Full opinion text
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER KANE, District Judge. PROCEDURAL BACKGROUND After a twenty month investigation conducted before two successive grand juries, the instant proceeding was commenced on September 30, 1982 by the filing of a twenty-seven count indictment charging seven individuals and The Bank of Nova Scotia with conspiracy, mail fraud and tax fraud and also charging William A. Kilpatrick with obstruction of justice (Count 27). The bank was charged in ten counts with conspiracy to defraud (18 U.S.C. § 371) (Count 1) and aiding and abetting a mail fraud (18 U.S.C. § 1341 and § 2) (Counts 13 through 21). On February 21, 1983, I dismissed the first twenty-six counts of the indictment for failure to charge a crime and as improperly pleaded. Additionally, upon separate motion by the bank, I dismissed the charges in which the bank was named upon the ground that the indictment failed to allege that the bank or any of its representatives had the requisite knowledge and intent to commit the crimes charged. The government appealed the dismissals. On August 8, 1983, after briefing but before oral argument, the Tenth Circuit entered an order partially remanding the case to me so that all defendants could participate in hearings to determine whether prosecutorial misconduct and irregularities in the grand jury process constituted additional grounds for dismissal. Before and immediately after the partial remand by the Tenth Circuit, the Honorable Fred M. Winner, Senior United States District Judge, presided over post-trial mo.tions hearings following a guilty verdict against Mr. Kilpatrick on Count 27. On August 25, 1983, at about the time of his retirement from the bench, Judge Winner issued a memorandum decision which, among other things, summarized the status of the hearings which were being reassigned to me. Further, Judge Winner ordered that the government provide defendants with copies of transcripts of all proceedings that occurred before the grand juries. After some bizarre episodes of procedural novelty, Judge Winner’s opinion was finally published. See United States v. Kilpatrick, 575 F.Supp. 325 (1983). The instant Findings of Fact, Conclusions of Law and Order must be read in conjunction with Judge Winner’s opinion. The government attorneys failed to provide defendants with complete transcriptions as ordered. They apparently overlooked, and did not transcribe, dozens of proceedings before the grand jury. The latter proceedings — which converted into hundreds of pages of transcript and, more significantly, disclosed clear violations of Rule 6 — were not produced until the defense detected the lack of compliance with Judge Winner’s order. Even now, the government remains unable to provide transcripts of all the proceedings and was unable to produce a single Rule 6(e) order (which government attorneys testified they obtained) authorizing several major disclosures of grand jury matters. The government asserts that it had turned over such transcripts as could be had as soon as they were received from the court reporter. Such, in my view, does not excuse the failure to produce complete and accurate transcripts. If the assertion minimizes the inference of dissimulation, it exacerbates stronger ones of confusion and indifference. FACTS ESTABLISHED BY THE RECORD A. Grand Jury Agents Despite detailed instructions from the impaneling court that the grand jury should maintain its independence and not develop into a “prosecutor’s agent,” shortly after both grand juries involved in the investigation leading to the instant indictment were sworn, the prosecutors created the office of “agent of the grand jury” for Messrs. Mendrop and Raybin, Special Agents assigned by the IRS' to assist the prosecutors. Several months later an IRS agent assigned to the civil division and who the prosecutors relied upon as an expert was also sworn in as an “agent of the grand jury.” G.J. Tr. Schneider, May 3, 1982, 1:34 p.m., at pp. 2-3. The prosecutors divined the office of “grand jury agent” by personally administering oaths before the grand jury to Raybin, Mendrop and Schneider. The government concedés that the prosecutors possessed no authority to administer such oaths. Indeed, the prosecutor who administered the oaths now concedes he created the oath and was “shooting from the hip” when he did so. K.Tr. 501. The government argues that this event should be viewed as a technical mislabeling of no great import. It is, however, more than a misnomer. First, the prosecutor’s description to the grand jury of the role of a “grand jury agent” clearly misled the grand jury as to the appropriate role of the IRS agents in the proceedings. See Winner opinion, 575 F.Supp. at 329. As conceded by the prosecutor, there is simply no basis for his description to the grand jury of the role of grand jury agents. K.Tr. 501. Second, the grand jury was consistently reminded of the agents’ uniquely created and described role and urged to rely upon the IRS special agents as their “agents.” Thus, on many occasions when Raybin and Mendrop appeared as witnesses the government attorney reiterated that they were appearing as “agents of the grand jury.” See e.g., G.J. Tr. Mendrop, August 4, 1981, 9:25 a.m., at p. 2, August 5, 1981, 4:04 p.m., at p. 2, September 29, 1982, 9:32 a.m., at p. 2; G.J. Tr. Raybin, July 8, 1981, 9:11 a.m., at p. 5, March 3, 1982, 1:19 p.m., at p. 2, September 29, 1982, 2:32 p.m., at p. 2. Further, the government attorneys assigned special importance to identifying the IRS agents with the grand jury. When conducting interviews in connection with the investigation, Raybin and Mendrop were directed by the prosecutor to inform witnesses that they were “assisting a grand jury investigation in the Judicial District of Colorado.” K.Tr. 619; see also G.J. Tr. Mendrop, August 5,1981, 4:04 p.m., at p. 2; G.J. Tr. Raybin, July 8, 1981, 9:11 a.m., at p. 5, September 29, 1982, 2:32 p.m., at p. 2. Third, contrary to the role of the IRS agents described to the grand jury by the prosecutors, Mendrop and Raybin did not view their role and conduct their investigation as agents of an independent, unbiased grand jury. Rather, they viewed their role as agents of the Department of Justice, not the grand jury. When asked if his function as an agent of the grand jury was to assist the grand jury, Raybin testified: A: My duties were designed to assist the Department of Justice in its investigation ____ K.Tr. 232. Mendrop similarly interpreted his role as agent of the grand jury to be “primarily” to assist the prosecutors: Q: ... Mr. Mendrop, who were you really assisting in this matter during the grand jury investigation? A: Well, primarily, I was assisting the attorneys for the government and indirectly I’m sure that I must have been assisting the grand jury through the work that I was doing for the investigation that they were, that they had under consideration. Q: Well, in fact, you directly represented to the grand jury that you were assisting them, did you not, sir? A: I’m not sure how you mean that. Q: In fact, you represented to the grand jury that you were their agent and Mr. Snyder also represented to the grand jury that you were their agent; is that correct, sir? A: I believe those words were used, yes, sir- v K.Tr. 401-02 (emphasis supplied). Ironically, the government attorneys who created the grand jury agents and described their role are confused themselves as