United States v. Taglianetti

• Decision Date: 04 October 1967
• Docket Number: Crim. No. 6912.
• Citation: 274 F. Supp. 220
• Parties: UNITED STATES of America v. Louis J. TAGLIANETTI.
• Court: U.S. District Court — District of Rhode Island

274 F. Supp. 220

UNITED STATES of America v. Louis J. TAGLIANETTI.

Crim. No. 6912.

United States District Court D. Rhode Island.

October 4, 1967.

Charles J. Alexander, Sp. Atty., Dept. of Justice, Washington, D. C., Edward P. Gallogly, U. S. Atty., Providence, R. I., for plaintiff.

John A. Varone, Bruce M. Selya, Providence, R. I., for defendant.

OPINION

DAY, Chief Judge.

On September 16, 1966, the defendant filed an appeal with the Court of Appeals For The First Circuit from the sentence imposed on him by this court following his conviction upon an indictment charging him with three violations of 26 U.S.C. § 7201. Thereafter, on December 27, 1966, the Government filed with said Court of Appeals a motion to remand the case to this court for "further proceedings". In said motion the Government stated in substance that the Federal Bureau of Investigation in March, 1962, installed a microphone, by means of a trespass, at the place of business of a close business associate of defendant where defendant and others frequently met; that on various occasions between 1962 and 1965 defendant's conversations were monitored by agents of the Federal Bureau of Investigation, certain of which related to that indictment upon which the defendant was tried and convicted; that logs were kept in which there appear summaries of these and other conversations in which defendant participated; that although tape recordings were also made of said conversations, they were later routinely erased, but the logs are in existence; and that it does not appear from said logs or from inquiry into the handling of defendant's case by the Internal Revenue Service, the Department of Justice and the United States Attorney that any of said monitored conversations were used in evidence or were the source of leads to any evidence presented during the trial of said case; and requested that said case be remanded to this court "for the limited purpose of enabling the district court to examine the facts and to determine whether appellant's conviction should stand or a new trial be granted."

Thereafter, on January 17, 1967, the Court of Appeals remanded said case for the limited purpose requested by the Government in its motion, but with the cautionary instruction that "if the court is in doubt as to its ability, as the evidence develops, to resolve the matter as clearly as it could were a complete new trial granted, it may, and should, order such a new trial forthwith."

After said remand, this court, upon the motion of the defendant, entered its orders dated March 8, 1967 and April 17, 1967, directing the Government to deliver to the defendant and his counsel for examination and inspection copies of all logs containing summaries of all monitored conversations in which the defendant participated at said place of business of his close business associate, and copies of any and all memoranda and airtels summarizing such conversations. In addition, said orders directed the Government to furnish the defendant and his counsel with the names and addresses of all persons who participated in said monitoring and in the preparation of said logs, memoranda and airtels.

Defendant also moved for the production and inspection of all logs, memoranda and airtels containing summaries of the monitored conversations of other persons on said premises in which he did not participate. The Government objected to the production of these logs, memoranda and airtels on the ground that the defendant had no standing which entitled him to their production for examination and inspection. It did, however, submit all of said logs, memoranda and airtels to me for inspection in order to determine whether they, or any of them, should be produced. I examined all of them and concluded that they included no additional conversations in which the defendant participated, and that the conversations included therein have no relevance to this proceeding. Accordingly, I sustained the Government's objection to their production for examination and inspection by the defendant. Said logs, memoranda and airtels have been impounded and made available for appellate review if such review of my ruling in this respect is desired by the defendant.

After the logs of said monitored conversations were delivered to the defendant pursuant to said orders of this court, dated March 8, 1967 and April 17, 1967, John A. Varone, Esquire, of counsel for the defendant, on April 28, 1967, advised me and counsel for the Government in my chambers that the material produced pursuant to said orders disclosed the monitoring, on February 16, 1965, of a telephone conversation between the defendant and Robert G Crouchley, Esquire, an attorney in the office of Mr. Varone, who had been associated with him from November, 1962 until October 1, 1965, and who had assisted him while so associated in the preparation of the defendant's defense to the alleged offenses for which he was indicted on February 26, 1963. This indictment, No. 6912, contained three counts and charged that the defendant did wilfully and knowingly attempt to evade and defeat a large part of the income taxes due and owing by him and his wife for the calendar years 1956, 1957 and 1958, in violation of 26 U.S.C. § 7201.

