Case Name: UNITED STATES of America, Appellee, v. Eugene SCHAEFER, Appellant; UNITED STATES of America, Appellee, v. Angelo DEL PIETRO, Appellant; UNITED STATES of America, Appellee, v. Frank VINCERI, Appellant; UNITED STATES of America, Appellee, v. Clifford LANCASTER, Appellant; UNITED STATES of America, Appellee, v. James LONSBERRY, Appellant; UNITED STATES of America, Appellee, v. John Edward VOGT, Appellant; UNITED STATES of America, Appellee, v. William CHRISTOPHEL, Appellant
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1975-01-03
Citations: 510 F.2d 1307
Docket Number: Nos. 73-1506, 73-1526, 73-1538, 73-1577, 73-1578, 73-1611 and 73-1617
Parties: UNITED STATES of America, Appellee, v. Eugene SCHAEFER, Appellant. UNITED STATES of America, Appellee, v. Angelo DEL PIETRO, Appellant. UNITED STATES of America, Appellee, v. Frank VINCERI, Appellant. UNITED STATES of America, Appellee, v. Clifford LANCASTER, Appellant. UNITED STATES of America, Appellee, v. James LONSBERRY, Appellant. UNITED STATES of America, Appellee, v. John Edward VOGT, Appellant. UNITED STATES of America, Appellee, v. William CHRISTOPHEL, Appellant.
Judges: Before LAY, BRIGHT and STEPHENSON, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 510
Pages: 1307–1318

Head Matter:
UNITED STATES of America, Appellee, v. Eugene SCHAEFER, Appellant. UNITED STATES of America, Appellee, v. Angelo DEL PIETRO, Appellant. UNITED STATES of America, Appellee, v. Frank VINCERI, Appellant. UNITED STATES of America, Appellee, v. Clifford LANCASTER, Appellant. UNITED STATES of America, Appellee, v. James LONSBERRY, Appellant. UNITED STATES of America, Appellee, v. John Edward VOGT, Appellant. UNITED STATES of America, Appellee, v. William CHRISTOPHEL, Appellant.
Nos. 73-1506, 73-1526, 73-1538, 73-1577, 73-1578, 73-1611 and 73-1617.
United States Court of Appeals, Eighth Circuit.
Submitted June 25, 1974.
Decided Jan. 3, 1975.
Rehearings and Rehearings En Banc Denied Feb. 27, 1975.
Certiorari Denied May 19, 1975.
See 95 S.Ct. 1975, 1980.
Donald Wolff, Merle L. Silverstein, Clayton, Mo,, Harold M. Weber, St. Louis, Mo., and Ray B. Marglous, Clayton, Mo., for appellants.
Marc P. Riehman, Dept, of Justice, Grim. Div., App. Section, Washington, D. C., for appellee.
Before LAY, BRIGHT and STEPHENSON, Circuit Judges.

Opinion:
STEPHENSON, Circuit Judge.
These consolidated criminal appeals concern review of convictions for conducting an illegal bookmaking business and conspiracy to conduct that business. We affirm the substantive charges and reverse the conspiracy charges.
All seven defendants (an eighth defendant died subsequent to conviction) were charged in two-count indictments. Count I charged violation of 18 U.S.C. § 1955, "Prohibition of illegal gambling businesses." Count II charged conspiracy to violate § 1955.
Jury trial was waived and the cases were tried to- the court on essentially undisputed facts, including a lengthy stipulation. Two defendants, Lancaster and Lonsberry, chose not to stipulate regarding expert testimony of an F.B.I. . agent as to bookmaking customs and procedures. Those defendants were severed and tried separately. They went to trial essentially on stipulated facts except for the expert testimony.
All defendants were convicted on both counts. The trial court sentenced each defendant to a prison term and fine on Count I. All defendants received suspended sentences on Count II with a probation period to run consecutively to the sentence on Count I.
At the outset we must meet the argument raised by all appellants that the contents of the intercepted oral communications, which formed the greatest part of the government's case, should have been suppressed because the wiretap application was signed by a Deputy Assistant Attorney General and not the Attorney General or his specially designated Assistant Attorney General as required pursuant to 18 U.S.C. § 2516.
