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United States v. Tweel

United States Court of Appeals, Fifth Circuit
Apr 8, 1977
550 F.2d 297 (5th Cir. 1977)

Summary

holding that an IRS agent's deliberate misrepresentation that an investigation was civil, rather than criminal, vitiated consent

Summary of this case from United States v. Dion

Opinion

No. 76-2324.

April 8, 1977.

Harold Ungar, Edward Bennett Williams, Washington, D.C., for defendant-appellant.

Robert W. Rust, U.S. Atty., Miami, Fla., Scott P. Crampton, Asst. Atty. Gen., Gilbert E. Andrews, Chief, Appellate Section, Robert E. Lindsay and Charles E. Brookhart, Attys., Tax Div., Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before MORGAN and FAY, Circuit Judges, and HUNTER, District Judge.

Senior District Judge of the Western District of Louisiana, sitting by designation.


Appellant, Nicholas J. Tweel, was convicted of conspiring (with an unindicted co-conspirator, Charles Zemliak) to defraud the United States by obstructing the lawful functions of the Internal Revenue Service (IRS), two counts of tax evasion for 1967 and 1969, and two counts of making false statements in a tax return for those same years. Two other co-defendants were named in one of the counts for tax evasion. Tweel was sentenced to four years on three counts and three years on each of the other two, all concurrent. He was also fined a total of $30,000.

26 U.S.C. § 7201 (Internal Revenue Code of 1954).

26 U.S.C. § 7206(1) (Internal Revenue Code of 1954).

The government's evidence showed to the jury's satisfaction that in the tax years, 1967 and 1969, Tweel "laundered" parts of his income to avoid paying taxes by passing sums on to persons who would owe little in taxes because they were in a lower tax bracket or had large losses which would offset the income.

The investigation leading up to appellant's indictment began on May 28, 1969. Don L. Miller, revenue agent for the Internal Revenue Service informed appellant and his wife by letter that he had been assigned to conduct an audit of their federal income tax returns for 1966 through 1968 and asked for an appointment. Appellant's accountant, Ben A. Bagby, telephoned the agent on June 10, 1969 to request a postponement of this audit because the IRS had just completed an audit of appellant's returns for 1958 through 1963. They did set an appointment for August 4, 1969.

During the earlier audit for 1958 through 1963, a special agent of the Intelligence Division of IRS became involved but eventually withdrew, with the audit remaining civil instead of criminal. To discover whether his client was again involved in a criminal inquiry, Bagby asked Miller whether a "special agent" was involved in the new investigation. Miller replied that no special agent was involved. This response led Bagby to believe that Miller was just conducting a civil audit. What Miller did not disclose was that this audit was not a routine audit to which any taxpayer may be subjected from time to time. This audit was conducted at the specific request of the Organized Crime and Racketeering Section of the Department of Justice.

The Organized Crime and Racketeering Section of the Justice Department is only involved in criminal investigations and requested this audit in its own name.

Bagby, who had his own records of appellant's tax affairs as well as some of Tweel's also allegedly obtained additional records from Tweel to voluntarily present to Miller for the new audit. Miller microfilmed all the records that were given to him.

No summons of any sort was directed to appellant or his accountant by the IRS.

The theory on which the motion to suppress was based is that Miller's microfilming of appellant's records constituted an illegal search in violation of the Fourth Amendment because appellant's consent was obtained through deception. This Court agrees that appellant was grossly deceived and the motion should have been granted; as a matter of procedure we remand this case back to the district court for a hearing to determine what evidence admitted at the trial was tainted due to the government's violation of appellant's constitutional rights.

The district court findings were that the Justice Department requested the IRS to investigate the appellant, a revenue agent was assigned the task, and the accountant asked the agent whether or not a special agent was involved and received a negative response which was at that point a true statement. The trial judge subsequently stated:

If it is deception not to advise at the outset that you were sent there or requested to be there by the Justice Department when asked the question whether there is a special agent involved, then the Court is wrong.

It is a well established rule that a consent search is unreasonable under the Fourth Amendment if the consent was induced by the deceit, trickery or misrepresentation of the Internal Revenue agent. United States v. Rothstein, 530 F.2d 1275 (5th Cir. 1976); United States v. Dawson, 486 F.2d 1326 (5th Cir. 1973); United States v. Bland, 458 F.2d 1 (5th Cir. 1972) cert. denied, 409 U.S. 843, 93 S.Ct. 43, 34 L.Ed.2d 83 (1972); United States v. Ponder, 444 F.2d 816 (5th Cir. 1971) cert. denied, 405 U.S. 918, 92 S.Ct. 944, 30 L.Ed.2d 788 (1972); United States v. Tonahill, 430 F.2d 1042 (5th Cir. 1970), cert. denied, 400 U.S. 943, 91 S.Ct. 242, 27 L.Ed.2d 247 (1970); United States v. Prudden, 424 F.2d 1021 (5th Cir. 1970), cert. denied, 400 U.S. 831, 91 S.Ct. 62, 27 L.Ed.2d 62 (1970).

