198 F.

2d 382

CENTRACCHIO
v.
GARRITY.
No. 4633.

United States Court of Appeals, First Circuit.

July 25, 1952.
Writ of Certiorari Denied October 27, 1952.

See 73 S.Ct. 108.

Joseph J. Gottlieb, Boston, Mass. (Lawrence E. Cooke, Boston, Mass., on
the brief), for appellant.
Meyer Rothwacks, Sp. Asst. to Atty. Gen. (Ellis N. Slack, Acting Asst.
Atty. Gen., Ben Kohler, Jr., Sp. Asst. to Atty. Gen., and George F. Garrity,
U. S. Atty., and Edward D. Hassan, Asst. U. S. Atty., Boston, Mass., on
the brief), for appellee.
Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN,
Circuit Judges.
MAGRUDER, Chief Judge.

We have here an appeal from an order denying on the merits a Petition and
Motion to Suppress Evidence filed in the court below prior to indictment.

The petition alleged that the United States attorney for the District of
Massachusetts "has given notice of intention to present evidence to the Grand
Jury to obtain an indictment of your petitioner for violation of the Internal
Revenue Code in filing of income tax returns by your petitioner for the years
1945 to 1949 inclusive. The evidence which the United States Attorney intends
to present to the Grand Jury was given by your petitioner to Agents of the
Bureau of Internal Revenue upon the promise of the United States Secretary of
the Treasury that your petitioner would not be prosecuted, which promise was
contained in the Secretary of the Treasury's public statement of its policy to

grant immunity to taxpayers making voluntary disclosures * * *." This

statement, issued by Secretary of the Treasury Vinson on August 21, 1945, was
as follows:
3

"The Commissioner of Internal Revenue does not recommend criminal

prosecution in the case of any taxpayer who makes a voluntary disclosure of
omission or other misstatement in his tax return. Monetary penalties may be
imposed for delinquency, for negligence and for fraud, but the man who makes
a disclosure before an investigation is under way protects himself and his
family from the stigma of a felony conviction. And there is nothing
complicated about going to a collector or other revenue officer and simply
saying, `There is something wrong with my return and I want to straighten it
out'."

It was further alleged in the petition that independent of the "promise" of the
Secretary of the Treasury aforesaid, "the Agents of the Bureau of Internal
Revenue by express and implied promises of immunity made by them to the
petitioner obtained from him the evidence sought to be suppressed"; that at a
conference on May 22, 1950, agents of the Treasury Department agreed to
accept petitioner's case as one of voluntary disclosure, and petitioner was
induced by such agents to believe "that no prosecution would result from his
disclosures relating to his income tax liability"; that on said date petitioner did
not know and had no reason to believe that his income tax returns for 1945 to
1949 were under investigation or examination; that petitioner, fully cooperating
with the said agents, submitted to them all necessary information, records and
files in his possession and made a sworn statement at their request, thus
enabling the agents fully to determine petitioner's income tax deficiency; that
petitioner on April 12, 1951, "learned for the first time that his case was not
being accepted by the Treasury Department as a civil matter and that on the
following day he learned that his case had been recommended for criminal
prosecution on the grounds that income had been fraudulently omitted from his
income tax returns" for the taxable years in question. The petition further
alleged that the agents of the Bureau of Internal Revenue, in obtaining the
evidence from him, did not advise petitioner of his constitutional rights against
self-incrimination; and averred, as a conclusion of law, that the evidence given
by the petitioner to said agents was obtained from petitioner "in violation of his
rights guaranteed under the Fifth Amendment to the Constitution of the United
States, and may not be used against him in any criminal prosecution."

The petition prayed for an order (1) restraining the United States attorney from
using before the grand jury or in any criminal prosecution the evidence so
obtained from petitioner, including his sworn statement aforesaid, and (2)

directing the suppression of said evidence in any criminal prosecution of the

petitioner.
6

The petition came on to be heard before Judge Wyzanski. Petitioner, and one
Francis H. Sloan, an accountant who had participated in the negotiations with
the Treasury agents on behalf of petitioner, testified in support of the petition.
The United States attorney stated that he had several witnesses to call, but the
district judge, after hearing petitioner's case, indicated that it was not necessary
to hear testimony on the part of respondent, and no such testimony was offered.