to whether the “agents” roles should be considered aligned with that of independent grand jurors or the prosecutors. K.Tr. 534-35; 1126. Fourth, the government attorneys used the “grand jury agents” to do more than assist the attorneys in the investigation. They used them to summarize evidence in front of the grand jury. On the first day that the second grand jury convened, after his pseudo-investiture as a grand jury agent, Raybin summarized the investigation so far conducted, explained tax shelters to the jury, and opined that the circular financing utilized in the tax shelters under investigation was illegal. See G.J.Tr. Raybin, September 29, 1982, 2:32 p.m.; Mendrop, September 29, 1982, 9:32 a.m.; Raybin, September 30, 1982, 10:40 a.m. Similar kinds of substantive testimony were given by Raybin on September 9, 1981 and March 3, 1982. See G.J. Tr. Ray-bin, September 9, 1982, 10:02 a.m.; March 3,1982,1:19 p.m. On September 29 and 30, 1982, when the government attorneys, and apparently the “agents of the grand jury,” were seeking the indictment, Raybin and Mendrop purported to summarize the evidence for the grand jury to support the 27 count indictment presented by the government attorneys. On September 30, 1982 Schneider appeared as “the expert” in the field of tax shelters to summarize the legal theory. G.J. Tr. Schneider, September 30, 1982, 9:22 a.m. These summaries contained numerous inaccuracies and were misleading in several respects. Although the government attorneys were quick to inform the grand jury of their role as advocates, the grand jurors were never informed that their “agents” were “primarily” representing the interests of the Department of Justice attorneys. Finally, the prosecutors' creation and use of grand jury agents resulted in many other abuses and Rule 6 violations. Most notably the agents made many joint appearances before the grand jury, without the presence of government counsel, and read transcripts to the jurors. K.Tr. 483-87; 636-39; 691-92; 707-12. Raybin and Mendrop appeared before the second grand jury to give testimony regarding the investigation. Each time they appeared alone, were sworn, and were examined by the government attorneys. When they appeared to read testimony from the first grand jury to the second grand jury, they appeared together, were apparently not sworn, and were not examined by government attorneys because the latter were usually absent. It is not clear in what capacity they were appearing to read testimony. The confusion was exacerbated by two other IRS agents — Burke and Shea — also appearing together to read testimony to the second grand jury. In what capacity they were appearing is even less evident since they were not made “grand jury agents” and the record of their appearance does not support a finding that they were witnesses. The transcripts of the agents’ simultaneous appearances establish that they were not present as witnesses. They appear not to have been sworn; they appeared together; they were not examined; ' and they were mostly unaccompanied by government attorneys. The testimony of the prosecutors and agents that the agents were sworn-, even if evidenced by a transcript, would not authorize their simultaneous appearances under Rule 6(d). The recollection of the prosecutors and agents that the oath was administered is challenged by the almost dozen transcripts showing the oath was not administered on any single occasion where the agents appeared together. The record reveals that the agents’ many appearances before the second grand jury, whether sworn or unsworn, were largely unsupervised. The agents were frequently unattended by government attorneys and, in some instances, may have convened the grand jury sessions without government counsel in order to read testimony. K.Tr. 483-87; 636-39; 691-92; 707-12. In other instances the transcripts do not make clear precisely when the agents entered or left the grand jury room. It appears that they may have been present while the prosecutors engaged in colloquy with grand jurors. G.J. Tr. Remarks of Prosecutor, February 2, 1982, 1:07 p.m. at p. 18; Remarks of Prosecutor, February 4, 1982, 3:30 p.m. at pp. 2-3; Remarks of Prosecutor, April 6, 1982, 9:08 a.m. at p. 8. Both prosecutors acknowledge that the agents “were not under examination” when they read to the grand jury. K.Tr. 485 (emphasis supplied); see also K.Tr. 707. The conclusion that they were not under examination is inescapable because no attorney was present to conduct an examination. Further, the grand jurors were under instructions not to question the agents during such appearances. K.Tr. 481-87. B. Improper Disclosure, Improper Use and Secrecy Violations During the course of the grand jury investigation, the government representatives systematically disregarded the strictures of Rule 6(e). The record demonstrates that the responsibility and decision making authority that Rule 6(e) vests in government attorneys was relinquished to and exercised by the Internal Revenue Service. Members of that agency undertook a policy of determining whether and to whom disclosure of confidential material would be. made and whether notification of such disclosure would be made pursuant to the Federal Rules. Moreover, the evidence suggests that information was disclosed to other IRS agents for use in civil cases. Grand jury secrecy was repeatedly breached by those with a duty to remain silent and secrecy obligations were imposed upon others of whom the law does not require confidentiality. (1) Disclosure The disclosure notices filed pursuant to Rule 6(e)(3)(B) indicate that numerous individuals at all levels of the Internal Revenue Service, many of whom were assigned from the civil division of that agency, were permitted access to grand jury material. DX Q; see K.Tr. 26, 29-36, 40, 43, 50. The hearings have demonstrated that numerous other IRS personnel (all of whom were civil personnel), were given access to grand jury material, that these people were never identified on a disclosure notice and that they remain unknown even now. That the decision as to which individuals should be privy to the grand jury material was frequently made by the IRS, rather than by the prosecutors, was admitted by the agents. K.Tr. 241. That it was the norm is confirmed by several additional facts. Disclosure was made liberally and often before obtaining attorney approval, an act the prosecutors acknowledged violates Department of Justice rules.. K.Tr. 57-69; 754. Notice of such disclosure was no.t made “promptly” as required by Rule 6(e). The decision as to which names to include on the disclosure lists was largely left up to the IRS agents. The integrity of the lists themselves, as well as the decisions to make disclosure to the listed personnel, is lacking. The government attorneys admitted that they were unable to identify a substantial number of those named on the disclosure notices. K.Tr. 498-99. Further, these notices were frequently filed by attorneys having little relationship to the investigation. See K.Tr. 15-67; DX Q. The IRS agents were likewise unable to identify many of the persons on the list or why they were listed. K.Tr. 14-22, 30, 36-38, 39, 43-44, 56, 60-61, 65, 69, 106-09. Perhaps the best illustration of the insouciance with which grand jury disclosures were made and recorded appears in the circumstances surrounding the post-indictment notice. The agents were directed by the government attorneys to pick their