Garpeg, Ltd. v. United States, 588 F. Supp. 1239 (S.D.N.Y. 1984)

Gallop, Dawson, Kimelman & Clayman, New York City, for petitioner; Steven Kimelman, Charles E. Clayman, Chris McAliley, New York City, of counsel.

Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City, for respondent; Jonathan Lindsey, Asst. U.S. Atty., New York City, of counsel.

SWEET, District Judge.

As more fully set forth in the opinion of this date in Vanguard International Manufacturing, Inc. v. United States, 588 F. Supp. 1229 (RWS), this action is one of a series of related actions arising out of an Internal Revenue Service ("IRS") investigation of Dr. Aldo Gucci ("Gucci") and Gucci Shops, Inc. ("Gucci Shops"). The IRS issued an administrative summons on December 19, 1983 to Citibank, N.A. ("Citibank") pursuant to sections 7602 and 7609 of the Internal Revenue Code of 1954, 26 U.S.C. §§ 7602, 7609. The summons requested production of records located in "all branches of Citibank including ... Citibank Hong Kong," concerning, among other things, bank accounts "in the name of and/or under the signatory authority of" Garpeg, Ltd. ("Garpeg") for the period September 1, 1978 through January 31, *1240 1982." Notice of the summons was given to Garpeg on December 20, 1983. Garpeg commenced this action on January 19, 1984 by filing a petition to quash the summons. The Government has moved to enforce the summons. For the following reasons, the Government's motion is granted, and the petition to quash the summons is dismissed.

Garpeg has challenged the summons on grounds of inadequate notice, improper use of the IRS summons authority and lack of relevancy. Garpeg's arguments with respect to notice and enforcement of an IRS summons after referral of the matter to a grand jury have been discussed in the opinions of this date enforcing the summonses in two of the related actions, Vanguard International Manufacturing, Ltd. v. United States, 588 F. Supp. 1229 (RWS), and Vanguard International Manufacturing, Ltd. United States, 588 F. Supp. 1234 (RWS), and will not be repeated here.

To establish that the records summoned are relevant to the IRS investigation, the Government has submitted a supplemental affidavit of Richard Collery, Special Agent of the Criminal Investigation Division of the IRS, dated March 5, 1984, which was filed in Garpeg, Ltd. v. United States, 583 F. Supp. 799. For the reasons set forth in Garpeg, Ltd. v. United States, 583 F. Supp. 789 (S.D.N.Y.1984), the summons will be enforced to the extent that it seeks production of records relating to financial transactions between Garpeg and Gucci Shops or between Garpeg and Gucci, including any financial transactions between Garpeg and other parties which were authorized by Gucci or Gucci Shops.

IT IS SO ORDERED.