Opinion ID: 468531
Heading Depth: 2
Heading Rank: 4

Heading: The Third Party Summonses

Text: 24 On August 31, 1981, the IRS invoked 26 U.S.C. Sec. 7602(2) (redesignated as 26 U.S.C. Sec. 7602(a)(2) (1982)) to issue three summonses to Lucid requesting that he produce certain records pertaining to Picciandra and NEI. 26 U.S.C. Sec. 7602 enables the IRS to investigate a taxpayer by obtaining records that are in the possession of third parties. Lucid did not comply with the summonses and one year later, on September 7, 1982, the district court ordered Lucid to produce any financial records of Picciandra and NEI that remained in his possession. 25 On May 21, 1984, prior to trial, Lucid moved to discover the date of receipt by the IRS of any allegations of criminal culpability on the part of Lucid. Lucid's argument on his discovery motion in district court was essentially the same as his position on this appeal: that the issuance of the summonses constituted a misrepresentation because it amounted to an affirmative representation [that] the IRS had no reason to believe any personal criminal activity or complicity on [Lucid's] part was in issue. The district court found that the IRS made no such misrepresentations. Our review is to determine whether this finding is clearly erroneous. Cf. United States v. Jobin, 535 F.2d at 156. 26 Lucid asserts on appeal that the IRS misrepresented its position at two different times: first, when it applied for the summonses in August 1981, and knew or should have known that the investigation would lead to Lucid, and second, when it continued the summons enforcement process after it had the April 1982 statements of Julie Davis that criminally implicated Lucid. He argues that the misrepresentations denied him his fifth amendment right against compulsory self-incrimination. 27 Courts that face this argument generally suppress evidence only if the IRS obtained it through fairly serious affirmative misrepresentations. United States v. Irvine, 699 F.2d 43, 46 (1st Cir.1983) (emphasis in original). Indeed, several cases have expressly denied suppression when IRS agents made no affirmative misrepresentations but simply failed to disclose information. Id. (citing United States v. Robson, 477 F.2d 13 (9th Cir.1973)). See also United States v. Lehman, 468 F.2d 93, 105 (7th Cir.), cert. denied, 409 U.S. 967, 93 S.Ct. 273, 34 L.Ed.2d 232 (1972). 28 No case holds that an IRS agent breaches a constitutional duty when he obtains information merely by failing to state specifically that he is conducting a criminal investigation. And, we see no basis for such a holding in circumstances such as those present here, where any reasonable person would have known from what the agent explicitly did say that a criminal prosecution could well be in the offing. 29 Irvine, 699 F.2d at 46. We are satisfied that the issuance of the summonses did not constitute a representation that possible criminal activity of Lucid would not become an issue at some time in the future. 30 We now turn to the question whether the district court's enforcement of the summonses after the IRS had evidence that incriminated Lucid constituted a representation that the IRS did not believe Lucid's possible criminality was at issue. The Second Circuit addressed this question in In re Magnus, Mabee and Reynard, Inc., 311 F.2d 12 (2d Cir.1962), where the IRS issued summonses under section 7602 requiring a corporation to produce certain records. The corporation did not comply with the summonses. Ten months later, the Government secured an indictment against the corporations' majority shareholder in order to prevent the statute of limitations from running. The question on appeal was whether the indictment nullified the right of the IRS to enforcement of the summonses. Id. at 13-14. The court held that the district court could enforce them, noting that to hold otherwise would encourage litigants to purposefully delay compliance with summonses. Id. at 16-17. 31 In the context of this case, Magnus instructs that enforcement of a summons issued before the development of evidence criminally implicating a taxpayer does not constitute a representation that the taxpayer will not subsequently become the focus of a criminal investigation. Magnus effectively rebuts both of Lucid's arguments. First, it noted that to hold that information cannot be obtained under Section 7602 merely because it may be used in criminal proceedings would virtually write that Section out of the statute. Id. at 16. Second, it concluded that the taxpayer has standing to object only if the use of the summons is an impermissible ruse to obtain the taxpayer's books and records or other material or information in violation of the taxpayer's constitutional rights. Id. at 17. 