The testimony on behalf of petitioner was to the effect that upon learning of the
Treasury's voluntary disclosure policy, and upon being assured by the Treasury
agents that his case would be accepted on that basis, petitioner told revenue
agents that his returns were not in order, and supplied them with all of the
necessary data to enable them to compute his deficiencies. He gave the revenue
agents access to his safe deposit box and turned over to them his cancelled
checks, his bank statements, and his check books; also the records of a bank
account in his wife's name and of a joint account in the name of petitioner and
his wife. In addition, he made available to the Treasury agents his case files as
an attorney at law, turned over to them the diaries which he used for filing
interrogatories and listing his appointments, and gave them information on his
dividends, a rent analysis for his office, a statement of the interest he had
received on his deposits, and copies of his earlier tax returns. Finally, he
furnished them a sworn statement with respect to the expenses or disbursements
incurred in connection with the cases listed in his case files. Neither the
testimony of petitioner nor that of Sloan suggested that the representations
made to petitioner by the Treasury agents were in the nature of a ruse or
scheme designed to induce him to incriminate himself so that he might be
prosecuted. The thrust of the testimony was that in ultimately recommending
criminal prosecution the Treasury agents failed to comply with the announced
voluntary disclosure policy, not that they never intended so to comply.

On February 20, 1952, the district court entered its order now appealed from
denying the Petition and Motion to Suppress Evidence. In a memorandum the
district judge found that petitioner, being aware of the announced voluntary
disclosure policy of the Treasury Department, turned over the evidence in
question, and made the sworn statement aforesaid, to agents of the Treasury
Department. The district judge also found that there was no evidence that at the
time these disclosures were made the Treasury officials did in fact contemplate
any criminal prosecution of petitioner, and that therefore there was no basis for
a finding that the Treasury agents intended all along to break some promise or
declaration of policy, and obtained from petitioner the evidence in question by

fraudulent misrepresentation of their intention in that regard. This finding that

there was no evidence of any such fraud on the part of agents of the Treasury
was fully warranted by the testimony. Further, the district judge found that
there was no evidence that the intention of the Treasury agents at the time of
receiving the evidence from petitioner was the slightest bit different from that
declared in the statement of August 21, 1945, by the Secretary of the Treasury;
that such published statement was no more than a declaration of policy as to
what would be recommended by the Department and was in no sense a promise
that there would be no criminal prosecution.
9

We are informed that on February 21, 1952, one day after the entry of the order
now on appeal, a grand jury in the District of Massachusetts handed down an
indictment against Centracchio, charging that he filed false and fraudulent
income tax returns, understating his income and the tax due thereon in the years
1945, 1946, 1947 and 1948, in violation of 26 U.S.C. 145 (b). Whether the
handing down of this indictment has any effect upon the present appeal we
reserve for later consideration.

10

There is no doubt that the order under review was a "final decision", appealable
to this court under 28 U.S.C. 1291. It was not an interlocutory order in the
course of a criminal proceeding. No such proceeding was pending before the
district court. The filing of the Petition and Motion to Suppress Evidence was
the initiation of an independent proceeding of a summary character against the
United States attorney as an officer of the court. The order of the district court
denying the petition finally disposed of this proceeding, and was therefore an
appealable "final decision". Perlman v. United States, 1918, 247 U.S. 7, 38
S.Ct. 417, 62 L.Ed. 950; Burdeau v. McDowell, 1921, 256 U.S. 465, 41 S.Ct.
574, 65 L.Ed. 1048; Turner v. Camp, 5 Cir., 1941, 123 F.2d 840; In re Fried, 2
Cir., 1947, 161 F.2d 453. See Cogen v. United States, 1929, 278 U.S. 221, 225,
49 S.Ct. 118, 73 L.Ed. 275.

