Written by: Theodore M. David, Chair, Tax Law Committee

Current Items:                                                                                    

1) IRS and The Lindbergh Case           

1). People sometimes ask what do lawyers do? Now, of course, there is all the paper shuffling associated with various types of personal and business transactions, but for trial lawyers and prosecutors alike, it’s really not that at all. Whether pitching a case to a jury, judge, or the IRS, the job comes down to this: Lawyers paint pictures. You see, clients provide the basic paint colors of some facts, more or less ideally irrefutable. This is not a paint-by-numbers kind of task. Think Salvador Dali. One year, I traced his steps in Spain to his house and museum. BTW there’s one in St. Petersburg, Florida, which is a lot closer. When seen up close, some of his paintings look like a mishmash of dabs of color, but when you step back, your brain registers a complete picture. It’s an amazing phenomenon. Dali painted some pretty weird pictures. Melting clocks bizarre groupings of animals, men and women as well. He was perhaps one of the best self-promoters that has ever lived. Those dashing black eyes matching his turned-up waxed mustache and his antics made him one of the most popular artists of the 20th century. Dali would’ve made a great lawyer.

We, lawyers with dabs of tiny facts, arrange them in a fashion that best supports our client’s position. When viewed up close, they don’t seem to amount to much, but when seen from afar, like from the jury box, the picture is clear. What happens to truth in all of this? They say if it looks like a duck and quacks like a dark, it’s a duck… isn’t it? A federal tax judge once told me it wasn’t a matter of who was telling the truth but who was lying the least. Does who had painted the better picture better describe justice? Now, some painters just slap paint on a canvas, not knowing where it’s going or what the painting will be. Others carefully study rough drawings until they are convinced they have the picture in their head they want to appear on the canvas.

Now the New Jersey State Police, the folks we usually recognize along the Parkway and Turnpike and try to avoid, began its existence in 1921 curiously with Superintendent H. Norman Schwarzkopf, the father of Norman Schwarzkopf, the General in charge of seeking out those weapons of mass destruction in Iraq. By March 1, 1932, police work in New Jersey was far from the sophisticated forensic undertaking you see on TV these days. Today, the state police website says its state-of-the-art operation employs the most sophisticated crime prevention and detection techniques available. Its oath of honor, duty, and fidelity was set forth by Superintendent Schwarzkopf in 1921. The “Crime of the Century”, they called it, happened right in our backyard in Hopewell, New Jersey. It was on that night that Charles Lindberg, Jr., the 20-month-old son of Charles Lindbergh and his wife Anne Morrow, was abducted from his crib on the upper floor of their farmhouse. Their retreat farmhouse sat in the woods on 400 isolated acres. Kidnapping had become a favored sport of gangs and other destitutes during the Great Depression.

Typically, handwritten ransom notes were eventually delivered, and wealthy parents often coughed up. Way too often, the kidnapping case was turned into homicide. If you are keeping track, you have noticed that this bar bulletin is late. Truth be told I was lollygagging in Florida when I got wrapped up in the Lindbergh kidnapping case. It started innocently enough. Diane’s friend Marie, a retired document examiner for the San Diego police, stayed with us a few days and told me about a presentation she was doing on the handwriting analysis of the 13 ransom notes which were delivered in the Lindbergh case. She got my attention. Theories of all types have emerged in the last almost hundred years.

But none of them seem very convincing to me. The picture that was painted by prosecuting Attorney General David Wilentz( yes, that Wilentz whose son Robert became Chief Justice of the NJ Supreme court 1979-1996)  trying his very first criminal case was that a single German immigrant named Bruno Hauptmann had pulled off the kidnapping and murdered baby Lindbergh. Hauptmann got the electric chair on April 3, 1936. Up to that time, kidnapping was a state law offense.

After the kidnapping, the Federal Kidnapping Act, referred to as the Lindbergh Law, was passed by Congress to make it a federal crime that could be investigated by the FBI in any state. In 1932, there were so many local and state police involved in the investigation that it looked like a Keystone Cops silent film. The case was followed closely by people here and around the world. Even Scotland Yard offered their assistance.  Now whether Hauptmann was guilty or not I will leave to your own research. But I suggest it is an example of a trial attorney as a prosecutor painting a picture a jury wanted to see. This case was tried before the Supreme Court case of Brady was decided, which required prosecutors to give exculpatory evidence to a defendant prior to trial. Lindbergh was perhaps the most revered and honored hero in America at the time.

And curiously, it was Lindbergh’s own version of how the crime was committed, which was accepted by the police, Wilentz, and the jury. Some facts that seemed irrefutable were painted to make Hauptmann out to be a cold-blooded killer. He protested his innocence right up to his execution. While in prison awaiting that day, he wrote an autobiography that is still available today. The trial in 1935 was a circus in Flemington, and scalpers sold tickets to the show. Celebrities flocked there to see it as well.  Where was the IRS in all of this? After all, this is a tax bulletin. Enter Elmer Irey. It was Irey who insisted over Lindbergh’s objection that the ransom money be identified by recording the serial numbers of the cash. Since 1919, when it was formed, Irey, a lawyer from Georgetown Law School, was the first Chief of the Internal Revenue Service Intelligence Unit that would later become the IRS Criminal Investigation Division.

In 1931, Irey led the IRS unit that helped put Al Capone in prison. In addition to serial number recording, some of the $50,000 ransom (about $860,000 today) was in gold certificates which looked a lot like our current paper money but were emblazoned with a gold seal claiming that the United States government had the gold to back it up. After America had gone off the gold standard, spotting those certificates in circulation was easy. Hauptmann had used one of those identifiable bills to purchase some gasoline for his 1930 Dodge. The gas station attendant recorded his license plate number. Another $14,000 eventually turned up in Hauptmann’s garage. All were easily identified, thanks to Elmer Irey. So, it could be said that it was the IRS that got Hauptmann into the electric chair. Perhaps even if he had survived the trial and avoided the electric chair, another punishment would have been discovering that the ransom money would have been taxable income. It probably would not have made Lindbergh happy either in that I could see the IRS asserting its lien against the cash itself for the income taxes before refunding only the balance to Lindbergh himself.

But I’m not done with the Lindbergh case. Over 200,000 exhibits and documents are lodged in the New Jersey State Police Museum in Trenton, New Jersey. They include the infamous ladder that was supposedly used to reach the second-floor baby’s nursery, as well as the ransom notes. Since the days of Gov. Brendan Byrne, all of this stuff has been available for research by anyone so interested. Frankly, after spending hours poring over the known facts of the case instead of writing this tax bulletin on time, I’m not sure I see the same picture the jury saw in 1935. Trenton anyone?

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Theodore M. David: