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UNITED STATES v. COSTELLO

February 20, 1959

UNITED STATES of America
v.
Frank COSTELLO, Defendant



The opinion of the court was delivered by: DAWSON

This is an action brought by the United States of America pursuant to the provisions of Title 8 U.S.C.A. § 1451(a) *fn1" to revoke and set aside an order of this court entered September 10, 1925 admitting the defendant Frank Costello to United States citizenship, and to cancel a certificate of naturalization issued to this defendant, on the ground that said order and certificate of naturalization were procured by the concealment of material facts and by willful misrepresentation.

The past history of this action bears mention. On October 22, 1952 the Government instituted denaturalization proceedings against this defendant under § 338(a) of the Nationality Act of 1940, 54 Stat. 1158, § 738 of old Title 8, U.S.C.A. That action came on for trial before Judge Palmieri of this court in 1956. Defendant's counsel moved to dismiss the action on the ground that both the affidavit of good cause and the Government's evidence were tainted by wiretapping. This contention was sustained by the court and the action was dismissed without prejudice to renew and upon certain conditions. United States v. Costello, D.C.S.D.N.Y.1956, 145 F.Supp. 892.

This judgment was subsequently reversed by the United States Court of Appeals for this circuit on the ground that even if the Government's affidavit of good cause was invalid as the fruit of illegal interceptions, the Government should have been permitted to file a new affidavit rather than have the case dismissed. United States v. Costello, 2 Cir., 1957, 247 F.2d 384. The Supreme Court granted certiorari and reversed the Court of Appeals on the ground that the affidavit of good cause should have been filed contemporaneously with the complaint; it ordered that the complaint be dismissed. Costello v. United States, 1958, 356 U.S. 256, 78 S. Ct. 714, 2 L. Ed. 2d 741. The Government, on May 1, 1958, instituted this action. It is brought under the provisions of § 340(a) of the Immigration and Nationality Act of 1952, *fn2" and an affidavit of good cause was filed contemporaneously with the complaint.

 The basic facts underlying this action are not in dispute. Frank Costello was, prior to September 10, 1925, a citizen of Italy. On May 1, 1925 he filed a petition for naturalization in the United States District Court for the Southern District of New York. On September 10, 1925 he was admitted to citizenship and Certificate of Naturalization No. 2136470 was issued to him on that date. The Government contends that in more recent years facts have been discovered which indicate that Costello obtained his citizenship by the concealment of material facts and by willful misrepresentation. Thus, this action was instituted.

 The factual issue to be determined by this Court can be simply stated. It is whether or not the defendant did in fact obtain his citizenship by the concealment of material facts or by willful misrepresentation. If this question is answered in the affirmative, this Court must then examine the several important further legal questions propounded by the defense.

 At the conclusion of the Government's case the defendant's attorney indicated that he would not present any witnesses in this action. The defendant moved to dismiss the complaint, resting upon the Government's presentation of evidence and the legal issues which he felt militated in his favor.

 Before turning to the findings of fact and conclusions of law, a short review of the law of denaturalization is in order. Naturalization is one of the powers expressly granted by the states to the Federal Government. The Constitution, Article I, Section 8, Clause 4, provides that 'The Congress shall have Power * * * To establish an uniform Rule of Naturalization.' Congress has from time to time exercised that power, established the rule and declared the manner of and the conditions under which an alien may be naturalized to become a citizen of the United States. Pursuant to this authority the first uniform rule of naturalization established by Congress was the Act of March 26, 1790. This basic act has been changed from time to time but it was not until the Naturalization Act of June 29, 1906 that the Act granted for the first time the authority to denaturalize. Section 15 of the 1906 Act directed United States district attorneys, upon affidavit showing good cause, to institute proceedings for the purpose of setting aside and cancelling the certificate of citizenship on the ground of fraud or on the ground that such certificate of citizenship was illegally procured.

