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UNITED STATES v. DEL SANDRO

February 7, 1979

UNITED STATES of America and William J. Shay, Special Agent of the Internal Revenue Service, Plaintiffs,
v.
David F. DEL SANDRO, Defendant. UNITED STATES of America and William J. Shay, Special Agent of the Internal Revenue Service, Plaintiffs, v. Rose Ann DEL SANDRO, Defendant. UNITED STATES of America and William J. Shay, Special Agent of the Internal Revenue Service, Plaintiffs, v. Nick TONTY, Defendant



The opinion of the court was delivered by: WILLSON

MEMORANDUM AND ORDER DENYING ENFORCEMENT OF THREE INTERNAL REVENUE SUMMONSES

Contemporaneously with the hearing, which had been directed in this case, the Government filed a brief. The brief succinctly outlines the Government's position with respect to its contention that the Court should direct enforcement of the Internal Revenue summonses directed to the three individual defendants, that is, David F. Del Sandro, Rose Ann Del Sandro, and Nick Tonty.

 The brief supports the allegations in the three complaints. In part, it reads:

 
"These are related actions, instituted by the plaintiffs pursuant to Sections 7402(b) and 7604(a) of the Internal Revenue Code of 1954, to enforce three Internal Revenue Service summonses served upon the defendants pertaining to an investigation of the correct federal tax liabilities of Emma Gardner.
 
"William J. Shay is a Special Agent of the Criminal Division Internal Revenue Service. Special Agent Shay is conducting an investigation of the federal wagering tax liabilities of Emma Gardner for the period beginning July 1, 1977 and ended June 30, 1978. The purpose of this investigation is to determine the correct civil tax liabilities of Emma Gardner and also to determine whether she filed false or fraudulent tax returns during any, or all, of the periods under investigation.
 
"Pursuant to this investigation, Special Agent Shay served summonses on David and Rose Ann Del Sandro, husband and wife, on August 31, 1978. In the summonses, the Del Sandros were compelled to appear before Special Agent Shay to make personal handwriting exemplars, to give testimony and to furnish all books and records relating to their participation, if any, in wagering activities during the period beginning July 1, 1977 and ended June 30, 1978. On the return date of the summonses, the Del Sandros failed to appear and failed and refused to produce the documents, testimony and handwriting exemplars sought. Because it is essential to the determination of the correct tax liabilities of Gardner for the periods under investigation that the Del Sandros be required to provide the materials demanded in the summonses, the plaintiffs filed civil actions, pursuant to Sections 7402(b) and 7604(a) of the Internal Revenue Code of 1954, to enforce the summonses.
 
"Pursuant to the investigation, Special Agent Shay also served an Internal Revenue summons upon the defendant Nick Tonty, seeking from Tonty personal handwriting exemplars, testimony and books and records relating to his participation in gambling activities during the period under investigation. Tonty appeared before Special Agent Shay on September 20, 1978, in response to the summons. When Tonty was asked whether he was currently involved in a numbers operation, he claimed the privileges of the Fourth and Fifth Amendments to the Constitution. Tonty also claimed the privileges of the Fourth and Fifth Amendments with respect to submitting handwriting exemplars.

 A complaint against each of the above-named defendants was filed entitled: "Complaint To Enforce An Internal Revenue Service Summons," and duly served. With respect to the Del Sandro complaints, an answer was filed by James K. O'Malley, Esquire, in which it was admitted that defendant failed to appear in accordance with the summons, but the answer alleges that the defendant had no obligation to appear because the summons requested the production of documents or other data "which is not authorized by Section 7602." And as one of the affirmative defenses, it was alleged that: "Section 7602 does not authorize the production of handwriting exemplars not in existence." A similar answer was filed by Mr. O'Malley on behalf of Rose Ann Del Sandro.

 In the Nick Tonty case, the same general denial was averred, that is, it is alleged that Section 7602 does not authorize the production of handwriting exemplars not in existence. But also, this defendant alleged bad faith in the issuance of the summons.

 A hearing has been had in which William J. Shay, the Special Agent, was the only witness. It developed at the hearing that the Del Sandros would appear before him at any subsequent time with respect to the summonses, but would not provide the handwriting exemplars unless ordered by the Court. It is noticed too that in the Tonty case only the exemplars are at issue.

 Thus, the issue is presented as to whether under Section 7602 this Court can compel these three defendants to provide handwriting exemplars. At the outset it is emphasized that these three defendants are not taxpayers under investigation. From Mr. Shay's testimony, it appears that Emma Gardner is under investigation because she allegedly conducts a numbers or lottery business in and about the City of Erie. Mr. Del Sandro is her nephew, and Rose Ann Del Sandro is his wife. Nick Tonty is not related to Emma Gardner.

 The procedure in this case is pursuant to Chief Judge Seitz's direction in United States v. McCarthy, 514 F.2d 368, 372 (CA3, 1975). He says in discussing the practice:

 
"1. The Secretary or his delegate would file a complaint accompanied by an affidavit of the agent who issued the summons, seeking enforcement. The complaint should separately allege compliance with each of the requirements of the Powell test of ...

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