brains and' prepare a catch-all disclosure notice listing any individuals whom they could recall may have had access to secret grand jury materials but who were not listed as required. Thus, on October 20, 1982, approximately three weeks after the indictment was returned, a final notice of disclosure adding sixteen names of IRS employees was filed. K.Tr. 57-59. The agents’ post hoc attempt to determine to whom disclosure had been made in order to supplement the disclosure notices was not entirely successful. Numerous persons with access to grand jury material were forgotten and never included on the notices. The discovery of these forgotten people occurred only because, during the hearings, government representatives testified at length concerning two computer programs compiled from grand jury documents, ostensibly for purposes of assisting in the grand jury’s investigation. See, e.g., K.Tr. 71-79, 87-91, 157-61. The performanee of this function was riddled with Rule 6(e) violations. Although the prosecutors testified that a court order was obtained permitting the transfer of the derivative grand jury information for that purpose to Lowry Air Force Base, the government was unable to produce such an order at the hearings. K.Tr. 494-9; 517; 755; 807. The prosecutors acknowledge that no order was obtained permitting transfer of similar information to Dallas and Utah, a failure caused by their unawareness even at the hearing that the IRS agents had taken it upon themselves to arrange for the computer work to be done at those locations and because the prosecutors left the “details” of the computer work to the IRS. K.Tr. 87-88, 494-96, 523, 807. Many IRS employees with access to information used in compiling the computer program were eventually listed on the disclosure notices. See K.Tr. 34, 40, 43, 61, 72, 76, 78. Just as many, however, apparently never found their way onto the lists. Although the computer programs were created by computer “groups” in Dallas and Ogden (K.Tr. 74-76), the Disclosure Notices list few, if any, of the computer personnel from Utah or Texas. The indifference of the government attorneys is further revealed by the fact that a student clerk assisting the prosecutors was not listed as having had access to grand jury material although it was revealed at these hearings that she did. K.Tr. 1085-87. Whatever instructions there were, if any, concerning disclosure and use of the grand jury material was apparently passed on by the staff of the Internal Revenue Service itself and not by the Department of Justice attorneys. Little or no instruction concerning the strictures of Rule 6(e) is included in the training of many of those IRS employees who had access to the information. K.Tr. 155. Further, when the IRS agents acting as “agents of the grand jury” undertook the task of explaining the secrecy provisions to other employees of the IRS, it is clear that the information was of little practical use. For example, one such agent testified that, although he informed the supervisor of the computer program that he should disclose information only to one whose name was listed on the disclosure notices, only a few of the names on those lists were revealed to the supervisor. K.Tr. 155. (2) Improper Use The free rein given the IRS by the Department of Justice attorneys in this investigation and in the use and disclosure of grand jury material presents a serious possibility that the extraordinary powers of the grand jury were manipulated in order to obtain evidence useful in later civil litigation. The record reveals that such a danger was real and that substantial investigative activities disclosures were made for purposes other than “to assist an attorney for the government in the performance of [his] duty to enforce federal criminal law.” See Rule 6(e)(3), Fed.R.Crim.P. IRS institutional intent to take advantage of the grand jury investigation in civil audits was confirmed by Richard Gullion, a civil IRS agent assigned to the examination division in Denver, who freely acknowledged that the IRS hoped to take advantage of the facts developed by the criminal investigation after conclusion of the criminal proceedings. W.Tr. 836-38. The government, in resisting this claim, has asserted that no improper disclosure to IRS civil agents has occurred. K.Tr. 150-51, 413-14, 416-17, 645-46. Disclosure is only one of the forbidden purposes. It is equally improper to manipulate the grand jury investigation to obtain evidence for eventual civil use by the IRS. United States v. Sells Engineering, Inc., 463 U.S. 418, 103 S.Ct. 3133, 77 L.Ed.2d 743 (1983). As is discussed below, the record confirms that the grand jury’s extraordinary powers and resources were, in part, initiated and channeled for just such a purpose. The government’s investigation of defendants originated at the IRS in 1979. From August, 1979 to July, 1980, the IRS conducted a joint civil and criminal investigation. In July, 1980, the IRS referred its investigation to the Tax Division of the Department of Justice with the recommendation that a grand jury investigation be conducted because its administrative processes were potentially ineffective. DX M. The agents’ testimony that they abandoned all civil interest when the grand jury commenced reminds me of Joel Chandler Harris’ story about Bre’r Rabbit asking the fox not to throw him in the briar patch. At least one witness believed that the government was anxious to build civil cases through the use of grand jury information. W.Tr. 73-74. Several facts confirm that the IRS agents did not abandon entirely IRS civil interest in recouping taxes. For example, agents of the IRS interviewed numerous tax shelter investors. The interviewees were threatened that if they did not speak voluntarily a grand jury subpoena might be obtained. Thus, they were informed that the interview was being conducted in lieu of a grand jury appearance. K.Tr. 191. In connection with these investor interviews the IRS agents assisted in the creation of “Investor Questionnaires.” These questionnaires instructed interviewers to ask numerous questions concerning the tax shelters. Several of the questions involved investor motives, a subject of no conceivable relevance to a criminal investigation of the targets but highly relevant in a civil audit of the investor. DX W; G.J. Tr. Raybin, January 6, 1981 at pp. 4-7. That this interviewing program had no criminal investigation purpose is demonstrated by the fact that no investor, let alone any investors interviewed, appeared before the grand jury. None of the interviews, nor the results of the interviews, was presented to the grand jury. K. Tr. 149. The government offered no explanation at the hearings of why and for what purpose such interviews were conducted. Civil IRS employees, armed with grand jury information, were brought into the investigation to prepare audits of the tax shelter investors. These audits, like the interviews, were, not presented to the grand jury and no reasons or explanations for their preparation were offered at the hearings. K. Tr. 149. IRS activity since the return of the indictment confirms its intent to utilize the grand jury investigation and information for civil litigation purposes. Since return of the indictment the IRS has issued civil audit letters to the investors interviewed, notifying them that their returns were being examined. The letters read in part: “[a] report will be issued in the near future containing