Indictments returned by a grand jury in 1952, charging
petitioners with evading and conspiring to evade federal income
taxes, were dismissed by the District Court on the ground that
their constitutional privilege against self-incrimination had been
violated by requiring them to testify and produce records before
that grand jury while criminal informations charging tax evasions
were pending against them, without being warned of their
constitutional privilege. In 1953, they were indicted by another
grand jury for substantially the same offenses, and they were
convicted in a federal court. Both before and at the beginning of
their trial, they moved (1) for a hearing to determine whether, in
procuring the indictment, the Government had used testimony given
or documents produced by them before the 1952 grand jury or leads
and clues furnished thereby, and (2) to suppress the use at the
trial of all such evidence and all evidence derived therefrom. The
court denied these motions, but said that if, during the trial,
petitioners had reason to believe that illegally obtained material
was being or might be used against them, they could object at that
time. On appeal, they challenged the validity of their convictions
because of denial of these motions and on other grounds.
Held: the convictions are sustained. Pp.
355 U. S.
341-363.
1. In the circumstances of this case, petitioners were not
entitled to a preliminary hearing to enable them to satisfy their
unsupported suspicions that the 1953 grand jury which returned this
indictment had made direct or derivative use of the materials they
had produced before the 1952 grand jury. Pp.
355 U. S.
348-350.
(a) Petitioners had laid no foundation for the holding of such a
preliminary hearing. Pp.
355 U. S.
348-349.
Page 355 U. S. 340
(b) An indictment returned by a legally constituted unbiased
grand jury, if valid on its face, is enough to call for a trial of
the charge on the merits, and satisfies the requirements of the
Fifth Amendment. Pp.
355 U. S.
349-350.
2. Receipt in evidence at the trial of a photostatic copy of a
canceled check and its corresponding check stub, obtained from
petitioner Lawn in the 1952 grand jury proceeding, did not deprive
him of due process in violation of the Fifth Amendment, because it
appears from the record that his counsel consciously and
intentionally waived any objection to their receipt in evidence.
Pp.
355 U. S.
350-355.
(a) In the circumstances of this case, denial of petitioners'
pretrial motion to suppress the use in evidence of materials
obtained from petitioners in the 1952 grand jury proceeding did not
preserve Lawn's objections to these exhibits when his counsel
consciously and intentionally waived objection to them. Pp.
355 U. S.
353-354.
(b) The Government has filed in this Court what is said to be a
transcript of a hearing accorded Lawn at his request in 1952, which
it says contains photostatic copies of the check and check stub in
question voluntarily produced by him; but his motion to strike the
transcript and the portions of the Government's brief relating
thereto is sustained, as this Court looks only to the certified
record in deciding questions presented. P.
355 U. S.
354.
3. On the record in this case, there is no factual basis for
petitioners' contention that they were denied an opportunity to
examine and cross-examine witnesses at the trial to determine
whether evidence derived from leads and clues furnished by
materials obtained from them in the 1952 grand jury proceedings was
used by the prosecution at the trial, and that this deprived them
of due process in violation of the Fifth Amendment. Pp.
355 U. S.
355-358.
4. The evidence was sufficient to sustain the convictions of
petitioners Lawn and Livorsi. Pp.
355 U. S.
358-362.
5. On the record in this case, petitioner Lawn was not deprived
of a fair trial by a statement made by government counsel in his
closing summation to the jury that, "We vouch for [Roth and Lubben]
because we think they are telling the truth." P.
355 U. S. 359,
n, 15.
6. The contention of petitioners Giglio and Livorsi that the
trial court erred in denying their motion for production of
Lubben's federal income tax return for 1946, all testimony given by
him before the grand jury, and all written statements made by him
to
Page 355 U. S. 341
any agent of the Government is not properly before this Court,
because that issue was not raised in the Court of Appeals nor
mentioned in the petition for certiorari filed in this Court. P.
362,
n 16.
232 F.2d 589 affirmed.
MR. JUSTICE WHITTAKER delivered the opinion of the Court.
On July 23, 1953, a 10-count indictment was returned in the
United States District Court for the Southern District of New York
charging petitioners and others with evading, and conspiring to
evade, assessment and payment of a large amount of federal income
taxes for the year 1946 in violation of the internal revenue laws
(§§ 145(b) and 3793(b) of the Internal Revenue Code of 1939)
[
Footnote 1] and of the general
conspiracy statute (18
Page 355 U. S. 342
U.S.C. § 371). After a protracted trial before a jury,
petitioners were found guilty as charged. [
Footnote 2] On appeal, the Court of Appeals found that
there was substantial evidence that petitioners, operating through
the media of several partnerships and corporations, [
Footnote 3] conspired to evade, and by a
variety of means did evade, both the
Page 355 U. S. 343
assessment [
Footnote 4] and
the payment [
Footnote 5] of
more than $800,000 of individual and corporate federal income taxes
for the year 1946 [
Footnote 6]
upon income derived from the World War II black market in sugar,
and that petitioners Giglio and Livorsi, who owned equal interests
in the several enterprises of which Giglio was the chief executive,
were the principals in the conspiracy, but Roth, an accountant, and
Lawn, a lawyer, [
Footnote 7]
provided the accounting and legal services required to carry out
the conspiracy. It found that the evidence amply sustained the
verdicts, and that no prejudicial error was committed at the trial,
and it affirmed the judgments of conviction.
United States v.
Giglio, 232 F.2d 589. Upon petition by Lawn in No. 9, and by
Giglio and Livorsi in No. 10, we granted certiorari. 352 U.S. 865.
Because the challenged convictions resulted from a common trial at
which petitioners were represented by the same counsel, and because
several of the questions presented in each case are similar, the
two cases will be decided in one opinion.
