The opinion of the court was delivered by: Marovitz, District Judge.
Motion of Defendant for the Return of Property and
Suppression of Evidence
This is a criminal prosecution under 26 U.S.C. § 7203
for failure to file income tax returns for the years 1960,
1961, and 1962. Pursuant to Rule 41(e) of the Federal Rules of
Criminal Procedure, defendant has filed a motion to suppress
as evidence certain property and information allegedly
obtained from him in violation of his constitutional rights.
Specifically, he asks this court to suppress as evidence all
documents and statements, written and oral, which he supplied
to agents of the Internal Revenue Service on or about March
24, 1965, and on four subsequent occasions in that year.
On March 5, 1968, plaintiff filed his motion and attached an
affidavit alleging that on several occasions in 1965 he gave
information and records to a Special Agent and an Internal
Revenue Agent of the Internal Revenue Service in violation of
his constitutional rights since he had not been warned by the
agents of those rights. The government denied any information
had been gathered illegally, but filed no affidavits in
support of its answer.
At a hearing on June 27, 1968, held for the purposes of
clarifying the criminal nature, if any, of the various
interviews, Internal Revenue Agent Donald J. Petrovic
testified that while he was making an audit of a scavenger
company, he found an entry on the company's books reflecting
a large payment to defendant, but that no information return
in connection with that payment had been filed by the company.
Agent Petrovic suspected defendant had not reported this sum
as income, was assigned to audit the defendant, and did so in
July, 1964. During this visit, defendant told Petrovic that he
had failed to file various income tax returns. At this point,
Petrovic had reason to believe that defendant had committed a
criminal violation and, pursuant to Internal Revenue Service
regulations, suspended any further activity in his civil
investigation and referred the case to his superiors to
determine if the case warranted criminal investigation. In
January, 1965, the case was assigned to Special Agent Allen
Cornue, an investigator for the Internal Revenue Service's
Intelligence Division, the jurisdiction of which is limited to
criminal investigations. Revenue Agent Petrovic was assigned
to assist him. The investigation by the two agents began on
March 24, 1965, with a visit to defendant at his place of
business, at which time Cornue identified himself as a
"Special Agent," but did not advise defendant that the
investigation had become a criminal, rather than a civil one,
or that defendant had a right to remain silent and to refuse
to turn over any documents to the agents, or that any records
which were handed over could be used against him, or that he
had a right to consult with an attorney before questioning and
to have an attorney present during the questioning. The two
agents saw defendant again on May 7, 1965. Special Agent
Cornue interviewed Dickerson by himself on March 29, 1965,
April 1, 1965, and June 24, 1965. At the hearing, both agents
indicated that they received all of their information from
defendant before or on June 24, 1965. When defendant was next
interviewed, on November 10, 1965, an attorney was present.
The instant indictment is a result of the information gathered
in these interviews.
The question presented is whether the information obtained
by the Revenue and the Special Agent were in violation of the
defendant's Constitutional rights and, therefore, should be
suppressed. More specifically, the question is whether the
agents of the Internal Revenue Service, at and from the time
a criminal investigation is launched
against a taxpayer, are required to inform him of his right to
remain silent, of the fact that anything he says may be used
against him, and that he has a right to counsel. Initially, it
is clear that the principles of Escobedo v. State of Illinois,
378 U.S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977 (1964) and Miranda
v. State of Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d
694 (1966), upon which defendant relies, are timely. The
Escobedo decision was announced before the investigations into
defendants tax returns had begun. The Miranda decision was
handed down after the investigation had occurred. However, it
is applicable to all cases where, as here, the trial began
after the date of decision. Johnson v. State of New Jersey,
384 U.S. 719, 734, 86 S.Ct. 1772, 16 L.Ed.2d 882 (1966); Cook v.
United States, 392 F.2d 219 (5th Cir. 1968); United States v.
Remco, 388 F.2d 783 (3rd Cir. 1968); United States ex rel.
Walker v. Young, 388 F.2d 675 (9th Cir. 1968); Carr v.
Henderson, 385 F.2d 531 (6th Cir. 1967); United States v.
Smith, 379 F.2d 628, 631 (7th Cir. 1967).
Of course, the landmark decisions in Escobedo and Miranda,
which held that evidence obtained from a defendant is
admissible only if it is supplied after a knowing and voluntary
waiver of constitutional rights, involved interrogations by
police officers in jail surroundings. In another case in this
district involving the question of the applicability of
Escobedo and Miranda to non-custodial Internal Revenue Service
questioning, United States v. Turzynski, 268 F. Supp. 847 (D.C.
