to New York Executive Law § 70-a (18 McKinney), in March 1973. Subpoenas and subpoenas duces tecum were issued to defendants and others.
The government asserts that OCTF obtained the following types of evidence pertaining to defendants:
1. Records obtained from banking institutions pertaining to accounts of defendants 2. Records obtained from banking institutions pertaining to accounts of corporate depositors;
3. Records obtained from corporations, towns, counties and the state;
4. Corporate, town, county and state records obtained from defendants.
5. Testimony under oath by defendants, Frank Cedrone, Lenora Cedrone and Dominick Galoni, in response to questions asked by an OCTF Assistant Attorney General. Defendant Pastore refused to submit to an oral examination.
As a result of this investigation, state indictments were returned against Ron-Ore, defendant Frank Cedrone, defendant Galoni and others. However, Judge Aloi of the New York Supreme Court, Onondaga County, dismissed the indictments, People v. Ron-Ore Soil Systems, Ltd., 81 Misc.2d 121, 364 N.Y.S.2d 310 (1975), on the ground that Executive Law § 70-a was unconstitutionally vague for failing to define the term "organized crime" and held the statute invalid on its face and as applied. An appeal from that decision is presently pending in the New York courts.
The government concedes that a sizable amount of evidence was obtained by the IRS from OCTF. The question here is whether such evidence is admissible in this federal prosecution. Defendants have requested that we also declare Executive Law § 70-a unconstitutional. However, in view of the proper pendency of that question in the New York state courts and our conclusion that such a decision is unnecessary to the resolution of the issue before us, we refrain from consideration of the statute's constitutionality. Instead, we shall assume, without deciding, that § 70-a is unconstitutional and that the OCTF was without authority to conduct the investigation or to issue subpoenas.
In former days, all evidence obtained by state officials was admissible in federal prosecutions, regardless of the manner by which it was obtained, under the so-called "silver-platter" doctrine. That doctrine, however, has long been discredited. Whether evidence obtained by state officials must be suppressed in a federal prosecution is a question for the federal court to decide, and state officials are held to the same requirements of constitutional regularity as federal officials.2
Defendants contend that the investigation by OTCF violated their constitutional rights under the fourth and fifth amendments. The government counters by asserting that defendants lack standing to object to some of the evidence and waived their rights as to the rest. Our analysis of the issues thus raised is aided by consideration of each type of evidence separately.
In order to challenge the use of these records on fourth amendment grounds, defendants must first establish standing. To do so, they call our attention to the recent case of United States v. Miller, 500 F.2d 751 (5th Cir. 1971), which held that copies of bank checks obtained by means of a faulty subpoena duces tecum constituted an unlawful invasion of privacy of the depositors under investigation. That court conferred standing on the depositors to raise this objection.
The Miller holding, however, is contrary to the law in virtually every other circuit in the country,3 and its correctness has been vigorously questioned even within the Fifth Circuit. This is seen from the dissenting opinion upon that court's denial of an en banc rehearing of Miller by an 8-7 vote, where it was stated:
4
The government's petition for certiorari in Miller was granted by the Supreme Court on June 9, 1975 (421 U.S. 1010, 95 S.Ct. 2414, 44 L.Ed.2d 678). We cannot await a dispositive holding on this question by the Supreme Court. We, therefore, feel compelled to follow the decisions of this circuit and hold that defendants lack standing to raise a fourth amendment objection to this evidence.5
Defendants likewise lack standing to raise a fifth amendment objection. As was stated by the Supreme Court in California Bankers Ass'n v. Shultz, 416 U. S. 21, 55, 94 S.Ct. 1494, 1514, 39 L.Ed.2d 812 (1974), "a party incriminated by evidence produced by a third party sustains no violation of his own Fifth Amendment rights."
Therefore, since defendants lack standing to object to the use of this type of evidence, it is fully admissible at trial.
As we have already held defendants lack standing to object to evidence obtained from banks pertaining to their own accounts, a fortiori, they lack standing to object when the accounts are those of corporate entities.
The same reasoning applies to this type of evidence as applied to the two types already considered. If the rights of any one were invaded by the alleged faulty subpoenas, it was the rights of the corporations surrendering these documents, and not those of the defendants. (Towns, counties and states are not within the protection afforded by the fourth and fifth amendments.) Thus, defendants lack standing to object to the admissibility of this type of evidence.
Defendants have no colorable claim of standing to object to the use of these town, county and state records. The use of the corporate records raises issues which require some elaboration.
It is clear that defendants lack standing to challenge the use of these corporate records on fifth amendment grounds. In Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771 (1911), the Supreme Court held that a corporate officer could not claim his privilege against self-incrimination to justify his refusal to produce corporate books pursuant to a grand jury subpoena. This was extended in later cases to include records of an unincorporated association.6 And in Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L. Ed.2d 678 (1974), this doctrine was extended to preclude a member of a dissolved partnership from claiming his fifth amendment privilege to justify his refusal to produce partnership financial books and records.
There remains the question whether defendants may assert a fourth amendment objection to this type of evidence. In the past, the law was clear on this point:
"When a man chooses to avail himself of the privilege of doing business as a corporation, even though he is its sole shareholder, he may not vicariously take on the privilege of the corporation under the Fourth Amendment; documents which he could have protected from seizure, if they had been his own, may be used against him, no matter how they were obtained from the corporation."7
Some doubt has entered this area, largely due to the case of Mancusi v. DeForte, 392 U.S. 364, 88 S.Ct. 2120, 20 L.Ed.2d 1154 (1968). There, the Nassau County District Attorney issued a subpoena duces tecum to a labor union. When the union refused to comply, state officials conducted a warrantless search of the union offices, in which DeForte was working, and seized certain union records. The Supreme Court held that DeForte had standing to raise a fourth amendment objection to the use of these records against him since he was legitimately on the premises searched and since he had a reasonable expectation of freedom from governmental intrusion.
We question whether the same considerations appear in the present case. Defendants did not refuse to comply with the subpoenas, and no state officials invaded any area where defendants might have an...
To continue reading
Request your trial