Petitioners ask this Court to reverse their convictions upon
four main grounds. First, they contend, Lawn only
Page 355 U. S. 344
tangentially, that they were deprived of due process in
violation of the Fifth Amendment by the refusal of the District
Court to conduct a full-dress hearing to determine whether
testimony or documents obtained from them in a prior grand jury
investigation, or evidence derived from leads and clues furnished
thereby, was considered by the grand jury that returned the present
indictment. Second, petitioner Lawn contends that receipt in
evidence at the trial of a photostatic copy of a canceled check and
its corresponding check stub, obtained from him in a prior grand
jury investigation, deprived him of due process in violation of the
Fifth Amendment. Third, petitioners contend they were denied an
opportunity to examine and cross-examine witnesses at the trial to
determine whether evidence derived from leads and clues furnished
by testimony and documents obtained from petitioners in a prior
grand jury investigation was used by the prosecution at the trial,
and that this deprived them of due process in violation of the
Fifth Amendment. And fourth, petitioners Lawn and Livorsi contend
that the evidence does not support their convictions.
Understanding of petitioners' first and second contentions, and
to a lesser extent their third contention, requires a review of the
underlying facts upon which they are based. Revenue agents began an
investigation in 1948 of petitioners' income tax liabilities, and,
on September 14, 1950, three criminal informations were filed
charging them with violation of the federal income tax laws. Those
informations were not brought to trial because the Government had
not completed its investigation, and later concluded that "much
more serious crimes [were] involved." In early July, 1952,
petitioners and Roth were served with subpoenas
duces
tecum commanding them to appear and testify before a grand
jury on July 14, 1952, and to produce certain partnership and
corporate records of the Giglio and Livorsi enterprises.
Page 355 U. S. 345
They appeared and testified, but were not warned of their
constitutional privilege against self-incrimination. Lawn produced
three canceled checks made by Tavern Fruit Juice Co. payable to his
order and the checkbook stub corresponding to the second check.
Those instruments were there marked "G.J. Ex. [1, 2, 3 and 4,
respectively] 7/15/52 L.F.G.," and were photostated by the United
States Attorney and returned to Lawn. Giglio produced a quantity of
records, including some partnership records, but stated that
"practically all of these companies and corporations turned over
the books and records to the Internal Revenue Department on some
date in 1949."
On October 20, 1952, the grand jury returned six indictments
against petitioners charging them with offenses similar to those
charged in the present indictment. Petitioners moved to dismiss
those indictments upon the ground that they had been procured, in
part at least, upon evidence obtained from petitioners in violation
of their Fifth Amendment rights. The District Court held that to
require petitioners to testify and produce partnership and personal
records before the grand jury, while criminal informations charging
tax evasions were pending against them, without warning them of
their constitutional privilege against self-incrimination, violated
their Fifth Amendment rights. It therefore dismissed the
indictments and directed the Government "to return to the
respective defendants the partnership and personal records produced
by them in response to the subpoenas."
United States v.
Lawn, 115 F.
Supp. 674,
678.
The Government appealed from that order, but the appeal was
dismissed as untimely on October 19, 1953.
United States v.
Roth, 208 F.2d 467. [
Footnote
8] While that appeal was pending,
Page 355 U. S. 346
the Government caused a new investigation to be made of
petitioners' federal income tax liabilities by another grand jury,
before whom petitioners did not appear, and, on July 23, 1953, that
grand jury returned the present indictment, which was sealed. After
the Government's appeal from the order dismissing the 1952
indictment had been dismissed (
United States v. Roth,
supra) the new sealed indictment was opened, and, soon
afterward, petitioners moved (1) to dismiss the indictment, and in
that connection (2) to have a hearing to determine whether the
Government had used testimony given or documents produced by
petitioners before the 1952 grand jury, or evidence obtained
through leads and clues furnished thereby, in procuring the
indictment, and (3) to inspect he minutes of the grand jury and, if
the motion to dismiss the indictment be denied, (4) to suppress the
use at the trial of all testimony and documents procured from
petitioners in the 1952 grand jury proceeding and all evidence
derived therefrom. These motions were submitted to the court upon
affidavits. [
Footnote 9] After
considering them and
Page 355 U. S. 347
hearing extensive arguments of counsel, the court found that the
affidavits left no room for an inference that the Government had
used illegally obtained materials in securing the present
indictment, that petitioners' claim did not have the "solidity"
required to justify the holding of such a hearing, and that to do
so
"on the basis of the showing made by the defendants and the
Government would indeed be subordinating 'the need for rigorous
administration of justice to undue solicitude for potential . . .
disobedience of the law by the law's officers.' [
Nardone v.
United States, 308 U. S. 338,
308 U. S.
342.]"
United States v. Giglio, 16 F.R.D. 268, 270. The court
declined to hold the requested hearing and denied the motion to
inspect the grand jury minutes and the motion to dismiss the
indictment. The court also denied the motion to suppress, [
Footnote 10] but, in that
connection, said:
"Of course, if, during
Page 355 U. S. 348
the course of the trial, defendants have reason to believe that
illegally obtained material is being or may be used against them,
they can object at that time, and it will be incumbent upon the
trial judge to rule on their objections."
United States v. Giglio, supra, 16 F.R.D. at 271.
Pursuant to order of the court, the Government produced for
inspection by petitioners, before the trial, the corporate records
delivered by Giglio to the 1952 grand jury in compliance with its
subpoena, the documents which had been abandoned by petitioners and
examined by the Government, and the documents relating to
petitioners' businesses obtained from the New Jersey receiver. At
the beginning of the trial, petitioners renewed the above-mentioned
motions, which were again denied. In the course of the trial, the
Government furnished petitioners a transcript of their testimony
before the 1952 grand jury.
I
As stated, petitioners first contend that they were deprived of
due process by the refusal of the court to conduct the requested
full-dress hearing to enable them to attempt to determine whether
materials obtained from them in the 1952 grand jury proceeding, or
evidence derived therefrom, was considered by the 1953 grand jury.
We believe there is no merit in this contention. The District
Court's order dismissing the 1952 indictments because of the use of
such evidence before that grand jury, though final, could not in
any way determine that any direct or derivative use of such
evidence was made by the 1953 grand jury that returned the present
indictment. The affidavits submitted in support of and in
opposition to the motion for the requested hearing disclosed, as
found by the trial court and the Court of Appeals, with which
findings we agree, that petitioners had no reason, beyond
suspicion, to believe that the 1953 grand jury considered
Page 355 U. S. 349
any of the materials produced by petitioners before the 1952
grand jury. These facts make clear that petitioners laid no
foundation for the holding of a protracted preliminary hearing (at
which they would, in effect, take the depositions of the
Government's witnesses) to determine whether there was any
substance to their suspicion that some direct or derivative use may
have been made by the 1953 grand jury of materials produced by
petitioners before the 1952 grand jury.
