Page:Summary Report of Al Capone for the Bureau of Internal Revenue.djvu/26

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SI-7085-F
 

There is submitted herewith as Exhibit No. 17, a stenographic report of an interview with the taxpayer, Al Capone, and his attorney, Mr. Lawrence P. Mattingly of Washington, D. C., held in the office of the Internal Revenue Agent in Charge at Chicago, Illinois. It will be noted that in this interview Mr. Capone authorized and delegated Mr. Mattingly as his agent to furnish the Internal Revenue Bureau with evidence relating to his income. At that time Mr. Capone and his attorney were warned that any statements or information furnished by them would be used against Capone in a criminal prosecution if in the judgement of the government, it was considered necessary or advisable. In response to pertinent questions relating to his income, the taxpayer stated, "I will let my lawyer answer that for me". There is submitted herewith, as Exhibit No. 18, a power of attorney signed by Alphonse Capone authorizing Mr. Mattingly to represent him before the Internal Revenue Bureau. The original of this power of attorney was filed with the Commissioner of Internal Revenue in Washington, D. C., and a duplicate of it was filed in Chicago with the Revenue Agent in Charge.

Between May 19, 1930, and September 20, 1930, several conferences were held at our office in Chicago by Mr. Mattingly, Revenue Agent Hodgins and me. At each conference Mr. Mattingly expressed the desire that the Capone income tax case be closed promptly and he agreed to furnish me with all the facts he could secure from the taxpayer regarding his taxable income for the years under investigation and also to furnish information regarding his activities during those years in order that we might get all the facts so as to expedite the closing of this case. We knew that Mr. Mattingly and the taxpayer had been previously warned and understood that any facts furnished by them would be used if necessary or advisable by the government in a criminal prosecution against the taxpayer and I therefore encouraged Mr. Mattingly to submit to us all the facts he could secure from the taxpayer. As a result of these conferences Mr. Mattingly submitted a letter to us dated September 20, 1930. This letter contained admission of large taxable income for the four years 1925 to 1928, inclusive, and it was introduced as evidence in the trial against the taxpayer. This letter was considered of great importance by the attorneys presenting the case for the government and the defense attorneys made unusually strenuous efforts to prevent its introduction as evidence. A copy of the letter is submitted herewith as Exhibit No. 19. It will be noted that the following admissions were made: that the taxpayer was a member of an organization or syndicate from 1925 to 1929; that he was acting as a principal in this organization with three associates and that the profits were divided as follows—One third to a group of regular employees and one sixth each to the taxpayer and three associates. Government witnesses established

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