Court Opinion

ID: 9456471
Source: CourtListenerOpinion
Date Created: 2023-08-04 19:54:08.87737+00
Date Added: 2024-06-11T17:34:59.536091
License: Public Domain

CELEBREZZE, Circuit Judge
(dissenting) .
I would affirm the District Court’s order suppressing all information gleaned by the United States as a result of its interviews between Agent East and the Appellee.
It is well established that agents of the Internal Revenue Service may not use fraud, trickery or deceit to obtain consent to examine documents or conduct a search. Such actions would vitiate the voluntary character of any evidence gained through such tactics. Gouled v. United States, 255 U.S. 298, 304-305, 41 S.Ct. 261, 65 L.Ed. 647 (1921). This rule has been affirmed in *774recent cases by the United States Courts of Appeals from the Second, Fifth, Eighth and Ninth Circuits. See, United States v. Sclafani, 265 F.2d 408, 414 (2d Cir.) cert. den. 360 U.S. 918, 79 S.Ct. 1436, 3 L.Ed.2d 1534 (1959); United States v. Prudden, 424 F.2d 1021, 1032, 1033 (5th Cir. 1970); Cohen v. United States, 405 F.2d 34, 40 (8th Cir. 1968) cert. den. 394 U.S. 943, 89 S.Ct. 1274, 22 L.Ed.2d 478 (1969); Spahr v. United States, 409 F.2d 1303, 1306 (9th Cir.) cert. den. 396 U.S. 840, 90 S.Ct. 102, 24 L.Ed.2d 91 (1969). This Court has also acknowledged the validity of the rule enunciated down in GoulecL that incriminating evidence is not admissible if obtained under a promise of immunity or through fraud or misrepresentation on the part of the Government. We held:
“It is settled law that the privilege against self-incrimination does not preclude the admission into evidence of documents voluntarily given to a revenue agent in a civil tax investigation without promise of immunity and in the absence of fraud or misrepresentation, even though the taxpayer did not anticipate criminal prosecution. [Cites omitted]
“Whether the books were voluntarily surrendered by the Appellant or were obtained under a promise of immunity or through fraud or misrepresentation on the part of the Government is a question of fact.” 246 F.2d at 44.
I believe that based upon the facts of this case, there is clear and convincing evidence to support the District Court’s factual finding that the Appellee “and his counsel were misled by Mr. Kast and were lulled into believing that the disclosures being made would be used solely to determine the correctness of [Appel-lee’s] * * * amended returns.” (Appendix at 337).
In February, 1963, the Intelligence Division of the Internal Revenue Service began an investigation of the Appellee with a view toward determining whether or not he should be criminally prosecuted for violations of the Internal Revenue Code. Under compulsion of a summons which was issued pursuant to 26 U.S.C. § 7602 (1964) and which purportedly concerned an employee of the Ap-pellee, the Internal Revenue Service sent out a Special Agent to interview the Ap-pellee. That interview which took place in March, 1963, set off a chain of investigations of the Appellee’s activities in Chicago, Illinois, Seattle, Washington, Cincinnati, Ohio and Kentucky. By late August, 1963, the Internal Revenue Service Assistant Regional Commissioner in Cincinnati, whose jurisdiction covers a five state area including all of Kentucky and Ohio, was sent a report on the Internal Revenue Service’s widespread investigation of Appellee’s activities. While this investigation was taking place, the Appellee filed amended returns.
In response to the filing of Appellee’s amended returns, the Canton office of the Internal Revenue Service sought to requisition the Appellee’s tax returns and was informed that the material requested was in the hands of a Special Agent of the Intelligence Division for the past several months. There is no indication in the record that the Canton office made any further inquiry as to the status of the Intelligence Division’s investigation into the Appellee’s affairs. Indeed, the Canton office did not even inquire to its Regional Office in Cincinnati concerning the status of the Internal Revenue Service’s investigation on the Appellee. Had the Canton office followed up on this matter, they would have been made aware of the multistate investigation for tax fraud which the Intelligence Division was pursuing. Instead, the Canton office ordered Agent Kast to interview the Appellee with respect to his amended tax returns for the years 1959-62.
Agent Kast met with the Appellee and his tax lawyers several times in November and December, 1963 and affirmatively represented to the Appellee that his purpose in conducting those interviews was to determine the correctness *775of Appellee’s amended returns for the years 1959-62. Agent East did not express any intention to audit Appellee’s original returns or to gain facts which might be used against the Appellee in a criminal prosecution based on his original returns. While Agent East may have believed his statements to the Ap-pellee were true because his own superiors did not inform him of the continuing criminal investigation, there can be no question these affirmative statements misrepresented the position of the Internal Revenue Service with regard to the Appellee. The Appellee testified under oath that he would never have volunteered the records or information he provided Agent East had he known such information could have been used against him in a criminal prosecution or had he known that the Internal Revenue Service had begun investigating the possibility of a criminal indictment based on his original returns several months before the East interviews. Appellee testified he offered the records and volunteered the information he gave so that the Internal Revenue Service could fairly determine the accuracy of his amended returns as Agent East had indicated to him was the purpose of his visit.
I believe the record in this case provides “clear and convincing” evidence to support the District Court’s finding that the Appellee and his counsel were affirmatively misled and deceived into believing that the Internal Revenue Service’s purpose in seeking information was in the pursuit of an exclusively civil investigation which would not lead to criminal charges. The majority concedes that Agent East affirmatively represented to the Appellee that the limited purpose of his audit and interviews was to determine the correctness of Appel-lee’s amended returns. Those statements by Agent East served to affirmatively mislead the Appellee into volunteering information which he would not otherwise have given. The fact that Agent East was not informed by his immediate superiors at the Canton Field Office or by his superiors in the Cleveland District Office or in the Cincinnati Regional Office that a continuing nationwide criminal investigation of Ap-pellee had been in progress for a period of several months cannot be used as a shield if in fact his misleading statements deceived the Appellee. The District Court so found. An agent of a field office of the Internal Revenue Service must be held answerable for information which his immediate superiors- should have discovered and which his district and regional offices clearly possessed. The District Court’s order suppressing all evidence gleaned by the Internal Revenue Service from the East interviews should be affirmed.