Moreover, this Court has several times ruled that one indictment
returned by a legally constituted nonbiased grand jury, like an
information drawn by a prosecutor, if valid on its face, is enough
to call for a trial of the charge on the merits, and satisfies the
requirements of the Fifth Amendment. In
Holt v. United
States, 218 U. S. 245,
this Court was required to decide whether an indictment should be
quashed because procured in part by incompetent evidence of an
admission by the accused, aside from which "there was very little
evidence against the accused."
Id. at
218 U. S. 247.
This Court refused to hold that such an indictment should be
quashed, stating: "The abuses of criminal practice would be
enhanced if indictments could be upset on such a ground."
Id. at
218 U. S. 248.
In
Costello v. United States, 350 U.
S. 359, this Court squarely faced and decided the
question, saying:
"If indictments were to be held open to challenge on the ground
that there was inadequate or incompetent evidence before the grand
jury, the resulting delay would be great indeed. The result of such
a rule would be that, before trial on the merits, a defendant could
always insist on a kind of preliminary trial to determine the
competency and adequacy of the evidence before the grand jury. This
is not required by the Fifth Amendment. An indictment returned by a
legally constituted and unbiased
Page 355 U. S. 350
grand jury, like an information drawn by the prosecutor, if
valid on its face, is enough to call for trial of the charge on the
merits. The Fifth Amendment requires nothing more."
Id. at
350 U. S.
363.
This Court was urged in that case to
"establish a rule permitting defendants to challenge indictments
on the ground that they are not supported by adequate or competent
evidence,"
id. at
350 U. S. 364,
but the Court declined to do so, saying:
"It would run counter to the whole history of the grand jury
institution, in which laymen conduct their inquiries unfettered by
technical rules. Neither justice nor the concept of a fair trial
requires such a change. In a trial on the merits, defendants are
entitled to a strict observance of all the rules designed to bring
about a fair verdict. Defendants are not entitled, however, to a
rule which would result in interminable delay but add nothing to
the assurance of a fair trial."
Ibid.
It should be unnecessary to say that we are not here dealing
with the use of incompetent or illegal evidence in a trial on the
merits, nor with the right to decline to give incriminating
testimony in legal proceedings, or to suppress the direct or
derivative use at the trial of evidence illegally obtained. We deal
here only with the question whether petitioners, in the
circumstances of this case, were entitled to a preliminary hearing
to enable them to satisfy their unsupported suspicions that the
1953 grand jury that returned this indictment made direct or
derivative use of the materials which they produced before the 1952
grand jury. We hold that they were not.
II
We come now to petitioner Lawn's contention that receipt in
evidence at the trial of a photostatic copy of a
Page 355 U. S. 351
canceled check and its corresponding check stub, obtained from
him in the 1952 grand jury proceeding, deprived him of due process
in violation of the Fifth Amendment. As earlier stated, Lawn,
pursuant to subpoena, produced before the 1952 grand jury a
canceled check of Tavern Fruit Juice Co. payable to his order in
the amount of $15,000, endorsed by him, and the corresponding stub,
which were marked on their faces "G.J. Ex. 2 7/15/52 L.F.G." and
"G.J. Ex. 4 7/15/52 L.F.G.," respectively, and were photostated by
the United States Attorney and returned to Lawn. Those photostats
were offered in evidence -- it appears inadvertently -- by the
prosecution at the trial as Exhibits 61-A and 61-B. However, before
those exhibits were offered, Exhibit 58-A, being a statement of
assets, liabilities, income, profit and loss and supporting
schedules of Tavern Fruit Juice Company prepared some time after
Tavern's fiscal year had ended on March 31, 1946, and Exhibit 7,
being Tavern's information tax return for 1946 which was filed on
September 15, 1947, had been received in evidence without
objection. The former contained an item of "legal expenses
$16,600," while the latter recited "legal fees $1,600." Roth, in
explanation, testified that, "sometime during the operation of the
partnership, a check for $15,000 was drawn to Howard Lawn," and
that a question had arisen about how to enter it on the books.
After discussing the matter with Giglio, Roth charged it to legal
expense. Months later, Lawn asked Roth how the item was carried on
Tavern's books, and Roth told him that it was carried as a legal
expense. Lawn advised Roth that this handling was incorrect, as the
item was a loan from Giglio, and not a legal expense of Tavern.
Thereupon, after consulting Giglio, Roth altered Tavern's books by
removing the item from legal expense and charging it to Giglio.
Roth did not remember just when the alteration of the
Page 355 U. S. 352
books was made, except that it was after the preparation of
Exhibit 58-A and prior to the filing of Exhibit 7.
It is important to note that, at this stage of the trial, there
was thus clear evidence before the jury, corroborated by Exhibits
58-A and 7, all admitted without objection, showing that Lawn had
received the $15,000 check from Tavern, but an issue existed
whether it was an innocent loan from Giglio or an incriminatory
payment by Tavern in the guise of a legal fee. The prosecution then
offered in evidence Exhibits 61-A and 61-B, being the $15,000 check
and corresponding stub. Petitioners' able and experienced counsel
(now deceased) then asked, and was granted, permission to examine
the witness Roth preparatory to a possible objection to those
exhibits. He then questioned the witness at some length about the
handwriting on the check and stub, [
Footnote 11] and concluded by asking the witness:
"Q. And under that check stub or in that No. 640 [the number of
the check stub], which corresponds with the check itself, there is
a parenthetical statements, 'Bill G'?"
"A. Yes, sir."
"Q. Indicating it is for
Page 355 U. S. 353
Mr. Giglio's account?"
"A. Yes, sir."
And petitioners' counsel then stated, "No objection," and the
exhibits were received. This examination and use of those exhibits
(showing on their face that they had been exhibits before the 1952
grand jury) by petitioners' able counsel to show that the check was
an innocent loan by Giglio, and not an incriminatory payment by
Tavern in the guise of a legal fee -- his only opportunity to drive
that point home to the jury if petitioners were not to take the
stand, as they did not -- and his affirmative statement that he had
"no objection" to receipt of the exhibits show, we believe, a
conscious and intentional waiver of all objections to receipt of
those documents in evidence.
