United States v. Lasalle National Bank

437 U.S. 298 (1978)

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Nature of the Case

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Facts

An agent for P was investigating Gattuso. Tax returns disclosed rental income from real estate. That property was held in Illinois land trusts by LaSalle National Bank (D), as trustee. The agent issued two summonses, under the authority of § 7602 of the Code. Each summons related to a separate trust and requested, among other things, that D as trustee. appear before the IRS at a designated time and place and produce its 'files relating to the specified trusts. Lang, a vice-president of D, appeared in response to the summonses but, on advice of counsel, refused to produce any of the materials requested. P petitioned the United States District Court for enforcement of the summonses. Criminal charges were not pending but P alleged in the petition and an incorporated exhibit that the requested materials were necessary for the determination of the tax liability of Gattuso. D argued that P's investigation was 'purely criminal' in nature. The court ruled for D. The court said that it was an improper use of the summons 'to serve it solely for the purpose of obtaining evidence for use in a criminal prosecution.' The court stated that P was conducting an investigation solely for the purpose of unearthing evidence of criminal conduct by Mr. Gattuso. The Seventh Circuit affirmed; The use of an administrative summons solely for criminal purposes is a quintessential example of bad faith. The Supreme Court granted certiorari.