Source: https://law.justia.com/cases/federal/appellate-courts/F2/834/109/32885/
Timestamp: 2019-03-20 23:34:45
Document Index: 324724806

Matched Legal Cases: ['§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1302', '§ 1301', '§ 1955', '§ 1955', '§ 4424', '§ 4403', '§ 4424', '§ 1955']

United States of America, Plaintiff-appellee, v. Doyle D. King (86-5646), Kenneth H. Colliver (86-5647), Johnm. Poppas (86- 5648), Robert Allen Johnson(86-5672), and Dallas Howard Barnett(86-5674), Defendants-appellants, 834 F.2d 109 (6th Cir. 1988) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Sixth Circuit › 1988 › United States of America, Plaintiff-appellee, v. Doyle D. King (86-5646), Kenneth H. Colliver (86-56...
United States of America, Plaintiff-appellee, v. Doyle D. King (86-5646), Kenneth H. Colliver (86-5647), Johnm. Poppas (86- 5648), Robert Allen Johnson(86-5672), and Dallas Howard Barnett(86-5674), Defendants-appellants, 834 F.2d 109 (6th Cir. 1988)
US Court of Appeals for the Sixth Circuit - 834 F.2d 109 (6th Cir. 1988)
Argued April 14, 1987. Decided Nov. 25, 1987. Rehearing Denied Feb. 4, 1988
Doyle King, Kenneth Colliver, John Poppas, Robert Johnson, and Dallas Barnett challenge their convictions for operating an illegal gambling business involving five or more people in violation of 18 U.S.C. § 1955.1 They argue that the district court erred in instructing the jury that one contact between a layoff man2 and a gambling operation is sufficient to include the layoff man within the five persons required by 18 U.S.C. § 1955(b) (1) (ii). We agree and consequently reverse for a new trial.
Indictments for violations of federal anti-gambling laws were brought against eleven people, some of whom pled guilty. After a winnowing of charges and defendants, the trial proceeded against nine defendants on only one count, conducting an illegal gambling business in violation of 18 U.S.C. § 1955. That statute makes it a federal crime for five or more people to conduct a gambling business in violation of state law. At trial, the government argued to the jury that the defendants exchanged line information and layoff bets. Because of these mutually-advantageous and interlocking relationships, the government contended, the nominally-independent defendants could be counted together as operating a single, integrated illegal gambling business.
At the end of the trial, the district court instructed the jury on the application of 18 U.S.C. § 1955 to layoff men.3 It said, "One contact is enough for a layoff man to become a bookmaker, and, thus, one of the five persons involved in the business." The defendants objected and requested an instruction requiring the jury to determine that the acceptance of layoffs must "substantially affect" the bookmaker's business for the person taking the layoffs to be counted as one of the five persons involved in the business.
One defendant was acquitted, and the jury found the eight before them guilty of operating an illegal gambling business in violation of 18 U.S.C. § 1955. Five of the convicted defendants, King, Colliver, Poppas, Johnson, and Barnett, now appeal. Each has raised a number of claims and has adopted those of the others. Colliver, Poppas, and Barnett reassert the objection to the jury instructions. Colliver complains that the admission of wagering records violated his constitutional and statutory rights against self-incrimination, and King challenges the admission of some tape recordings. The other claims do not merit mentioning.
Because 18 U.S.C. § 1955 does not explicitly refer to layoff men, the defendants' objection to the "one contact" jury instruction raises the significant issue of how layoff men should be treated under the federal anti-gambling business statute. In order to lend some perspective to this issue, we briefly review the history of gambling laws in America.4
The general tolerance of gambling continued into the nineteenth century. Many states ran lotteries to raise money, and unlicensed lotteries prospered. Some of these lotteries became mired in scandal, with the corruption of public officials and the disappearance of proprieters with the prizes. Public outcry produced a spate of state enactments prohibiting lotteries, the first appearing in the 1830's. After the Civil War, however, Southern states began to turn to lotteries again as painless means of raising desperately-needed revenue. In the late nineteenth century there was a new series of scandals, most notably those surrounding the Louisiana State Lottery. The ensuing public outrage was so great that even Congress legislated on gambling. In 1890, Congress forbade the use of the postal service for the carriage of lottery paraphernalia. See Act of Sept. 19, 1890, ch. 908, Sec. 1, 26 Stat. 465 (codified as amended at 18 U.S.C. § 1302). Five years later, Congress extended the ban to all interstate commerce with the Federal Lottery Act, the first use of the commerce clause in an area of state and local police power. See Act of Mar. 2, 1895, ch. 191, Sec. 1, 28 Stat. 963 (codified as amended at 18 U.S.C. § 1301). After this brief foray into the field of gambling legislation, Congress resumed its hands-off approach to gambling.