The burden for determining whether or not the government has resorted to a deception is on the moving party and this Court in each of the above cases set forth what that party must establish:

We conclude that the mere failure of a revenue agent (be he regular or special) to warn the taxpayer that the investigation may result in criminal charges, absent any acts by the agent which materially misrepresent the nature of the inquiry, do not constitute fraud, deceit and trickery. Therefore, the record here must disclose some affirmative misrepresentation to establish the existence of fraud, and the showing must be clear and convincing. (Footnote omitted)

Prudden, supra, p. 1033.

The Prudden court also stated that:

Silence can only be equated with fraud where there is a legal or moral duty to speak or where an inquiry left unanswered would be intentionally misleading.

Supra, p. 1032.

From the facts we find that the agent's failure to apprise the appellant of the obvious criminal nature of this investigation was a sneaky deliberate deception by the agent under the above standard and a flagrant disregard for appellant's rights. The silent misrepresentation was both intentionally misleading and material. Any findings to the contrary under the facts of this case are clearly erroneous. United States v. Reynolds, 511 F.2d 603 (5th Cir. 1975); United States v. Gunn, 428 F.2d 1057 (5th Cir. 1970).

The court below appears to have based its decision on United States v. Cleveland Trust Co., 474 F.2d 1234 (6th Cir. 1973), cert. denied sub nom. Miceli v. United States, 414 U.S. 866, 94 S.Ct. 48, 38 L.Ed.2d 118 (1973). We do not agree with its applicability. Cleveland Trust was a suit for enforcement of a summons which was allegedly not issued in good faith. Deception was not the issue in that case.

Appellant showed Miller knew that the IRS was acting at the request of the Organized Crime and Racketeering Section of the Justice Department which is undeniably an instrument for criminal investigation. Miller obviously knew the accountant inquired whether a special agent was involved to determine whether he was conducting a criminal audit. Miller's response, although on the face of it true, misled appellant to such a degree that his consent to the "search" must be vitiated by the agent's silence concerning the origin of this investigation.

In this case, the agent testified he intended, if appellant had consented to an interview to advise him of his rights. Because the IRS requires only special agents to warn taxpayers of their rights, by assigning a revenue agent the IRS still succeeded in masking the undeniable criminal nature of this investigation and materially deceived this appellant.

Tweel did not agree to be interviewed.

Under Internal Revenue guidelines promulgated in IRS News Release No. 897, 7 CCHI 1967 Stand. Fed.Tax Rep. ¶ 6832, and IRS News Release IR-949, 1968 CCH Fed.Tax Rep. ¶ 6946, a special agent must advise the taxpayer before an interview of the following:

As a special agent, one of my functions is to investigate the possibility of criminal violations of the Internal Revenue Laws, and related offenses. In connection with my investigation of your tax liability (or other matter) I would like to ask you some questions. However, first I advise you that under the Fifth Amendment of the Constitution of the United States I cannot compel you to answer any questions or to submit any information if such answers or information might tend to incriminate you in any way. I also advise you that anything which you say and any information which you submit may be used against you in any criminal proceeding which may be undertaken. I advise you further that you may, if you wish, seek the assistance of an attorney before responding. Do you understand.

We cannot condone this shocking conduct by the IRS. Our revenue system is based upon the good faith of the taxpayers and the taxpayers should be able to expect the same from the government in its enforcement and collection activities.

During oral argument counsel for the government stated that these procedures were "routine". If that is the case we hope our message is clear. This sort of deception will not be tolerated and if this is the "routine" it should be corrected immediately.

Since the consent given by appellant was obtained by deception, the microfilming of the documents constituted an unreasonable search in violation of the Fourth Amendment. Gouled v. United States, 255 U.S. 298, 41 S.Ct. 261, 65 L.Ed. 647 (1921). The evidence obtained here in violation of appellant's Fourth Amendment rights, as well as any evidence derived therefrom, should have been suppressed. Alderman v. United States, 394 U.S. 165, 171, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969). The burden of proving any evidence was untainted is on the government. Nardone v. United States, 308 U.S. 338, 341, 60 S.Ct. 266, 84 L.Ed. 307 (1939). Therefore, we remand for a hearing to make that determination. If any of the evidence was tainted, it must be suppressed and appellant afforded a new trial. The other issue raised on appeal is without merit.