a position consistent with fads as presented in the Federal Grand Jury Indictment of September 30, 1982, for the United States District Court for the District of Colorado.” DX L (emphasis supplied); see also K. Tr. 176-78, 344-48. Finally, several statements attributed to the prosecutors by witnesses during the course of the investigation confirm that the grand jury proceedings, at least in part, were conducted for other than legitimate federal criminal purposes. Richard Birchall, a former attorney with the Department of Justice, testified that “[tjhere was a vengeance to the manner in which [the prosecutor] conducted the investigation.” W.Tr. 69. Mr. Birchall also reported that on one occasion the prosecutor indicated that even if he were unsuccessful on the merits, the defense would be excessively expensive to the defendants. W. Tr. 133. A similar improper motive was testified to by Donald Morrison a witness who made numerous grand jury appearances. With regard to a proposed business activity of some of the defendants, Morrison testified that a prosecutor indicated they were going to "shoot in [the] ass [the] coal deal.” W. Tr. 192. These statements were vigorously denied by the prosecutors. I am in no position to resolve the obvious conflict in the testimony by assessing the credibility of witnesses appearing before Judge Winner with those appearing before me. Thus, I do not find as a fact that the statements were actually made. I describe them here because they illustrate the infusion of hostility and vitriol which permeates this entire case — a condition which I attribute to the frequently rude, consistently arrogant, and occasionally obnoxious conduct of some of the government attorneys assigned to the prosecution of this case. (3) Secrecy Violations Several instances demonstrate blatant disregard for the' time-honored tradition of grand jury secrecy. As discussed below, such violations were utilized by the government, not only to gain what was certainly perceived as an advantage in connection with the intended prosecution but were also apparently part of an improper attempt to embarass the targets and hinder the ongoing operation of their business during the course of the grand jury investigation. Throughout the course of the grand jury investigation the government widely publicized the names of the individuals and entities that were being investigated as well as the nature of the grand jury’s inquiry. The dissemination of information concerning the proceedings before the grand jury was undertaken without the circumspection normally afforded such disclosure by government attorneys. Such disclosures were particularly egregious insofar as the recipients of the' information were known customers and business associates of the targets. With the knowledge of Department of Justice attorneys, numerous letters were sent out identifying the targets, the related entities and the nature of the criminal investigation. The letters were sent to individuals beyond the subpoena power of the grand jury and with whom it was understood the targets had ongoing business and professional relationships. The letters, which were written on the letterhead of the United States Attorney, but signed by supposed agents of the grand jury, were not only misleading in terms of the capacity in which they were sent, but also clearly posed a danger of adversely affecting the acknowledged business and professional relationships. K. Tr. 121-25, 597-98, 969-75; DX V-l through V-15; DX Y. The text of the letters read in part as follows: The United States Department of Justice is conducting a Grand Jury investigation of the business activities of William A. Kilpatrick, Decían J. O’Donnell, John Pettingill and Sheila C. Lerner for the years 1977 through 1980. The Grand Jury is attempting to determine whether these individuals, through United Financial Operations, Inc., P & J Coal Company, Inc., Marlborough Investments, Ltd., International Fuel Development Corp., Ltd., and International Block Construction Company, Ltd., have committed violations of Title 18 and Title 26 of the United States Code. The Grand Jury has obtained information which indicates that you have had and/or currently do have a business relationship with one or more of the individuals and/or entities listed above. It has been determined that your testimony will be helpful in resolving questions which still face the Grand Jury. Subsequently, the United States Department of Justice cordially invites you to appear and testify before the Federal Grand Jury in Denver, Colorado (U.S.A.) at your convenience. Transportation, lodging and meals will be arranged for and paid by the United States Department of Justice. * ¥ * * * * We look forward to your response, Sincerely yours, STEPHEN L. SNYDER Trial Attorney Criminal Section Tax Division By: PAUL E. RAYBIN Special Agent (emphasis supplied) The impropriety of publicly identifying targets in these letters was readily apparent to Judge Winner: [T]he identity of the persons and the transactions which were under grand jury scrutiny shouldn’t be disclosed to anyone by letter or otherwise, but these startling letters did precisely that. 575 F.Supp. at 334. The prejudicial disclosure of the targets and the nature of the grand jury’s investigation, however, was not limited to these “startling letters.” During the course of the investigation, the “agents of the grand jury,” and other employees of the IRS, ostensibly in connection with the ongoing criminal investigation, interviewed numerous investors in the tax shelters. Those investors, too, were informed of the nature of the grand jury’s inquiry and the names of those being investigated. K. Tr. 93-94. Rule 6(e) imposes upon government attorneys the obligation to secure grand jury information from improper disclosures. That obligation was breached several times. The disclosure of secret grand jury material was not limited to identification of the targets of the investigation. Grand jury information was also shared with Richard Birchall a witness and one-time potential target. Details of the investigation were revealed to Birchall during a meeting in which one of the prosecutors attempted to persuade him to assist in the government’s investigation by suggesting that the grand jury had received evidence warranting his consideration as a target. W.Tr. 44-52, 983-84; 575 F.Supp. at 332-33. Moreover, Birchall, who apparently was led to believe that he might face criminal exposure, was left unattended in a room housing grand jury material. He admittedly utilized the opportunity to rummage through the grand jury documents. 575 F.Supp. at 332-33. In further disregard of the secrecy provisions of Rule 6(e) another witness, Bernard Bailor noted that the room in which the grand jury material was housed was generally left open. W. Tr. 1130-31. Judge Winner commented that he found Mr. Bailor’s testimony to be knowledgeable and candid during the hearings. 