The opinion of the court was delivered by: CHARLES S. HAIGHT, JR.
This Part I matter arises out of the government's attempt to enforce an Internal Revenue Service ("IRS") summons over the Fifth Amendment objections of respondent Ira Blumberg.
For the reasons set forth below, the summons will be enforced.
On May 14, 1987 the IRS served Blumberg with a Collection Summons requiring him to appear at the White Plains office of the IRS on May 26, 1987. Blumberg failed to appear as directed by the summons.
After receiving an extension of the time to appear, Blumberg did appear before the IRS on August 20, 1987. When Blumberg appeared, he replied to all questions by stating that he was invoking his Fifth Amendment privilege against self-incrimination and that he intended to invoke that privilege as to each question he was asked other than his identity. Affidavit of Michael Ferrato Dated September 20, 1990 ("Ferrato Aff.") PP5-6.
On October 15, 1990 the government moved by Order to Show Cause to compel compliance with the IRS summons. The government argued that Blumberg's testimony and documents "may be relevant to and can reasonably be expected to cast light on the subject of petitioner's investigation." The IRS investigation was for the purpose of locating assets to collect the income tax liability of Blumberg for the tax year ending December 31, 1984. The government alleged that Blumberg was in possession of books, records and other papers or had knowledge relating to this investigation. Petition to Enforce Internal Revenue Service Summons PP3-4, 7.
On November 14, 1990 Blumberg's attorney, Dominic F. Amorosa, Esq., submitted an affirmation in opposition to the government's Order to Show Cause. Defense counsel reported that Blumberg had previously been employed at Longfellow Industries, Inc. which went into bankruptcy in 1985. Longfellow, and subsequently the bankruptcy trustee, contended that Blumberg stole hundreds of thousands of dollars while employed there in 1984 and 1985 and had concealed the proceeds of these thefts. Defense counsel argued that the government was now seeking Blumberg's testimony and documents relating to his income at the very same time that these alleged thefts were alleged to have occurred. Defense counsel reported that Blumberg had asserted the Fifth Amendment privilege because he had a real fear that his testimony and documents could be used against him a criminal proceeding. Defense counsel argued that these fears were still legitimate and contended that if the trustee was correct, and Blumberg did steal funds, Blumberg's answers to the IRS's questions would expose his crimes. Defense counsel argued that Blumberg should not be compelled to answer IRS questions without immunity. Defense counsel contended that otherwise Blumberg had no assurance that his IRS testimony would not be used against him in a future criminal proceeding. Defense counsel also contended that Blumberg had no assurance about documents being used against him either, although he would not confirm or deny the existence of documents. Arguing that Blumberg had a valid Fifth Amendment concern in this matter, defense counsel asked that he not be ordered to testify about these financial matters. Affirmation of Dominic F. Amorosa, Esq. Dated November 15, 1990 PP2-5.
On November 29, 1991 Blumberg and the government agreed by stipulation that Blumberg would appear and testify before an IRS Revenue Officer.
On December 23, 1991 Blumberg, accompanied by Amorosa appeared and was deposed by Revenue Officer Michael Ferrato. At the deposition Blumberg asserted the Fifth Amendment privilege in refusing to answer questions regarding his home, job, banking arrangements, debts, assets and documents concerning assets. Transcript of Deposition of Ira Blumberg on December 23, 1991 ("Blumberg Dep.") at 6-8, 11-16.
The government now presses the petition to enforce the summons and asks that Blumberg be ordered to answer all questions previously put to him by Revenue Officer Michael Ferrato at the interview on December 23, 1991. The government argues that Blumberg has never contested that the IRS has made the preliminary showing required for enforcement of the summons. See United States v. Powell, 379 U.S. 48, 57-58, 13 L. Ed. 2d 112, 85 S. Ct. 248 (1964). The government argues that Blumberg is not entitled to assert the privilege because he has not come forward with facts that show a personal fear of prosecution. Instead, the government contends, Blumberg has only come forward with an attorney affirmation based upon information and belief which should be disregarded by the Court. The government argues that even assuming Amorosa's statements are true, Blumberg has no legitimate fear of prosecution because of the state and federal statutes of limitations have run for any crimes of embezzlement committed in 1984 or 1985. In addition, the government contends that Blumberg has not shown how the questions asked in December 1991 about his current assets could lead to prosecution for his alleged thefts in 1984 or 1985. The government argues that Blumberg's assertion of the Fifth Amendment privilege is improper and asks the Court to enforce the summons.
On February 4, 1992 the government and defense counsel appeared before the Court, as the Part I Judge, and argued the merits of enforcing the summons. The Court directed both sides to make additional submissions to complete the record in this case.
By letter dated February 6, 1992 defense counsel argues that Blumberg still could be prosecuted for the alleged thefts in 1984 and 1985, particularly if the charges relate to his income taxes. Defense counsel contends that transfers of the money into subsequent years could extend the statute of limitations and that charges such as mail and wire fraud are still possible. Defense counsel argues that even answers to questions about his current financial holdings could lead to charges against Blumberg, if the holdings are shown to be the fruits of the alleged crimes. In addition, defense counsel contends, the IRS questioned Blumberg about events from January 1, 1984 to the present. Defense counsel contends that if the IRS is only interested in Blumberg's current assets, they would not be asking about past events. Once again ...