As the legislative history of section 1955 reveals, Congress passed this law in an attempt to attack sophisticated, large-scale illegal gambling operations which Congress thought to be a major source of income for organized crime. See 114 Cong.Rec. 15,603 (1968) (remarks of Sen. McClellan upon introducing a predecessor of 18 U.S.C. § 1955) ("Gambling is the principle source of income for the elements of organized crime and it is the purpose of this bill to seek to shut off this flow of revenue by making it a crime to engage in a substantial business enterprise of gambling."); 116 Cong.Rec. 590-91, 603-04 (1970) (remarks of Sens. McClellan and Allot); President's Commission on Law Enforcement & Administration of Justice, The Challenge of Crime in a Free Society (1967). The House Judiciary Committee Report on this part of the Crime Control Act explained that the intent
To permit the government that needed flexibility, the originally-proposed section 1955(b) (1) (ii) defined an "illegal gambling business" as an operation involving five or more people who "participate" in the gambling. This language was objected to, however, on the grounds it swept too broadly. "The word 'participate,' it was argued, could include even the customers of a gambling business, thereby bringing the federal power to bear against such small scale operations as 'Mom and Pop' bookmaking businesses having two owners and three customers." United States v. Thomas, 508 F.2d 1200, 1205 (8th Cir.), cert. denied, 421 U.S. 947, 95 S. Ct. 1677, 44 L. Ed. 2d 100 (1975) (citing Hearings on S. 30 and related proposals before Subcomm. No. 5 of House Comm. on the Judiciary, 91st Cong., 2d Sess., ser. 27, 325-326 (1970)). See 116 Cong.Rec. 589-91 (1970) (remarks of Sen. McClellan). The statute now reads, "conduct, finance, supervise, direct, or own all or part...." 18 U.S.C. § 1955(b) (1) (ii). The term "conduct" was chosen in order to reach both "high level bosses and street level employees," but not bettors. House Report, 1970 U.S. Code Cong. & Admin. News 4029. "Conduct," explained the House Report, "does not include the player in an illegal game of chance, nor the person who participates in the illegal gambling activity by placing a bet." Id.
We have sought to give more precise meaning to this inclusive statute, and the prevailing rule is that a person "conducts" a gambling business if he either performs any act which is necessary to the operation of the gambling enterprise or regularly engages in conduct which is helpful to the enterprise. United States v. Merrell, 701 F.2d 53, 55 (6th Cir.), cert. denied, 463 U.S. 1230, 103 S. Ct. 3558, 77 L. Ed. 2d 1415 (1983). Under certain circumstances, a layoff man can clearly fit this formulation. For instance, a layoff man who regularly accepts a substantial amount of excess wagers performs a service that is essential to the profitable running of a gambling operations. See United States v. Grezo, 566 F.2d 854, 858-59 (2d Cir. 1977).
The crucial question remains how little contact between a layoff man and a bookmaking operation need be demonstrated for him to be found to have conducted the gambling business and be counted in the statute's jurisdictional five. The majority of the Courts of Appeals that have considered the issue have required proof of regular contacts. See, e.g., Grezo, 566 F.2d at 859 (2d Cir. 1977) (approving jury instructions that stated, " [t]he word 'conduct' ... does not include anyone, including an outside or independent bookmaker who places a single, or isolated bet for his own customer, or who makes isolated and casual, rather than substantial and regular lay-off bets, or who occasionally exchanges line information with the central gambling operation"); United States v. Avarello, 592 F.2d 1339, 1347 n. 11 (5th Cir.) (approving jury instructions that stated, "it is only when there is a consistent and regular pattern of accepting or placing lay-off bets between bookmakers that one bookmaker can be said to conduct or finance the business of the other bookmaker"), cert. denied, 444 U.S. 844, 100 S. Ct. 87, 62 L. Ed. 2d 57 (1979); United States v. Box, 530 F.2d 1258, 1266 (5th Cir. 1976) (a layoff man cannot be convicted under section 1955 unless there is evidence that he provided a regular market for layoff bets or otherwise was an integral part of the bookmaking business); United States v. Turzitti, 547 F.2d 1003, 1005-06 (7th Cir.) (following Box), cert. denied, 430 U.S. 969, 97 S. Ct. 1653, 52 L. Ed. 2d 361 (1977); Thomas, 508 F.2d at 1206 (8th Cir. 1975) (" [I]solated and casual lay off bets and an occasional exchange of line information may not be sufficient to establish that one bookmaker is conducting or financing the business of a second bookmaker."); United States v. Hawthorne, 626 F.2d 87, 91-92 (9th Cir. 1980) (following Thomas) . See also United States v. Campion, 560 F.2d 751, 754 (6th Cir. 1977) ("Nothing in the record suggests that Campion's involvement had a significant or substantial impact upon the gambling enterprise."). But see United States v. Jenkins, 649 F.2d 273, 275 (4th Cir. 1981) (adopting a "one contact" rule).
