LOCATION: U.S. Department of Labor
DOCKET NO.: 78-1729
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Sixth Circuit
CITATION: 447 US 727 (1980)
ARGUED: Feb 20, 1980
DECIDED: Jun 23, 1980
Bennet Kleinman - for respondent
Wade H. McCree, Jr. - for petitioner
Facts of the case
Media for United States v. Payner
Audio Transcription for Oral Argument - February 20, 1980 in United States v. Payner
Warren E. Burger:
We'll hear arguments next in United States against Payner.
Mr. Solicitor General.
Wade H. McCree, Jr.:
Mr. Chief Justice and may it please the Court.
This case presents the question whether the District Court possesses, and if so, whether it should've exercised supervisory power to suppress relevant evidence allegedly obtained in an illegal search that did not violate respondent's rights under the Fourth Amendment.
The facts giving rise to this controversy are as follows.
In September 1976, respondent was indicted in the United States District Court for the Northern District of Ohio of a charge of knowingly and willfully making a false statement in a matter within the jurisdiction of a federal agency in violation of 18 United States Code, Section 1001.
Specifically, he was charged with falsely stating in his 1972 federal income tax return that he did not have a foreign bank account when in fact he knew that during 1972, he had such an account in the Castle Bank and Trust Company of Nassau, Bahamas.
The critical piece of evidence in the Government's case was a loan guarantee agreement dated April 28th, 1972, in which respondent pledged the money in his Castle Bank and Trust Company account to secure a loan of $100,000 extended by the Bahamian Bank through a -- an American correspondent, the Perrine Bank of Florida to a Michigan land development company in which he was interested.
The guarantee agreement was produced by the Bank of Perrine, Florida in response to Government subpoenas issued in April and May, 1974 requesting the production of all documents concerning the Bank of Perrine's business affairs with Castle Bank and Trust Company.
Other evidence, also critical to the conviction, was furnished by a former President of Castle Bank and Trust Company who testified that he had checked respondent's bank account with Castle Bank and Trust and that the amount entered at the time of the loan exceeded $100,000.
Before trial, respondent moved to suppress this evidence on the ground that it has -- had been obtained as a result of an illegal search conducted in Miami, Florida of a briefcase belonging to a Herbert Michael Wolstencroft, a Castle Bank and Trust Company officer, indeed a trust officer who is visiting in the United States in January 1973.
The person primarily responsible for the search of the briefcase was Norman Casper, a private investigator who was used as an informer by the Internal Revenue Service and who was working with the encouragement and assistance of Special Agent Richard Jaffe of the Internal Revenue Service. Casper admits -- Wolstencroft earlier, when Casper had visited Nassau in an effort to obtain information useful to the Internal Revenue Service in the course of a long time investigation of it called “Operations Trade Winds” which was an inquiry into the use of offshore tax havens for illegally obtained or employed funds by United States taxpayers.
And the Internal Revenue Service had learned that a suspected taxpayer in San Francisco had an account in the Castle Bank and Trust Company and that the Bank of Perrine Florida was an American correspondent of the Bahamian Bank.
Casper reported this discovery to Jaffe who encouraged him to try to obtain a list of the depositors in the Castle Bank and Trust Company.
On two of Wolstencroft's visits to Miami, Casper had introduced him to women, one of whom was a Sybol Kennedy, a private investigator who sometimes worked for Casper.
When Casper learned that Wolstencroft was coming to Miami in January 1973, he arranged with Sybol Kennedy to help him secure a list of depositors in Castle Bank and Trust.
Wolstencroft visited Kennedy at her Miami apartment and after which, the two went to a restaurant for dinner.
Casper then entered the apartment by means of a key which had been given to him by Kennedy and took Wolstencroft's locked briefcase to a locksmith who had -- as the Court found, had been recommended by Agent Jaffe.
When the locksmith made a key by means of which the briefcase was opened, it was taken to a photographer by IRS Agent Jaffe where the contents were photographed.
The briefcase was returned to Kennedy's apartment before she and Wolstencroft returned from dinner.
The Internal Revenue Service ratified this by paying Casper $8000 for his services out of which he paid $1000 to Kennedy.
Jaffe made inquiries about the persons whose names appeared in the photograph material and learned from the Cleveland Office that respondent Payner's returns for the years 1968 through 1971 were under investigation.
The Cleveland Special Agent was told of the listing of Payner's name but nevertheless, the investigation in Cleveland was closed for want of evidence and the returns from 1968 to 1971 were accepted as filed.
Thereafter, the Department of Justice initiated a grand jury investigation in Miami into secret bank accounts.
The subpoenas were issued in April and May 1974 and the critical loan agreement was produced.
This opened the investigation again in Cleveland which led to respondent's indictment involving his 1972 return.
Respondent waived the jury trial and moved to suppress the evidence, particularly the loan guarantee and any testimony associated with it.
After some proceedings not relevant here, the Court entered a verdict of guilty and then set it aside when it ordered the loan guarantee and the testimony related to it suppressed.
The District Court held that the suppressed testimony was tainted by the illegal search of Wolstencroft's briefcase.
It held that respondent lacked standing under the Fourth Amendment to challenge the legality of the January 1973 search, but that this, the Government agent's conduct demonstrated a “knowing and purposeful bad faith hostility to a person's fundamental constitutional rights” that the Due Process Clause of the Fifteenth Amendment requires suppression of the challenged evidence.