Leo N. Levitt and Ruth G. Levitt - Page 25

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               James MacDonald (MacDonald) was a staff attorney who                   
          reviewed criminal tax matters for respondent's Regional Counsel             
          in Newark.  His work was limited to criminal enforcement.                   
          MacDonald did not have authority to stop a recommendation to                
          prosecute a strike force case.  MacDonald reviewed O'Byrne's                
          report and the file for respondent's Regional Counsel.  MacDonald           
          had a conference with Herbert Zuckerman (Zuckerman), petitioner's           
          counsel.  In March or April 1973, MacDonald contacted O'Byrne and           
          asked him for additional information including a copy of the rule           
          6(e) order.  O'Byrne did not obtain a copy of the rule 6(e)                 
          order; he believed that his supervisor, Dubow, gave the rule 6(e)           
          order to MacDonald.                                                         
               MacDonald sent a criminal referral letter to Scott P.                  
          Crampton, Assistant Attorney General, Tax Division, Department of           
          Justice, dated May 17, 1973.  The letter stated:                            
               The specific items of unreported income in this case                   
               were discovered by review of Resyn Corporation's                       
               cancelled checks gotten by the government as a result                  
               of a grand jury subpoena (Special Agent's Report, Pages                
               12 and 13).  The examining agents (acting pursuant to                  
               the authority granted by the Court in a valid [Rule �                  
               6(e)] order * * *) found checks payable to Polymer                     
               Chemicals.  Subsequent inquiries with the bank where                   
               the Polymer Chemical account was held disclosed the                    
               existence of the Chemical Trader account (Special                      
               Agent's Report, Page 12).  No evidence of the two bank                 
               accounts was disclosed by Levitt, or by any of his                     
               employees, pursuant to testimony in bankruptcy                         
          MacDonald's criminal referral letter stated that a copy of the              
          rule 6(e) order was attached as exhibit C.  However, there is no            
          copy of the rule 6(e) order in respondent's file.                           

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