Costello v. United States
Citation
350 U.S. 359 (1956)
Facts
Frank Costello was indicted for federal income tax evasion. At the grand jury proceedings, the government presented testimony solely from IRS agents who summarized their analysis of Costello’s income — no primary witnesses, documents, or other direct evidence was presented to the grand jury. Costello challenged the indictment on the grounds that it was based entirely on incompetent hearsay and secondary evidence, arguing this violated his Fifth Amendment right to indictment by grand jury.
Issue
Must a federal grand jury indictment be based on competent, admissible evidence, or may the grand jury rely on hearsay and secondary evidence?
Holding
The Supreme Court upheld the indictment unanimously. A grand jury may return a valid indictment based on evidence that would be inadmissible at trial, including hearsay. Courts will not inquire into the sufficiency or competency of evidence before the grand jury.
Rule / Doctrine
Grand jury evidentiary independence: grand juries are not bound by the Federal Rules of Evidence. They may consider any evidence they deem appropriate, including hearsay, illegally obtained evidence, and incompetent testimony. So long as the grand jury is properly constituted and returns a facially valid indictment, courts will not look behind it to assess the quality of evidence presented.
Significance
Costello establishes the grand jury’s broad investigative latitude and the minimal scope of judicial oversight over grand jury proceedings. It reflects the grand jury’s historical role as an independent screening body, though critics argue Costello’s rule in practice gives prosecutors unreviewable control over the charging decision. The case is frequently taught alongside challenges to the grand jury’s independence and screening function.