575 F.Supp. at 338-43. Whatever may be said as to the impropriety of Richard Birchall’s rummaging through grand jury testimony and documents when he was left alone in the grand jury storage room, it does not excuse the government attorneys’ impropriety in availing him of that opportunity. Before leaving him alone in the grand jury storage room they accused Birchall of making several extortion threats to O’Donnell, a target of the investigation. K.Tr. 377, 381, 422-23, 425-26. Birchall obviously took advantage of the opportunity improperly provided to him to search through the grand jury records and documents. (4) Improper Imposition of Secrecy Obligations For what the record reveals was clearly an improper strategic purpose, secrecy obligations in clear violation of Rule 6(e)(2), Fed.R.Crim.P., were imposed upon two grand jury witnesses. On January 5, 1982, David H. Hoff and David R. Major appeared before the grand jury. When Hoff appeared separately before the grand jury he was advised: Q: You are also aware that the proceedings of this Grand Jury are secret and that is covered by Rule 6 of the Federal Rules of Criminal Procedure, that is, any questions I put to you today, questions that the Grand Jury may have, any discussion we have in this room at your appearance, that your appearance should be kept secret by you; do you understand that? A: Yes, sir, I do. G.J.Tr. Hoff, January 5, 1982, 9:59 a.m., at p. 4. A similar directive was given to David R. Major, G.J.Tr. Major, January 5, 1982, 11:13 a.m., at p. 5. These confessed violations of Rule 6(e) were neither innocent nor inadvertent. Rather, the record reveals the improper obligation to keep the information and fact of their appearances secret was imposed for a strategic purpose. Both witnesses occupied positions as attorneys who had formerly represented Defendants Kilpatrick and O’Donnell in previous SEC proceedings involving the same tax shelters under investigation before the grand jury. See G.J.Tr. Remarks of Prosecutor, January 5, 1982, 9:09 a.m., at p. 8. The government attorney explained to the grand jury the purpose of calling them as follows: The primary focus of our investigation involving the financing is the factual representations made concerning Marlborough Investments Limited, IFDC; we want to know what the lawyers were told by the principals, and what information they relayed to the parties. G.J.Tr. Remarks of Prosecutor, January 5, 1982, 9:09 a.m., at p. 12. Thus, the government attorney imposed the unauthorized secrecy obligations upon these two witnesses to prevent defendants from determining the nature and extent of any such communication that might have been revealed and to foreclose a challenge to such testimony based upon an applicable privilege. Such a conclusion is buttressed by the fact that the same government attorney examined four other witnesses that same day, several witnesses two days later on January 7, 1982, and approximately fifteen witnesses on other occasions. None of those witnesses were given the same directive. The prosecutors were fully cognizant that Rule 6(e) prohibits the imposition of secrecy obligations on grand jury witnesses. Indeed, during these hearings, the Department of Justice attorney involved acknowledged that at the time he imposed the improper obligations he was aware of the United States Attorneys’ Manual provisions prohibiting the imposition of an obligation of secrecy upon a witness. Yet, although provided with ample opportunity, he was unable to offer any legitimate reason for his transgressions. K.Tr. 697-99. C. Use of Pocket Immunity During this investigation, Department of Justice attorneys ignored entirely the federal immunity statute (18 U.S.C. §§ 6001, et seq.) which prescribes the congressionally authorized procedure for conferring grants of immunity and, instead, secured testimony by engaging extensively in what I have previously described as the “damnable practice” of bestowing “informal immunity” through “letters of assurance.” United States v. Anderson, 577 F.Supp. 223, 233 (D.Colo.1983). The testimony of 23 witnesses in this investigation was secured by means of such “immunity” conferred by Snyder and Blondin. K.Tr. 513. Not one witness was given statutory immunity. The profligate issuance of such “letters of assurance” had its inception shortly after the investigation commenced, in a telephone call between one of the prosecutors and Bernard Bailor, Esq., who, with his firm, represented many of the witnesses who later received such letters. K.Tr. 476. Bailor explained that his clients would not testify voluntarily before the grand jury. In response, the prosecutor suggested that in lieu of statutory immunity he would be willing to issue letters of assurance. Mr. Bailor accepted the offer and at that point a procedure for issuing the so-called informal “immunity” was inaugurated. K.Tr. 476-77. After reaching his agreement with Bail- or, the prosecutor apparently consulted with senior assistant chief Edward Vellines of the Tax Division. According to the prosecutor, Vellines indicated that the prosecutor had the authority to issue such letters of assurance provided he abided by the instructions of a Department of Justice memorandum and the United States Attorneys Manual and provided further that the recipient was not a target of the investigation. K.Tr. 514-15; 602; 623. Thereafter, the prosecutors undertook, without seeking specific approval from any superior, what was characterized as a “liberal” policy of distributing this type of informal immunity to witnesses. At no point was an effort made to obtain statutory immunity for any witness, nor was the United States Attorney’s Office for the District of Colorado informed of the issuance of such letters though written on United States Attorney’s stationery. K.Tr. 476-77, 720, 731-32; 575 F.Supp. 335-36; Remarks of Prosecutor, February 2, 1982 at 1:07 p.m. at p. 5-8; DX U-l-U-17. No witness who testified pursuant to this form of informal “immunity” bestowed by the prosecutors indicated that he or she would have been less cooperative or unwilling to testify had he or she been granted statutory immunity. Rather, the government attorneys readily concede that they chose the method they did simply for the sake of expediency — to by-pass the review procedure established by Congress in the statutory scheme. K.Tr. 476, 721-22; 724-28. Among the vehicles for review avoided by the unauthorized method chosen here was the statistical compilation that Congress indicated as among its purposes for establishing the statutory procedure. Indeed, the government acknowledged that, unlike grants of statutory immunity on which central records are maintained, there is no realistic way for the Department of Justice to determine the number of letters of assurance execute’d. K.Tr. 729; 839. Despite what the prosecutor explains were his specific instructions, informal immunity was bestowed upon individuals once considered targets of the investigation (i.e., John Jewell and Richard Bell). Moreover, one of the prosecutors admitted having conferred immunity upon an individual who it was later learned had failed to file tax returns for several years. K.Tr. 734-35; see also G.J.Tr. Kitriek, May 5, -1981, 10:36 a.m., at p. 3-4; Stephenson, April 6, 1981, 3:01 p.m., at p. 3-4, 575 F.Supp. at 335. In their deliberate efforts to avoid the review process and the certainty that Congress intended in the granting of witness immunity, the prosecutors injected serious ambiguity in the critical area of witness credibility. Several facts demonstrate the seriousness of the ambiguity created by this unauthorized procedure. Despite alleged explanations of letters of assurance, the grand jurors whose job it was in this investigation to assess witness credibility were presented with conflicting descriptions of the effect of these letters upon the witnesses and, consequently upon the value to place upon their testimony. On some occasions, the