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CHAKEJIAN v. TROUT

January 7, 1969

Sarkis Chakejian
v.
James F. Trout, Sheldon Cohen, and Girard Trust Bank


Higginbotham, District Judge.


The opinion of the court was delivered by: HIGGINBOTHAM

This is a civil suit against a Special Agent of the Internal Revenue Service, the Commissioner of Internal Revenue and a bank. In this action the plaintiff seeks to enjoin compliance with or enforcement of a summons issued by Special Agent Trout to the Girard Trust Bank, and to quash and dismiss it; to suppress evidence allegedly obtained in violation of the plaintiff's constitutional right against self-incrimination; to compel the return of evidence and property allegedly illegally seized from the plaintiff, as the fruits of the unlawful interrogation; and to enjoin the defendants from using the evidence or presenting it to a grand jury.

 The plaintiff's primary contention is that since an IRS special agent's sole function is to investigate the possible criminal liability of a taxpayer, when questioning the taxpayer the agent should be required to inform him of his constitutional right against self-incrimination and of his right to have a lawyer present during the interview; but that Trout, by misrepresenting the purpose of his visit and failing to give the required warnings, obtained tax information from the plaintiff, duplicated his financial records and obtained other information leading him to issue and serve a summons upon the defendant, Girard Trust Bank, demanding certain business records of the bank relevant to the possible income tax liabilities of the plaintiff, all in violation of the plaintiff's Fifth Amendment right against self-incrimination.

 Counsel for the Internal Revenue Service and Agent Trout have moved to dismiss the complaint on the following grounds: (1) that this court is without jurisdiction to enjoin compliance with or enforcement of an Internal Revenue summons; (2) that this action is, in reality, a suit against the United States to which it has not consented; (3) that the court may not suppress evidence prior to indictment, nor enjoin its use or presentation to a grand jury; and (4) that a special agent in a non-custodial situation is not required to give the "Miranda warnings" to a taxpayer before he is questioned as to potential criminal tax liabilities.

 An argument and an evidentiary hearing were held on the defendants' motion to dismiss. After giving careful consideration to the pleadings and evidence, to the briefs submitted by the parties and the oral arguments of counsel, the court now makes the following Findings of Fact and Conclusions of Law.

 I. Findings of Fact

 The plaintiff, Sarkis Chakejian, together with his son, Richard Chakejian, operates a cleaning establishment in Bala Cynwyd. On April 11, 1967, Special Agent Trout, accompanied by Special Agent Deubler, visited the Chakejian business establishment and requested an interview with Richard Chakejian concerning his income tax returns for the years 1962-64. (N.T. 6-7, 50-51) The agents introduced themselves, showed their credentials and informed Richard Chakejian that he could have a lawyer present, if he wanted one. (N.T. 6, 51) Richard replied that he did not feel that it was necessary because he didn't have anything to hide. (N.T. 6) The interview lasted for approximately two hours, then the agents left. (N.T. 7)

 Agent Trout returned for a second visit April 25, 1967, accompanied by another special agent (Gindhart). Richard Chakejian was again informed that he could have a lawyer present and he replied, "I have done nothing wrong. I don't think it is necessary, is it." (N.T. 8) Richard showed the agents his cancelled checks for the years in question at their request, and they were duplicated on a microcopying machine by Agent Gindhart during the interview. After the interview the agents accompanied Richard to his home to see whether he had any additional cancelled checks there, then to the Girard Trust Bank to examine the contents of his safe deposit box. (N.T. 9)

 The agents returned to the Chakejian business establishment for a third visit on May 9, 1967. This time they asked to see both Richard and Sarkis Chakejian. The agents gave Sarkis Chakejian the same warning they had previously given Richard -- i.e., that he could have a lawyer present if he wanted one. Sarkis Chakejian replied, "Where could I get a lawyer now if I wanted one." (N.T. 10, 30, 33) Both Chakejians were adamant, and I so find, that Agent Trout did not inform them that they were not required to make any statements that they felt might incriminate themselves. *fn1" (N.T. 20, 21, 40, 41, 79, 82) Agent Trout then proceeded to question Sarkis Chakejian about his income tax returns for the years 1964-66. Mr. Chakejian answered freely and also made available for photocopying certain personal documents, business records, etc. (N.T. 11, 33, 37, 61) Toward the end of the interview Special Agent Trout stated words to the effect: "You are aware that this is a criminal investigation Mr. Chakejian?" This was the first point at which the Chakejians realized that the agents were present on more than a routine tax investigation. (N.T. 11-12, 34)

 The agents retained no cancelled checks, personal documents or other property of the plaintiff; merely the copies which they made of the documents. (N.T. 49, 50)

 In June 1967, Agent Trout served upon the Girard Trust Bank an Internal Revenue summons requesting that an officer of the bank appear at his office on July 17, 1967, bringing with him certain bank records pertaining to all financial transactions by the Chakejian family (including in-laws), for the years 1962-66. The bank notified Chakejian of its receipt of the summons and its intent to comply unless Chakejian, through his attorney, obtained a court order enjoining the production of the records, prior to the required date of compliance. By agreement between the bank and the Internal Revenue Service, the time for compliance with the summons was deferred until July 20, 1967; and on July 19, 1967, the plaintiff filed his complaint seeking to quash the summons and to obtain the other relief set forth in the opening paragraph of this opinion. (Complaint, amplified by affidavits and appendices attached thereto.)

 II. Discussion

 On the facts as stated above, and drawing inferences most favorable to the plaintiff, I conclude that the plaintiff is not entitled to the relief which he seeks, and that the complaint should be dismissed for lack of equity jurisdiction in this court.

 On the threshold issue of the challenge by counsel for defendants Trout and the Commissioner of Internal Revenue, Sheldon Cohen, to the jurisdiction of this court to consider the complaint on the ground that it is a disguised suit against the United States to which it has not consented; such a contention was made, and disposed of by the Court of Appeals for the District of ...


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