Opinion ID: 614361
Heading Depth: 4
Heading Rank: 5

Heading: Renewed Motion to Suppress, Motion for Reconsideration, and Second Renewed Motion to Suppress

Text: In February 1971, Taxpayers filed a renewed motion to suppress based on newly discovered evidence. United States v. Stonehill, 420 F.Supp. 46, 51 (C.D.Cal. 1976) (Stonehill III) . The motion was based largely on an affidavit of Damaso Nocon, Lukban's right-hand man. Nocon's affidavit, executed in November 1970, told a very different story from that told by Hawley and Chandler. Nocon stated that he was an NBI Special Agent and that part of his job was to maintain[ ] liaison with agencies of the United States Government operating in the Philippines. Taxpayers introduced a copy of Nocon's Special Agent ID. Nocon stated that in 1961 Hawley began expressing interest in Stonehill. Nocon stated that [b]ecause of Mr. Hawley's interest, and upon instructions of the NBI Director I commenced tapping Mr. Stonehill's telephones. Nocon turned these transcripts over to Hawley. Nocon further stated that Chandler told him he was interested in making a tax case against Stonehill, and hoped to obtain Philippine assistance in gathering evidence in the Philippines. Nocon stated that Chandler told him that after talking with Spielman he felt he could make a case against Taxpayers, but that he needed more documentary evidence. Nocon stated that he met with Chandler and Hawley on an almost daily basis and talked to Chandler at least four or five times a day. They discussed and laid plans for the raids, and Chandler reviewed all information so the NBI would be certain of raiding all places where any documents might be located. Together, we made a comprehensive list of these locations. Nocon described a meeting at the Philippine Columbian Club on February 6, 1962, attended by Hawley, Chandler, Secretary Diokno, Spielman, and Nocon. Nocon stated that Chandler told Secretary Diokno that the raid would receive full U.S. backing and that special U.S. agents would be flown over to assist in the raid. Chandler also stated that he would try to arrange a meeting between Diokno and Attorney General Kennedy. Nocon further stated that [a]t Chandler's request the NBI made photographs of all target areas for the raid. After this had been done, Chandler and Nocon reviewed the photographs together, and Chandler gave instructions in writing for what to do in each place. Nocon stated that because the NBI had never before been involved in massive raids of this kind, its officials relied heavily on Mr. Chandler's apparent expertise. Nocon also described Chandler's suggestion that they add the Army and Navy Club to the warrants, but stated that Chandler and Nocon went to see the Army and Navy Club together after leaving Lukban's house. Finally, Nocon stated that Chandler made a house available for the NBI to store the seized documents for free, provided, however, that he be given exclusive use of a separate room for photo-copying the seized documents. In response, the United States submitted an affidavit by Colonel Lukban, dated March 2, 1971. Lukban stated that he found Nocon's affidavit inaccurate, misleading and false in a number of its allegations. He stated that Nocon was not a special agent because he did not have the educational qualifications. He said Nocon was his confidential agent. Nocon had no official duties or an official position which called for him to maintain liaison with foreign governments and police agencies. Nocon never made a telephone tap for the NBI as he says in his affidavit, although he may well have made some typewritten transcripts from records. However, his function was strictly that of typing. Lukban further stated that Nocon lied about Chandler's requests for help: I was in charge of the Stonehill investigation, not Mr. Nocon, and I was in charge of all the preparation for the raids, not Mr. Nocon nor anybody else. There were no joint preparations, US-Philippine, for the raids nor was there any joint strategy for the raids. I ordered the investigations into Stonehill's affairs long prior to meeting Spielman solely for purposes of Philippine law enforcement and I ordered the raids on Stonehill's businesses under the authority of then Secretary of Justice, Jose Diokno, with the sanction of President Macapagal, solely for the purposes of Philippine law enforcement. These raids were not a joint effort between Philippine authorities and United States authorities and the raids were not made because of any request by United States authorities or for the purpose of helping United States authorities in any investigation of theirs. Lukban stated that, although he let Chandler see the documents, it was not because Chandler had negotiated a deal. Rather, it was because Lukban believed then and now that there should be cooperation and pooling of information among the various police agencies of the world. He stated that the NBI had conducted large-scale raids in the past, and did not need to rely on, and had not relied on, Chandler's expertise in preparing for the Stonehill raid. The district court denied Taxpayers' Renewed Motion on May 26, 1971. Stonehill III, 420 F.Supp. at 51. Taxpayers filed a Motion for Reconsideration in August 1971. Id. In response the government submitted more evidence. In an affidavit filed September 16, 1971, John McCarthy, the government's lawyer throughout the litigation, stated that he had asked Powers, the IRS representative in Manila, to look into Nocon's status with the NBI. McCarthy stated that Powers had reported that Lukban told him that Nocon was never a Special Agent of the NBI, though Lukban gave Nocon an ID card (which had been introduced by Taxpayers) for his protection so he could legally carry a firearm. Powers told McCarthy that Lukban told him that Nocon was merely an informer and he is not qualified educationally speaking to become a Special Agent of the N.B.I. In the attachments to his affidavit, McCarthy included a certification from the then-current NBI Director that Nocon does not appear in any of the NBI's payroll history, and that he served only as a Confidential Agent to Lukban, paid out of Lukban's discretionary funds. The government also submitted several other documents suggesting that Nocon had never worked directly for the NBI. After hearing oral argument, the court denied the Motion for Reconsideration on November 11, 1971. Id. In May 1975, in connection with the litigation of the substantive tax assessment issues, Taxpayers filed a second Renewed Motion to Suppress, arguing that new evidence discovered since 1968 required suppression. Id. In addition to the evidence just discussed, Taxpayers had Nocon's deposition, taken on September 4, 1974. Nocon testified that Lukban had appointed him the direct liaison with Chandler. He said that the planning of the raid was a joint venture from the very beginning. He further testified that technical surveillance of Stonehill started in the early 1960s based on instructions from the FBI's Tokyo office. The district court denied this motion, and rejected Taxpayers' substantive tax law claims, on July 23, 1976. Stonehill III, 420 F.Supp. at 46. Ironically, given that litigation was to continue for an additional thirty-five years, the district judge began by lamenting the many hundreds of thousands of dollars that had been spent litigating the case, the more than 35 separate court sessions that had been held, and the work put in by the three district court judges who had been assigned to the case at various times. Id. at 51. He also noted the difficulty caused by the unavailability or noncooperation of important witnesses, including Stonehill and Brooks who refused to appear, as well as the allegations of misconduct by both sides. Id. The court then addressed Taxpayers' two new arguments. First, based on Nocon's testimony, Taxpayers argued that U.S. officials were actively investigating Taxpayers much earlier than previous evidence had showed, and that Philippine authorities were acting at the direction of U.S. officials. Id. at 52. The district court found that Nocon's testimony was not credible, and concluded that the NBI conducted the raid for the purposes of Philippine law enforcement. Id. at 52-53. Second, Taxpayers argued that the government's evidence came from illegal wiretaps. Id. at 53. The district court concluded that even if the wiretaps had been illegal, they were NBI wiretaps that had been installed in the course of the NBI's own investigation. Id. It noted that the only evidence to the contrary came from Nocon, whom the court did not believe. Id.