 It was early settled by the Supreme Court that it was constitutional to sue to revoke a judgment of naturalization for fraud or illegality, Johannessen v. United States, 1912, 225 U.S. 227, 32 S. Ct. 613, 56 L. Ed. 1066, and it was also permissible for the Government both to protest the naturalization proceeding and, upon losing, bring suit to revoke a judgment. United States v. Ginsberg, 1917, 243, U.S. 472, 37 S. Ct. 422, 61 L. Ed. 853.

 The 1906 Act remained basically unchanged with regard to denaturalization until the passage of the Nationality Act of October 14, 1940. This Act codified the Nationality and Naturalization laws of the United States, repealing generally all previous laws of this nature. The Act went into effect January 13, 1941, and § 15 of the 1906 Act was re-renewed as § 338(a)(b)(c)(d)(f) and (g) of the 1940 Nationality Act.

 The next important change was the enactment of the Immigration and Nationality Act of 1952, which superseded the prior Act of 1940. The Act of 1940 had provided that the order admitting a person to citizenship might be revoked and set aside and the certificate of naturalization cancelled 'on the ground of fraud or on the ground that such order and certificate of naturalization were illegally procured.' Section 340(a) of the 1952 Act changed the grounds to read: 'on the ground that such order and certificate of naturalization were procured by concealment of a material fact or by willful misrepresentation.'

 Thus, the basic difference between the denaturalization provisions of the new Act of 1952 and those of the prior Act of 1940 is that the prior Act provides as the ground for the bringing of a denaturalization action 'fraud' or 'illegal procurement.' The new Act eliminates the second ground and provides for denaturalization only on the ground of 'concealment of a material fact' or 'willful misrepresentation.' It has never been fully resolved as to whether or not the elimination of the ground of illegal procurement and the inclusion of the ground of concealment of a material fact makes the 1952 Act more stringent or less stringent. If the Government proceeds on the allegation of 'fraud' it must introduce evidence that is 'clear, unequivocal and convincing' and which does not leave 'the issue in doubt' that the defendant has been guilty of fraud. Maisenberg v. United States, 1958, 356 U.S. 670, 78 S. Ct. 960, 962, 2 L. Ed. 2d 1056; Schneiderman v. United States, 1943, 320 U.S. 118, 158, 63 S. Ct. 1333, 87 L. Ed. 1796; Klapprott v. United States, 1949, 335 U.S. 601, 612, 69 S. Ct. 384, 93 L. Ed. 266; Baumgartner v. United States, 1944, 322 U.S. 665, 64 S. Ct. 1240, 88 L. Ed. 1525; United States v. Anastasio, 3 Cir., 1955, 226 F.2d 912.

 This burden of the Government to establish clearly and convincingly its evidence is rightly based upon the concept that nowhere in the world today is the right of citizenship of greater worth to an individual than it is in this country. Schneiderman v. United States, 1943, 320 U.S. 118, 122, 63 S. Ct. 1333, 87 L. Ed. 1796; United States v. Meli, D.C.E.D.Mich.1957, 158 F.Supp. 217. We are ever cognizant that denaturalization, like deportation, may result in the loss of all that makes life worth living. Knauer v. United States, 1946, 328 U.S. 654, 659, 66 S. Ct. 1304, 90 L. Ed. 1500. These truths led the courts to lay down the rule that 'the facts and the law should be construed as far as is reasonably possible in favor of the citizen.' Schneiderman v. United States, 1943, 320 U.S. 118, 63 S. Ct. 1333, 1335, 87 L. Ed. 1796; United States v. Anastasio, 3 Cir., 1955, 226 F.2d 912; United States v. Meli, D.C.E.D.Mich.1957, 158 F.Supp. 217. There can be no dispute that our jurisprudence requires a solidity of proof which leaves no troubling doubt when a court decides a question of such gravity as is implied in an attempt to reduce a person from the status of citizen to that of alien. Baumgartner v. United States, 1944, 322 U.S. 665, 670, 64 S. Ct. 1240, 88 L. Ed. 1525; United States v. Anastasio, 3 Cir., 1955, 226 F.2d 912.

