Opinion
Docket No. 9680-74.
1976-03-18
JOHN W. SINGLETON, A.K.A. JOHN WESTLY, A.K.A. JOHN SINKLER, PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
Laurence Goldfein, Ira L. Tilzer, and Richard A. Levine, for the petitioner. Michael K. Phalin, for the respondent.
After this case was set for trial and an evidentiary hearing scheduled on whether petitioner's constitutional rights guaranteed by the fourth and fifth amendments to the U.S. Constitution were violated, petitioner was indicted for income tax evasion for 1 of the 4 years pending before us. Respondent moved for a protective order under Rule 103(a)(1), (2), and (4), Tax Court Rules of Practice and Procedure, to suspend all further proceedings pending the final disposition of the criminal indictment. Held, under the particular circumstances present here, respondent's motion is denied and further proceedings in this civil case will not be suspended.
Petitioner was physically searched at Kennedy Airport as he departed on an airplane leaving the United States at which time $20,000 in cash was discovered on his person. Petitioner was required to execute Form 4790, ‘Report of International Transportation of Currency or Monetary Instruments.’ The search prompted an investigation of petitioner's income tax returns which ultimately led to the instant case. The identity of petitioner's bank on the Form 4790 was not used by agents of the Commissioner in their investigation of petitioner for income tax evasion. Held: The airport search of petitioner violated his rights guaranteed under the fourth amendment to the U.S. Constitution but the Commissioner's determination was not based upon constitutionally tainted evidence because the connection between the illegally obtained evidence and the respondent's proof became so attenuated so as to dissipate the taint. The presumption of correctness of the statutory notice of deficiency is not destroyed and the burden of going forward with the proof is not shifted to respondent under the authority of Efrain T. Suarez, 58 T.C. 792 (1972).
The initial interview of petitioner as to the investigation of his income tax returns was conducted by special agents of the Commissioner early in the morning at petitioner's residence without advance warning simultaneous with an initial interview of petitioner's accountant who prepared petitioner's income tax returns. Held, the manner of conducting the interview of petitioner did not violate his rights guaranteed under the fifth and sixth amendments to the U.S. Constitution. Laurence Goldfein, Ira L. Tilzer, and Richard A. Levine, for the petitioner. Michael K. Phalin, for the respondent.
GOFFE, Judge:
The Commissioner determined the following deficiencies in income tax and addition to tax against petitioner:
+----------------------------------------+ ¦Taxable ¦Deficiency ¦Addition to tax ¦ +---------+------------+-----------------¦ ¦year ¦in tax ¦ sec. 6653(b) ¦ +---------+------------+-----------------¦ ¦ ¦ ¦ ¦ +---------+------------+-----------------¦ ¦1969 ¦$20,554.10 ¦$10,277.05 ¦ +---------+------------+-----------------¦ ¦1970 ¦11,506.63 ¦5,753.32 ¦ +---------+------------+-----------------¦ ¦1971 ¦6,624.07 ¦3,312.04 ¦ +---------+------------+-----------------¦ ¦1972 ¦56,999.56 ¦28,499.78 ¦ +----------------------------------------+
All Code section references are to the Internal Revenue Code of 1954, as amended.
Petitioner included in his petition allegations that his constitutional rights were violated. Shortly after respondent filed his answer, petitioner filed numerous motions
to bring about a ruling on the constitutional grounds prior to trial. After numerous hearings on the motions, we set a hearing in New York City to receive evidence as to the alleged violation of petitioner's constitutional rights. Prior to that hearing, we held a hearing in Washington, D.C., on petitioner's motion for reconsideration of our ruling on petitioner's motion for production of documents at which time respondent filed a motion for protective order on the grounds that petitioner had, the previous week, been indicted for income tax evasion. We denied respondent's motion for protective order; we granted petitioner's motion for production of documents relating to the hearing to be held in New York City; we ordered respondent to turn over to the Court its files for an in camera inspection; we examined the files in camera and served the parties with the portions of respondent's files which we deemed appropriate for petitioner's use for the evidentiary hearing set for New York City.
The motions relevant here are described in detail in our findings of fact.
The evidentiary hearing was held in New York City after which we served the parties with findings of fact and directed them to file memoranda of law.
The proceedings up to this point present the following issues: (1) Should the discovery proceedings in the Tax Court be suspended pending final disposition of the indictment for income tax evasion brought against petitioner; (2) were petitioner's rights guaranteed under the fourth amendment to the United States Constitution violated when he was ‘frisked’ as a departing airline passenger for a foreign destination; (3) were petitioner's rights guaranteed under the fifth and sixth amendments to the United States Constitution violated when agents of the Commissioner conducted the initial interview of petitioner at his residence; and (4) if petitioner's constitutional rights were violated at the airport or at his residence, to what extent should the evidence to be introduced by the Commissioner at trial be suppressed as being tainted.
FINDINGS OF FACT
Some of the facts have been stipulated and are found accordingly. The stipulation of facts and the attached exhibit are incorporated by this reference.
John W. Singleton (hereinafter petitioner) resided at 488 North Woodland Street; Englewood, N.J., at the time he filed his petition in this proceeding. Petitioner timely filed Federal income tax returns for the periods here involved with the following Internal Revenue Service Centers:
+----------------------------------+ ¦TYE Dec. 31— ¦Service Center ¦ +----------------+-----------------¦ ¦ ¦ ¦ +----------------+-----------------¦ ¦1969 ¦Andover, Mass. ¦ +----------------+-----------------¦ ¦1970 ¦Andover, Mass. ¦ +----------------+-----------------¦ ¦1971 ¦Philadelphia, Pa.¦ +----------------+-----------------¦ ¦1972 ¦Holtsville, N.Y. ¦ +----------------------------------+
On the morning of December 7, 1972, petitioner arrived at the BOAC terminal of John F. Kennedy International Airport for the purpose of boarding a flight to Jamaica. Petitioner first checked his baggage at the Air Jamaica counter; when his flight was called, he proceeded to the designated departure gate by means of the north ramp of the terminal.
The following diagram depicts the north ramp of the BOAC terminal as it appeared on December 7, 1972: (DIAGRAM OMITTED)
At the base of the north ramp was stationed a BOAC employee who checked each passenger's boarding pass, denying access to the ramp to any person not possessing such a pass. On the podium next to the official was a sign, 9-by-11 inches in size located 3 feet above the floor facing approaching passengers, indicating that all baggage would be searched prior to boarding and that all passengers would be required to demonstrate that they were carrying no lethal weapons. Passengers proceeding up the ramp toward the flight gates were required to walk to either side of a partition beyond which were located tables on which carry-on baggage was placed for inspection. On the wall at one end of the tables were two 11-by-14-inch signs provided to all carriers by the FAA. The signs, one in English and one in Spanish, stated that carrying concealed weapons aboard an aircraft is punishable by prison sentences and fines and that all passengers and baggage were subject to search. They were printed in red and blue letters 1 1/2 inches in height. The searches of the carry-on luggage were conducted by employees of the U.S. Customs Service. After customs officials were satisfied that carry-on baggage contained no weapons, it was placed on tables directly behind them where it could be claimed by its owner. After picking up their luggage at these tables, the passengers were searched for weapons. The personal searches were conducted behind either of two portable screens located approximately 10 feet beyond the tables. All passengers were frisked by customs officials.
