1. The provision of 26 U.S.C. § 3740 barring suits for the
recovery of taxes unless the Attorney General directs that the suit
be commenced applies only to civil suits, and not to criminal
proceedings, and does not vitiate indictments based on evidence
which a United States Attorney presented to the grand jury without
the authorization of the Attorney General. Pp. 348 U. S.
2. Section 5 of Executive Order No. 6166, and Circular Letter
No. 2431 of the Department of Justice, did not limit the action of
the grand jury in respect to cases concerning violations of the
internal revenue laws, and the grand jury in this case was free to
consider the evidence which was presented to it by the United
States Attorney without authorization of the Attorney General. Pp.
348 U. S.
3. The District Court did not abuse its discretion in denying
petitioner's motion, after sentence, for leave to withdraw his
pleas of nolo contendere,
since petitioner failed to show
the "manifest injustice" which, under Rule 32(d) of the Federal
Rules of Criminal Procedure, would warrant permitting him to
withdraw his pleas. Pp. 348 U. S.
212 F.2d 125 affirmed.
MR. JUSTICE MINTON delivered the opinion of the Court.
Upon pleas of nolo contendere,
the petitioner was found
guilty of violating the income tax laws by making and filing false
and fraudulent returns. The District Court
Page 348 U. S. 171
sentenced him to three years' imprisonment and fined him
$13,000. The Court of Appeals affirmed, 212 F.2d 125, and we
granted certiorari, 347 U.S. 1010.
On February 28, 1952, a duly constituted grand jury for the
District of Kansas indicted the petitioner on four counts for false
and fraudulent statements in his individual tax returns and on two
counts in another indictment for false and fraudulent returns of
the Central Theatre Co., a corporation of which he was president.
To these indictments, the petitioner entered pleas of not guilty.
He later withdrew these pleas, and, to two counts of the indictment
on his individual returns and to one count on the corporation
returns, he entered pleas of nolo contendere.
counts were dismissed.
Before the pleas of nolo contendere
petitioner had filed motions to dismiss the indictments because the
evidence upon which they were based was presented to the grand jury
by the District Attorney without direction to do so by the Attorney
General's office. These motions were overruled after argument and
time for briefing. This presents the first question -- namely, were
the indictments faulty because, without sanction by the Attorney
General's office, the District Attorney offered evidence to the
grand jury upon which the indictments were returned? It is first
contended by petitioner that, pursuant to 26 U.S.C. § 3740,
] the indictments
could not be returned without authorization by that office. We
agree with the Court of Appeals that this section applies only to
civil suits, and not to criminal proceedings. In the absence of
words in their context requiring a different conclusion, the phrase
"suits for recovery" ordinarily means civil suits, and not
Page 348 U. S. 172
prosecutions. Hepner v. United States, 213 U.
, 213 U. S.
-109; Stockwell v. United
13 Wall. 531, 80 U. S.
-543. One "recovers" in a civil action, but
prosecutes and punishes in a criminal proceeding.
The further contention is made that § 5 of Executive Order No.
6166, [Footnote 2
] and Circular
Letter No. 2431 of the Department of Justice, [Footnote 3
] required approval from the Attorney
General's office before any evidence could be presented to the
grand jury, and that such direction was not given. It is admitted
that no authorization was received from the Attorney General's
office to present the evidence to the grand jury in the instant
case; nor does the record reveal clearly that an emergency existed.
Apparently none was reported to the Department of Justice, as
required by Circular Letter No. 2431.
Page 348 U. S. 173
Prior to Executive Order No. 6166, prosecutions for the
violation of internal revenue laws were often referred directly to
United States District Attorneys for presentation to grand juries.
The purpose of § 5 of Executive Order No. 6166, among other things,
was to transfer responsibility for the prosecution of criminal
proceedings and suits by or against the United States in civil
matters to the Department of Justice.
It was not the purpose of the Executive Order to direct how the
responsibility should be exercised, but to fix it in the Department
of Justice. How that responsibility was to be discharged was a
matter for the Department. To make the system uniform, Circular
Letter No. 2431 was sent to all District Attorneys. It was never
promulgated as a regulation of the Department and published in the
Federal Register. It was simply a housekeeping provision of the
Department, and was not intended to curtail or limit the well
recognized power of the grand jury to consider and investigate any
alleged crime within its jurisdiction. See United States v.
Thompson, 251 U. S. 407
251 U. S.
-415; Blair v. United States, 250 U.
, 250 U. S. 282
Hale v. Henkel, 201 U. S. 43
201 U. S. 61
Frisbie v. United States, 157 U.
, 157 U. S.
