Costello v. United States

1956-04-01

Headline: Court upholds conviction even though the grand jury relied only on hearsay summaries by agents, allowing indictments based on such summaries and limiting pretrial challenges to grand jury evidence.

Holding: The Court held that a valid grand jury indictment may be sustained even when the grand jury heard only hearsay summaries from agents, and that such an indictment is sufficient to require a trial on the merits.

Real World Impact:

Makes it harder to dismiss indictments before trial over grand jury hearsay.
Allows prosecutors to use agents' summaries and net‑worth computations to secure indictments.
Defendants retain full trial protections to challenge evidence at trial.

Topics: grand jury, indictments, tax evasion, hearsay evidence, pretrial procedure

Summary

Background

Frank Costello, a private individual, was charged by the United States with trying to evade income taxes for 1947–1949. The government presented many witnesses and documents at trial. Costello asked to inspect the grand jury minutes and move to dismiss the formal charge (an indictment), saying no legal evidence supported it. The trial court denied those requests, and Costello was convicted; the Court of Appeals affirmed.

Reasoning

The central question was whether a grand jury may return a formal charge when its only information consisted of hearsay summaries by three government agents. The Court said the Constitution does not tell grand juries what kind of evidence they must use and pointed to long historical practice allowing broad grand jury inquiries. The Court emphasized that allowing challenges to the adequacy of grand jury evidence would invite lengthy pretrial mini-trials and delay, and held that an indictment returned by a properly organized and unbiased grand jury is enough to require a trial.

Real world impact

The practical effect is that defendants in federal cases will find it harder to have indictments thrown out before trial merely because the grand jury heard only hearsay. Prosecutors may rely on agents’ summaries and net‑worth calculations to obtain indictments. But the Court stressed that all normal trial rules still apply: evidence can be tested, challenged, and excluded at trial, so defendants keep their full trial protections.

Dissents or concurrances

Justice Burton wrote a separate opinion agreeing with the judgment but warning that courts should be able to set aside an indictment if the grand jury had no substantial evidence or if bias or prejudice is shown.