When petitioner's boarding pass was checked at the base of the ramp, he did not notice the sign on the podium; nor did he notice the signs on the wall at one end of the inspection tables where his carry-on baggage, a small airline bag, was searched. After his airline bag was inspected, he was required to walk behind one of the portable screens where he was frisked. The frisking officer, a U.S. Customs Service employee, passed his hands over petitioner's body from his feet upward. Upon feeling something in the breast pockets of petitioner's suit coat, he opened the coat which was previously unbuttoned by petitioner and removed petitioner's passport and a transparent plastic envelope containing currency from each pocket. Each envelope was approximately 2 1/2 inches wide, 6 inches long, and 1/4- to 1/2-inch thick and contained 100 new $100 bills fastened with bank wrappers. The packets had been inserted in petitioner's coat pocket vertically and the tops of the packets of money did not extend above the upper edge of each coat pocket. After the two parcels of cash were removed, petitioner was told to #Wait here.' The officer soon returned with a second customs official at which time petitioner was required to sign Form 4790, entitled ‘Report of International Transportation of Currency or Monetary Instruments.’ That form indicated that the source of funds being transferred out of the United States was ‘Chemical Bank— N.Y.’ The packets of cash were returned and petitioner was allowed to board his flight. Petitioner had previously flows from Kennedy Airport to Jamaica in March 1972.
The purpose of the search procedure in December 1972 was to prevent passengers from carrying on to aircraft firearms, dangerous knives, swords, explosive devices, or other lethal weapons capable of being used to hijack an aircraft. The procedures in effect at the BOAC terminal in December 1972 required a physical search of all hand-carried luggage and hand ‘frisking’ of all departing passengers.
During the period December 1, 1972, through April 1973, Special Agent Robert Mongelli was assigned by his supervisor in the Intelligence Division of the Internal Revenue Service to a detail at the Customs Service. This assignment required him to visit the Financial Unit of the U.S. Customs Service in New York City where he would examine Forms 4790. The purpose of the examination of these forms was to find leads for the initiation of tax investigations.
Around the end of January 1973, Special Agent Mongelli discovered in the records of the Customs office the Form 4790 dated December 7, 1972, bearing the signature of petitioner. Prior to discovering this form, Special Agent Mongelli had no knowledge whatsoever of petitioner, his activities, or his background. Nor was petitioner at the time of such discovery the subject of any investigation by the Internal Revenue Service. It was only after the discovery of the Form 4790, and as a result of the discovery, that Special Agent Mongelli began gathering background information concerning petitioner.
Special Agent Mongelli selected the Form 4790 signed by petitioner because of knowledge of two tax fraud investigations involving individuals who resided on the same street as petitioner and because of the amount of $20,000 which the form indicated petitioner took out of the United States. The Form 4790, in addition to showing the name and address of petitioner and the sum of money taken out of the United States by him, reflected his passport number and country, his ‘title’ as ‘restaurant owner,‘ date of birth, and in the space designated ‘the name of person from whom the currency or monetary instrument was received’ the words ‘Chemical Bank— NY’ were inserted.
Upon completion of the information gathering activity regarding petitioner, Mongelli forwarded the report of his findings, along with the Form 4790, to the U.S. Treasury Target Selection Committee which then authorized the Intelligence Division of the Internal Revenue Service to initiate a criminal tax investigation of petitioner. Following such authorization, the criminal tax investigation of petitioner was, on September 13, 1973, assigned to Special Agent Heriberito Collazzo of the Intelligence Division of the Manhattan District Office of the Internal Revenue Service.
When Collazzo received the file on petitioner, he reviewed it and decided that it was not complete enough to commence an investigation because petitioner's income tax returns were not in the file. He, therefore, requisitioned the returns. Collazzo headed a team of special agents which included Special Agents Garrett Howard and Anthony Mannherz who, together with Revenue Agents Martin Kenneally and John Spadola, performed the major portion of the income tax investigation of petitioner. None of the agents of the Internal Revenue Service contacted Chemical Bank in New York City as to petitioner's accounts in that bank until after petitioner was interviewed in his home. The item of information on Form 4790 indicating that Chemical Bank, New York, to be the source of the $20,000 taken out of the United States by petitioner, was not utilized by the Internal Revenue Service in their investigation of petitioner for income tax evasion. The primary purpose in not contacting any banks in which petitioner might have accounts prior to the personal interview of petitioner was that the agents found in their practice that it was more expeditious to obtain bank records from the taxpayer than from a bank. A secondary reason, in this case, was that the agents feared that petitioner might be tipped off as to the investigation prior to the interview.
Acquiring information as to petitioner's accounts at Chemical Bank was based upon his original income tax returns on file with the Internal Revenue Service and upon the initial interview by Special Agents Howard and Mannherz with petitioner at his residence on December 11, 1973. Neither Special Agent Howard nor Special Agent Mannherz was aware that the Form 4790 was obtained from petitioner as a result of a search of him at Kennedy Airport until after they completed their investigation in the autumn of 1974.
At approximately 7 a.m. on December 11, 1973, Special Agents Howard and Mannherz arrived in front of petitioner's home to interview him as part of the criminal investigation. The motive for their early arrival was twofold: (1) Previous surveillance having revealed the time range during which petitioner normally left for work, they knew that they had to arrive early in order to interview him at his home which would be free of the distractions normally inherent in an interview at one's place of business; and (2) they desired to conduct the interview at a time when they knew petitioner would be unprepared. At 8:05 a.m., approximately 20 minutes after first observing signs that petitioner had awakened, Special Agents Howard and Mannherz rang his front doorbell. After petitioner opened the front door, the two agents showed their identification, identified themselves as special agents of the Intelligence Division of the Internal Revenue Service, and requested that they be admitted to discuss petitioner's financial affairs and have him identify some of his income tax returns. Petitioner, appearing apprehensive at first, granted their request. While walking toward the living room of petitioner's home, petitioner asked the agents the purpose of their visit. Special Agent Howard told petitioner that he was the subject of a criminal investigation. After being seated, Special Agent Howard read petitioner his constitutional rights from a card, the contents of which are as follows:
IRM 9384.2(2)(a)(b)— At the outset of your first official meeting with the subject of an investigation
Identify yourself as a special agent of IRS and produce authorized credentials.
Then State:
‘As a special agent, one of my functions is to investigate the possibility of criminal violations of the Internal Revenue laws, and related offenses.’
‘In connection with my investigation of your tax liability (or other matter) I would like to ask you some questions. However, first I advise you that under the 5th Amendment to the Constitution of the U.S. I cannot compel you to answer any questions or to submit any information if such answers or information might tend to incriminate you in any way. I also advise you that anything which you say and any information which you submit may be used against you in any criminal proceeding which may be undertaken. I advise you further that you may, if you wish, seek the assistance of an attorney before responding.’
The functions of a special agent were then explained to petitioner, after which petitioner was asked if he understood the meaning of what had been read to him. Petitioner mumbled, at which time Special Agent Howard repeated the question. Petitioner replied that he did. Petitioner was then told that he was in no way restrained in his freedom of movement and that they would leave at his request. The interview lasted until 9:50 A.m. At the same time petitioner was being interviewed, Morris Butcher, petitioner's accountant, was being interviewed concerning petitioner's affairs.