witnesses were advised before the grand jury that the letters gave them “immunity” and that they had no Fifth Amendment privilege. See, e.g., G.J.Tr. Stanley, April 6, 1981, 4:27 p.m., at p. 5; Stephenson, April 6, 1981, 3:01 p.m., at p. 4; Kitriek, May 5, 1981, 10:36 a.m., at p. 4; Miller, June 2, 1981, 9:28 a.m., at pp. 3-4. On other occasions, witnesses were advised that although they were testifying after receiving a letter of assurance, they retained their Fifth Amendment privilege and could refuse to testify. See, e.g., G.J.Tr. Jewell, February 4, 1982, 1:19 p.m., at pp. 2-3; Caddell, February 4, 1982, 10:50 a.m., at p. 3; Folsom, April 6, 1982, 11:42 a.m., at p. 4; see also, G.J.Tr. Remarks of Prosecutor, February 2, 1982, 1:07 p.m. at pp. 5-8. Moreover, the prosecutors’ avoidance of statutory immunity in this investigation left every witness in the posture of testifying with the impression and fear that unless the witness' testimony pleased the government, the government might withdraw its assurances. That such a fear was more real than imagined was apparent to Judge Winner in his review of the events surrounding the grand jury appearance of Richard Bell, a witness who testified with a “Letter of Assurance.” Mr. Bell was represented by his brother, Malcolm, an attorney practicing in New York City, and a witness I found to be straight-forward, fair, convincing, and most generous to Mr. Snyder. Malcolm Bell succumbed to the carrot of pocket immunity for his brother, but, later he was told by Mr. Snyder that if Richard ‘testified for Mr. Kilpatrick, all bets were off.’ Maybe this meant that if Mr. Bell perjured himself he would be prosecuted for perjury, but if the immunity statute had been followed, the nagging question of the meaning of ‘all bets are off’ wouldn’t confront us. 575 F.Supp. at 335. The meaning of the admonition of the prosecutor was a “nagging question” to Malcolm Bell, who as an experienced attorney ultimately determined that the prosecutor must have meant that the deal was not withdrawn but that Richard Bell was subject to perjury. More significantly, how-' evér, Richard Bell, as would most lay witnesses, believed it meant the “Letter” would be withdrawn. T.Tr. 460-63. D. Witness Invocation of Privilege Against Self-Incrimination The prosecutors pursued their course of distributing letters of assurance “quite liberally” until, in the words of one of them, it was decided “all good things come to an end.” G.J.Tr. Remarks of Prosecutor, February 2, 1982, 1:07 p.m. at p. 5. At that point they replaced the unauthorized procedure with the equally abusive and dubious practice of calling witnesses who had not been issued letters and having them invoke their Fifth Amendment privilege before the grand jury regarding the targets and the transactions under investigation;' knowing in advance that they would do so. K.Tr. 515. In all, seven witnesses were called to invoke their privilege in February and March, 1982. That the purpose was to prejudice the grand jury against the targets and the tax shelter transactions under investigation, and not to lay a statutory predicate for immunizing the witnesses (which the prosecutor never did) cannot be denied. First, the prosecutor who called the witnesses admitted that he did not do so to obtain congressionally authorized grants of immunity. K.Tr. 515. Second, the uniform questions posed to the witnesses evidence the intention to utilize the witnesses assertion to prejudice the grand jurors against the targets: Q: Now, Mr. Drizin, if I would ask you any questions concerning any relationship you may or may not have had with William A. Kilpatrick, John Peddingill [sic], Shiela. Lerner or Decían J. O’Donnell or United Financial Operations, would you assert your right against self-incrimination on those questions? A: Yes, sir. G.J.Tr. Drizin, March 2, 1982, 9:29 a.m., at p. 4. Third, the prosecutor did not limit his questioning merely to have the witness invoke his Fifth Amendment privilege but rather questioned several of the witnesses to elicit that Kilpatrick’s company, United Financial Operations, was paying their attorneys’ fees, leaving the grand jury with the impression that their refusal to testify was being financed by the targets. See e.g., G.J.Tr. D’Amico, February 4, 1982, 12:35 p.m., at pp. 6-7. That the prosecutor's conduct in this regard (which occurred before the second of the two grand juries empanelled in connection with this investigation) was known to him to be improper and prejudicial is revealed by his statements to the first grand jury several months earlier: Immediately all the witnesses I had subpoenaed today decided that they would not want to come in here and testify and they said they would assert their Fifth Amendment rights. I could force them in here under their Fifth Amendment rights, but under the Department of Justice guidelines I should not do that except in exceptional circumstances should I bring a person in here and have them assert their Fifth Amendment rights because it serves no purpose and it only serves to prejudice, and it can prejudice a layman. G.J.Tr. Remarks of Prosecutor, February 2, 1981, 9:40 a.m. at pp. 2-3 (emphasis supplied). Indeed, the prosecutor did to the second grand jury precisely what he told the first grand jury he could not and should not do. The only difference is that, when he did it anyway, he did not tell the grand jurors that he was doing it to them. General instructions, months prior, that jurors not draw inferences from an individual’s invocation of the privilege against self incrimination cannot correct such corruptions of the grand jury process. G.J.Tr. Remarks of Prosecutor, July 8, 1981, 10:50 a.m., at p. 6; January 5, 1982, 9:09 a.m., at pp. 22-23. E. Government Summaries of the Evidence Although the investigation of the instant case covered almost two years, the transcripts reveal that the case against The Bank of Nova Scotia was, for the most part, presented on a single day, September 29, 1982, the day before the indictment was returned. It was done, moreover, almost exclusively by having Mendrop summarize the “evidence” against the bank. The government seeks to explain these summaries as nothing more than legitimate use of hearsay testimony by the grand jury. See United States v. Rogers, 652 F.2d 972, 975 (1981). During the course of the September 29, 1982 proceedings, the grand jurors expressed concern that The Bank of Nova Scotia was being singled out for prosecution while other banks that allegedly permitted similar banking activity were not being named as defendants. In response, the prosecutor suggested that the Bank of Nova Scotia was a more appropriate target because, unlike the other institutions involved, it was a large internationally known bank doing business in the United States and its prosecution could be expected to deter others. See G.J.Tr. Mendrop, September 29, 1982, 9:32 a.m., at p. 50-52. The prosecutor erroneously suggested that the “evidence” indicated that The Bank of Nova Scotia representatives were familiar with the operation of Kilpatrick’s business and that the IRS was to be defrauded by virtue of the banking activity. See G.J.Tr. Remarks of Prosecutor, September 29, 1982, 8:52 a.m. at pp. 8, 13. No evidence of the kind suggested by the prosecutor had been presented to the grand jury. The discussion of these points was heard for the first time during the testimony of Mendrop. Instead of being presented as a witness