United States v. Kasmir

• Decision Date: 21 August 1974
• Docket Number: No. 73-1973.,73-1973.
• Citation: 499 F.2d 444
• Parties: UNITED STATES of America and James S. Mabrey, Special Agent of the Internal Revenue Service, Plaintiffs-Appellees, v. C. D. KASMIR and Jerry A. Candy, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

499 F.2d 444 (1974)

UNITED STATES of America and James S. Mabrey, Special Agent of the Internal Revenue Service, Plaintiffs-Appellees, v. C. D. KASMIR and Jerry A. Candy, Defendants-Appellants.

No. 73-1973.

United States Court of Appeals, Fifth Circuit.

August 21, 1974.

COPYRIGHT MATERIAL OMITTED

Cyril David Kasmir, pro se; Edward A. Copley, Jr., Robert E. Goodfriend, Dallas, Tex., for defendants-appellants.

Scott P. Crampton, Asst. Atty. Gen., Jeffrey D. Snow, Atty., Ernest J. Brown, Acting Chief, Meyer Rothwacks, Atty., Tax Div., Dept. of Justice, Washington, D. C., Frank D. McCown, U. S. Atty., Kenneth J. Mighell, Asst. U. S. Atty., Fort Worth, Tex., Robert E. Lindsay, John P. Burke, Attys., Tax Div., Dept. of Justice, Washington, D. C., for plaintiffs-appellees.

Before BELL, THORNBERRY and DYER, Circuit Judges.

THORNBERRY, Circuit Judge:

In United States v. White, 5th Cir. 1973, 477 F.2d 757, aff'd en banc, 487 F.2d 1335, we phrased the issue presented thusly:

. . . whether the constitutional privilege against compulsory self-incrimination may be invoked in behalf of a taxpayer by his attorney to prevent the production of income tax workpapers in his attorney\'s possession . . .

That same issue is before us again, this time with a different factual background.

On January 3, 1973, the taxpayer, Dr. Mason, was visited in his office in Dallas, Texas, by two Special Agents of the Internal Revenue Service who informed Dr. Mason that his tax returns for the years 1969, 1970, and 1971 were under investigation and gave him Miranda warnings. During the visit, one of the Special Agents asked to see Dr. Mason's personal books and records. Mr. Mason complied with the request, but at the same time, he called his accountant Candy, who advised him not to show any of his records to the Agents. The doctor followed Candy's advice, withdrew the records on the desk, and concluded the interview.

Following Dr. Mason's call to Candy, Candy called Kasmir and informed him of the visit. At Candy's request, Kasmir called Dr. Mason that afternoon and was retained by the doctor as his attorney. Early the next morning, at the direction of his employer, Candy delivered an assortment of records and documents to Dr. Mason at the doctor's office, and simultaneously relinquished to the taxpayer "the rightful, indefinite and legitimate possession of" the materials. Within minutes of receiving the materials, the taxpayer turned them over to appellant Kasmir as his attorney.

The next day summonses were served on Candy and Kasmir, ordering the latter to give up the documents and the former to give testimony concerning them.¹ When neither appellant agreed to comply with the summonses, the government sought enforcement. In a pre-White and pre-Couch v. United States hearing and order, the district court granted the government's petition on the grounds that the records were owned by the accounting firm and that at the time the summonses were served, the records were in Kasmir's possession. The district court stayed its order pending this appeal.

Appellants contend that in the circumstances of this case, (1) the taxpayer's attorney has standing to raise the taxpayer's constitutional right to be free from self-incrimination, (2) enforcement of the summons for the production of records violates the taxpayer's Self-Incrimination Privilege, and (3) enforcement of the summons for production of records should be denied because IRS agents materially misrepresented themselves before the taxpayer.

Following the procedure employed in White, we begin with appellants' second contention, for recognition of standing in the attorney would be of little comfort to appellants unless the attorney's client does have Fifth Amendment rights in the summoned materials. Appellants contend here, as the appellant did in White, that enforcement of the summons violates the taxpayer's privilege because possession of the records by the taxpayer's attorney constitutes constructive possession by the taxpayer. Initially faced with our en banc decision in White as a formidable wall to scale, appellants have launched a methodical effort in order to disabuse us of the notion that White compels their defeat. They argue that the taxpayer doctor's actual possession of the summoned documents is a crucial factual distinction between this case and White. They see further significance in the fact that here the taxpayer turned the papers over to his attorney pursuant to their attorney-client relationship while in White the transfer of the documents was not from the client to the attorney but from the taxpayers' accountant to the attorney. Both parties agree that the question before this court is whether those factual differences warrant a result different from that reached in White.