32 In the case at hand, the IRS did not employ the summonses as a ruse to trap Lucid. Neither the summonses nor the petition to enforce them contained any misrepresentation by the IRS investigators. In light of Lucid's role in handling large sums of cash, the observation of this court in Irvine that a reasonable person should know that a criminal prosecution could well be in the offing is particularly apt. We hold that a district court does not err in refusing to suppress evidence obtained through summonses issued by the IRS before the commencement of any criminal proceedings against the taxpayer or his attorney or the enforcement of such summonses, in the absence of misrepresentations by government agents.IV. A. The Maniego Instruction 33 The court in United States v. Maniego, 710 F.2d 24 (2d Cir.1983), instructed the jury that an attorney is not held to a higher than normal standard of conduct, or legal obligation, to verify independently the truth of the information given by the client. Id. at 28. Lucid argues that Judge Mazzone erred in not giving the Maniego instruction in this case, and that the trial judge in fact agreed to give the instruction but then failed to do it. 34 We review the propriety of instructions to a jury under the abuse of discretion standard. United States v. Fishbach and Moore, Inc., 750 F.2d 1183, 1195 (3d Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 1397, 84 L.Ed.2d 785 (1985). We must determine whether the charge, taken as a whole and viewed in the light of the evidence, fairly and adequately submits the issues in the case to the jury. Id. See also United States v. Hill, 470 F.2d 361, 365 (D.C.Cir.1972) (The trial judge has considerable latitude in fashioning instructions to fit the case). 35 Our reading of the transcript satisfies us that the trial court never agreed to give the Maniego instruction. Moreover, Maniego does not enunciate the circumstances under which the above instruction is necessary. Nor does Lucid cite any case, including Maniego, which mandates that such an instruction must be given. Lucid argues that the instruction was required here because the Government sought to create the impression appellant was remiss and in essence negligent by not seeking to look behind his client's representation. If the Government had created such an impression, it is possible that the court then should have given the instruction to counter it. We do not reach the question, however, because a review of the trial excerpt relied on by Lucid fails to support his contention. The Government did not try to raise an inference that Lucid should be held to a standard higher than normal, nor did its questions have the effect of raising such an inference. Besides, Lucid's attorney did not object to the questions. We therefore conclude that the district court committed no error and did not prejudice Lucid in refusing to give the requested Maniego instruction. B. The Conscious Avoidance Instruction 36 Judge Mazzone instructed the jury that it could infer from the evidence that defendant deliberately refused to enlighten or to take notice of a certain fact. Lucid argues that no evidence supported the court's issuance of this instruction. 37 This instruction is appropriate when a defendant claims a lack of knowledge, the facts suggest a conscious course of deliberate ignorance, United States v. Cincotta, 689 F.2d 238, 243-44 (1st Cir.), cert. denied, 459 U.S. 991, 103 S.Ct. 347, 74 L.Ed.2d 387 (1982); Cimpaglia, 628 F.2d at 642-43, and the instruction, taken as a whole, cannot be misunderstood by a juror as mandating such an inference. Cimpaglia, 628 F.2d at 642. The Cimpaglia court found a sufficient factual predicate to justify the instruction where defendants whose acts furthered a fraudulent scheme claimed to be simply associated with [the scheme's originator] and did not realize that they were assisting in the fraudulent schemes. 628 F.2d at 643. The instruction was also appropriate in Cincotta where the evidence suggested that the defendant consciously chose not to ask about what he had reason to believe he would discover. 689 F.2d at 243. 38 Testimony in the instant case justifies the court's conscious avoidance instruction. Lucid received shopping bags full of cash from Picciandra and his wife. Lucid claimed that he relied on the representation that the bags of cash were attributable to the sale of Picciandra's schooner and that he accepted at face value Picciandra's representation that the cash was legal. Any reasonable person would have realized that in today's society the bizarre bearing of shopping bags filled with large sums of cash signalled some form of illegal activity. Further, the court formulated the instruction so that the jury knew that it was permitted, but not required, to draw the inference. The district court's conscious avoidance instruction to the jury does not constitute reversible error. 2