The opinion of the court was delivered by: BRYAN
The Government moves to punish respondent in civil contempt for failure to obey an order of Judge Cashin dated June 10, 1958. This order directed respondent to appear before a Special Agent of the Internal Revenue Service on a specified date to answer questions concerning the tax liability of and the collection of taxes from six named corporations,
and to produce all books and records of such corporations for examination.
Dresden has produced a substantial volume of books and records of the corporations in question for the Internal Revenue Service. He insists that he has produced all which are available to him and that he has been unable to locate any others despite thorough search.
The Government, on the other hand, while admitting that it has received most of the books and records which it desires, alleges that other crucial records under Dresden's control were not produced.
There was no substantial conflict in the testimony adduced at the hearing, and the only real dispute is as to the inferences to be drawn from the undisputed evidence. I find the following to be the facts as established by the record:
The six corporations in question were engaged in contract clothing manufacturing in Northern New Jersey. They were successively organized, apparently to succeed one another in this business, and each was in business for about a year. None of them are now in business and one, A. D. Valentine & Company, is in bankruptcy in this court.
Respondent Dresden, a member of the bar who is not practicing, was an officer of all six corporations and appears to have controlled them.
In the spring of 1958 Special Agent Goldstein of the Internal Revenue Service, before whom Judge Cashin's order directed Dresden to appear, was carrying on an investigation into the withholding and social security tax liabilities of these six corporations. Goldstein met Dresden at the factory of Bonnie Tweed Corporation in Garfield, New Jersey, on March 24, 1958. There were apparently no operations going on and Dresden was the only one there.
Goldstein asked to see the corporate books and records of the six corporations. Dresden told him that he had virtually none on the premises but would send some over later that day. He invited Goldstein to look around and Goldstein found the payroll book of Bonnie Tweed Corporation and took it with him.
Some time later, pursuant to Dresden's directions, one of his employees delivered a package of records to Goldstein at the Dante Fashions, Inc. office in Peterson, New Jersey, consisting of the general journal, general ledger, cash book and two checkbooks of that corporation.
Subsequently Goldstein telephoned Dresden and requested that he appear at the Internal Revenue Office in Newark on April 14, 1958 and bring with him all records of the corporations which had not been produced up to then. Dresden appeared on that date without any records and his testimony was taken by Agent Goldstein.
Thereupon Goldstein served an Internal Revenue Service summons upon Dresden requiring him to appear at the office of the Service on May 1, 1958 with 'all corporate books & records of the (six) corporations including cancelled checks, bank statements and payroll records'. It is undisputed that Dresden failed to appear or to produce any records on that date, but there is dispute as to whether he communicated with Goldstein to inform him that he could not be there.
Upon Dresden's non-appearance on May 1 the United States Attorney for New Jersey informed him by letter that he could be punished for contempt for his failure to comply with the Internal Revenue Service summons.
On June 10, 1958, upon the application of the United States Attorney for this district, Judge Cashin of this court issued an order directing that Dresden
'* * * appear before Special Agent Jacob Goldstein * * * at 1:00 P.M., June 16, 1958, to answer questions relating to the tax liability and/or the collection of the tax liability of (the six corporations) and bring with him and produce for examination all corporate books and records of the aforementioned ...