who was to present hearsay investigative information concerning the Bank’s role, Mendrop was introduced to the grand jurors as one who was to “summarize” and “just walk through, one more time, and refresh your memory.” G.J.Tr. Remarks of Prosecutor, September 29, 1982, 8:52 a.m. at p. 5. Mendrop then proceeded to “summarize the evidence relating to each of the .individuals involved” and “the evidence pertaining to The Bank of Nova Scotia.” See GJ.Tr. Mendrop, September 29,1982, 9:32 a.m., at pp. 40, 52, 64, 66, 72. On the vital issue of the bank’s knowledge and intent, however, it is clear that Mendrop’s testimony was both misleading and inaccurate. In particular, Men-drop purported to “summarize” in connection with the bank’s role the testimony presented by three witnesses: Messrs. Waters, Ros and Charles. An examination of the grand jury testimony, however, reveals that it was' not a summary of the evidence before the grand jury. One of the witnesses whose testimony was “summarized” never appeared before either grand jury. The other two witnesses whose testimony was “summarized” did not give testimony even remotely resembling that supposedly “summarized” by Mendrop. The grand jury was never informed of these mischaracterizations or of any alternative basis for Mendrop’s summary. The inaccurate “summaries” of the evidence before the grand jury concerning the role of The Bank of Nova Scotia was particularly abusive for several reasons: (i) ' The misleading “summaries were presented by an individual upon whom the grand jurors had been urged to rely as their “agent,” (ii) The investigation spanned 20 months and two successive grand juries. Much of the testimony of the 27 witnesses who appeared before the first jury was read to the second grand jury in an improper and unsupervised manner, (iii) The grand jurors had not previously focused on The Bank of Nova Scotia as a target since the bank was not mentioned as a target until the month the indictment was returned; (iv) The reading of testimony from the first grand jury (which included the testimony of Ros and Charles) occurred early in the presentation of the case to the second grand jury. The grand jurors and the prosecutors frequently commented upon the monotony and difficulty of listening to the readings and, indeed, the grand jurors expressed confusion as to which transcripts had been read. See, e.g., G.J.Tr. Remarks of Prosecutor, November 4, 1981, 9:12 a.m. at p. 5; Remarks of Prosecutor, February 2, 1982, 1:07 p.m. at p. 20; and (v) The improper summaries related to vital issues concerning the Bank’s knowledge and intent. Unbeknown to the grand jurors, the government attorneys contemporaneously entertained serious doubts as to the accuracy of certain critical “facts” contained in the summaries. In sum, the mischaracterizations reasonably could not have been expected to be picked up by the grand jurors and, undoubtedly, formed a substantial basis for the indictment against the bank. The ex-ampies of improper mischaracterizations of the evidence are detailed below. (1) Mr. Waters Asserting that he was discussing a “few of the pieces of evidence” and “the summary of the evidence pertaining to The Bank of Nova Scotia,” Mendrop purported to summarize what the prosecutor characterized as the “evidence” provided by Waters about a trip supposedly made by defendant Monte Smith, the bank’s Cayman Island branch manager, to Kilpatrick’s offices in Denver. (Smith was vital as it is upon his activities that the bank has been claimed vicariously liable.) G.J.Tr. Mendrop, September 29, 1982, 9:32 a.m., at pp. 36, 64, 65-72; see also G.J.Tr. Remarks of Prosecutor, September 29, 1982, 9:07 a.m., at p. 10. According to Mendrop and the prosecutor, this claimed trip by Monte Smith was important because it demonstrated that Smith was familiar with Kilpatrick’s tax shelter operations. Apparently unbeknown to the grand jurors, Waters never testified before either of the grand juries. The grand juries were never informed of the actual source of Mendrop’s testimony which apparently was an interview of Waters or testimony of Waters at a contempt hearing involving Kilpatrick. Whatever the source, it is clear that Men-drop’s supposed “summary!’ of Waters’ testimony is an inaccurate recitation of “facts” in several significant respects. At the time Mendrop was supposedly summarizing the “facts” of Monte Smith’s trip to Denver, the government attorneys entertained serious doubts about its accuracy because Waters’ description of the individual he met at Mr. Kilpatrick’s offices did not resemble Monte Smith. The testimony of Waters during the 1983 obstruction trial of Mr. Kilpatrick confirms the inaccuracies of Mendrop’s testimony. During that trial Waters testified that when picking up some checks from Kilpatrick for payment due him, he was informed by Kilpatrick that one of the people present was Mr. Smith who was the manager of the Bank branch on which the checks were drawn. Mr. Waters’ description of that individual during trial does not resemble Monte Smith. T.Tr. 311-12. In fact, at these hearings, commenting on Mr. Water’s somewhat unusual description of Monte Smith, one of the prosecutors admitted that at the time “[tjhere was a real question as to whether or not it was the same person.” K.Tr. 742-43. Despite the facts that Waters was not called as a witness before either grand jury, that the grand jurors were never informed that transcripts of taped interviews of Waters existed and that a “real question” existed as to the accuracy of Waters’ identification, Mendrop was permitted to represent to the contrary that there was “considerable confirmation that Mr. Smith did actually come out here and visit with Mr. Kilpatrick.” G.J.Tr. Mendrop, September 29, 1982, 9:32 a.m., at pp. 66-68. (2) Mr. Ros Raul Ros, a “chauffeur” for Mr. Kilpatrick, testified before the first grand jury. He did not appear before the grand jury that returned the indictment; his testimony was read to the second grand jury. G.J.Tr. Mendrop, September 9, 1981, 8:44 a.m., at p. 3. A year after Mendrop read his testimony to the grand jurors, Mendrop purported to summarize it. According to Men-drop, Ros’ evidence confirms the testimony of Waters with regard to Monte Smith’s appearance in Denver. G.J.Tr.' Mendrop, September 29, 1982, 9:32 a.m., at p. 66. Mendrop indicated that Ros commented that during .Smith’s claimed visit to Denver, he and Kilpatrick discussed funding for the tax shelters. No such testimony can be found in Raul Ros’ grand jury transcript. Mendrop gave absolutely no explanation of an alternative source, but rather erroneously led the grand jurors to believe that he was simply relaying information contained in the Ros testimony before the prior grand jury. (3) Mr. Charles Mendrop’s “summary” also mischaracterizes the testimony of Barry Charles. Like Raul Ros, Charles testified before the first grand jury not the second grand jury. As he did with Raul Ros’ testimony, Men-drop attributed “testimony” to Charles that the bank fulfilled virtually all of Mr. Kilpatrick’s requests and that it “appeared” to Charles that the bank officers knew what was being done. G.J.Tr. Mendrop, September 29, 1982, 9:32 a.m., at p. 68. The “summary” given by Mendrop is at odds with Charles’ testimony. G.J.Tr. Charles, June 2, 1981, 8:40 a.m. Again, Mendrop did not identify any alternate source for the comments attributed to Charles. In his testimony before the first grand jury