Al Capone Trial (1931)
  Excerpts from the Trial Transcript: Frank Wilson (revenue agent discussing the Mattingly letter)

Direct examination by Samuel Clawson:

[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 know....

[Clawson reads the transcript of the interview.]

[Clawson asks questions about Capone's responses to certain questions, which to referred to his lawyer, during the April 17 interview.]

Clawson:  When he said this, what gesture did he make?

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.


[Clawson asked Wilson what happened the when Lawrence Mattingly next visited the office.]
Wilson: Mr. Mattingly said it was difficult to get the facts and figures together. He took a letter from his inside coat pocket and while turning it over he would look out the window and talk very slowly, very deliberately. Finally he threw the papers over to me. He said, “This is the best we can do. Mr. Capone is willing to pay the tax on these figures.”
Clawson [showing a letter and other papers]: Are these the papers?
Wilson: They are.
[Defense attorneys Fink and Ahern object to the admission of the letter in evidence. Judge Wilkerson sends the jury out.]

Fink: ...This is the last toe. They have got him nailed to the cross now. This is just putting the last toe on him now. I do not want to waive it but I think in justice to the defendant that Your Honor ought to overrule the objection to this matter and 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--
Court: I 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 the taxes.......If this is admissible at all, it is admissible
on the theory that it is in effect a statement of the defendant. Is that right?
Clawson: 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 introduced:]

The following statement is made without prejudice to the rights of the above-mentioned taxpayer in any proceedings that may be instituted against him. The facts stated are upon information and belief only.

The taxpayer is now 31 years old, and has continuously lived with his wife since his marriage in 1917. He has one child, a son, now nearly 12 years old. Since 1922 he has been the principal support of his widowed mother and his sister and brother, now 19 and 21 years of age, respectively.
Prior to the latter part of the year 1926 he was employed at a salary which at no time exceeded $75 per week. During the years 1926 to 1929, inclusive, he was the recipient of considerable sums of money, title to which vested in him by right of possession only.
Taxpayer became active as a principal with three associates at about the end of the year 1926. Because of the fact that he had no capital to invest in their various undertakings, his participation during the entire year 1926 and the greater part of 1927 was limited. During the years 1928 and 1929 the profits of the organization of which he was a member were divided as follows: one-third to a group of regular employees and one-sixth each to the taxpayer and three associates.
The, taxpayer was at no time the banker for the organization, nor did he, ever actively participate in the conduct of its individual enterprises.
The only attorneys employed by the taxpayer personally during this period were Nash & Ahern, Ben Epstein and Capt. Billy Waugh, all of Chicago, Ill. The so-called bodyguards with which he is reputed to surround himself on the occasion of infrequent appearances in public, were not, as a general rule, his personal employees, but were, in fact, employees of the organization which participated in its profits. Several of these employees stopped at the same hotel with the ,taxpayer while he was in Chicago.
That a large force of bodyguards did not continually surround him is established by the fact that on the occasion of his arrest at Philadelphia in 1929 only one companion was with him.
The furniture in the home occupied by the taxpayer while he was in Florida was acquired at a cost not in excess of $20,000. The house and grounds have been thoroughly appraised and the appraisal has been heretofore submitted to you.
There is a mortgage against the house and grounds of $30,000. His indebtedness to his associates has rarely ever been less than $75,000 since 1927. It has frequently been much more.
Notwithstanding that two of the taxpayer's associates from whom,I have sought information with respect to the taxpayer's income insist that his yearly income never exceeded $50,000 in anyone year, I am of the opinion that his taxable income for the years 1925 and 1926 might fairly be fixed at not to exceed $26,000 and $40,000 respectively and for the years 1928 and 1929 not to exceed $100,000 per year.
                                                                   LAWRENCE P. MATTINGLY