Special Agent Howard prepared a memorandum of contact of the interview with petitioner in which he reported that petitioner stated he maintained the following bank accounts:
+---------------------------------------------------------------------+ ¦Bank ¦Type of account ¦Name ¦ +------------------------------+-----------------+--------------------¦ ¦ ¦ ¦ ¦ +------------------------------+-----------------+--------------------¦ ¦Chemical (143 St. & Amsterdam)¦Business-Checking¦John Wesley, Inc. ¦ +------------------------------+-----------------+--------------------¦ ¦Chemical ¦Personal-Checking¦John W. Singleton ¦ +------------------------------+-----------------+--------------------¦ ¦Chemical ¦Savings-Personal ¦John W. Singleton ¦ +------------------------------+-----------------+--------------------¦ ¦Chemical ¦Checking-Business¦John W. Singleton ¦ +------------------------------+-----------------+--------------------¦ ¦ ¦ ¦(jukebox business) ¦ +------------------------------+-----------------+--------------------¦ ¦Carver Savings & Loan ¦Savings-Personal ¦John W. Singleton ¦ +------------------------------+-----------------+--------------------¦ ¦Chemical ¦Checking-Business¦2268 8th Ave. Realty¦ +------------------------------+-----------------+--------------------¦ ¦Chemical ¦Checking-Business¦B.J. Car Services ¦ +---------------------------------------------------------------------+
At the time Agent Mongelli worked on the investigation of petitioner, he was not aware that the Form 4790 had been obtained as a result of a ‘frisking’ of petitioner. Nor were Agents Howard and Mannherz aware of that fact until some time after they interviewed petitioner at his residence.
A jeopardy assessment was made against petitioner on August 9, 1974, and payments of income taxes and additions to tax, arising from service of notices of levy and seizures of property, were made during the month of August 1974. A notice of deficiency, setting forth income tax deficiencies and additions to tax for fraud, aggregating $143,526.55, for the taxable years 1969 through 1972, was mailed to petitioner on September 20, 1974. Petitioner subsequently timely filed his petition in this proceeding on December 11, 1974.
On March 10, 1975, petitioner filed a #Motion for an Order Granting to the Petitioner Judgment on the pleadings; Dismissing the Case; and Determining That There are No Deficiencies in Income Tax and No Penalties Due From Petitioner' and a #Motion for An Order Granting a Hearing to Determine Whether Petitioner's Rights, Guaranteed by the Constitution and by Decisional Law, Were Violated and, If So, Dismissing this Case and Suppressing All Tainted Evidence Flowing From the Illegality.' After a hearing on the motions before Commissioner Randolph F. Caldwell, Jr., on April 9, 1975, the first motion was taken under advisement and a decision on the latter motion was reserved pending the outcome of the first. Both motions were denied by Commissioner Caldwell in an order dated August 4, 1975. In a memorandum sur order, referred to in his order of August 4, 1975, Commissioner Caldwell made the following observations (p. 5):
The Suarez case, supra, is authority for holding a hearing in advance of trial on an issue of violation of a taxpayer's Constitutional rights in relation to the determination of a deficiency in his taxes. Respondent does not object to such a pretrial resolution of the issues posed by petitioner's motion. The parties seem to be apart only as to the time when such a hearing should be held.
After due consideration, we are persuaded that the hearing should await the calendaring of the case for trial.
On August 26, 1975, petitioner filed a ‘Motion for Reargument and for Reconsideration, by the Chief Judge of This Court or by the Entire Court, of the Order of Commissioner Randolph F. Caldwell, Jr., dated August 4, 1975.’ On September 2, 1975, petitioner filed his reply and on the same date he filed a ‘Motion for An Order That This Case be Calendared for an Early Trial.# A hearing on both motions was held in Washington, D.C., on October 8; 1975, before Chief Judge Howard A. Dawson, Jr. By an order dated October 30, 1975, Chief Judge Dawson denied the motion for reargument and reconsideration and granted the motion to calendar the case for early trial, setting the case for trial at the session of the Court to be held at New York City beginning March 22, 1976.
On November 13, 1975, petitioner filed a ‘Motion to Compel Production of Documents Pursuant to Rule 72(b) of the Rules of Practice and Procedure of this Court’ and a ‘Motion for An Order Granting a Hearing to Determine Whether Petitioner's Rights, Guaranteed by the Constitution and by Decisional Law, Were Violated, and if so, Dismissing this Case and Suppressing All Tainted Evidence Flowing From the Illegality.’ A hearing on the two motions were held in Washington, D.C., on December 10, 1975. By an order of the same date, the motion for production of documents was denied, the motion for hearing on whether petitioner's constitutional rights were violated was granted, and a hearing was set for January 6, 1976, in New York City. On December 22; 1975, petitioner filed a ‘Motion for Reconsideration of the Order of Judge William A. Goffe, on December 10, 1975, to the Extent That It Denied Production of Documents, Which Are Relevant to the Issues Involved in the Hearing Which Has Been Scheduled for January 6, 1976, and, Upon Reconsideration, to Order Production of Those Documents.’ On December 23; 1975, an indictment was filed in the United States District Court for the Southern District of New York, charging petitioner with unlawfully and willfully attempting to evade his individual income taxes for the taxable year 1969 in violation of section 7201, I.R.C. 1954. On December 29, 1975, respondent filed a ‘Motion for Protective Order,‘ requesting that this Court stay the proceedings before it until the conclusion of the criminal trial. After a hearing on the motions, the ‘Motion for Protective Order’ was denied and respondent was directed to deliver to the Court its files pertaining to the case for an in camera inspection by the Court. After an inspection of the files, all of the documents which the Court deemed appropriate for petitioner to have available for the hearing were attached to an order dated December 31, 1975, and served on the parties. Pursuant to petitioner's informal request for continuance, the hearing was continued to January 8, 1976.
OPINION
The first issue is procedural. During the discovery process, after numerous hearings and after the case was at issue, respondent filed a motion for protective order requesting that we stay further proceedings pending the final disposition of a criminal indictment returned against petitioner the previous week. We denied respondent's motion for protective order.
The petition in this case was filed on December 11, 1974. Because of the time required for disposition of issues raised by petitioner in motions filed after respondent filed his answer, the reply was not filed until September 2, 1975, which, under our rules, is the time that the case was at issue. On October 30, 1975, the case was set for trial in New York City on March 2, 1976. Petitioner was indicted for income tax evasion on December 23, 1975.
The indictment of petitioner for income tax evasion covered only the taxable year 1969. The case before us involves deficiencies in income tax and fraud penalties for the taxable years 1969, 1970, 1971, and 1972. A jeopardy assessment was made against petitioner in August 1974 and payments arising from levies and seizures of property pursuant to the jeopardy assessment were made in August 1974.
Respondent's motion for protective order under Rule 103(a)(1), (2), and (4) of our Rules of Practice and Procedures is based upon two events. One of the events is the action of the United States Supreme Court on June 6, 1975, in granting certiorari in United States v. Janis, docket No. 74-958. Why respondent waited over 6 months to request a stay in our proceedings on such a basis is not clear. During the interim period from the time certiorari was granted and the time respondent requested the protective order the following actions were taken: (1) We issued an order disposing of petitioner's motions; (2) petitioner filed a motion for reconsideration; (3) petitioner filed his reply; (4) petitioner filed a motion to set the case for trial; (5) we held a hearing on the motions in Washington; (6) we issued an order denying petitioner's motion for reconsideration but granted petitioner's motion setting the case for trial and set the case for trial; (7) petitioner filed a motion to compel production of documents and a motion for an order granting a hearing to determine whether petitioner's constitutional rights were violated; (8) we held a hearing on those two motions in Washington and we issued an order denying the motion to compel production of documents and granted the motion for a hearing on whether petitioner's constitutional rights were violated; (9) petitioner filed a motion for reconsideration; and (10) we held a hearing on the motion for reconsideration.
The case of United States v. Janis, supra, involves the excise imposed upon wagering. The assessment was based upon evidence illegally obtained from the taxpayer. The District Court suppressed the evidence, quashed the assessment, and shifted the burden of proof to the Government. It found as a fact that the information upon which the assessment was based did not come from any source independent of the illegal search and seizure. The Court of Appeals for the Ninth Circuit affirmed in an unpublished opinion and the Supreme Court granted certiorari.