Thereafter a hearing was held by me pursuant to said order of the Court of Appeals to determine whether any of said monitored conversations were used as evidence or were used as leads to any evidence presented in the prosecution and trial of the defendant. During this somewhat protracted hearing, the Government and the defendant produced both testimonial and documentary evidence.

The evidence adduced at said hearing establishes that from March 6, 1962 until July 12, 1965, inclusive, agents of the Federal Bureau of Investigation (hereinafter called "F.B.I.") maintained an electronic surveillance of the place of business of a business associate of the defendant located at 168 Atwells Avenue, in the City of Providence, in the State of Rhode Island. The overall purpose of said surveillance was to gather criminal intelligence with respect to organized crime. It was conducted under the direction of Mr. John F. Kehoe, Jr., a Special Agent in the Boston office of the F.B.I. Special Agents assigned to the Providence office of the F.B.I. monitored conversations that occurred on said premises and made notes thereof in a log. Some of the conversations were also recorded on a tape recorder. At the end of each day said log and tape recording were mailed or delivered to Special Agent Kehoe in Boston. The monitors were instructed not to discuss the information recorded by them and were under orders not to disseminate said information to anyone except Special Agent Kehoe. Special Agent Kehoe would review the log and listen to the tape recording. After doing so, he would dictate a memorandum and an airtel summarizing the contents thereof. The tape recording would then be routinely erased. The memoranda and airtels were substantially duplicates and after a while he dictated only airtels.

An airtel is an inter-bureau teletype sent by air mail. The airtels were sent by him to the F.B.I. in Washington, D. C. and in some instances to certain field offices of the F.B.I. In no instance was an airtel disseminated to a field office or to the headquarters of the F.B.I. because it contained information concerning the defendant. The logs received by Special Agent Kehoe were retained by him in his office under lock and key until this proceeding. He kept a record of any of the material that was disseminated by him. His records reflected no dissemination outside the F.B.I. except for two memoranda that were transmitted to the Attorney General concerning an incident in New York. These memoranda were delivered to counsel for the defendant prior to the hearing, were not introduced into evidence and have no bearing on any claim that tainted evidence was used during said trial. Mr. Kehoe testified unequivocally that none of the information concerning the defendant was ever disseminated or communicated to the Internal Revenue Service or any other Federal agency.

The criminal tax evasion case against the defendant had its inception in June, 1961 when Internal Revenue Agent Robert J. Manning, was assigned to audit the defendant's tax returns for the years 1959 and 1960. After an extensive investigation he referred the case to the Intelligence Division of the Internal Revenue Service for criminal investigation on September 11, 1961. At that point, Special Agent James F. O'Brien of the Internal Revenue Service was directed to examine said case and determine whether it merited a criminal investigation. After examining Manning's written report and discussion with him, he concluded that said case warranted a criminal investigation. On September 20, 1961, he was placed in charge of that investigation.

Thereafter, Revenue Agent Manning continued to work on said case under the direction of Special Agent O'Brien until he was succeeded by Revenue Agent Frank A. Racca, on March 20, 1962. Manning's work papers and report were completed on March 5, 1962 and were introduced as exhibits in this hearing. They were used and relied upon by Special Agent O'Brien as the source of leads to evidence produced in said criminal trial. In fact, it is clear that they contained the items of evidence and leads to every item of evidence that was presented by the Government during this trial, except the evidence of expenditures made by the defendant for food which was furnished by the defendant at an interview on April 23, 1962.

The evidence clearly establishes that Revenue Agent Racca adopted Manning's work product and worked under the direction of Special Agent O'Brien until he completed his report on June 26, 1962. That report reflects every item of evidence developed during the criminal trial and the figures contained therein were the same as those developed during said trial except for increases...