Therefore, it is not contended that, aside from the Executive
Order and the departmental letter, a grand jury may not consider
evidence of crime known to the grand jurors or revealed by their
investigation. It is only urged that the Executive Order and the
departmental letter limited the action of the grand jury in respect
to cases concerning violations of internal revenue laws. We hold
that the Order and the letter had no such restrictive effect, and
that the grand jury in this case was free to consider the evidence
put before it by Government counsel without authorization from the
Attorney General's office in Washington. The evidence was presented
by the District Attorney, who was a representative of the
Page 348 U. S. 174
of Justice, notwithstanding that he failed to comply with the
departmental directive. For this, he is answerable to the
Department, but his action before the grand jury was not subject to
attack by one indicted by the grand jury on such evidence. The
motions to dismiss were properly overruled.
Three days after judgment had been pronounced finding the
petitioner guilty under his pleas of nolo contendere
sentences passed, the petitioner filed a motion asking for leave to
withdraw his pleas. Later he filed an amended motion to withdraw
the pleas and a petition for probation. In his motion to withdraw
the pleas, he gave the following reasons: (1) because of manifest
injustice, (2) because he had entered his pleas under the mistaken
belief, induced by the acts and statements of Government counsel,
that he would be placed on probation, and (3) because of misconduct
of the District Attorney. The District Court, after hearing
argument, denied the motion and the petition for probation and
filed its findings of fact, although there apparently was no
request for them. [Footnote 4
Under Rule 32(d), [Footnote 5
a defendant may, after sentence, withdraw a plea of nolo
to correct manifest injustice. It is this provision
that petitioner relies upon. He claims he was somehow misled by
Government counsel to believe that, if he entered the pleas of
he would receive probation. By the
court's findings, which, in light of the evidence, raise not a
doubt, it is settled that the court in no way
Page 348 U. S. 175
misled the petitioner, and that Government counsel made no
promises of leniency or probation. [Footnote 6
Petitioner argues that the United States Attorney misled him
because his statement to the court during the hearing for probation
was stronger than petitioner and his counsel expected. No exception
was taken to anything the District Attorney said, nor was any
complaint made about such statement until after sentence was
pronounced. We have read this statement and the affidavits of both
counsel. The statement was factual, dispassionate and fair. The
petitioner has failed to show any "manifest injustice," as required
by Rule 32(d). During all of the proceedings from arraignment to
denial of petition for probation, petitioner was represented by
able and experienced counsel. In our opinion they were not and
could not have been misled by the action and statements of
Government counsel. The judgment is
"No suit for the recovery of taxes, or of any fine, penalty, or
forfeiture, shall be commenced unless the Commissioner authorizes
or sanctions the proceedings and the Attorney General directs that
the suit be commenced."
"The functions of prosecuting in the courts of the United States
claims and demands by, and offenses against, the Government of the
United States, and of defending claims and demands against the
Government, and of supervising the work of United States attorneys,
marshals, and clerks in connection therewith, now exercised by any
agency or officer, are transferred to the Department of
"As to any case referred to the Department of Justice for
prosecution or defense in the courts, the function of decision
whether and in what manner to prosecute, or to defend, or to
compromise, or to appeal, or to abandon prosecution or defense, now
exercised by any agency or officer, is transferred to the
Department of Justice."
"For the exercise of such of his functions as are not
transferred to the Department of Justice by the foregoing two
paragraphs, the Solicitor of the Treasury is transferred from the
Department of Justice to the Treasury Department."
"Nothing in this section shall be construed to affect the
function of any agency or officer with respect to cases at any
stage prior to reference to the Department of Justice for
prosecution or defense."
Promulgated June 10, 1933, 5 U.S.C. §§ 124-132.
"In accordance therewith, all United States Attorneys are
directed to present evidence to a grand jury concerning violations
of revenue laws of the United States only when authorized to do so
by this office, unless an emergency calls for immediate action, in
which event, a full report should promptly be submitted."
August 10, 1933.
Rule 23(c), Fed.Rules Crim.Proc.
"WITHDRAWAL OF PLEA OF GUILTY. A motion to withdraw a plea of
guilty or of nolo contendere
may be made only before
sentence is imposed or imposition of sentence is suspended; but to
correct manifest injustice the court after sentence may set aside
the judgment of conviction and permit the defendant to withdraw his
Rule 32(d), Fed.Rules Crim.Proc.
"At the June 23 hearing, the court specifically inquired of
defendant's counsel as to whether any remark or statement made by
the court to defendant's counsel had influenced them in advising
the defendant to enter the pleas above mentioned. The court was
assured by defendant's counsel, and now finds, that no statement of
the court made to defendant's counsel or in the presence of
defendant influenced the defendant's entrance of his pleas of
"The court further finds that no promise of probation or
lenience was made either to the defendant personally or to his
counsel by the United States Attorney or his assistant who handled
the prosecution for the Government."
Findings 9 and 10, R. 91-92.