United States District Court, Northern District of Illinois, E. D
October 25, 1968
UNITED STATES OF AMERICA, PLAINTIFF,
ALBERT M. DICKERSON, DEFENDANT.
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
significant way." 384 U.S. 436, at 478, 86 S.Ct.
1602, at 1612.
Confinement in a jail-house setting was considered an obvious
situation where pressures would act to undermine the free
choice of the individual being interrogated. Yet, the Supreme
Court in Miranda was not concerned solely with the symptoms, i.
e., with jail-house confinement, but with the disease, i. e.,
coercion, for it said:
"Today, then, there can be no doubt that the
Fifth Amendment privilege is available outside of
criminal court proceedings and serves to protect
persons in all settings in which their freedom of
action is curtailed in any significant way from
being compelled to incriminate themselves." 384
U.S. at 467, 86 S.Ct. at 1624.
It would seem to us that the average citizen, faced with
repeated questioning by two government agents is an ominous
situation to say the least. The Government suggests that the
defendant was in no way physically restrained, but we doubt
that he really felt free to walk out on the investigators from
the Internal Revenue Service. In the absence of sufficient
warnings and the assistance of counsel, there are innumerable
factors which act on the taxpayer's mind compelling
him to "co-operate" with the federal authorities. See Andrews,
The Right to Counsel in Criminal Tax Investigations Under
Escobedo and Miranda: "The Critical Stage," 53 Iowa L.Rev.
1074, 1111-14 (1968).
That defendant Dickerson was not advised by the Special
Agent that the Revenue Service was now conducting a criminal
investigation did not make Dickerson's situation less
foreboding, but serves only to demonstrate how unprotected he
was. In this regard, we consider Judge Will's analysis in
United States v. Turzynski, 268 F. Supp. at 851, to be worthy
of a lengthy quotation:
"Whether a suspect is induced to incriminate
himself by a combination of ignorance of his
rights and the coercive atmosphere of custody, or
by ignorance of his rights combined with the
inference that the purpose of the interrogation
is simply to ascertain his dollars and cents
liability for taxes, the result is the same, an
involuntary self-incrimination. In some respects
the tax investigation is more insidious and
dishonest than custodial interrogation, for the
suspect in custody well knows his interrogators
are seeking evidence to convict him of a crime
while a tax suspect is permitted and even
encouraged to believe that no criminal
prosecution is in contemplation. The Internal
Revenue Agent who has discussed possible
deficiencies with the taxpayer continues active
in the investigation augmented by the Special
Agent whose presence and purpose as a criminal
investigator is never disclosed to the suspect."
Finally, the Government argues that Congress in the newly
enacted Omnibus Crime Bill has demonstrated its intent that
the Miranda rationale should not be applied to non-custodial
interrogations. The Government cites 18 U.S.C. § 3501(d):
"Nothing contained in this section shall bar the
admission in evidence of any confession made or
given voluntarily by any person to any other
person without interrogation by anyone, or at any
time at which the person who made or gave such
confession was not under arrest or other
We do not believe that this subsection alters our position,
however. In the first place, defendant underwent extensive
interrogation by two government agents. Secondly, it is clear
that the subsection, in both its clauses, refers only to
confessions voluntarily made. Under 18 U.S.C. § 3501(a), the
duty of determining whether a statement has been made
voluntarily is that of the trial judge. Among the factors the
judge is to consider are:
"(1) The time elapsing between arrest and
arraignment of the defendant making the
confession, if it was made after arrest and
before arraignment, (2) whether such defendant
knew the nature of the offense with which he was
charged or of which he was suspected at the time
of making the confession, (3) whether or not such
defendant was advised or knew that he was not
required to make any statement and that any such
statement could be used against him, (4) whether
or not such defendant had been advised prior to
questioning of his right to the assistance of
counsel; and (5) whether or not such defendant
was without the assistance of counsel when
questioned and when giving such confession."
18 U.S.C. § 3501(b).
We think it apparent from our discussion that defendant
Dickerson was not apprised of his rights and that he was not
aware of the nature of the investigation being made. It
appears, further, that his freedom of action was curtailed in
a very significant way. Thus, it cannot be said that his
statements to the government agents was voluntary or that he
knowledgeably waived his rights. Yet, this is precisely what
the constitution requires. Miranda v. State of Arizona,
384 U.S. 436
, 475, 86 S.Ct. 1602
, 16 L.Ed.2d 694 (1968); Johnson
v. Zerbst, 304 U.S. 458
, 464, 58 S.Ct. 1019, 82 L.Ed. 1461
(1937); United States v. Turzynski, 268 F. Supp. 847
Because the defendant was not properly advised of his
constitutional rights to remain silent and to have the
assistance of counsel, the evidence obtained from the
defendant during the criminal investigation and before
retention of counsel must be suppressed. So too must be any
evidence obtained as a result of information gained during
that portion of the criminal investigation. Any information
gained during the civil investigation may, of course, be
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