Evening star. [volume] (Washington, D.C.) 1854-1972, 1952-04-01
|bo|ich Blocked
Tax FRAUD Case,
|Probers Told
Ordered No Action
Against Dress Firm,
Witness Testifies
By Cecil HoIIond

that Daniel A. Bolich overruled
New York revenue agents and
ordered a mo prosecution" of a
fraud case against a dressmaking
company after becoming assistant
commissioner of revenue in 1948
The testimony came from Ear
c. Crouter of Los Angeles, who
heads a special board reviewing
tax fraud cases closed out in the
New York area between 1945 and
1851. During that time Mr.. Bolich
was special agent in charge OF
the bureaus intelligence unit ir
New York and had the final say
on such matters.
Mr.. Crouter told the House
Ways and Means subcommittee
headed by Representative King
Democrat, of California, that the
case against the dressmaking con-
Germ was one of 81 cases the re-
viewing board has concluded was
improperly" closed out.
Unusual Interest in Case.
The subcommittee turned to the
specific case involving Patulla
Modes. Inc, the dressmaking firm,
after receiving testimony yester-
day that Mr.. Bolich, after coming
to Washington, occupied a SOFA
day hotel suite on which Wash
ington's Mystery man, Henry w.
Grunewald, paid the rent. Dur
ing the time he occupied the suite,
the subcommittee learned, Mr..
Bolich showed unusual interest
in bureau investigation of Mr..
EGrunewald's tax returns for pos
sible criminal or civil action.
Committee members said Mr.
Grunewald also will figure in the
testimony regarding the Patulls
Modes case in connection with 9
civil settlement of the matter.
The subcommittee has launched
an intensive investigation of Mr.
Bolich's activities while serving in
New York and from September /
1913, until last year as the No
2 man in the Washington
headquarters of the scandal-h
Bureau of Internal Bureau. The
official resigned last fall while un-
der investigation, giving i'll health
as the reason.
"NO Prosecution" Ordered.
Mr.. Crouter testified that Mr.
Bolich, in effect. ordered a M
prosecution" in the case after q
conference here in Washington
with the taxpayers attorneys or
the grounds of a voluntary dis.
closure.
The witness said the decision
overruled the New York Office
which had held there had beer
no voluntary disclosure by the tax.
payer prior to the opening of ar
investigation. Until recently the
bureau followed the practice of moi
prosecuting in cases where a tax.
payer would come forward anc
make a voluntary disclosure be.
fore a bureau investigation hac
been undertaken.
Committee Counsel Adrian w
DeWind said the Patulla Modes
case was reopened after the sub.
committee looked into it in New
York hearings last August. The
case involves alleged unreportec
income totaling about 100000.
Requested Status Report.
Mr.. Crouter indicated that Mr.
Bolich showed an unusual inter.
est in the case before he was pro-
NOTED from head of the bureaus
intelligence unit in New York to
assistant commissioner in 1948
He said records indicate that be-
fore leaving New York, Mr.. b.
Itch requested a status report on
August S, 1948.
The witness testified that the
reviewing board, set up last No.
vember by Commissioner John
Dunlap, has checked over about
600 cases handled by the New
York offices of the intelligence
unit and the regional council. In
addition to the 81 cases found to
have been improperly closed out
Mr.. Crouter said there were eight
other cases having unusual cir
cumStanceS which also might