Leo N. Levitt and Ruth G. Levitt - Page 22

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          him to provide Resyn's records.  He explained that Resyn's                  
          receiver in bankruptcy had been unable to get Resyn's records.              
          Fried sent the memorandum because he wanted to review Resyn's               
          books and records and because the cooperating revenue agent                 
          needed those records to prepare a proof of claim.  Fried's                  
          request was approved.  Fried served grand jury subpoenas on                 
          petitioner and Goldstein on June 17, 1971, and Philbin on                   
          June 28, 1971.  Philbin, Resyn's bookkeeper, gave Resyn's                   
          business records to the grand jury.  Respondent obtained those              
          records from the grand jury.                                                
               In July 1971, Special Agent Frank O'Byrne (O'Byrne) replaced           
          Fried in the investigation of petitioner and Resyn.  O'Byrne read           
          the case file when he was assigned to the case.  It contained               
          certain of Resyn's ledgers, files, and canceled checks for 1967,            
          1968, and 1969.  The file also contained transcripts of the grand           
          jury testimony of Goldstein, Becker, and Philbin.  The file did             
          not include a copy of a rule 6(e) order.                                    
               Revenue Agents Paul A. Dorgeval, Jr. (Dorgeval), and Cronin            
          continued to investigate petitioner and Resyn for respondent.               
          Dorgeval and Cronin did not read the grand jury transcripts.                
              From July to October 1971, respondent's agents examined                
          Resyn's canceled checks.  They discovered a wide gap between the            
          time that certain Resyn checks were written and the time they               
          were deposited or negotiated by the payee.                                  






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