United States v. Dickerson

• Decision Date: 05 September 1969
• Docket Number: No. 17349.,17349.
• Citation: 413 F.2d 1111
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Albert DICKERSON, Defendant.
• Court: U.S. Court of Appeals — Seventh Circuit

413 F.2d 1111 (1969)

UNITED STATES of America, Plaintiff-Appellant, v. Albert DICKERSON, Defendant.

No. 17349.

United States Court of Appeals Seventh Circuit.

July 28, 1969.

Rehearing Denied September 5, 1969.

Thomas A. Foran, U. S. Atty., Chicago, Ill., Johnnie M. Walters, Asst. Atty. Gen., Joseph M. Howard, Richard B. Buhrman, Mitchell Rogovin, Joseph M. Howard, Attys., Dept. of Justice, Tax Division, Washington, D. C., for appellant.

William A. Barnett, Chicago, Ill., for appellee; William R. Quinlan, Chicago, Ill., of counsel.

Before FAIRCHILD and CUMMINGS, Circuit Judges, and GRANT, District Judge.¹

CUMMINGS, Circuit Judge.

In April 1967, defendant was indicted for failure to file income tax returns for 1960, 1961 and 1962 in violation of Section 7203 of the Internal Revenue Code (26 U.S.C. § 7203). In March 1968, claiming a violation of his rights under the Fourth and Fifth Amendments, he filed a motion for the return of certain property and for the suppression of evidence. The motion was based on the admitted failure of the Internal Revenue Agents to warn him of his constitutional rights during five interviews with him.

Based on an affidavit of defendant and the testimony of Revenue Agent Donald Petrovic at the hearing on the motion to suppress, the district court found that while "auditing" a scavenger company Petrovic found an entry on its books reflecting a large payment to defendant but that the company had filed no related information return. Consequently in July 1964, Petrovic "audited" defendant, who admitted that he had failed to file certain income tax returns. Late that year Petrovic referred the case to his superiors to determine if the case warranted criminal investigation. In January 1965, the case was assigned to Special Agent Cornue, an investigator for the Intelligence Division of the Internal Revenue Service. The jurisdiction of the Intelligence Division is limited to criminal investigations. Petrovic was assigned to assist Cornue. Their joint investigation began on March 24, 1965, with a visit to defendant at his place of business. On that occasion, Cornue identified himself as a Special Agent but did not advise defendant that the investigation had become criminal, nor was defendant advised of any of his constitutional rights. Petrovic and Cornue again saw defendant on May 7, 1965, and Cornue alone interviewed defendant on March 29, April 1, April 6² and June 24, 1965.

Cornue's affidavit in support of the Government's motion for reconsideration showed that at the June 24, 1965 interview, defendant said he had engaged a lawyer and had given him "everything he could find that had anything to do with his income tax." Defendant's lawyer was present when defendant was next interviewed by both agents on November 10, 1965.

The Government's brief concedes that the indictment resulted from the information gathered at five of the earlier interviews. These are the occasions when, according to his affidavit, defendant answered the agents' questions and furnished them with documentary and oral information. This affidavit claims that the records surrendered to the agents consisted of personal records of income and expenses, including the names of customers and names of persons to whom commission payments were made.

Relying on Escobedo v. Illinois, 378 U. S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977, and Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694, the district court held that "at and from the time a criminal investigation is launched against a taxpayer," IRS Agents are required to inform him of his right to remain silent, that anything he says may be used against him, and that he has a right to counsel. The Escobedo opinion was handed down before the civil or criminal investigations of defendant's tax returns had begun, and Miranda was handed down more than a year after the crucial interviews. However, the district court noted that Miranda is applicable to all cases filed (as here) after its promulgation.

Applying the Miranda rationale, the trial court held that the evidence obtained from defendant during the criminal investigation and before his retention of counsel would have to be suppressed, along with any evidence obtained as a result of information gained during that phase of the criminal investigation. 291 F.Supp. 633. The Government appealed under Title VIII of the Omnibus Crime Control Act (18 U.S.C. § 3731).³ We affirm.