Lawn argues that the denial, before the trial, of petitioners'
motion to suppress, and the unequivocal affidavit of the United
States Attorney in charge of the case stating that materials
obtained from petitioners pursuant to subpoena in the 1952 grand
jury proceeding would not be used in the future course of the case,
preserved his objections to these exhibits and made it unnecessary
again to object to them at the trial. It is quite true generally
that the overruling of a pretrial motion to suppress the use at the
trial of particular evidence preserves the point and renders it
unnecessary again to object when such evidence is offered at the
trial.
Cogen v. United States, 278 U.
S. 221,
278 U. S. 223;
Gouled v. United States, 255 U. S. 298,
255 U. S.
312-313;
Waldron v. United States, 95
U.S.App.D.C. 66, 69-70, 219 F.2d 37, 41;
and compare Keen v.
Overseas Tankship Corp., 194 F.2d 515. But the rule is one of
practice, and is not without exceptions, nor is it to be applied as
a hard and fast formula to every case regardless of its special
circumstances.
Cogen v. United States, supra, 278 U.S. at
278 U. S.
223-224;
Gouled v. United States, supra, at
255 U. S. 312.
It will be remembered that the court, in passing on the motion to
suppress said respecting
Page 355 U. S. 354
the affidavit of the United States Attorney that, "at this stage
of the proceedings, that oath is sufficient" (
United States v.
Giglio, 16 F.R.D. at 271), but he expressly left the matter of
suppression of evidence to the trial court, and admonished
petitioners that if, during the course of the trial, they
"have reason to believe that illegally obtained material is
being or may be used against them, they can object at that time,
and it will be incumbent upon the trial judge to rule on their
objections."
Id. at 271. The record shows that petitioners' counsel
was fully aware of all this when Exhibits 61-A and 61-B were
offered in evidence, and when, after using them for his purposes,
he affirmatively said he had "no objection" to them.
The Government argues that, had its attention been called to the
fact that these particular photostatic copies had been exhibits
before the 1952 grand jury by an objection to them, it could and
would have produced other copies obtained from other sources before
the 1952 grand jury proceeding was commenced. In that connection,
it has filed here what is said to be a transcript of a hearing
accorded to Lawn at his request on May 12, 1952, which it says
contains photostatic copies of the check and check stub in question
voluntarily produced by Lawn. Lawn has moved to strike that
transcript and the portions of the Government's brief relating
thereto. That motion must be sustained, as we must look only to the
certified record in deciding questions presented.
McClellan v.
Carland, 217 U. S. 268.
We believe that the facts from the certified record, above
discussed, show that petitioners' counsel, after using the check
and check stub to make his point before the jury that the check was
an innocent loan from Giglio, and not an incriminatory payment by
Tavern in the guise of a legal fee, wisely (as, we believe, every
impartial and experienced trial lawyer would agree) said that he
had
Page 355 U. S. 355
"no objection" to those exhibits, and thus consciously and
intentionally waived any objection to their receipt in
evidence.
III
Petitioners argue that they were denied an opportunity to
examine and cross-examine witnesses at the trial to determine
whether evidence derived from leads and clues furnished by
materials obtained from them in the 1952 grand jury proceedings was
used by the prosecution at the trial, and that this deprived them
of due process in violation of the Fifth Amendment. It cannot be
doubted that petitioners had that right in the circumstances of
this case,
Nardone v. United States, 308 U.
S. 338,
308 U. S.
341-342, and the Government does not otherwise contend.
Moreover, as earlier stated, the District Court, in ruling the
pretrial motion to suppress, expressly left this subject open to
inquiry at the trial.
United States v. Giglio, 16 F.R.D.
at 271. The contention is wholly factual, and a thorough study of
the record discloses that petitioners were accorded that right. The
court did not sustain objections to petitioners' examination or
cross-examination of witnesses attempting to show derivative use at
the trial of any evidence produced by petitioners before the 1952
grand jury, but only sustained objections to questions attacking
the procedural validity of the indictment. [
Footnote 12] At no time did counsel for
petitioners point
Page 355 U. S. 356
specifically to any evidence offered at the trial which they
claimed was derived from materials furnished by petitioners before
the 1952 grand jury. Near the close of the Government's case, the
court stated that, so far as he could detect, there had been no
direct or derivative use of any tainted evidence by the Government
at the trial, and he requested counsel for petitioners, on two
occasions, to submit a memorandum of any evidence offered by the
Government which he believed was obtained through leads or clues
from materials produced by petitioners before the 1952 grand jury.
No such memorandum was ever furnished.
Petitioners point to three instances there they say the trial
court denied them the right to examine witnesses about the source
of evidence offered by the Government at the trial. First, they say
that, in cross-examining the Government's witness Roth, they sought
to question him concerning an affidavit he had made in support of
the motion to dismiss the 1953 indictment, but the court sustained
an objection to the question. It is clear that the ruling was made
upon the ground, as petitioners' counsel stated at the time, that
the purpose of the interrogation was to "go into the question of
what evidence was used to obtain this indictment," rather than to
show the use by the Government of tainted evidence at the trial.
Second, they point to the fact that, during the
cross-examination
Page 355 U. S. 357
of Treasury Agent Present, their counsel asked him whether, in
his audits, he had examined any other books or records about which
counsel had failed to ask, and they argue that the purpose of the
question was to determine whether tainted evidence had been or was
being used by the Government at the trial, and that they were
denied an answer to the question. But examination of the record
discloses that counsel's announced purpose in asking the question
was not to determine whether tainted evidence had been or was being
used at the trial, but was, rather, to determine whether tainted
evidence was "used by the grand jury that found this indictment."