When respondent filed his motion for protective order there was no evidence as to the extent that the statutory notice of deficiency was based upon evidence illegally obtained; moreover, it was not established whether any evidence was illegally obtained. Therefore, the opinion of the Supreme Court in Janis may or may not have any bearing on the issues presented in the instant case. To hold petitioner's case in abeyance pending the outcome of a case which is of uncertain application while petitioner's assets are in the Government's control under a jeopardy assessment appears inappropriate after actively pursuing discovery and preparation for trial some 6 months after the Supreme Court granted certiorari. Respondent's second ground for the protective order rests upon the indictment of petitioner for income tax evasion 1 week before respondent filed his motion. Respondent argues that petitioner seeks evidence in the instant case to which he would not be entitled in the criminal case and he relies primarily upon Campbell v. Eastland, 307 F.2d 478 (5th Cir. 1962), cert. denied 371 U.S. 955 (1963).
That case involved a possible criminal prosecution under consideration by the United States Attorney for the Eastern District of Texas at a time when the taxpayer filed a suit for refund in the Northern District of Texas after which petitioner promptly filed a motion for production of documents in the civil proceeding. The civil proceeding was transferred to the Eastern District of Texas. The Court found that the filing of the suit for refund, or at least the discovery motion, was a tactical maneuver for the taxpayer to gain advance information as to the criminal case. After a hearing, the District Court ordered the Government to turn over its files which it refused to do. The Court then entered judgment in favor of the taxpayer in the civil refund suit. The Government appealed and the Court of Appeals reversed and remanded.
We agree with the Court of Appeals but conclude that the instant case is distinguishable. The court pointed out that the matter is one in the discretion of the trial court, describing that discretion as follows:
(1) There is a clear-cut distinction between private interests in civil litigation and the public interest in a criminal prosecution, between a civil trial and a criminal trial, and between the Federal Rules of Civil Procedure and the Federal Rules of Criminal Procedure. But these distinctions do not mean that a civil action and a criminal action involving the same parties and some of the same issues are so unrelated that in determining good cause for discovery in the civil suit, a determination that requires the weighting of effects, the trial judge in the civil proceeding should ignore the effect discovery would have on a criminal proceeding that is pending or just about to be brought. The very fact that there is a clear distinction between civil and criminal actions requires a government policy determination of priority: which case should be tried first. Administrative policy gives priority to the public interest in law enforcement. This seems so necessary and wise that a trial judge should give substantial weight to it in balancing the policy against the right of a civil litigant to a reasonably prompt determination of his civil claims or liabilities.
A litigant should not be allowed to make use of the liberal discovery procedures applicable to a civil suit as a dodge to avoid the restrictions on criminal discovery and thereby obtain documents he would not otherwise be entitled to for us in his criminal suit. Judicial discretion and procedural flexibility should be utilized to harmonize the conflicting rules and to prevent the rules and policies applicable to one suit from doing violence to those pertaining to the other. In some situations it may be appropriate to stay the civil proceeding. United States v. Bridges, N.D. Calif. 1949, 86 F.Supp. 931. In the proper case the trial judge should use his discretion to narrow the range of discovery. Here, however, the trial judge seemed to think that he had no discretion— once discovery was moved for in a civil suit. (307 F.2d at 487.)
When we denied respondent's motion for protective order we were not operating under the misapprehension which the Court of Appeals described of the District Court. We carefully weighed the various factors and concluded that the matter was discretionary. Initially we point out that we did not permit unlimited discovery but only very limited discovery under the careful scrutiny of our in camera inspection of respondent's files. The discovery was limited to the sole factual situation of showing whether the Commissioner's examination of petitioner's income tax returns resulted from a search of petitioner at Kennedy Airport as he boarded an airplane to leave the United States. Such facts were solely within the knowledge of respondent and petitioner needed the facts to move to suppress illegally obtained evidence if he could show that the airport search was illegal. We set that matter for hearing before petitioner was indicted.
Here, as distinguished from Campbell v. Eastland, the Commissioner made a jeopardy assessment against petitioner. That procedure required him to issue a statutory notice of deficiency within 60 days. Sec. 6861(b), I.R.C. 1954. Electing to take that step the Commissioner could anticipate that petitioner would invoke the jurisdiction of the Tax Court and if a criminal prosecution were to be instituted it should be done promptly to proceed ahead of the civil case. The Commissioner has been well aware of these procedural problems since 1958. Commissioner v. Peter Licavoli, 252 F.2d 168 (6th Cir. 1958), affg. a Memorandum Opinion of this Court. In the instant case petitioner was not indicted until some 16 months after the Commissioner made his jeopardy assessment. Speculation as to the cause of for the delay would serve no useful purpose.
The Court of Appeals in Campbell v. Eastland, supra, enumerated the elements to be used in balancing the individual's rights to prepare his civil case promptly against the public interest in withholding full disclosure sought by the taxpayer. In applying those tests to the instant case the following material distinctions are readily apparent: (1) Here the motion for discovery was not for the purpose of obtaining the otherwise unobtainable reports because the discovery motions had been pending before us for many months before petitioner was indicted and they were needed to prepare for an evidentiary hearing set before petitioner was indicted; (2) here the Commissioner was not defending a suit for refund but he; instead, had made a jeopardy assessment and mailed a statutory notice of deficiency in which he claimed deficiencies in income taxes and fraud penalties aggregating $143,526.55. He seized petitioner's property in satisfaction of the assessment and had been holding the property for over 16 months while petitioner proceeded in the Tax Court along the only procedural lines available to him to recover his property; (3) no other remedies were available to petitioner to obtain the facts he needed for the evidentiary hearing on the constitutional issue; and (4) the success of petitioner's contention on the constitutional issue was not based upon the truth or falsity of his own financial affairs or records but instead upon facts within the sole knowledge of respondent and his agents. At the time respondent filed his motion for protective order we had set for an evidentiary hearing the matter of possible violation of petitioner's constitutional rights which, if decided in favor of petitioner, would in all probability dispose of the criminal case as well as the civil case. At that point in time, we were ‘well down the road’ in the civil suit when petitioner was indicted. Out holding, we conclude, is in accord with the discretion accorded a trial court by the rationale of Campbell v. Eastland; supra. Because the matter is discretionary, our holding here should not be interpreted to mean that we would not grant a protective order under different circumstances. Respondent pointed out at the hearing that we have the identical situation pending before us in Robert Gonzer, docket No. 102-75, and in Oliver J. and Estelle Schwabe, docket Nos. 5728-74, 4580-75, and 5163-75. Schwabe has since been disposed of on another basis. Because the matter is discretionally and factually distinguishable, no reason existed for not ruling on the motion when we did.
Respondent points out that once petitioner obtained the evidence which he sought in the civil proceeding he could invoke the fifth amendment privilege against self-incrimination which he, in fact, had done in response to discovery requests made by the Commissioner. Respondent overlooks the fact that the matters sought by petitioner for the evidentiary hearing were facts solely within the knowledge of respondent and his agents. The situation could never arise, nor did it arise at the evidentiary hearing, where petitioner would invoke his fifth amendment privilege as to the facts petitioner sought from respondent's files because petitioner could never testify as to the relationship of the airport search to the Commissioner's investigation of petitioner's income tax returns.
Respondent has cited no cases factually similar to the instant case to convince us that we erred in refusing to grant his motion for protective order and stay our proceedings pending final disposition of the criminal case.
