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UNITED STATES v. COLE

December 6, 1972

United States of America, Plaintiff
v.
Marvin R. Cole, Arthur A. Fischer and Cole, Fischer & Rogow, Inc., Defendants


Pollack, District Judge.


The opinion of the court was delivered by: POLLACK

POLLACK, District Judge:

Defendants move pursuant to Rule 33 Fed. R. Cr. P. to set aside their convictions of engaging in income tax frauds and of conspiring to do so and for a new trial upon the ground of newly discovered evidence.

 I.

 This is defendants' third attempt to win a dismissal or a new trial. The earlier moves were rejected in opinions herein, reported at 325 F. Supp. 763 and 334 F. Supp. 961 and those rulings were specifically reviewed and sustained on the appeal from the convictions which were affirmed, United States v. Cole, 463 F.2d 163 (2d Cir. 1972), cert. denied, 409 U.S. 942, 93 S. Ct. 238, 34 L. Ed. 2d 193 (1972).

 The first attack on the prosecution was under Fed. R. Cr. P. 41(e) seeking a dismissal on the grounds that the "saturation" tax investigation leading to the indictment stemmed from illegal electronic eavesdropping. After a four day hearing (held after the jury's verdict), this motion was denied. Among other things, it appeared clearly that the acts for which the defendants were prosecuted were, with one minor exception, not committed until after the illegal electronic surveillance was terminated. As stated by this Court: "By definition, the illegal 'bugs' in this case could not have picked up in 1961 and 1962 leads or other information dealing with violations of federal law in future tax years." And, "While the government's breach of the defendants' constitutional right to be free of illegal searches and seizures is reprehensible, such illegality by the government does not fortuitously give the defendants a license to break the law thereafter with impunity." 325 F. Supp. at 769. In this connection it was further pointed out that: "The rule contended for by defendants would be tantamount to lifetime exoneration from tax accountability for future tax evasion in any general category of deductions or income touched upon through an illegal surveillance. A rule of reason and common sense precludes such a far fetched consequence". Id.

 Responsive to defendants' principal argument, this Court found as fact that, "The government was not motivated to 'focus' on the defendant Cole by tainted information -- or to state it another way, there was no tainted decision to focus taxwise on the defendant Cole", (Id. at 770) and "beyond a reasonable doubt that the proof used in the trial was free of any taint of illegality." Id. "The significant evidence in this case was all of independent origin. There is no reasonable possibility that a substantial portion of the case is tainted." (Id. at 771)

 The validity of the prosecution and the evidence used on the trial were affirmed on the appeal to the Court of Appeals from the convictions. Chief Judge Friendly wrote:

 
"we find that the Government proved that the evidence resulted from the legal saturation investigation, rather than from any illegal information as to personal expense accounting . . . . Knowledge of the facts on which these defendants were convicted of income tax evasion in 1963 and 1964 was 'gained from an independent source.' Silverthorne Lumber Co. v. United States, 251 U.S. 385, 392, 64 L. Ed. 319, 40 S. Ct. 182 (1920)." 463 F.2d at 174.

 A petition for a rehearing containing a suggestion that the action be reheard en banc failed to evoke a request from any active judge that a vote be taken on that suggestion and upon consideration thereof the petition for a rehearing was denied.

 One of the questions then presented by the defendants for the issuance of a writ of certiorari from the Supreme Court, as phrased and argued by the Solicitor General was:

 
"2. Whether the government's evidence in this case was tainted by illegal electronic surveillance ".

 As stated previously, a writ of certiorari was denied.

 The second attack by the defendants sought a new trial on the ground that the admission on the trial into evidence of a prior conviction deprived defendants of due process of law because that conviction was invalidated on constitutional grounds after the trial of this case was concluded. That matter has no bearing on the present motion.

 In this third attempt to void the convictions the defendants have returned to their earliest effort, namely, to establish that the government's evidence and proceedings stemmed from a tainted source. In short, they offer more of the same type of proof, recently obtained, to show that the motivating force in the "saturation" investigation was the illegal electronic surveillance. On the findings made by this Court and by the Court of Appeals, mentioned above, the cumulative evidence now being offered is beside the mark since the affirmed findings are that the government proved that the evidence actually used on the trial in respect to the 1963 and 1964 income tax returns resulted from the legal saturation investigation made in 1965 which actually was caused by, sought and obtained on information which had come to the government ...


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