[
Footnote 13] Third,
petitioners argue that, in examining their own witness, former
Assistant United States Attorney Leone, they were denied an
opportunity to show
Page 355 U. S. 358
derivative use of tainted evidence by the Government at the
trial. The record shows that there is no basis whatever for this
contention. [
Footnote
14]
IV
Petitioners Lawn and Livorsi argue that the evidence is
insufficient to sustain their convictions. In support of Count 10,
the conspiracy count, the record contains evidence tending to show
that Lawn, formerly Chief of the Criminal Division of the United
States Attorney's Office for the District of New Jersey, was
employed by Giglio and Livorsi because "he had a terrific entry
with some of the highest government offices," "was a part of the
organization," and was "there to prevent any trouble." He was
frequently in Giglio's private office, which adjoined his own. Lawn
was present in Giglio's office when it was decided that Eatsum
would purchase corn at black market prices and have it refined into
syrup to be sold for over-ceiling prices, and Lubben began the
handling of those matters. But Lawn later told him that he "had
terrific connections" with a syrup company and with a prominent
political figure in the midwest, and that he could procure the corn
and syrup more advantageously, and Lawn then took over the handling
of those matters. Lubben was called into Giglio's office in
September, 1945, where Giglio, Roth, and Lawn were present, and
Giglio stated
"that the profits from [Tavern's] candy business and primarily
[Eatsum's] corn syrup business were becoming terrific, and that he
wasn't interested in paying a lot of income tax, and something had
to be done, and done quick;"
that "it had been decided to form a number
Page 355 U. S. 359
of companies" to siphon off the profits of the partnerships
through "phony invoices," and that the companies would "be
dissolved . . . before it came time to pay the income tax." Soon
afterward, Lawn was instrumental in the creation of a number of
corporations bearing in some combination the word "American." Lawn
was an officer and nominal stockholder in several of these
corporations, and owned 25% of the stock of one of them which had
been given to him by Giglio and Livorsi, and Lawn received
substantial payments from the Giglio and Livorsi enterprises in
addition to his salary. In September, 1947, near the time the
delinquent income tax returns were filed for the year 1946 by
Giglio, Livorsi, and their several corporations, a meeting was held
in Lawn's private office with Giglio and Roth where it was agreed
that Giglio would transfer his home to Roth so that the Government
would "not be able to take the house," and Lawn said the
arrangement "would save Mr. Giglio's home." Soon afterward, the
transfer was made. There was other evidence tending to show Lawn's
participation in the conspiracy, but we believe the above-recited
evidence, with the legitimate inferences that might be drawn
therefrom by the jury, was clearly sufficient to support the
verdict on the conspiracy count.
Lawn also contests the sufficiency of the evidence to support
the verdicts against him on Counts 7 and 9, but, since the sentence
upon those counts run concurrently with the sentence on Count 10,
which we have found sustained by the evidence, it is unnecessary
for us to consider those contentions.
Sinclair v. United
States, 279 U. S. 263,
279 U. S. 299;
Hirabayashi v. United States, 320 U. S.
81;
Pinkerton v. United States, 328 U.
S. 640. [
Footnote
15]
Page 355 U. S. 360
Petitioner Livorsi argues that the evidence was not sufficient
to support the verdicts against him. As to Count 6, which charged
him with attempting to evade assessment of his income taxes for the
year 1946 by filing a fraudulent return, the record shows that his
return disclosed income from Eatsum for that year of $101,123.88.
However, the Government introduced evidence showing that his income
from that source in that year was $228,288.58, and that his income
from Tavern for that year was understated by more than $40,000.
During the trial, an issue arose concerning the proper
"distributive
Page 355 U. S. 361
shares" of Giglio and Livorsi in the profits of Eatsum for the
year 1946, by reason of the sale by Lubben of his "distributive
share" in the profits of that partnership to Giglio and Livorsi (on
March 8, 1946) prior to the close of its accounting year on May 31,
1946. Because of that complication, the court, in an effort to
simplify the matter, gave a supplemental charge to the jury in
which, among other things, he said:
"[W]hen you get to counts 5 and 6,
where it was claimed that
the income received from Eatsum wasn't fully reported by the
defendant Giglio and by the defendant Livorsi, in connection with
their individual returns, I say, because of that distributive share
difficulty, don't consider Eatsum at all. . . ."
(Emphasis supplied.) Livorsi now contends that the effect of
that charge was to eliminate the $101,123.88 of income which he had
reported in his sworn return as received from that source in that
year, and to give him a credit in that amount which more than
offset his understatement of income from other sources, and, thus,
established that there was no deficiency in his reporting of
income. This contention need not detain us long. While, of course,
a conviction upon a charge of attempting to evade assessment of
income taxes by the filing of a fraudulent return cannot stand in
the absence of proof of a deficiency, the court's charge did not
create the credit claimed by Livorsi. It only withdrew from the
jury's consideration the Government's claim that his income from
Eatsum in that year was $127,164.70 more than he had reported in
his return. That meaning of the charge could not have been
misunderstood by the jury.
Count 9 charged Livorsi and others with attempting to evade
payment of income taxes of American Brands Corporation for the
calendar year 1946 by converting and diverting its assets. Livorsi
argues that there is no evidence to support his conviction on that
count. We must disagree. The evidence disclosed that Livorsi owned
half
Page 355 U. S. 362
of the capital stock of that corporation and frequently
conferred with Giglio, who owned the other half of its capital
stock, concerning the operations of the corporation and was
familiar with its affairs; that no income tax was withheld by the
corporation from his salary; and that, from January 1, 1946, to
June 16, 1947, he withdrew from the corporation more than $122,000,
including salary, while the corporation had a federal income tax
liability for the year 1946 of more than $100,000, as shown by its
own return, of which only $300 had been paid. This evidence, with
the legitimate inferences that might be drawn therefrom be the
jury, was clearly sufficient to support the verdict on Count 9.
Livorsi's contention that there was not sufficient evidence to
support the verdict against him on Count 10, the conspiracy count,
when viewed in the light of all the foregoing facts, and those
found by the Court of Appeals, which we find are supported by the
record, is entirely without merit.
Livorsi also contends that the evidence was not sufficient to
support the verdict against him on Count 8, but, since the sentence
on that count runs concurrently with the sentence on Count 6, which
we have affirmed, it is unnecessary to consider his contentions
concerning Count 8.
Sinclair v. United States, supra;
Hirabayashi v. United States, supra; and
Pinkerton v.
United States, supra. [
Footnote 16]
Page 355 U. S. 363
Several other points raised by petitioners have been carefully
considered and are found to be without merit. The judgment in each
case must be
Affirmed.