The second issue is substantive. Petitioner contends that the search conducted at Kennedy International Airport on December 7, 1972, was in violation of his rights guaranteed by the fourth amendment to the United States Constitution and, therefore, all leads obtained as a result of the search must be suppressed. Respondent, on the other hand, takes the position that (1) petitioner implicitly consented to the airport search and (2) the search was ‘reasonable’ under the circumstances, and thus the motion to suppress, to the extent it relates to leads emanating from the airport search, should be denied.
The fourth amendment provides as follows:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
It is well-settled that evidence obtained in violation of an individual's fourth amendment rights is inadmissible in a criminal trial. Furthermore, it has been the position of this Court since our decision in Efrain T. Suarez, 58 T.C. 792 (1972), that the protection of the fourth amendment extends to civil tax proceedings. Cf. Elmer J. Brod, 65 T.C. 948 (1976).
Respondent first argues that petitioner implicitly consented to the search by continuing to proceed to board the airplane despite the presence of signs warning of the search and the fact that he saw others ahead of him being frisked. With this theory of consent, we cannot agree. Compelling one to choose between exercising his fourth amendment rights and his right to travel constitutes a form of coercion, however subtle; the respondent cannot be said to have established that petitioner freely and voluntarily consented to the search when to do otherwise would have meant foregoing the constitutional right to travel. United States v. Albarado, 495 F.2d 799 (2d Cir. 1974); United States v. Kroll, 481 F.2d 884, 886 (8th Cir. 1973). While it may be argued that there are often other forms of transportation available, it would impose a substantial hardship on many air travelers to be forced to use an alternate form of transportation; assuming one exists at all.
Respondent's reliance upon United States v. Williams, 516 F.2d 11 (2d Cir. 1975), and United States v. Doran, 482 F.2d 929 (9th Cir. 1973), is misplaced. Both cases dealt with the legality of search of carry-on luggage, rather than a personal frisk. The Williams panel based its holding on the following passage from Judge Oakes' concurrence in United States v. Edwards, 498 F.2d 496, 501, 504 (2d Cir. 1974):
All baggage is not generally subject to search according to the FAA's directives; rather, only carry-on baggage is generally subject to search. Thus, one is not forced to choose between flying to one's destination and having one's baggage searched. Rather one may merely consign any baggage he does not want searched to the baggage compartment. The only imposition upon the passenger then is not having the bag during the flight and, perhaps, a little wait at the destination for his luggage. Clearly this is not the same case involved when the only way to avoid search is to forego flying. The conclusion, therefore, must be that a carry-on luggage search, unlike the personal search, may be justified on a consent bases. (Fn. ref. omitted.)
Preboarding searches of passengers and their carry-on luggage must be tested by the fourth amendment's general proscription against unreasonable searches and seizures, because as a practical matter an airport search could not be subjected to the warrant procedures. United States v. Albarado, supra at 804; United States v. Slocum, 464 F.2d 1180; 1183 (3d Cir. 1972); United States v. Epperson, 454 F.2d 769, 771 (4th Cir. 1972). The fourth amendment forbids only those searches and seizures that are unreasonable. Elkins v. United States, 364 U.S. 206, 222 (1960). Therefore, the ultimate standard on which we must base our decision is one of reasonableness. Cady v. Dombrowski, 413 U.S. 433 (1973); United States v. Slocum, supra at 1182. The reasonableness of a search depends upon the facts and circumstances and the total atmosphere of each case. Chimel v. California, 395 U.S. 752, 765 (1969). The reasonableness of any search must be determined by balancing the Government interest in searching against the invasion of privacy which the search entails. These interests must be balanced at two stages: (1) The search must be ‘justified at its inception’ and (2) ‘reasonably related in scope to the circumstances which justified the interference in the first place.’ Terry v. Ohio, 392 U.S. 1, 19 (1969); United States v. Epperson, supra at 771.
The search of petitioner was conducted pursuant to a nationwide program to prevent aircraft hijacking.
The need to prevent such hijackings is unquestionably grave and urgent.
See United States v. Davis, 482 F.2d 893, 897-904 (9th Cir. 1973).
The potential damage to persons and property from such acts is enormous. Thus, there is clearly a compelling need to detect the presence of weapons and explosives before they are brought onto an airplane. While this might justify some search of all prospective passengers at an airport, the question becomes whether it will justify, in any given case, the search as carried out and, for this case, the frisk of petitioner. We recognize that a frisk normally involves a gross invasion of one's privacy. In Terry v. Ohio; supra, the Supreme Court rejected the claim that a frisk is only a ‘petty indignity.’
See United States v. Epperson, 454 F.2d 769, 771 (4th Cir. 1972).
Courts which have dealt with airport searches have utilized various approaches in ruling on the validity of the search. A number of Federal cases have applied the test of Terry v. Ohio, 392 U.S. 1 (1968), in determining whether the particular search in question violated the accused's fourth amendment rights. See, e.g., United States v. Clark, 498 F.2d 535 (2d Cir. 1974); United States v. Albarado, supra; United States v. Fern, 484 F.2d 666 (7th Cir. 1973); United States v. Ruiz-Estrella, 481 F.2d 723 (2d Cir. 1973); United States v. Moreno, 475 F.2d 44 (5th Cir. 1973); United States v. Slocum, 464 F.2d 1180 (3d Cir. 1972).
In Terry v. Ohio, supra, the Supreme Court, in upholding the validity of a frisk conducted by a plainclothes detective without a warrant or probable cause to arrest, stated at page 30:
Where a police officer observes unusual conduct which leads him reasonably to conclude in light of his experience that criminal activity may be afoot and that persons with whom he is dealing may be armed and presently dangerous, where in the course of investigating this behavior he identifies himself as a policeman and makes reasonable inquiries, and where nothing in the initial stages of the encounter serves to dispel his reasonable fear for his own or others' safety, he is entitled for the protection of himself and others in the area to conduct a carefully limited search of the outer clothing of such persons in an attempt to discover weapons which might be used to assault him.
But in order to justify the particular intrusion, the Court held that ‘the police officer must be able to point to specific and articulable facts which taken together with rational inferences from those facts, reasonably warrant that intrusion.’ Terry v. Ohio, supra at 21. Therefore, the cases applying Terry v. Ohio, supra, in the context of an airport search have generally upheld the validity of a frisk or inspection of carry-on luggage where the official who conducted the search was able to articulate specific facts which aroused his suspicion of danger. However, these cases have allowed a lower level of suspicion than that required in Terry v. Ohio, supra, in view of the limited time available and the substantial potential consequences.
Some courts have utilized approaches other than the Terry standard in ruling on the validity of airport searches. For example, in United States v. Skipworth, 482 F.2d 1272 (5th Cir. 1973), the Fifth Circuit stated:
Necessity alone, however, whether produced by danger or otherwise, does not in itself make all non-probable-cause searches reasonable. Reasonableness requires that the courts must weigh more than the necessity of the search in terms of possible harm to the public. The equation must also take into account the likelihood that the search procedure will be effective in averting potential harm. On the opposite balance we must evaluate the degree and nature of intrusion into the privacy of the person and effects of the citizen which the search entails. (482 F.2d at 1275.)
Our conclusion, after this tripartite weighing of the relevant factors, is that the standards for initiating a search of a person at the boarding gate should be no more stringent than those applied in border crossing situations. In the critical pre-boarding area where this search started, reasonableness does not require that officers search only those passengers who meet a profile or who manifest signs of nervousness or who otherwise appear suspicious. Such a requirement would have to assume that hijackers are readily identifiable or that they invariably possess certain traits. The number of lives placed at hazard by this criminal paranoia forbid taking such deadly chances. * * * we hold that those who actually present themselves for boarding on an air carrier, like those seeking entrance into the country, are subject to a search based on mere or unsupported suspicion. (582 F.2d at 1276.)