Summaries of

United States v. Tweel

United States Court of Appeals, Fifth Circuit
Apr 8, 1977
550 F.2d 297 (5th Cir. 1977)

holding that an IRS agent's deliberate misrepresentation that an investigation was civil, rather than criminal, vitiated consent

Summary of this case from United States v. Dion

holding that when a taxpayer asked whether a "special agent" was involved in the investigation and the Internal Revenue Service answered "no" even though the IRS was reporting to a criminal section of the Department of Justice, consent was invalid because the misrepresentation was material in that it suggested the investigation was only civil, not criminal

Summary of this case from United States v. Funds in the Amount of $830,000 in U.S. Currency

holding evidence obtained by consent deceptively sought in a civil audit should be excluded from a criminal trial

Summary of this case from United States v. Utsick

finding consent vitiated by misrepresentation that investigation was civil, not criminal

Summary of this case from PagáN-González v. Moreno

finding consent vitiated by misrepresentation that investigation was civil, not criminal

Summary of this case from PagáN-González v. Moreno

finding bad faith when a criminal investigation was conducted under the guise of a civil audit

Summary of this case from Gonzalez v. United States

concluding that an Internal Revenue Service revenue agent was deliberately deceptive when he failed to reveal that he was conducting an audit at the request of criminal investigators, which vitiated the defendant's consent to the agent microfilming documents

Summary of this case from United States v. Jaimez

In Tweel, the government agent knew that the defendant believed that the investigation was a civil one, and the agent knew that the defendant's belief was completely false.

Summary of this case from United States v. Bogomol

suppressing evidence when the IRS conducted a criminal investigation through civil examiners and lied to the taxpayer's accountant about whether a "special agent" was involved, which would have indicated the inquiry was criminal

Summary of this case from U.S. v. Rutherford

suppressing evidence where IRS agent falsely stated that the audit was routine though he knew that a special investigator was involved

Summary of this case from U.S. v. Rutherford

providing copies of tax returns

Summary of this case from U.S. v. Skilling

In United States v. Tweel, 550 F.2d 297 (5th Cir. 1977), a case in which improper government conduct of the type alluded to in Kordel figured prominently, the IRS initiated a tax audit at the request of the Organized Crime and Racketeering Section of the Department of Justice as part of a criminal investigation that ultimately led to the taxpayer's conviction on various tax fraud charges.

Summary of this case from U.S. v. Posada Carriles

In Tweel, the Fifth Circuit concluded that in order to suppress evidence obtained by the IRS, the record "must disclose some affirmative misrepresentation to establish the existence of fraud, and the showing must be clear and convincing."

Summary of this case from U.S. v. Bridges

suppressing evidence so obtained in criminal tax prosecution

Summary of this case from Crystal v. U.S.

stating that the IRS may not develop a criminal tax case under the guise of a civil audit

Summary of this case from United States v. Peters

In Tweel there was no genuine civil audit of the kind represented; the only audit was a criminal audit specially ordered for this particular taxpayer, and falsely represented as a routine civil audit.

Summary of this case from U.S. v. Blocker

In Tweel, the Organized Crime and Racketeering Section of the Department of Justice (DOJ) specifically requested the Internal Revenue Service (IRS) to conduct an audit of defendant Tweel.

Summary of this case from U.S. v. Blocker

explaining that the defendant was not some random, unfortunate victim of a routine IRS audit, but instead was hand-picked by the Department of Justice as the target of a criminal investigation

Summary of this case from U.S. v. Blocker

In Tweel the Organized Crime and Racketeering Section of the United States Department of Justice specifically requested that a revenue agent conduct an audit of the defendant's tax returns.

Summary of this case from U.S. v. Powell

In Tweel, clear criminal aspects anchored the investigation from the time it was referred from criminal law enforcement constituents in the Justice Department. And although Grove's audit grew into a criminal investigation, we have held that revenue agents have no duty to inform taxpayers that the agents' investigations might result in criminal charges.

Summary of this case from U.S. v. Powell

In Tweel, an IRS agent intentionally led the defendant to believe that the evidence was to be used only in a civil investigation when, in fact, he was conducting a criminal investigation.

Summary of this case from United States v. Davis

In Tweel, this Court held that the failure of an IRS agent to apprise a defendant of the criminal nature of his investigation before obtaining permission from the defendant to copy certain of the defendant's own tax records constituted an unreasonable search and seizure.

Summary of this case from United States v. Jennings

In Tweel, the taxpayer's accountant turned over to a revenue agent certain of taxpayer's tax records, which were copied by the agent.

Summary of this case from United States v. Miller

In Tweel, when asked directly about the nature of the inquiry, an IRS agent lied and answered in a way that reasonably made a taxpayer believe that the investigation was similar to a prior inquiry, and therefore not criminal in nature.

Summary of this case from United States v. Kamal Kabakibou, MD, PC

In United States v. Tweel, 550 F.2d 297 (5th Cir. 1977), the defendant's accountant asked the IRS agent whether a "special agent" was involved in the investigation.

Summary of this case from United States v. La Forgia
Case details for

United States v. Tweel

Case Details

Full title:UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. NICHOLAS J. TWEEL…

Court:United States Court of Appeals, Fifth Circuit

Date published: Apr 8, 1977

Citations

550 F.2d 297 (5th Cir. 1977)

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