* Together with No. 10,
Giglio et al. v. United States,
also on certiorari to the same Court, argued October 15, 1957.
[
Footnote 1]
26 U.S.C. (1952 ed.) §§ 145(b) and 3793(b).
The first five counts named only petitioner Giglio and Louis J.
Roth as defendants. Since Giglio does not here contest the adequacy
of the evidence to sustain those or any of the other counts against
him, and since Roth pleaded guilty to all counts of the indictment
and was a principal witness for the prosecution at the trial, those
counts are not here summarized.
The remaining counts in essence charged as follows:
Count 6 charged that Livorsi and Roth, on or about September 15,
1947, willfully attempted to evade assessment of income taxes of
Livorsi for the calendar year 1946 by filing a fraudulent
return.
Count 7 charged that Giglio, Lawn and Roth, from about September
1, 1947, to the date of filing of the indictment, willfully
attempted to evade payment of Giglio's income taxes for the
calendar year 1946 by concealing his assets.
Count 8 charged that Livorsi, from about September 1, 1947, to
the date of filing of the indictment, willfully attempted to evade
payment of his income taxes for the calendar year 1946 by
concealing his assets.
Count 9 charged that Giglio, Livorsi, Lawn and Roth, from about
January 1, 1946, to the date of filing of the indictment, willfully
attempted to evade payment of income taxes of American Brands
Corporation for the calendar year 1946 by converting and diverting
its assets.
Count 10 charged that Giglio, Livorsi, Lawn, Roth and American
Brands Corporation, from about July 1, 1945, to the date of filing
of the indictment, willfully conspired to commit the substantive
offenses charged in Counts 1 through 9 of the indictment.
Count 10 of the indictment was dismissed by the court as to
American Brands Corporation after the jury failed to report as to
it.
[
Footnote 2]
Lawn was sentenced to a year and a day on each of Counts 7, 9
and 10, the sentences to run concurrently. Giglio was sentenced to
a total of 15 years. Livorsi was sentenced to 5 years on each of
Counts 6, 9 and 10 to run consecutively, and was sentenced to 5
years on Count 8 to run concurrently with the sentence on Count
6.
[
Footnote 3]
The principal organizations were: Tavern Fruit Juice Company, a
partnership owned by Giglio and Livorsi; Eatsum Food Products Co.,
Ltd., a partnership owned 25% by Giglio, 25% by Livorsi, and 50% by
one Lubben until March 8, 1946, when he left the enterprise and
sold his "distributive share" in the profits thereof to Giglio and
Livorsi; and a series of corporations bearing in some combination
the word "American" which were created in early 1946 to drain off
the profits of Eatsum through the use of fraudulent invoices and
were to be dissolved before their income taxes became due.
[
Footnote 4]
The Court of Appeals found that, generally, three means of
evasion of tax assessment were used: (1) the fraudulent allocation
of income among the various companies and individuals in the
conspiracy; (2) the fraudulent overstatement of expenses; and (3)
the failure to disclose income.
[
Footnote 5]
The evasion of payment was, in general, accomplished by delaying
disclosure of income tax liabilities through the filing of returns
from 5 to 15 months late; by failing to withhold income taxes on
salaries; by concealment of the individual assets of Giglio and
Livorsi; and by the misappropriation, conversion and diversion of
corporate assets.
[
Footnote 6]
Of the total, $573,683.73 was admitted to be owing by Giglio,
Livorsi, and American Brands Corporation in the long-overdue
returns they filed, and only $16,735.95 was paid.
[
Footnote 7]
They were full-time employees of the several Giglio and Livorsi
enterprises.
[
Footnote 8]
In their belief on that appeal, petitioners had argued that the
Government's notice of appeal was not timely filed, but they did
not move to dismiss the appeal until after the period of
limitations had run in late September, 1953.
[
Footnote 9]
In support of their motions, petitioners filed a number of
affidavits reciting in essence that the 1952 indictment was
returned after the Government had secured testimony and documents
from petitioners in violation of their constitutional rights; that
the present indictment is very similar to the prior one, and that a
revenue agent had implied that some of his computations were based
on documents stored in a room in which the documents obtained from
petitioners were also kept.
In opposition to the motions, the Government filed affidavits
made by all of the revenue agents who had conducted investigations
leading to the indictment and by all the United States Attorneys
who had been responsible for the prosecution of the case. In
essence, they recited that, after the District Court dismissed the
1952 indictment, a conference was called by an assistant United
States Attorney of all revenue agents who had conducted the
investigations; that they were there told that it would be
necessary to obtain a new indictment which was not to be based in
any way, however remote, upon testimony or personal or partnership
documents obtained from petitioners in the 1952 grand jury
proceedings, and any doubts about the use of any evidence were to
be resolved in favor of exclusion; that none of the testimony or
personal or partnership records produced by petitioners before the
1952 grand jury was in any way used in obtaining the present
indictment; and that, long before 1952, the Government had in its
possession copies and microfilm enlargements of bank checks, bank
statements, and books and records pertaining to petitioners'
transactions which had been secured from banks, third persons, a
New Jersey receiver, government agencies, and abandoned books and
records relating to petitioners' businesses. The affidavit of the
Assistant United States Attorney in charge of the case
unequivocally recited that none of the materials obtained from
petitioners in the 1952 grand jury proceeding would be used in the
future course of the case.
[
Footnote 10]
The court stated as its reasons:
"The United States Attorney has sworn that this material will
not be used in the future course of this case, and, at this stage
of the proceedings, that oath is sufficient. The granting of
defendants' motion to suppress at this time would necessitate an
investigation of all of the Government's evidence. Such an
investigation would entail a great deal of useless effort, because
much of this material, which has been collected since 1948, will
not be used at the trial."
United States v. Giglio, 16 F.R.D. at 270, 271.
[
Footnote 11]
"Q. In whose handwriting are the entries on Government's Exhibit
61-B for identification? I think you said it is the stub book."
"A. To the best of my recollection, those are Mr. Cerone's."
"Q. How do you spell Cerone?"
"A. C-e-r-o-n-e."
"Q. He was one of your employees, Mr. Roth?"