The Ninth Circuit, on the other hand, in United States v. Davis, 482 F.2d 893 (9th Cir. 1973), has upheld the validity of preboarding screening of prospective passengers on the basis of a series of Supreme Court cases relating to ‘administrative searches.’ The essence of these decisions is that searches conducted as part of a regulatory scheme in furtherance of an administrative purpose, rather than as part of a criminal investigation to secure evidence of crime, may be permissible under the fourth amendment though not supported by a showing of probable cause directed to a particular place or person to be searched. However; the court placed the following limitations upon the screening of passengers and their immediate possessions:
As we have seen, however, the need for some limitations upon these rights is clear. In light of that need, a screening of passengers and of the articles that will be accessible to them in flight does not exceed constitutional limitations provided that the screening process is no more extensive nor intensive than necessary, in the light of current technology, to detect the presence of weapons or explosives, that it is confined in good faith to that purpose, and that potential passengers may avoid the search by electing not to fly. (Fn. ref. omitted. 482 F.2d at 913.)
The Third Circuit, the Court of Appeals to which an appeal from our decision herein will lie, has applied the Terry test in the two airport search cases which it has decided. United States v. Slocum, 464 F.2d 1180 (3d Cir. 1972; United States v. Lindsey, 451 F.2d 702 (3d Cir. 1971). In the instant case, respondent has failed to show the existence of any specific facts which aroused the suspicions of the customs officials or the airline personnel prior to the frisk. Consequently, the frisk in the instant case cannot be upheld under the principles enunciated in Terry v. Ohio, supra. Despite the fact that the Third Circuit has applied Terry in the two airport search cases decided by it, it has never expressly adopted the Terry rule for application in all such cases nor has it ever invalidated an airport search on the basis of Terry. Therefore, we do not feel constrained to apply the Terry rule in the instant case under our holding in Jack E. Golsen, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th Cir. 1971), cert. denied 404 U.S. 940 (1971). However, for reasons stated below, we need not determine whether the frisk was ‘justified at its inception’ and thus the adoption of one of the above approaches is unnecessary for the disposition of the search issue.
Assuming arguendo the legality of the initial ‘patdown’ of petitioner, we find that the removal of the packets of currency from the inside pockets of petitioner's coat exceeded the scope of the search permissible under the circumstances. ‘The scope of the search must be strictly tied to and justified by the circumstances which rendered its initiation possible.’ Terry v. Ohio, 392 U.S. 1, 19 (1968). Thus, a search which is reasonable at its inception may violate the fourth amendment by virtue of its intolerable scope and intensity. Kremen v. United States, 353 U.S. 346 (1957). We recognize from the outset that the weaponry of the skyjacker is not limited to the conventional weapons used by bank robber or burglar; his arsenal may include explosives.
‘A permissible search is an inspection of that which may reasonably be deemed to conceal a weapon or explosive. Reasonableness, in this context, is a matter of probabilities.’ United States v. Kroll, 481 F.2d 884, 886 (8th Cir. 1973), quoting 351 F.Supp. 148, 153 (W.D. Mo. 1972). We find it doubtful that the official frisking petitioner believed, upon feeling the two packets of currency and the passport from the outside of petitioner's coat, that his inside pockets contained weapons or explosives. There is no evidence that the customs official detected the presence of a solid object within petitioner's coat which he believed might be a weapon. Evidence of such a belief or another similar compelling reason is required to justify the greater intrusion. Respondent, the party on whom the burden of proof rests,
not only failed to produce such evidence, but did not even introduce the testimony of the official who conducted the search of petitioner, nor did he attempt to explain his failure to do so. Yet, respondent, in his memorandum of law, requests us to find facts that could have been established by the customs official who searched petitioner. Respondent's unexplained failure to call as a witness the U.S. Customs official whose name and number appear on the Form 4790 dated December 7, 1972, bearing the signature of petitioner, gives rise to the inference that any proof, if offered, would have been unfavorable. Interstate Circuit v. United States, 306 U.S. 208 (1939); Wichita Terminal Elevator Co., 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947). Furthermore, at the hearing, Brian Gilroy, a former New York City police officer, who during his career had conducted several hundred frisks, performed a frisk of petitioner. In order to reconstruct the circumstances of the airport frisk as nearly as possible, a passport and a plastic envelope containing 100 $1 bills were placed in one of the inside pockets of petitioner's suit coat while a similar plastic envelope was placed in the other inside pocket. After frisking petitioner, Mr. Gilroy concluded that petitioner was ‘clean.’ Upon further questioning, he stated that he would only have reason to believe that petitioner's pockets contained small pads or notebooks. We conclude on the facts of this case that the probabilities of the situation were such that the removal of the packets of currency from petitioner's pockets was unreasonable and thus in violation of his fourth amendment rights. Respondent has simply failed to establish that the customs official had reason to believe that petitioner's inside pockets contained weapons or explosives, thus warranting the greater intrusion. We recognize that there is a need for a flexible standard in determining the level of belief which should be imposed on law enforcement officials.
Once petitioner ‘has presented a prima facie case of illegal search, the government must assume the burden of proof that any search made was lawful.’ United States v. Thompson, 409 F.2d 113, 117 (6th Cir. 1969).
We must now decide what evidence, if any, must be suppressed as a result of our holding that the airport search was conducted in violation of petitioner's fourth amendment rights. Two principles are important in deciding this issue. First, the burden is upon the Government in a criminal proceeding to establish that the evidence to be introduced at trial is not tainted. United States v. Cales, 493 F.2d 215 (9th Cir. 1974); United States v. Cole, 463 F.2d 163 (2d Cir. 1972). We need not decide whether respondent has such a burden in a civil tax proceeding because of our finding as to the tainted evidence discussed hereafter. Second, #evidence discovered ‘as a result of both legal and illegal leads' is inadmissible, even though ‘the legal lead would itself probably have sufficed to uncover the evidence.“ United States v. Schipani, 414 F.2d 1262 (2d Cir. 1969).
Petitioner, relying primarily upon the decisions in United States v. Schipani; 289 F.Supp. 43 (E.D. N.Y. 1969), affd. 414 F.2d 1262 (2d Cir. 1969), and Wong Sun v. United States, 371 U.S. 471 (1963), takes the position that all evidence discovered during the course of the investigation must be suppressed for the following reasons: (1) The investigation would not have been initiated but for the illegal search and (2) all evidence eventually gathered emanated from information contained on the Form 4790. Petitioner's first argument is based upon the following language in the District Court's opinion in United States v. Schipani, supra at 62:
If illegally secured information leads the government to substantially intensify an investigation, all evidence subsequently uncovered has automatically ‘been come at by exploitation of that illegality.’ The unlawful search has set in motion the chain of events leading to the government's evidence.
Petitioner maintains on the basis of this language that if an investigation is not merely intensified, but is initiated as a result of an illegal search, all evidence has been arrived at by exploitation of that illegality and must be suppressed.