Charles indicated that he was not present during most of the transactions in the bank. Charles, who traveled to the Cayman Islands with Kilpatrick, Pettingill and O’Donnell, was the least involved in the group and observed less than Oliver Hemphill who himself testified that he had witnessed little of the banking activity. See G.J.Tr. Hemphill, May 5, 1981, 9:28 a.m., at p. 12. Thus, Mendrop’s suggestion to the grand jurors of the “evidence” to be gleaned from Charles “testimony” is contradicted by the actual testimony of Charles and others. (4) Comments by the Prosecutor In addition to presenting Mendrop’s summary of the “important evidence” against the bank on the day before the indictment, the prosecutors also argued in favor of an indictment of the bank. Once again, the evidence against the bank on the essential issue of knowledge of the claimed object of the conspiracy was seriously mischaracterized by the prosecutor, who asserted: [A]s my agents will tell you there is evidence that the Bank knew it was the IRS — they were in fact told that it was the IRS they were defrauding. G.J.Tr. Remarks of Prosecutor, September 29, 1982, 8:52 a.m. at p. 13 (emphasis supplied). No such evidence was ever presented. Indeed, even the misleading summary of Mendrop provides no basis for such a statement. F. Interrogation in Absence of Counsel In February, 1983, during the period between indictment and dismissal of the charges against The Bank of Nova Scotia, one of the prosecutors departed from the traditional role of a government trial attorney in order to travel to Puerto Rico and engage in investigative activity. The prosecutor undertook his journey with the intention of interviewing bank employees concerning the whereabouts and reasons for transfer of another bank employee, Malcolm Haynes, who the prosecutor understood was the second in command at the bank’s Cayman Island branch during the period covered by the indictment. No attempt had been made to talk to this potential witness before indictment. The prosecutor’s purpose was to interview him concerning matters underlying the indictment. W.Tr. 642-49; 694; 709-10. Although the prosecutor was fully aware that the bank, an indicted defendant, was represented by counsel, he did not feel constrained by the Supreme Court’s dictates in. Massiah v. United States, 377 U.S. 201, 84 S.Ct. 1199, 12 L.Ed.2d 246 (1964) to inform counsel of his intentions to interview high ranking bank employees. Instead, he undertook this investigative exercise with the “hope” of eventually interviewing Malcolm Haynes “in the absence of Mr. Morvillo,” firm in the belief that, if he committed a constitutional violation of the type identified in Massiah, the only likely sanction was the suppression of evidence in the government’s case-in-chief. In the prosecutor’s words, “no indictment has ever been dismissed because of [a Massiah violation].” K.Tr. 1114, 1122; W.Tr. 643, 693-94, 709-10. The prosecutor also testified that he believed it was permissible to interview high ranking employees of an indicted corporate defendant because it was authorized in Upjohn Co. v. United States, 449 U.S. 383, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981) and because, unlike Massiah he was not engaged in acts of “subterfuge.” W.Tr. 643, 693-94, 709-10; K.Tr. 1114-15. When he arrived in Puerto Rico, the prosecutor and another investigator, Victor Torrez Perez, an IRS special agent, appeared without prior arrangement at the branch offices of The Bank of Nova Scotia and proceeded to interrogate several of its representatives. Among others, they questioned Malcolm Haynes’ former secretary and his replacement, the branch’s controller. They also interrogated other high ranking representatives of the bank — including Douglas Rector, the Puerto Rico area manager of The Bank of Nova Scotia and chief executive officer of the Bank’s Puerto Rico subsidiary. W.Tr. 640-42, 696-99. After leaving the bank, accompanied by Special Agent Torrez Perez, he searched out the school attended by Haynes’ two small daughters, ages eight and ten, in order to determine the whereabouts of their parents. At the end of the school day, the prosecutor (who had already elicited information from the school’s principal and the girls’ teachers) followed the children on foot “by about a hundred yards.” His purpose was to have the girls lead him to their mother. W.Tr. 642-45; 699-708., The prosecutor’s visit to Puerto Rico, however, did not end his endeavor to interrogate high ranking representatives of the defendant bank without notice to or leave of defense counsel. Shortly after his interrogation of Mrs. Haynes, he wrote a letter to her requesting that she use her efforts to have her husband speak with the government. Like his previous efforts this approach was made without informing defense counsel. Indeed, the prosecutor asserted that he “would have interviewed Mr. Haynes in the absence of Mr. Morvillo hopefully.” W.Tr. 709-10. G. Mistreatment of Witnesses Professor Roland Hjorth, a tax law professor who Judge Winner observed “is a recognized expert who was employed by defense counsel” was permitted to testify before the grand jury that returned the indictment. His treatment by the prosecutor on the occasion of his appearance contrasts markedly with the treatment the prosecution afforded its own expert, Roger Schneider, who was passed off as an “agent of the grand jury.” As Judge Winner observed: [Professor Hjorth’s] views of tax law differed markedly from those of [the prosecutor], who bragged on frequent occasions that he had never taken a course in taxation and knew almost nothing about it. Nevertheless, Professor Hjorth was browbeaten and ridiculed by [the prosecutor], and some of the conversation so out of place for an ethical prosecutor took place during a recess in the hearing of some grand jurors. 575 F.Supp. at 333. Indeed, the prosecutor’s heated argument with Professor Hjorth was also overheard by witnesses scheduled to appear before the grand jury. W.Tr. 334. Moreover, the conduct was so shocking that Richard Slivka, a local attorney formerly employed by the Department of Justice and Colorado United States Attorney’s Office, who was representing witnesses scheduled to appear and who himself observed the conduct, wrote a letter to Chief Judge Fine-silver shortly thereafter reporting the incident. W.Tr. 317-27; 350-64. Professor Hjorth testified that the prosecutor’s conduct was so abusive that he would never again appear as an expert witness in a similar proceeding. Judge Winner concluded of the prosecutor’s conduct that: Intimidating witnesses by telling them that their testimony disgraces them and implying that the Tax Division of the Department of Justice will take after the witness and will complain to the University of Washington Law School because an expert testified to his expert opinions does no credit to our government____ [s]eemingly, the professor’s testimony isn’t seriously contested. I hope that we haven’t gotten to the point that disagreement with the legal concepts of the IRS provides grounds for attacks by that bureaucracy because sometimes the IRS is wrong. U.S. v. Sells Engineering, 463 U.S. 418, 103 S.Ct. 3133, 77 L.Ed.2d 743 and U.S. v. Baggot, 463 U.S. 476, 103 S.Ct. 3164, 77 L.Ed.2d 785. 575 F.Supp. at 333; see also K.Tr. 502-05. CONCLUSIONS OF LAW The government’s position in this case is reminiscent of the common law defense of confession and avoidance in wh