"A. No, he was a bookkeeper employed by Tavern Fruit Juice."
"Q. Would the same be true with regard to the check, the face of
the check, payee of the check?"
"A. The payee of the check and the amount?"
"Q. The handwriting is what I am asking about."
"A. The handwriting, that looks like William Giglio's
handwriting."
"Q. The maker of the check [for] the $15,000?"
"A. Yes, the signature."
"Q. They look like his handwriting, do they?"
"A. Yes, sir."
"Q. And this 61-B for identification, you have told me that that
looked like the printing or the writing of Mr. Cerone, did you
not?"
"A. Yes, sir."
[
Footnote 12]
Though, at times, in colloquies with the court, counsel for
petitioners was equivocal, the following is typical of the position
taken by him:
"Counsel: I really don't see how I can get adjudicated the
question of the illegality of the indictment before you without
calling all these people who made affidavits before Judge Palmieri.
Now, that obviously would be, well, very disruptive of your trial.
I would never think of doing it if . . . it didn't seem to me that
was all I had. . . . Have I made it plain?"
"The Court: I think you have, but I want to be sure. Now, the
whole purpose of this is to go to the procedural validity of the
indictment."
"Counsel: That is it, yes, sir. That is it, that is just it
exactly."
"The Court: And it is a question, really, of what happened
before the grand jury."
"Counsel: That's it, really, just that."
"The Court: Rather than its effect upon what you might call the
substantive issues of the case or the guilt or innocence of these
defendants, let us say."
"Counsel: My answer is an unequivocal yes, and I don't have to
look at a record to answer it."
[
Footnote 13]
The record shows that, although there was no objection to the
question, counsel for the Government stated to the court, out of
the hearing of the jury, that, prior to the dismissal of the 1952
indictment, the witness had examined partnership records produced
by petitioners before the 1952 grand jury and said:
"If counsel elicits testimony now about those facts, there is
going to be before this court evidence which Judge Goddard held
improper. . . . If counsel wishes to examine into this field, I
think he should do it outside the presence of the jury, because it
might be prejudicial error even if he voluntarily does it."
Counsel for petitioners then made plain that his purpose was to
determine whether tainted evidence was "used by the grand jury that
found this indictment," and he further said, "I have no other way .
. . than to do it here." Counsel for the Government then said to
the court:
"Now, the question specifically presented to the witness was
broad, and includes partnership records illegally produced and
partnership records legally obtained. There can't be objection to
the second part, but the question is too broad."
Counsel for petitioners replied: "Well, I am not going into
something half-way. . . ." The court then said: "All right, I think
that is the way I should rule." It is obvious that none of this
constitutes any support for petitioners' claim that they were
denied an opportunity to cross-examine the witness to determine
whether tainted evidence had been or was being used by the
Government at the trial.
[
Footnote 14]
In fact, all petitioners sought to show by this witness was
that, when he caused petitioners to be subpoenaed to appear before
the 1952 grand jury, he knew that criminal informations charging
tax evasions were then pending against them, and that these
prosecutions were instituted in "bad faith."
[
Footnote 15]
Petitioner Lawn also contends that a statement made by the
Government's attorney in his closing summation to the jury, saying,
in pertinent part, "We vouch for [Roth and Lubben] because we think
they are telling the truth," deprived him of a fair trial. No
objection was made to the statement at the trial. The Government's
attorney did not say nor insinuate that the statement was based on
personal knowledge, or on anything other than the testimony of
those witnesses given before the jury, and therefore it was not
improper.
Cf. Henderson v. United States, 218 F.2d 14, 19;
United States v. Holt, 108 F.2d 365, 370;
Tuckerman v.
United States, 291 F. 958, 969. Moreover, petitioners'
counsel, in his summation to the jury, had argued that the
Government's case was a persecution of petitioners, had been
instituted in bad faith at the instance of a group of revenue
agents, and was supported "solely" by the testimony of Roth and
Lubben, who were admitted perjurers, and counsel, in his opening
statement, had said that the United States Attorney and his
assistant in charge of the case "had been instructed, or, in my
opinion, they never would have done this." These comments clearly
invited the reply which petitioner Lawn now attacks.
Cf.
Gridley v. United States, 44 F.2d 716, 739;
United States
v. Battiato, 204 F.2d 717. In addition, the court, in his
charge to the jury, after telling them that they were the sole
judges of the credibility of the witnesses, called particular
attention to the fact that Roth was an accomplice, and said:
"You have got to be particularly careful in scrutinizing his
testimony to see whether, to save his own skin, he lied to hurt
somebody else, or whether he had some other motive for lying to
hurt somebody else."
As to Lubben, the charge continued: "I am going to tell you to
be just as careful with his testimony as you would with an
accomplice, and look and scrutinize it carefully." We think the
foregoing shows clearly that there is no merit in Lawn's
contention.
[
Footnote 16]
Petitioners Giglio and Livorsi contend that the trial court
erred in refusing their motion, made after several days of
cross-examination of Lubben at the trial, for production of
Lubben's federal income tax return for 1946, all testimony given by
Lubben "before the grand jury that found this indictment or found
any other indictment against these defendants," and all written
statements made by Lubben to any agent of the Government. This
issue was not raised in the Court of Appeals. Only in exceptional
cases will this Court review a question not raised in the court
below.
Duignan v. United States, 274 U.
S. 195,
274 U. S. 200;
Husty v. United States, 282 U. S. 694,
282 U. S.
701-702. There are no exceptional circumstances here.
Cf. United Brotherhood of Carpenters v. United States,
330 U. S. 395,
330 U. S. 412.
Moreover, the question was not mentioned in the petition for
certiorari filed in this Court. Our Rule 23(1)(c) provides, in
pertinent part: "Only the questions set forth in the petition or
fairly comprised therein will be considered by the court." The
question is not properly here.
Cf. Irvine v. California,
347 U. S. 128,
347 U. S.
129.
MR. JUSTICE HARLAN, whom MR. JUSTICE FRANKFURTER and MR. JUSTICE
BRENNAN join, concurring in part and dissenting in part.
I agree with all of the Court's opinion except Part II, relating
to Government exhibits 61-A and 61-B, which are the copies of the
canceled check and stub evidencing the $15,000 payment to Lawn.
