United States v. United States Coin & Currency – Oral Argument – February 25, 1969

Media for United States v. United States Coin & Currency

Audio Transcription for Oral Argument – February 26, 1969 in United States v. United States Coin & Currency
Audio Transcription for Oral Reargument – October 20, 1970 in United States v. United States Coin & Currency

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Earl Warren:

Number 477, United States, petitioner versus United States Coin and Currency, etcetera.

Oh Mr. Richards, the Court did appoint you to represent this indigent defendant and we consider that a real public service.

We’re grateful to lawyers who do it.

We’re grateful to you for your diligence in this case and the Court thanks you for it, and Mr. Glazer, we thank you also for the diligent manner which you represented the Government.

Glazer:

Thank you Mr. Chief Justice.

Earl Warren:

Mr. —

Claiborne:

Mr. Chief Justice and may it please the Court.

Philip Lacovara is a member of the bar of the highest court of the State of New York and an assistant to the Solicitor General.

I move his admission for the purpose of arguing this case.

Earl Warren:

Your motion is granted Mr. Claiborne.

Claiborne:

Thank you.

Earl Warren:

Mr. Lacovara.

Philip A. Lacovara:

Mr. Chief Justice and may it please the Court.

This internal revenue forfeiture case is here on writ of certiorari issued on the Government’s petition to review a judgment of the Court of Appeals for the Seventh Circuit, holding that a claim of the privilege against self-incrimination under principles announced last term by this Court in The Marchetti and Grosso decisions precludes forfeiture of property used in violation of the Wagering Tax Act.

The factual background of the case can be stated briefly.

As a result of investigation by the Internal Revenue Service and the Federal Bureau of Investigation into non-pari-mutuel betting at Sportsman’s Park Race Track in Cicero, Illinois in the summer of 1963.

Federal agents pursuant to a warrant arrested Donald Angelini, the claimant in this case at Sportsman’s Park on August 24, 1963.

When Mr. Angelini was taken to be booked, it was found that in his pockets, he held $8,674.00, the respondent money in this case.

Mr. Angelini was subsequently indicted and convicted on two counts for violating the Wagering Tax Act and over, he was sentenced to 60 days in prison and a $2,500.00 fine.

Over his objection that application of the act to him violated his privilege against self-incrimination.

The Seventh Circuit affirmed in this Court in October of 1965 denied certiorari.

In the meantime in February 1964, the Government instituted this present proceeding a libel in rem against the money that had been seized from Mr. Angelini when he was arrested.

At the trial on this libel, the Government produced approximately a dozen internal revenue and federal bureau of investigation agents who testified their observations of non-pari-mutuel betting at Sportsman’s Park and to Mr. Angelini’s role in it.

It was also stipulated that although Mr. Angelini had registered as a gambler for the fiscal years 1957 and 1958, he had not applied for or paying the $50.00 wagering occupational tax for the period covering August 1963.

The district judge jury trial not having been demanded made findings of fact and conclusions of law in which he agreed that an illicit wagering business had been conducted at Sportsman’s Park, and that the — that no person receiving wagers non-pari-mutuel wagers at the park had paid the $50.00 occupational tax, and he further found that the respondent money in this case had been used in the course of that violation of the internal revenue laws.

Accordingly, under Section 7302 of the Internal Revenue Code, the money in this case was ordered forfeit to the United States.

The Seventh Circuit affirmed again over self-incrimination objections and the case was pending here on petition for writ of certiorari when this Court decided Marchetti and Grosso last term.

Shortly thereafter, the petition was granted and the case remanded to the Seventh Circuit for reconsideration in light of Marchetti and Grosso.

On remand, Seventh Circuit without further brief in their argument determined that the principles announced by the court did indeed apply to the forfeiture of property used in violation of the Wagering Tax Act and it reversed the decree of forfeiture because the Sixth Circuit subsequently explicitly rejected the Seventh Circuit’s ruling in this case and held that the forfeiture provisions that are here in question are remedial rather than penal that the privilege does not constitute a substantive defense in this type of in rem action.

The Government therefore petitioned for certiorari to resolve the conflict among the circuits.

Audio Transcription for Oral Reargument – October 20, 1970 in United States v. United States Coin & Currency

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Philip A. Lacovara:

Our position is that the critical difference between a criminal proceeding, such as the proceedings involved in Marchetti and Grosso and an in rem forfeiture which is directed both in form and in substance against defending property and is remedial rather than punitive serves to distinguished Grosso and Marchetti and the spirit and letter of the Fifth Amendment from proceedings like the present one.

Our contention is that the heart of the decision below wherein lies critical error was the assertion by the Seventh Circuit that the application of the general forfeiture statutes in the Internal Revenue Code in circumstances like these have is there only purpose, the punishment of individuals for violation of the Wagering Tax Act.

The court said that since it’s a practical matter, Marchetti and Grosso established that individuals cannot be punished criminally for that sort of conduct.

It follows that they may not be punished indirectly by forfeiture.

While we would be prepared to reject the logic that the direct — the indirect consequences intolerable simply because direct criminal prosecution is also barred.

We think the basic error that the court committed was in asserting without any discussion whatsoever that the basic purpose, the only purpose the Seventh Circuit said of forfeitures like the present one is a penal purpose.

On the contrary, we submit a review of the historical and legal aspects of internal revenue forfeitures establishes that they are not penal.

They are not directed either in essence or in objective at punishing an individual for his violation of the Internal Revenue Code.

They are not designed to penalize anyone for his invocation or the privilege against self-incrimination.

Rather we submit they are remedial in the sense that they provide an alternative for assuring an adequate flow of revenue into the treasury.

We say that historically, this is true because this Court relying on past English decisions has consistently differentiated internal revenue forfeitures under statutes from the common law type of forfeiture which attached directly to an individual upon his criminal conviction.

A felon’s goods at common law were forfeit and all of the crown needed to do to obtain his property was to demonstrate that he had been convicted of a crime.

On the contrary, is this Court itself carefully pointed out in the Boyd decision on which claimant principally relies in which the court below termed controlling internal revenue forfeitures which have dated in this country from the first Revenue Act of 1789 are directed at a different purpose, their object is not criminal punishment as the court found the particular forfeiture statute in Boyd was, but merely at remedying a default on the treasury a non-payment of a valid tax.

We start in this case by assuming that the court in Marchetti and Grosso did not hold that the Wagering Tax Act is invalid in the sense that it does not impose civil liability for the tax.

We think this is a fair assumption because, in our view, the court went to great pains to point out that nothing in the decisions was to extinguish civil liability even in the face of the privilege, but was simply to preclude criminal punishment in the face of a proper invocation of the privilege.

Earl Warren:

Very well.