examination by Samuel Clawson:
When he said this, what gesture did he make?
[Clawson asked Wilson about a conversation with Capone's tax attorney,
Lawrence Mattingly, on April 10, 1930.]
Wilson: I told him that our office could give no immunity, but I
offered to listen to anything he had to say. Mr. Mattingly then
arranged to bring Capone in. On April 17, Mr. Mattingly came into
the office, and a little later Capone entered with two men I did not
[Clawson reads the transcript of the
[Clawson asks questions about Capone's responses to certain questions,
which to referred to his lawyer, during the April 17 interview.]
Wilson: He waved at Mr. Mattingly....
Clawson: Now, did you see Mr. Mattingly after that?
Wilson: I did. On September 19, 1930.
Clawson: Who was present?
Wilson: Revenue Agent Hodgins, Mr. Mattingly and myself.
Mr. Mattingly said that he had consulted with Mr. Capone and his
associates and had got some figures together and would bring them in.
asked Wilson what happened the when Lawrence Mattingly next visited the
Mr. Mattingly said it was difficult to get the facts and figures
took a letter from his inside coat pocket and while turning it over he
look out the window and talk very slowly, very deliberately. Finally he
the papers over to me. He said, “This is
the best we can do. Mr. Capone is willing to pay the tax on these
[showing a letter and other papers]: Are these the papers?
attorneys Fink and Ahern object to the admission of the letter in
Wilkerson sends the jury out.]
Fink: ...This is the
last toe. They have got him nailed to the cross now. This is just
last toe on him now. I do not want to waive it but I think in justice
defendant that Your Honor ought to overrule the objection to this
let the whole thing go in now, because there are
some things in this letter that at least indicate the lawyer is crazy.
Ahern: The Supreme Court has often held that it
is human nature to avoid tax. We had a Boston Tea Party--
suppose this is a Boston tea party.
[Judge Wilkerson reads the letter.]
Court: There are a lot of things that raise a question in my mind
about the admission of that letter. It is perfectly clear--the
law--with regard to that letter. Did Mr. Mattingly, under the
scope of authority, have authority to say all the things in that
letter. He held the authority to settle and adjust taxes.
Had he the authority to do anything more? And there is so much
extaneous matter in that letter that you cannot separate it as far as
this is admissible at all, it is admissible on the
theory that it is in effect a statement of the defendant. Is that right?
That is right....
[After further argument, Judge Wilkerson rules that
the letter can be admitted to show that the statement was made, but the
contents of the letter could not be considered by the jury as proof of
the statements made. The jury is called back and the letter is
following statement is made without prejudice to the rights of the
above-mentioned taxpayer in any proceedings that may be instituted
The facts stated are upon information and belief only.
taxpayer is now 31 years old, and has continuously lived with his wife
his marriage in 1917. He has one child, a son, now nearly 12 years old.
1922 he has been the principal support of his widowed mother and his
brother, now 19 and 21 years of age, respectively.
the latter part of the year 1926 he was employed at a salary which at
exceeded $75 per week. During the years 1926 to
inclusive, he was the recipient of considerable sums of money, title to
vested in him by right of possession only.
became active as a principal with three associates at about the end of
1926. Because of the fact that he had no capital to invest in their
undertakings, his participation during the entire year 1926 and the
part of 1927 was limited. During the years 1928 and 1929 the profits of
organization of which he was a member were divided
follows: one-third to a group of regular employees and one-sixth each
taxpayer and three associates.
taxpayer was at no time the banker for the organization, nor did he,
actively participate in the conduct of its individual enterprises.
attorneys employed by the taxpayer personally during this period were
& Ahern, Ben Epstein and Capt. Billy Waugh, all of Chicago, Ill.
The so-called bodyguards with which he is reputed to surround himself
occasion of infrequent appearances in public, were
general rule, his personal employees, but were, in
fact, employees of the
organization which participated in its profits. Several
employees stopped at the same hotel with the ,taxpayer while he was in Chicago.
large force of bodyguards did not continually surround him is
the fact that on the occasion of his arrest at Philadelphia in 1929 only one
furniture in the home occupied by the taxpayer while he was in Florida was
a cost not in excess of $20,000. The house and
have been thoroughly appraised and the appraisal has been heretofore
mortgage against the house and grounds of $30,000. His indebtedness to
associates has rarely ever been less than $75,000
since 1927. It has frequently been much more.
that two of the taxpayer's associates from whom,I have sought
respect to the taxpayer's income insist that his yearly income never
$50,000 in anyone year, I am of the opinion that his taxable income for
years 1925 and 1926 might fairly be fixed at not to exceed $26,000 and
respectively and for the years 1928 and 1929 not to exceed $100,000 per