This leads me to concur in the affirmance of the convictions of
Giglio and Livorsi, but, as to Lawn, I think a different result is
required.
The Court appears to recognize that these exhibits were
excludable as "tainted" evidence, since they were government-made
copies of documents which, as held in a prior decision,
United
States v. Lawn, 115 F.
Supp. 674, had been obtained from Lawn in violation of his
constitutional rights. Nevertheless the Court sustains their
admissibility on the ground that Lawn's counsel "consciously and
intentionally" waived at trial any objection to them. This view I
cannot share, for it seems to me the Court's action falls short of
what we should do in holding the Government to the strictest
measure of accountability on its repeated representations to court
and defense counsel that it was not using any "tainted" evidence at
the trial.
Page 355 U. S. 364
The Court justifies its finding of waiver by reasoning that the
"no objection" remark of Lawn's counsel at the time these exhibits
were introduced reflected his deliberate choice between having
these documents in, or securing their exclusion from, the case. But
to me this reasoning is quite unconvincing. At the outset, it
should be noted that the Court here assumes that counsel realized
these particular photostats of the original check and stub were
"tainted" copies. That, in my opinion, is a hazardous assumption.
It is true that each exhibit bore the tell-tale 1952 grand jury
markings, but assuming, as I do, that the Government's use of these
documents was the result of inadvertence, it is equally true that
this red light escaped the notice of the prosecutor, as well as
that of the trial judge, who, the record shows, was constantly
alert and sensitive throughout the trial to the possibility of
"tainted" evidence filtering into the case. I see no reason for
attributing to defense counsel greater awareness on this score than
that possessed by the prosecutor and the judge.
Further, it is by no means as apparent to me as it is to the
Court that counsel wanted these exhibits in the case for the
purpose of corroborating Lawn's explanation of the $15,000 payment
as being an innocent personal loan from Giglio, rather than, as
claimed by the Government, an incriminatory payment from the
partnership. [
Footnote 2/1] As
I
Page 355 U. S. 365
read the record on this episode, it seems just as reasonable to
suppose that counsel's
voir dire examination of the
witness through whom these exhibits were introduced, ending with
his "no objection" remark, was but the familiar kind of jury play
which a good trial lawyer sometimes uses to affect an appearance of
unconcern towards damaging evidence which he knows he cannot keep
out of the case. It is of interest that defense counsel did not
even mention the loan theory in his summation; this tends to show
that, having done what he could with these exhibits at the time of
their receipt in evidence, his tactics were to leave well enough
alone. On the other hand, it can hardly be denied that, from a
jury's standpoint, the actual canceled check bearing Lawn's
endorsement was of great value to the Government. In a jury's eyes,
the canceled check would be apt to be considered an instrument of
crime implicating Lawn in the conspiracy, and so indeed the
prosecutor played it up with telling effect in his summation.
In short, I think the Court has viewed this episode in an unreal
light. At least there is much room for doubt as to what counsel
actually intended. Where, as here, we are dealing with exhibits
whose use the Government can justify at all only on a plea of
good-faith inadvertence, I think the petitioner is entitled to the
benefit of that doubt, particularly in view of the Government's
repeated unequivocal representations that it would not use any of
the "tainted" evidence at the trial. The Court's contrary view I
deem inconsistent with the high standards which past decisions have
insisted be maintained in the conduct of federal criminal trials.
See McNabb v. United States, 318 U.
S. 332,
318 U. S.
340-341. "The dignity of the United States Government
will not permit the conviction of any person on tainted testimony."
Mesarosh v. United States, 352 U. S.
1,
352 U. S. 9.
Page 355 U. S. 366
In my opinion, the admission of these exhibits was prejudicial
error, and, if nothing further appeared, I think we would be
required to reverse for a new trial. However, additional evidence
now proffered by the Government indicates that other "innocent"
copies of the same check and stub were in the hands of the New
Jersey federal authorities at the time of the New York trial.
[
Footnote 2/2] Had the existence of
such copies been known to the New York prosecutor, the error
arising from the use of the "tainted" copies should be deemed
harmless, for, if objection to these exhibits had been made, the
prosecutor could have substituted "innocent" copies. If, on the
other hand, the federal authorities in New Jersey had no such
copies, or if, in any event, the New York prosecutor was unaware of
their possession of the copies, reversal would still be required on
grounds of prejudicial error, since the prosecutor would not have
been in a position to substitute "innocent" copies had the
"tainted" copies been objected to and excluded at the trial.
Although, as the Court properly holds, we cannot pass upon the
accuracy of this additional evidence in determining the issues
before us, I think the Government's proffer may properly be taken
into account in deciding the nature of the judgment we should
enter.
See 28 U.S.C. § 2106;
cf. United States v.
Shotwell Manufacturing Co., 355 U. S. 233. The
petitioner, by making his specific objection to admission of the
disputed exhibits for the first time on appeal, gave the Government
no occasion to introduce the "innocent" copies at the trial, and
thereby avoid error. He should not now be permitted to preclude the
Government from showing that the error complained of was
harmless.
Page 355 U. S. 367
In these circumstances I think the proper course for us is to
vacate the judgment of the Court of Appeals as to Lawn and to
remand the case to the District Court for the purpose of
determining whether "innocent" copies of these exhibits were within
reach of the New York prosecutor at the time of trial. If the court
so finds, it should be instructed to let Lawn's conviction stand,
and, if it finds otherwise, to grant him a new trial.
[
Footnote 2/1]
It is difficult to believe that counsel could have found in
these exhibits the important corroborative value which the Court
now attributes to them. The original recording of the $15,000
payment as "legal expense" on Tavern's books had been made by the
company accountant only after he had consulted Giglio, and there is
no dispute that the subsequent alteration in this entry to reflect
the payment as a transaction involving Giglio personally, rather
than the partnership, was urged by Lawn. Only because of Lawn's
insistence did the $15,000 "payment" take on its subsequent guise
as a loan from Giglio.
[
Footnote 2/2]
The Government asserts that such copies were voluntarily
produced by Lawn at a hearing with reference to his own income tax
returns which was held in New Jersey on May 12, 1952.