 Thus, viewing the development of the law and the heavy burden and great responsibility imposed upon the Government in enforcing the denaturalization aspect of our laws, this Court has given exceedingly careful consideration and weight to every allegation and defense. The contentions of the Government, plus the burden of evidence and the findings of fact are discussed seriatim below.

 The Government contends that the naturalization order and certificate were procured by willful misrepresentation or concealment of material facts in seven respects which are itemized in the complaint. The Court finds that two of the allegations have been established as constituting willful misrepresentation and fraud.

 1. That the defendant stated that his occupation was 'real estate' whereas his true occupation was bootlegging.

 2. That the defendant swore in his oath of allegiance to the United States, on September 10, 1925, that 'I will support and defend the Constitution and laws of the United States against all enemies, foreign and domestic; and that I will bear true faith and allegiance to the same;' whereas at the time the defendant was actually engaged in a course of activity which flouted the Constitution of the United States and was designed to violate the laws of the United States.

 On the same day that Costello took this oath of allegiance, Judge Thacher, a judge of this court, in consideration of the petition executed by Costello, and, having found that defendant had taken the oath required by law, admitted the defendant to United States citizenship. Can there be any doubt that, if Judge Thacher had known at that time that the occupation of the defendant, at that time, was not 'real estate' but 'bootlegging,' and that far from defending the laws of the United States the defendant was engaged in a series of extensive activities designed to flout those laws, he would have refused to admit Costello to citizenship? Lest there be any doubt on the subject, we must keep in mind that Judge Thacher himself decided, the following year, that one who deliberately violated the Eighteenth Amendment to the Constitution 'cannot be said to be attached to the principles declared by that amendment,' and denaturalized an alien who during the preceding five years had been convicted of violation of the prohibition laws. United States v. Mirsky, D.C.N.Y.1926, 17 F.2d 275.

 The question as to whether the answers given by the defendant and the oath taken by him were false might be more difficult to determine if it were not that defendant himself has admitted the facts in sworn testimony given by him in various legal interrogations in more recent times.

 Thus, in a statement given to Special Agent James N. Sullivan of the Intelligence Unit on July 24, 1938, the defendant Costello was asked the following questions and gave the following answers:

 'Q. Did you have anything to do with the liquor business during the Prohibition era -- that is, say, from 1920 to 1933? A. Yes.

 'Q. During what period of time? A. Oh, until about -- I will say from 1923 or 1924 until a year or two before repeal.'

 Costello was questioned by District Attorney Hogan before a New York County Grand Jury in 1943 in connection with an investigation into judicial nominations in New York County. He admitted that he had 'got large sums of money' from bringing in whisky during prohibition. He was asked the following questions and gave the following answers:

 'Q. That is true, you were in the bootlegging business, weren't you? A. Yes.

 'Q. And you did smuggle whisky into the country? A. Yes.'

 He admitted that he had reported to the State Tax authorities that for the years 1919 to 1932 his income totalled $ 305,000, and that most of it was made in the bootlegging business.

 He was then asked about his interest in real estate, and gave the following answers:

 'Q. Did you have any other occupation in those years? A. Well, I was doing a little real estate at that time.

 'Q. Did you ever make any money in real estate? A. Well, made some moneys, yes.

 'Q. Not very much was it? Do you recall any particular real estate transaction in which you made any money? A. Well, I had bought a building on West End Avenue and 92nd Street.

 'Q. Yes. A. And I believe I made a little money there.

 'Q. How much would you say? A. Well, I would say maybe $ 25,000.

 'Q. On the sale of that building? A. Yes.

 'Q. Did you take it in your name or in the name of a corporation? A. Well, I think it was a ...


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