11

The basis of the district court's jurisdiction to entertain the petition in such
independent proceeding warrants passing comment. It is not suggested that the
district court had jurisdiction under any of the jurisdictional grants in 28 U.S.C.
1331-1358. But it has long been accepted that where evidence, obtained by
an unconstitutional search and seizure in violation of the Fourth Amendment, is
in the hands of a United States attorney, a federal district court may entertain
and grant relief on a petition, filed even prior to any indictment, seeking a
return of the papers or property unconstitutionally seized and the suppression of
the same as evidence. Burdeau v. McDowell, 1921, 256 U.S. 465, 41 S.Ct. 574,
65 L.Ed. 1048; Go-Bart Importing Co. v. United States, 1931, 282 U.S. 344, 51
S.Ct. 153, 75 L.Ed. 374. See Perlman v. United States, 1918, 247 U.S. 7, 38

S.Ct. 417, 62 L.Ed. 950; Turner v. Camp, 5 Cir., 1941, 123 F.2d 840; In re No.
32 East Sixty-Seventh Street, 2 Cir., 1938, 96 F.2d 153, 156; Foley v. United
States, 5 Cir., 1933, 64 F.2d 1; Goodman v. Lane, 8 Cir., 1931, 48 F.2d 32;
United States v. Poller, 2 Cir., 1930, 43 F.2d 911, 74 A.L.R. 1382. The
rationale of such cases is that the petition for relief is addressed to the inherent
power of the court to discipline an officer of the court. Cf. In re Behrens, 2 Cir.,
1930, 39 F.2d 561. Thus in Go-Bart Importing Co. v. United States, 1931, 282
U.S. 344 at page 355, 51 S.Ct. 153, at page 157, 75 L.Ed. 374, the Court
explained:
12

"The United States attorney and the special agent in charge, as officers
authorized to conduct such prosecution and having control and custody of the
papers for that purpose, are, in respect of the acts relating to such prosecution,
alike subject to the proper exertion of the disciplinary powers of the court. And
on the facts here shown it is plain that the district court had jurisdiction
summarily to determine whether the evidence should be suppressed and the
papers returned to the petitioners."

13

Judge Hough made a similar explanation in a much-quoted passage in United

States v. Maresca, D.C.S.D.N.Y.1920, 266 F. 713, 717:

14

"Whenever an officer of the court has in his possession or under his control
books or papers, or (by parity of reasoning) any other articles in which the court
has official interest, and of which any person (whether party to a pending
litigation or not) has been unlawfully deprived, that person may petition the
court for restitution. This I take to be an elementary principle, depending upon
the inherent disciplinary power of any court of record.

15

"Attorneys are officers of the court, and the United States attorney does not by
taking office escape from this species of professional discipline. Thus power to
entertain this motion depends on the fact that the party proceeded against is an
attorney, not that he is an official known as the United States attorney. It is
further true that the right to move does not at all depend on the existence of this
indictment; it might be made, were no prosecution pending."

16

Although in the sense above indicated it cannot be said that the district court
lacked "jurisdiction" of the petition in the instant case, the propriety of
exercising such jurisdiction depends upon considerations of an equitable nature.
See Eastus v. Bradshaw, 5 Cir., 1938, 94 F.2d 788; Goodman v. Lane, 8 Cir.,
1931, 48 F.2d 32, 35. The search and seizure cases have gone pretty far with
this idea of "disciplining" the United States attorney as an officer of the court at

the pre-indictment stage. The lawfulness of a particular search and seizure may
involve sharply contested issues of fact or of law; and a conscientious district
attorney, entirely consistent with his oath of office, may deem it his duty to
present such evidence to a grand jury.
17

We must, of course, respect the clear line of authority in the search and seizure
cases. These authorities are indeed recognized in Rule 41(e) of the Federal
Rules of Criminal Procedure, 18 U.S.C., which is stated in the Advisory
Committee's notes to be merely a restatement of existing law and practice. Rule
41(e) provides:

18

"Motion for Return of Property and to Suppress Evidence. A person aggrieved

by an unlawful search and seizure may move the district court for the district in
which the property was seized for the return of the property and to suppress for
use as evidence anything so obtained on the ground that (1) the property was
illegally seized without warrant, or (2) the warrant is insufficient on its face, or
(3) the property seized is not that described in the warrant, or (4) there was not
probable cause for believing the existence of the grounds on which the warrant
was issued, or (5) the warrant was illegally executed. The judge shall receive
evidence on any issue of fact necessary to the decision of the motion. If the
motion is granted the property shall be restored unless otherwise subject to
lawful detention and it shall not be admissible in evidence at any hearing or
trial. The motion to suppress evidence may also be made in the district where
the trial is to be had. The motion shall be made before trial or hearing unless
opportunity therefor did not exist or the defendant was not aware of the grounds
for the motion, but the court in its discretion may entertain the motion at the
trial or hearing."