The language from Schipani, upon which petitioner relies, is dictum because the Government, in that case, sustained its burden of proof by showing that the investigation was not intensified by use of the illegally obtained evidence. The dictum is, in turn, based upon interpretations of opinions which the District Court in Schipani concluded had undermined the decision of the Second Circuit in United States v. Nardone, 127 F.2d 521 (2d Cir. 1942). In Nardone, the Second Circuit refused to suppress evidence where the information obtained by an illegal wiretap admittedly ‘spurred the authorities to press an investigation which might otherwise have been dropped.’ (127 F.2d at 523). Subsequent to Schipani, the Second Circuit has made it clear that Nardone had not been undermined and the District Court in Schipani erroneously concluded that Nardone did not continue to be the law in the Second Circuit. United States v. Friedland, 441 F.2d 855 (2d Cir. 1971). In United States v. Cole, 463 F.2d 163 (2d Cir. 1972), the Second Circuit made the following observation at page 172:
It seems not to be sufficiently realized that the holding of the district court in Schipani, 289 F.Supp. 43 (E.D. N.Y. 1968), which we affirmed, was that the Government had met its burden of showing by a preponderance of the evidence that it would have launched the saturation investigation which developed the evidence leading to Schipani's conviction even if no information had been received from illegal electronic surveillance of a travel bureau. It was with respect to this— not to everything said in the course of a 22-page opinion by the district judge— that Judge Jameson, writing for the court, ‘approve(d) the legal principles applied.’ 414 F.2d at 1266. (Fn. ref. omitted.)
We conclude that Nardone not the dictum in Schipani states the law in the Second Circuit; i.e., use of illegally obtained evidence to intensify the investigation does not taint the evidence subsequently acquired.
Moreover, the argument that evidence is tainted merely because it would not have been discovered but for the primary illegal invasion, has been rejected in numerous cases. United States v. Brandon, 467 F.2d 1008 (9th Cir. 1972); United States v. Fike, 449 F.2d 191 (5th Cir. 1971); United States v. Bacall; 443 F.2d 1050 (9th Cir. 1971); United States v. Friedland, supra.
United States v. Bacall, supra, involved an investigation by customs officials directed at misdescription of goods which resulted in the discovery of understatement of purchase prices. The information which triggered the investigation of misdescription was obtained as a result of an illegal seizure. The issue was whether the evidence of the purchase price understatement was tainted. The Ninth Circuit stated that rather than a ‘but for’ test, the proper standard to be applied was whether the illegally seized information ‘tended significantly’ to direct the investigation toward the specific evidence in question. Seven criteria were used in applying the test. Without discussing each in detail, a comparison will indicate the similarity between the instant case and the Bacall case in which the court held the evidence to be admissible. In addition, in this case, unlike Bacall, the illegal search did not reveal the existence of any illegal activity. Although we find the Bacall holding and analysis persuasive with respect to the issue of taint, we only make reference to it in support of our conclusion that the but for connection between the search and the initiation, intensification, and culmination of the tax investigation is not dispositive of the question of taint. Instead; we must determine whether the evidence has been obtained as a result of the illegally obtained leads contained on the Form 4790, or whether, as contended by respondent, the connection between the tainted leads and the evidence to be introduced at trial has ‘become so attenuated as to dissipate the taint.’ Nardone v. United States, 308 U.S. 338, 341 (1939).
Petitioner contends that under Wong Sun v. United States, supra, all evidence must be suppressed because the illegal search provided ‘the leads to all the information which was eventually gathered during the investigation of petitioner.’ Wong Sun involved the review of Wong Sun's and James Wah Toy's convictions for fraudulent and knowing transportation and concealment of illegally imported heroin. Toy was illegally arrested at his home by Federal narcotic agents, at which time he identified Johnny Yee as a person who had been selling narcotics. The agents then went to the home of Yee, who surrendered heroin to them and stated that it had been brought to him by Toy and an individual known as ‘Sea Dog.’ Toy soon identified this person as Wong Sun and took the agents to his home where Wong Sun was also illegally arrested. Wong Sun was later released; but returned several days later and gave a statement which he refused to sign although he admitted the accuracy of its contents. The Court determined that Toy's declarations at the time of the arrest were fruits of the illegal entry and arrest. In holding that the heroin to which his declarations had led the agents was also ‘fruit of the poisonous tree,‘ the Court set forth the following test at page 487:
Hence this is not the case envisioned by this Court where the exclusionary rule has no application because the Government learned of the evidence ‘from an independent source,‘ Silverthorne Lumber Co. v. United States, 251 U.S. 385, 392; nor is this a case in which the connection between the lawless conduct of the police and the discovery of the challenged evidence has ‘become so attenuated as to dissipate the taint.’ Nardone v. United States, 308 U.S. 338, 341. We need not hold that all evidence is ‘fruit of the poisonous tree’ simply because it would not have come to light but for the illegal actions of the police. Rather; the more apt question in such a case is ‘whether, granting establishment of the primary illegality, the evidence to which instant objection is made has been come at by exploitation of that illegality or instead by means sufficiently distinguishable to be purged of the primary taint.’ Maguire, Evidence of Guilt, 221 (1959). We think it clear that the narcotics were ‘come at by the exploitation of that illegality’ and hence that they may not be used against Toy.
The Court then faced the question of whether Wong Sun's unsigned confession was ‘fruit’ of his illegal arrest. Based upon evidence that Wong Sun had been released on his own recognizance after a lawful arraignment and had returned voluntarily several days later to make the statement, the Court held that the ‘connection between the arrest and the statement had become so attenuated as to dissipate the taint,‘ citing Nardone v. United States, 308 U.S. 338 (1939).
On the basis of the Court's holding with respect to Toy, petitioner maintains that #all evidence in a chain causally connected to and derived from illegally obtained evidence must be suppressed.' Respondent, on the other hand, maintains this case is controlled by the following principle set forth in the Supreme Court's decision in Nardone v. United States, supra, and relied upon by the Court in Wong Sun, supra, in upholding the admission of Wong Sun's unsigned statement:
Sophisticated argument may prove a causal connection between information obtained through illicit wire-tapping and the Government's proof. As a matter of good sense, however, such connection may have become so attenuated as to dissipate the taint. (308 U.S. at 341.)
We agree with respondent and hold that the connection between the illegal search and the evidence to be introduced at trial has ‘become so attenuated as to dissipate the taint.’
In reaching our conclusion, we have considered each item of information on the Form 4790 and have examined the use up to the time of the interview of petitioner when more detailed evidence was obtained. For purposes of analysis, the items of information can be broken down primarily into three categories: (1) Items relating to the identity of the taxpayer, such as his name, address, citizenship, and passport number; (2) the source of the $20,000, i.e., Chemical Bank— NY.; and (3) the amount of cash on his person at the time of the search.
First, respecting the items relating to petitioner's identity, we are convinced that it would be stretching the exclusionary rule beyond reasonable bounds to hold in every case in which the identity of an individual is somehow illegally obtained that all information subsequently acquired must be suppressed. In United States v. Friedland, 441 F.2d 855 (2d Cir. 1971), the Second Circuit held that even though the Government is put on notice, through the receipt of illegally obtained information, that a person has been involved in criminal activities and is, therefore, the sort of person who would bear watching, this alone would not immunize him from investigation of different criminal activities and from prosecution on the basis of facts about them learned in a lawful way. A much stronger case for admission exists where, as here, no evidence of any crime was uncovered by the illegal airport search. In addition, in the instant case there have been numerous intervening legal acts on the part of respondent's agents which are more than sufficient to break the causal connection between the illegal search and the evidence to be introduced at trial. See United States v. Fike; 449 F.2d 191 (5th Cir. 1971).
Second, we must ascertain whether respondent's agents exploited the lead on the Form 4790 relating to the source of the funds, i.e., ‘Chemical Bank—N.Y.’ After hearing the testimony of the agents who participated in the tax investigation of petitioner, we are satisfied that no use was made of this particular lead. The agents issued summonses for petitioner's records at Chemical Bank only after the interview of December 11, 1973, based upon petitioner's income tax return and the interview. In United States v. Schipani, 414 F.2d 1262 (2d Cir. 1969), the court approved the following legal principle applied by the District Court: ‘evidence discovered ‘as a result of both legal and illegal leads' is inadmissible even though ‘the legal lead would itself probably have sufficed to uncover the evidence.‘‘ However, the instant case does not present a situation requiring the application of this principle for we are convinced that the leads which the agents exploited which directed them to petitioner's accounts at Chemical Bank were petitioner's original income tax returns on file with the Internal Revenue Service, not the Form 4790. Had respondent's agents requisitioned petitioner's Chemical Bank records ‘as a result of’ the use of information on the Form 4790, such use would clearly have constituted an exploitation of the primary illegality. The mere fact that the information as to the source of the $20,000 in currency was in the possession of the respondent's agent is not sufficient to cause other evidence to be tainted if the lead was not utilized.