1967), Judge Will held that the Internal Revenue Service was
required to advise a taxpayer of his constitutional rights at
the moment an investigation into his tax returns shifts,
without taxpayer's knowledge, from a civil investigation to a
criminal investigation. Citing Escobedo and Miranda,
Judge Will continued:
"We hold that once a taxpayer becomes the subject
of a criminal tax investigation, as evidenced by
the referral of the investigation to the
Intelligence Division or otherwise, our adversary
process of criminal justice has become directed
against him as a potential criminal defendant.
Any evidence obtained from him is admissable only
if the taxpayer furnished it after knowingly and
voluntarily waiving his constitutional rights and
privileges." 268 F. Supp. at 850.
At the time Turzynski was decided, only two other
post-Miranda cases had concluded that Miranda was applicable to
non-custodial criminal investigations: United States v. Kingry,
67-1 U.S. Tax Cas. ¶ 9262 (N.D.Fla. 1967) and United States v.
Schoenberg, 67-1 U.S. Tax Cas. ¶ 9393 (D.Ariz. 1966). A number
of cases had held Escobedo and Miranda
inapplicable to the instant issue. 268 F. Supp. at 851 n. 2.
However, we believe that Judge Will skillfully and cogently
demonstrated the analytical faults of those cases. 268 F. Supp.
at 851-854. The misconceptions which those cases evidence
regarding the nature of a criminal tax investigation as well as
the lack of necessity for an arrest or physical custody are
also discussed, in more detail, in an excellent and recent
article: Andrews, The Right to Counsel in Criminal Tax
Investigations Under Escobedo and Miranda: The Critical Stage,
53 Iowa L.Rev. 1074, 1087-93 (1968). The Turzynski view that a
taxpayer is in need of the advice of counsel and should be
warned of his rights when a Special Agent enters the case was
cited with approval in United States v. Gower, 271 F. Supp. 655,
660 (M.D.Pa. 1967) where the court said that "(d)efendant was
an accused and any attempt at this point to distinguish a
criminal tax investigation from any other federal criminal
investigation where a crime is known to have been committed is
a distinction without a difference." Very similar language is
to be found in United States v. Wainwright, 284 F. Supp. 129,
131 (D.C.Colo. 1968).
The Government contends that the force of Turzynski as well
as Wainwright is of dubious value in view of United States v.
Mansfield, 381 F.2d 961 (7th Cir. 1967),
cert. denied, 389 U.S. 1015, 88 S.Ct. 593, 19 L.Ed.2d 661
(1968). As we said before in our Memorandum Opinion of April
25, 1968, however, Mansfield is clearly distinguishable from
the instant case as well as Turzynski and Wainwright. In
Mansfield, defendant was explicitly advised of his rights by
agents on at least two occasions during the investigation of
his tax returns. The Government decided as a tactical matter
not to repeat the warnings for fear of frightening off
otherwise forthcoming co-operation. At the time the warnings
were given, Dr. Mansfield said that he "understood [his rights]
and that he had nothing to hide." 381 F.2d at 963.
Consequently, the Mansfield case is clearly distinguishable
from the instant case where no warnings were made and where
defendant had no real understanding of his rights.
The Government then contends that the issue in this case was
foreclosed by the recent Supreme Court decision of Mathis v.
United States, 391 U.S. 1, 88 S.Ct. 1503, 20 L.Ed.2d 381
(1968), which according to the Government, held that
Miranda applies only to custodial interrogation. In Mathis,
petitioner, who was in a state prison, was questioned by an
Internal Revenue Service investigator who failed to warn the
prisoner that he had a right to be silent, that any evidence he
gave could be used against him, that he had a right to counsel,
and that counsel would be appointed for him if he were unable
to afford to provide it for himself. Some of the statements
made to the government agent were strongly incriminating and
were used at the trial in which petitioner was convicted of
filing false tax returns.
The Government there urged that Miranda was not applicable
because the questions asked were part of a routine tax
investigation and because petitioner had not been placed in
confinement by the officers interrogating him. Largely because
routine "tax investigations frequently lead to criminal
prosecutions, just as the one here did," the Supreme Court
rejected "the contention that tax investigations are immune
from the Miranda requirements for warnings to be given a person
in custody." 391 U.S. at 4, 88 S.Ct. at 1505.
Turning then to the custody issue, the Supreme Court also
rejected the notion that the scope of the "custody" was a
narrow one. It found no distinction in Miranda based on the
reason the party interrogated was "in custody." 391 U.S. at
4-5, 88 S.Ct. 1503. In Miranda, the Supreme Court explained
what it meant when in Escobedo, it spoke of an investigation
focusing on an accused by saying:
"By custodial interrogation, we mean questioning
initiated by law enforcement officers after a
person has been taken into custody or otherwise
deprived of his freedom of action in any