19

This rule does not specify the time when such a motion may be made, and
presumably it is broad enough to sanction the filing of such a motion in the
district court prior to indictment.

20

But in the unlawful search and seizure cases there has already, by hypothesis,
been a seizure of property or effects from the possession of the petitioner in
violation of his constitutional right. On the face of the petition in the present
case, and certainly on the evidence offered by petitioner at the hearing before
the district court, it is clear that the evidence in question did not come into the
possession of the government officials in violation of petitioner's rights under
the Fourth Amendment. He voluntarily turned over the evidence, and made the
disclosures, to the agents of the Internal Revenue Bureau, for the purpose of a
determination of his income tax liabilities. It is significant that the petition does
not ask for the return of the evidence now in the hands of the United States

attorney.
21

Judicial interference of this sort with the action of a United States attorney in
the administration of the criminal law, at a pre-indictment stage, must, we
think, be regarded as the exception rather than the rule. Cf. United States v.
Thompson, 1920, 251 U.S. 407, 40 S.Ct. 289, 64 L.Ed. 333. Aside from one
case, about to be noted, we are unaware of any authorities sanctioning such
interference except in the case of unlawful search and seizure.

22

In the case of In re Fried, 1947, 161 F.2d 453, a majority of the Second Circuit
(Judge A. N. Hand, dissenting), by analogy to the unconstitutional search and
seizure cases, held that a district court might entertain a pre-indictment petition
for the suppression of a coerced confession alleged to have been extracted from
petitioner in violation of his constitutional right under the Fifth Amendment.
We are not required in the present case to express any opinion as to the
correctness of this decision, and we merely note that it is not sanctioned by the
terms of Rule 41(e). The Fried case, even if correctly decided, is no authority
for appellant in the present case, for here it is clear that there has been no
coerced confession by petitioner in violation of his constitutional right. The
information supplied by petitioner was voluntarily given to aid in the
computation of his income tax liability. In his brief, appellant disclaims any
contention that the United States Government is bound on any contractual
theory not to prosecute him. Nor does he claim that there is any statutory basis
upon which a plea in bar or motion to dismiss the indictment could be
premised. "The appellant's contention is simply that the use of the evidence
which the government intended to present to the grand jury and which it now
intends to use on the trial of the case, would constitute a violation of the
appellant's rights under the Fifth Amendment, for the reasons set forth above.
The objection is being made to the evidence and not to the indictment."

23

The pre-indictment petition in the present case was filed for the reason that it
would obviously be to the advantage of petitioner if he could prevent an
indictment against him on the basis of the evidence sought to be suppressed,
and thus escape the burden of standing trial. As Judge Rifkind observed in the
district court, in the Fried case, (Application of Fried) 68 F.Supp. 961, at page
963: "It should nevertheless be noted that the same arguments which support
the petitioners' position here would also support the contention that allegedly
perjured statements in the possession of the United States Attorney may be
suppressed before indictment. Indictment or trial on perjured evidence is an
invasion of the right to due process. Such logic would lead to the absurd result
that in a criminal case we would first try the `evidence' before we indicted or
tried the accused." And, of course, more generally, it would be to the advantage

of a prospective accused if he could prevent an indictment by the suppression

of evidence which he claimed, on some rule of law, would be inadmissible
against him at an ensuing trial. But even the majority opinion in the Fried case
recognized that it was "not feasible to enjoin the presentation to grand juries of
all untrue, irrelevant or incompetent evidence." 161 F.2d at page 465. Judge
Learned Hand said in the same case: "It would be an intolerable burden upon
the prosecution of crime, if it were possible to test in advance the competency
of evidence which an accused, to say nothing of a prospective accused, might
be able to show was likely to be used against him. The protection of the
individual from oppression and abuse by the police and other enforcing officers
is indeed a major interest in a free society; but so is the effective prosecution of
crime, an interest which at times seems to be forgotten." 161 F. 2d at page 465.
It would not seem to be in the public interest to enlarge the recognized category
of dilatory motions at the pre-indictment stage, which would have the effect of
impeding prosecuting officers, without, except in rare instances, affording
defendants any relief not available after indictment or during trial.
24