Both parties seek to find support for their positions in the Miranda decision, the Government stressing the physical custody in which the interrogations involved in Miranda and its companion cases took place and defendant laying heavy emphasis on the policies underlying the adoption of the Miranda warnings. We recognize the factual limitations of the precise holding in Miranda. On the other hand, we cannot accept an interpretation of that decision which would restrict the implementation of the Court's overriding concern with the opportunity for intelligent exercise of constitutional rights to interrogations conducted in police stations. Indeed, the opinion makes clear that the privilege against self-incrimination is imperiled when one "deprived of his freedom of action in any significant way" (384 U.S. at pp. 444, 445, 467, 477, 478, 86 S.Ct. at p. 1612) is subjected to interrogation without being apprised of his right to remain silent, the consequences of a decision to forgo that right, and the right to the presence of an attorney, retained or appointed, to assist in making that decision. And the Court has recently confirmed that these warnings are required prior to interrogating a suspect in his own bedroom if it appears he is not free to go where he pleases. Orozco v. Texas, 394 U.S. 324, 89 S.Ct. 1095, 22 L.Ed.2d 311.⁴

Intelligent exercise or waiver of the Fifth Amendment privilege is the heart of the Court's concern in Miranda. See 384 U.S. at pp. 475-476, 86 S.Ct. 1602. The Government's brief appears to recognize that ignorant compliance with the requests of the authorities can no longer be equated with a valid waiver of constitutional rights.⁵ We understand the teaching of Miranda to be that one confronted with governmental authority in an adversary situation should be accorded the opportunity to make an intelligent decision as to the assertion or relinquishment of those constitutional rights designed to protect him under precisely such circumstances. No contention is made that the privilege against self-incrimination does not protect one interrogated in a non-custodial setting, only that one in such circumstances has no need of advice as to his rights, or, indeed, of the pendency of a criminal investigation at all. But custodial interrogation is merely one variety of confrontation, albeit one requiring the most stringent of protections for the criminal suspect. The inquiry does not end with custody or its absence. See Hewitt, "The Constitutional Rights of the Taxpayer in a Fraud Investigation," 44 Taxes 660, 668 (1966).

In this Circuit, the district courts recently considering the question have uniformly held that some form of warnings must be given by IRS agents once an investigation has shifted to one criminal in nature, despite the absence of physical custody.⁶ The Government has drawn to our attention numerous cases in this and other Courts of Appeals which are said to establish that Miranda has no application to criminal tax investigations. Our examination of those and other cases decided after Miranda reveals that in almost every instance some warnings were in fact given,⁷ an attorney was present during the crucial interviews,⁸ or the absence of physical custody was considered determinative.⁹ We recognize, of course, that language appears in many of these cases which is inconsistent with the conclusion which we reach today. We therefore turn our attention to the asserted distinctions which are said to render the Miranda concern that any incriminating statements elicited from a suspect should be "truly the product of free choice" (384 U.S. at p. 457, 86 S.Ct. 1619) inapplicable to criminal investigations by the IRS.

A line of cases originating between the Escobedo and Miranda decisions, notably Kohatsu v. United States, 351 F.2d 898 (9th Cir. 1965), reasons that because the IRS agents cannot determine whether a crime has in fact been committed until their investigation is complete, the adversary process has not sufficiently "focused" on the suspect as to require that warnings be given. But as Judge Will observed in his persuasive opinion in United States v. Turzynski, 268 F.Supp. 847, 852-853 (N.D.Ill.1967):

"This distinction between a criminal tax investigation where the taxpayer is suspected of a tax fraud not yet fully identified and a criminal investigation where a known violation of the law is attempted to be linked to a particular suspect is logically irrelevant for purposes of determining when the adversary process has begun, i.e., when the investigative machinery of the government is directed toward the ultimate conviction of a particular individual, and when, therefore, a suspect should be advised of his rights. What matter if the culprit be known before the crime or the crime before the culprit. In either case the investigator is attempting to develop evidence for the purpose of criminal prosecution and conviction."

Nor can the Kohatsu rationale, once accepted, be limited to investigations in the tax area. Such a rationale would apply to most white collar crimes and any other crimes where the identity of the suspected lawbreaker is not in issue. This category might include unauthorized practice of law, attempted bribery, impersonation of a federal officer, refusal to report for induction, violations of Section 5 of the Securities Act, the Landrum-Griffin Act, and the Sherman Act, among others. No principled distinction has been suggested which would carve out such exceptions to the policies expressed in Miranda.

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