Third, with respect to the amount of cash shown on the Form 4790, the illegal search of December 7, 1972, could not have picked up leads to the alleged fraudulent understatement of income which did not occur until a future date, i.e., the date he filed his 1972 Federal income tax return. United States v. Cole, 325 F.Supp. 763 (S.D. N.Y. 1971), affd. 463 F.2d 163 (2d Cir. 1972). In United States v. Cole, supra, the District Court rejected the contention that ‘a tainted lead to a taxpayer whose conduct is suspect generally as that of a habitual tax evader immunizes him from prosecution for tax evasion committed subsequent to an illegal eavesdrop.’ A contrary rule would give petitioner a license to violate the Federal income tax laws with impunity. Use of the lead of the amount of cash with respect to the determination for years prior to 1972 could hardly form the basis for suppressing all of respondent's evidence as to those years because the cash was not discovered until December 7, 1972 (the date of the airport search).
The fact situation of the instant case clearly constitutes one of those situations visualized by the Court in Nardone v. United States, supra, where ‘sophisticated argument may prove a causal connection’ between the illegal activity and the Government's proof, but where, ‘as a matter of good sense; * * * such connection (has) become so attenuated as to dissipate the taint.# The causal connection is far more attenuated than the one existing between Wong Sun's illegal arrest and his unsigned statement. Accordingly, we hold that none of respondent's evidence is tainted as a result of the airport search.
Finally, our holding that respondent's proof is not tainted by the illegal search rests upon our failure to recognize what policy considerations would be served by suppressing any evidence obtained as a result of the search. The primary purpose of the exclusionary rule is to deter unlawful police conduct and compel respect for the guaranty of the fourth amendment against unreasonable searches and seizures. United States v. Calandra, 414 U.S. 338 (1974). It has been held that where there is little deterrent effect in excluding evidence from consideration, there is no benefit in excluding it. United States v. Schipani, 434 F.2d 26, 28 (2d Cir. 1970). Due to the fact that airport searches are no longer conducted in the manner described in our findings of fact, we are unable to visualize what deterrent effect the suppression of any evidence in this case will have on the performance of future airport searches.
We now turn to petitioner's contention that his fifth and sixth amendment rights were violated by the alleged failure of respondent's agents to give him the warnings required by (1) Miranda v. Arizona, 384 U.S. 436 (1966), and (2) United States v. Heffner, 420 F.2d 809 (4th Cir. 1969), and United States v. Leahey, 434 F.2d 7 (1st Cir. 1970).
Petitioner first maintains that respondent's agents failed to comply with certain procedures published in I.R.S. News Release No. 949 (Nov. 26, 1968), thus violating his right to due process of law under the fifth amendment. In Heffner and Leahey the courts suppressed evidence obtained by special agents during interviews with taxpayers in which the agents failed to conform with published procedures of the Internal Revenue Service. The decisions were premised on the ground that the failure of the I.R.S. to follow its own established procedures constituted a violation of due process. In I.R.S. News Release No. 949 dated Nov. 26, 1968, the Service announced a revised procedure for advising a taxpayer of his rights during an investigation by a special agent of the Intelligence Division of the Internal Revenue Service. A special agent is now required to identify himself, describe his function; warn the taxpayer that he cannot be compelled to incriminate himself by answering any questions or producing any documents, and advise the taxpayer that he has the right to seek the assistance of an attorney before responding. As indicated in our findings of fact, Special Agent Howard fully complied with the requirements of this procedure. Accordingly, we find that petitioner's rights to due process of law under the fifth amendment were not violated during the interview.
Petitioner relies upon the decision of the Seventh Circuit in United States v. Oliver; 505 F.2d 301 (7th Cir. 1974), in support of his contention that his fifth and sixth amendment rights were violated by the failure of respondent's agents to give him the full Miranda warnings at the beginning of the interview of December 11, 1973. More specifically, petitioner contends that the special agents failed to advise him of his right to remain silent and his right to have an attorney present with him during the interview. In United States v. Oliver; supra, the Seventh Circuit reaffirmed its holding in United States v. Dickerson, 413 F.2d 1111 (7th Cir. 1969), that the full Miranda warnings must be given at the inception of the first contact with the taxpayer after the case has been transferred to the Intelligence Division. The Dickerson holding has not been followed by any of the Courts of Appeals which have been confronted with the issue of whether the Miranda warnings must be given in every instance to targets of criminal tax investigations.
In United States v. Jaskiewicz, 433 F.2d 415 (3d Cir. 1970), the Third Circuit, the Court of Appeals to which an appeal from our decision herein will lie; held that the affirmative duties imposed upon the Government by Miranda ‘arise not because the defendant has become the focus of the potential indictment but because the government has in some meaningful way imposed restraint on his freedom of action.’ In conclusion, the court stated at page 420:
Taglianetti v. United States, 398 F.2d 558 (1st Cir. 1969); United States v. White, 417 F.2d 89 (2d Cir. 1969); United States v. Jaskiewicz, 433 F.2d 415 (3d Cir. 1970); United States v. Bagdasian, 398 F.2d 971 (4th Cir. 1968); United States v. Prudden, 424 F.2d 1021 (5th Cir. 1970); United States v. Maius, 378 F.2d 716 (6th Cir. 1967); Muse v. United States, 405 F.2d 40 (8th Cir. 1968); United States v. Chikata, 427 F.2d 385 (9th Cir. 1970); Hensley v. United States, 406 F.2d 481 (10th Cir. 1968).
In short, the decision in Miranda v. Arizona, 384 U.S. 436, * * * (1966), does not require that this court in this case depart from its pre-Miranda rule that the sole test for admissibility of a taxpayer's statements to agents of the Treasury Department is the voluntariness of the statements. United States v. Frank, 245 F.2d, 284 (51 AFTR 537) (3 Cir.), cert. denied, 355 U.S. 819; * * * (1957); United States v. Burdick, 214 F.2d 768, 773 (45 AFTR 1823) (3 Cir. 1954), cert. denied, 350 U.S. 831, * * * (1955). (Fn. ref. omitted.)
Under our holding in Jack E. Golsen, 54 T.C. 743 (1970), affd. 445 F.2d 985 (10th Cir. 1971), cert. denied 404 U.S. 940 (1971), we are bound to apply the test utilized by the Third Circuit in determining the admissibility of statements made by petitioner during the course of the interview and leads obtained therefrom. Thus, in order for evidence resulting from the interview to be admissible, petitioner's statements must be found to have been made voluntarily. Based upon the testimony as to the atmosphere of the interview and our findings concerning the warnings given and the preliminary statements made by the special agents, we are satisfied that this test has been satisfied. Accordingly, the motion to suppress, to the extent it relates to statements made during the interview of December 11, 1973, and leads obtained therefrom, must be denied.
Accordingly, we hold that none of respondent's evidence is tainted by the illegal airport search or the interview of petitioner at his residence. None of respondent's evidence will be suppressed and no constitutional grounds exist for shifting the burden of going forward with the evidence to respondent.
An appropriate order will be entered.