The petition, and petitioner's evidence in support thereof, did not disclose that
petitioner had yet suffered any violation of his constitutional rights, either under
the Fourth or Fifth Amendment. Whether the use against him at the
forthcoming trial of the evidence now sought to be suppressed would be a
violation of his constitutional rights under the Fifth Amendment may be
regarded as doubtful. Quite apart from the question whether such exclusion
would be required by constitutional mandate, it is possible that the federal
courts, with the ultimate approval of the Supreme Court, should formulate a
rule of evidence for federal criminal trials to the effect that evidence voluntarily
disclosed by a taxpayer to agents of the Treasury on the faith of the announced
voluntary disclosure policy should be excluded from evidence in the event of a
subsequent indictment of the taxpayer. Cf. McNabb v. United States, 1943, 318
U.S. 332, 341, 63 S.Ct. 608, 87 L. Ed. 819. We do not determine these
questions now, nor do we intend to intimate any opinion thereon; for we think
that such questions as to the admissibility of evidence which may be produced
by the government at some future criminal trial ought not to be determined by
the district court, or by us on appeal, on a pre-indictment petition for the
suppression of evidence such as the one filed in the case at bar.

25

Our conclusion is that the district court should have dismissed the petition as
lacking in equity, which of course would have been without prejudice to the
right of petitioner, in the event of indictment, to raise at some appropriate stage,
whether before trial or during the trial,1 the question as to the admissibility of
the evidence disclosed by him in reliance on the Treasury's announced
voluntary disclosure policy.

26

We have considered somewhat whether the handing down of the indictment on

February 21, 1952, rendered this appeal moot. It is a curious situation. The fact
that the petition to suppress was filed as an independent proceeding prior to
indictment was the only thing that made the district court's order thereon a
"final decision" appealable under 28 U.S.C. 1291. If the motion to suppress
had been filed after indictment, for the sole purpose of procuring the exclusion
of evidence at a forthcoming trial, an order denying such motion would not
have been a "final decision" but rather an unappealable interlocutory order
entered in the course of the criminal case. Cogen v. United States, 1929, 278
U.S. 221, 49 S.Ct. 118, 73 L.Ed. 275.2 But presumably if the order of the
district court was a "final decision" when rendered, it did not lose that
characteristic from the fact that an indictment was subsequently handed down.
Cf. United States v. Poller, 2 Cir., 1930, 43 F.2d 911. And though the finding of
a true bill by the grand jury defeated one of the objects of petitioner in his
motion to suppress, the petition did not thereby become entirely moot, for
petitioner still remained interested in the relief sought in so far as it might be
directed to the suppression of the evidence at the trial. Probably, therefore, as a
technical matter, the present appeal should not be dismissed as moot. We do not
dwell upon the point at greater length, because whichever of the two
dispositions we chose to make of this appeal, the practical effect would be the
same; there would be no determination whether the evidence in question should
be excluded at the trial, but that question would be left open for determination
in the course of the pending criminal proceeding.

27

We may add that, even accepting appellant's contentions to the full, we could in
no event vacate the order with a direction to the district court to enter an order
suppressing the evidence at the trial. The reason for that is that the district
court entered its order of denial after hearing petitioner's witnesses only,
deeming it unnecessary to hear the witnesses which the United States attorney
was prepared to present. If it be assumed for the moment that evidence
disclosed to the Treasury officials on the faith of the announced voluntary
disclosure policy, and in compliance with its conditions, should be excluded
from evidence in a subsequent criminal trial, it would seem that the taxpayer
would have to satisfy the court that he made a voluntary, good faith disclosure
of all data necessary to a correct computation of his income tax deficiencies,
and that he made such disclosures before an investigation was under way.

28

The order of the District Court denying the petition is vacated, and the case is
remanded to the District Court with direction to enter an order dismissing the
petition for want of equity.

Notes:
1

Cf. Nardone v. United States, 1939, 308 U.S. 338, 341-342, 60 S.Ct. 266, 84
L.Ed. 307

It is true, as appears from an examination of the record in the Cogen case, that
the motion there prayed for an order for the return of the seized property "and
for a further order to the United States attorney directing him, or his assistants,
not to offer the same in evidence or to offer any testimony on any transaction
mentioned in any of the seized papers upon the trial." It was assumed by the
parties and by the court, we suppose correctly, that the order denying the
motion was not appealable unless it could be deemed a "final decision". It was
not suggested that the order was in effect an interlocutory order refusing an
injunction, a type of interlocutory order then immediately appealable under
129 of the Judicial Code. now found in 28 U.S.C. 1292