The government attacks the appellants' position from two sides. First, the government argues that an accused may not object to summons of records owned by third parties even if in the accused's possession. The government's theory is that an accused cannot invoke the Fifth Amendment privilege against self-incrimination unless he both owns and possesses the documents in question. Second, the government contends that the taxpayer never had "rightful possession" of the papers because this enterprise by the appellants and the taxpayer was "a frantic last minute effort to put the requested records beyond the reach of a legitimate tax investigation" by "winning a footrace with agents of the government."

In the theatre of criminal tax investigations, few issues have been more hotly contested than the determination of the scope of the Fifth Amendment privilege against self-incrimination. Drawing heavily upon the historical evolution of the privilege, the Supreme Court in Couch v. United States, 1973, 409 U.S. 322, 93 S.Ct. 611, 34 L.Ed.2d 548, has now spoken on the subject before us in a manner that guides our journey far down the road to judgment, but not to the very end. Lillian Couch was the sole proprietress of a restaurant who, since 1955, had given all of her financial records to an independent accountant for the purpose of preparing her income tax returns, although she retained title to the records. After a summons had been issued and served upon the accountant, the taxpayer instructed the accountant to deliver all of the sought-after documents directly to her attorney. In upholding enforcement of the summons against the accountant, the Supreme Court held that the taxpayer had no Fifth Amendment privilege in documents which she merely owned, which had been in the continuous possession of an independent accountant for over a decade, and with respect to which she could show no legitimate expectation of privacy.

The Court began its inquiry by quoting from Murphy v. Waterfront Comm'n of New York Harbor, 1964, 378 U.S. 52, 84 S.Ct. 1594, 12 L.Ed.2d 678, on the nature of the Self-Incrimination Privilege and the interests it was designed to protect. Writing for the Court in Murphy, Justice Goldberg offered this statement:

. . . It the privilege reflects many of our fundamental values and most noble aspirations: our unwillingness to subject those suspected of crime to the cruel trilemma of self-accusation, perjury or contempt; our preference for an accusatorial rather than an inquisitorial system of criminal justice; our fear that self-incriminating statements will be elicited by inhumane treatment and abuses; our sense of fair play which dictates "a fair state-individual balance by requiring the government to leave the individual alone until good cause is shown for disturbing him and by requiring the government in its contest with the individual to shoulder the entire load," 8 Wigmore, Evidence (McNaughton rev., 1961), 317; our respect for the inviolability of the human personality and of the right of each individual "to a private enclave where he may lead a private life," United States v. Grunewald, 2 Cir., 233 F.2d 556, 581-582 (Frank J., dissenting), rev\'d 353 U.S. 391, 77 S.Ct. 963, 1 L.Ed.2d 931; our distrust of self-deprecatory statements; and our realization that the privilege, while sometimes "a shelter to the guilty," is often "a protection to the innocent." Quinn v. United States, 349 U.S. 155, 162, 75 S.Ct. 668, 673, 99 L.Ed. 964. . . .

Id., 378 U.S. at 55, 84 S.Ct. at 1596-1597.

The Couch Court held that actual possession, rather than ownership, "bears the most significant relationship to Fifth Amendment protections against state compulsions upon the individual accused of crime." Couch v. United States, supra, 409 U.S. at 333, 93 S.Ct. at 618. But the Court was careful to note that "actual possession" is not necessarily the sine qua non for successful assertion of the Fifth Amendment privilege:

. . . Yet situations may well arise where constructive possession is so clear or the relinquishment of possession is so temporary and insignificant as to leave the personal compulsions upon the accused substantially intact . . .

Id. The Court explained further:

. . . We do indeed attach constitutional importance to possession, but only because of its close relationship to those personal compulsions and intrusions which the Fifth Amendment forbids . . . We do not adopt any per se rule. We also decline to conjecture broadly on the significance of possession in cases and circumstances not before this Court . . .

Id., 409 U.S. at 336, 93 S.Ct. at 620 n. 20.

As a positive indication that lack of physical possession is not necessarily determinative, the Court did not stop with its conclusion that the papers were in the possession of the accountant, not the taxpayer, at the time the summons was served, but inquired further into the nature of the records sought by the summons and concluded that the taxpayer could show no legitimate expectation of privacy with regard to them because

. . . there can be little expectation of privacy where records are handed to an accountant, knowing that mandatory

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