The opinion of the court was delivered by: LEVET
Opinion, Findings of Fact and Conclusions of Law
This is a proceeding brought by petitioner, the United States of America, to require the respondent, Joseph P. Pizzo (who was engaged as a labor relations counsel), to turn over to the petitioner two certain groups of papers relative to an income tax investigation being conducted by the Internal Revenue Service. These papers, Court's Exhibits 1 and 2 for identification, have been deposited with the court pending the outcome of this proceeding. Although the United States originally sought to hold respondent in contempt of court for failure to produce the papers, it has withdrawn that application by reason of the fact that the papers have been deposited with the court. The United States contends the papers belong to an accountant; the respondent claims they belong to him and he raises the privilege of the Fifth Amendment.
Although the respondent originally waived any hearing, the court subsequently held a hearing, took testimony, and permitted oral and written arguments to be submitted. I now make the following Findings of Fact and Conclusions of Law:
1. On January 13, 1964, the respondent, Joseph P. Pizzo, was properly served with an Internal Revenue Service summons. (Petitioner's Exhibit 1; M. 4)
2. This summons directed respondent to appear before Internal Revenue Service Special Agent Stanley Fensterman on January 27, 1966, and to bring with him at that time the 1959 through 1963 work papers of Leo H. Fleischman, certified public accountant, used by Fleischman in the preparation of the 1959 through 1963 federal tax returns of Joseph and Frances Pizzo, and containing a listing and an analysis of the deposits and disbursements of Joseph Pizzo's checking account at the Royal National Bank of New York (formerly known as the Royal State Bank of New York). (Petitioner's Ex. 1)
3. Respondent did not appear on the return day and has not submitted these papers to Special Agent Fensterman or to the Internal Revenue Service. (M. 6)
4. When respondent did appear on August 30, 1966 in response to the said summons, he refused to answer any questions concerning the papers, claiming privilege against self-incrimination under the Fifth Amendment. (M. 97 and transcript of hearing before Special Agent Fensterman, Respondent's Ex. A)
5. Respondent concedes that the papers were in his possession at the time the summons was served on him and until they were turned over to this court by his attorney in the present proceeding. (M. 58)
6. The government concedes that the investigation of respondent's tax returns could lead to a prosecution for criminal fraud. (M. 16)
7. In September 1965, Pizzo telephoned Fleischman and told him that he wanted his lawyer to look over the papers in question, which Fleischman at that time held in his office file. A couple of days later Fleischman dropped them off at Pizzo's office. (M. 50-51, 90-91) These papers included Court's Exhibits 1 and 2 for identification. (M. 52)
8. Thereafter, Fleischman was served with a summons, returnable November 29, 1965, requiring production of the said papers. Fleischman then sent Pizzo a letter, dated November 8, 1965 (Respondent's Ex. B), requiring Pizzo to return said papers so that he, Fleischman, might comply with the summons. (M. 53-55) At a chance meeting thereafter at the Concourse Plaza Hotel in the Bronx, Fleischman orally requested Pizzo to return the papers. Pizzo said his lawyer was not ready to give them up. (M. 68-70) Pizzo denies that this oral request was made (M. 104-105), but I believe Fleischman. Pizzo has not complied with the requests. (M. 93)
9. Neither at the time Fleischman left the papers at Pizzo's office nor at any time afterwards did he say whether or not he would want them returned or that he still considered them to be his own. (M. 51, 70, 86, 87-88) When Fleischman was asked by respondent's counsel, who had called him as a witness, if he, Fleischman, at the time he left the papers at Pizzo's office intended that the papers be ...