Although this flaw in the jury instructions requires reversal, the defendants' contentions reveal no other errors. Colliver claims that the admission into evidence of his betting records violated his fifth amendment right against self-incrimination and the protections created in 26 U.S.C. § 4424(c). He argues that tax code provision 26 U.S.C. § 4403 required him to keep these betting records, and, because he was compelled to keep these records, their use against him in this criminal case violated his fifth amendment privilege against self-incrimination. Their use also, according to Colliver, violated 26 U.S.C. § 4424(c), which forbids the use in a non-tax case of any material possessed by the taxpayer that he maintained to comply with the tax code's record-keeping requirement for wagering businesses. We disagree. The betting sheets admitted into evidence bore little resemblance or connection to those records maintained for the Internal Revenue Service. The evidence indicates that he kept substantially understated and incomplete records for tax purposes, and it is patently apparent that the betting sheets were kept solely for the business purpose of keeping track of his many bets. These betting sheets were not kept to comply with record-keeping requirements. When the government discovers such freely-prepared documents, the existence of a statute coincidentally requiring their maintenance does not transform the voluntary admissions into coerced incrimination. See Andresen v. Maryland, 427 U.S. 463, 470-77, 96 S. Ct. 2737, 2743-47, 49 L. Ed. 2d 627 (1976). See also United States v. Brian, 507 F. Supp. 761, 768-69 (D.R.I. 1981), aff'd sub nom. United States v. Southard, 700 F.2d 1 (1st Cir. 1983), cert. denied, 464 U.S. 823, 104 S. Ct. 89, 78 L. Ed. 2d 97 (1983).
King attacks the admission into evidence of a tape recording that had been made by some of the defendants as a record of bets in order to settle disagreements with bettors. King's claim that a foundation had to be laid as to the making and preservation of the tape is based on cases where the party making the tape introduces it into evidence. These tape recordings were found at one of the bookmaking operation sites, and the government agent who discovered the recordings testified that they were in the same condition as at the time of seizure. We think this foundation is sufficient to assure the accuracy of the recordings. See United States v. Fuller, 441 F.2d 755, 762 (4th Cir.), cert. denied, 404 U.S. 830, 92 S. Ct. 74, 30 L. Ed. 2d 59 (1971).
In a typical gambling operation, the bookmaker makes his profit by charging a bookmaker's commission, rather than by winning the bets themselves. Ideally, the bookmaker has equal amounts bet on each side of a contest so that the losing bettors, in effect, pay the winners, and the bookmaker keeps his commission. "Lay off" betting is one way in which a bookmaker can insure that bets on an event will be relatively balanced. A bookmaker with an unbalanced book can reduce his risk of loss by transferring, or "laying off," excess bets to a third person, or "layoff man." For a short dictionary of gamblers' terms, see United States v. Thomas, 508 F.2d 1200, 1202 n. 2 (8th Cir.), cert. denied, 421 U.S. 947, 95 S. Ct. 1677, 44 L. Ed. 2d 100 (1975)
In instructing the jury on the meaning of 18 U.S.C. § 1955, the district court began by explaining that "conduct" is a broad term and "would include any working in the business enterprise...." The court then emphasized, "Now, remember, a mere bettor or a customer, however, would not be participating in the conduct of the business." The district court subsequently turned to the significance of layoffs and line information:
For historical treatments of gambling law, see R. King, Gambling and Organized Crime (1969); Blakey & Kurland, The Development of the Federal Law of Gambling, 63 Cornell L. Rev. 923 (1978)