Since the United States Supreme Court decided United States v. Chavez, 416 U.S. 562, 94 S.Ct. 1849, 40 L.Ed.2d 380 (1974), this court has twice considered Justice Department procedures almost identical to those which led to the wiretaps in the instant case. United States v. Brick, 502 F.2d 219 (8th Cir. 1974); United States v. Schullo et al., 508 F.2d 1200 (8th Cir. filed January 3, 1975). As in those prior cases the record here indicates that Attorney General Mitchell initialed the wiretap authorization and submitted his affidavit 'reciting that he had authorized application for the specified interception order. Chavez and this court's opinions following Chavez have found this procedure to be sufficient. See also United States v. Cox, 462 F.2d 1293 (8th Cir. 1972).
Certain of the appellants further argue that the pen register used by the government to record numbers dialed from certain telephones is not authorized by the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. § 2510— 2520. We have held otherwise. United States v. Brick, supra, 502 F.2d at 223.
Several appellants claim that the affidavit of Robert J. Wilkinson, Special Agent of the F.B.I., was insufficient to demonstrate probable cause and need for the wire interception and the use of the pen register. Citing U.S.Const. Amend. IV; 18 U.S.C. § 2518(l)(c).
The affidavit in question is substantially similar to that approved in Brick, supra at 224. There we said:
The affidavit presented, that of Robert J. Wilkinson, Special Agent of the F.B.I., set forth in detail his personal observations concerning the investigations conducted, as well as those of two unnamed informants, one of whom had provided reliable information for several years to Special Agents "on a continuous basis concerning gambling matters." The affidavit described in detail the operations of the gamblers, and named certain of the persons involved, together with their places of meetings, movements and conversations. In addition it was stated that the informants, noted above, would not testify, nor, as evidenced by past experience, would the gambler's customers; that gambling raids had in the past proved ineffective, as had the telephone toll records.
The above representations in the affidavit, in conjunction with others more detailed contained therein, furnished ample probable cause for the order entered and were sufficient to demonstrate on a factual basis, as distinguished from a mere conclusion, that "other procedures reasonably appear unlikely to succeed." The statute does not require more. (Footnote omitted.)
The same holds true in the instant case.
The most serious problem before the court is whether the evidence shows activity which is proscribed by 18 U.S.C. § 1955. That is, whether the facts of this case evidence the sort of illegal gambling business, "involvpng] five or more persons who conduct, finance, manage, supervise, direct or own all or part of such business," that Congress sought to arrest.
The parameters of the Congressional intent when enacting § 1955 have now been fairly well defined. Congress sought to draw the line between large scale gambling operations and those that are relatively small. Brick, supra, 502 F.2d at 224; Schullo, supra, 508 F.2d at 1204; 116 Cong.Rec. 603 (1970) (remarks of Senator Allot). The statute is not meant to reach gambling operations that are of insignificant monetary proportions or those that are only occasional or intermittent in operation. Schullo, supra at 1204 and citations. Only gambling that is continuous and substantial was to be proscribed. H.R.Rep.No.1549, 91st Cong., 2d Sess. (1970), 1970 U.S. Code Cong. & Admin.News at 4029.
It has further been established that the alleged violator of the statute need not know that the activity engaged in was composed of five or more participants. Brick, supra, 502 F.2d at 224; see also United States v. Smaldone, 485 F.2d 1333, 1348 (10th Cir. 1973), cert. denied, 416 U.S. 936, 94 S.Ct. 1934, 40 L.Ed.2d 286 (1974); United States v. Iannelli, 477 F.2d 999, 1002 (3rd Cir. 1973), cert. granted, 417 U.S. 907, 94 S.Ct. 2602, 41 L.Ed.2d 211 (1974). However, mere customers of the gambling business are not within the statute's intended reach. Schullo, 508 F.2d at 1205 and citations.
Congress was aware that it is oftentimes difficult to prove the workings of an organized gambling setup and surmised that the statute would often oper- ' ate against gambling networks much larger than the statutory definition of "five or more" would indicate. S.Rep. No.91 — 617, 91st Cong. 1st Sess. 73 (1969); Schullo, supra at 1205.
In the context of the bookmaking business this court has recognized that layoff betting is the major link connecting independent operations into an effective gambling organization that will work profitably and well for all concerned. Schullo, supra at 1205; Brick, supra, 502 F.2d at 225; see also United States v. DeCesaro, 502 F.2d 604, 611 (7th Cir. 1974); United States v. McHale, 495 F.2d 15, 18 (7th Cir. 1974). The layoff system was studied by Congress before it enacted § 1955. See Hearings on S. 30 and related proposals before Sub-corn. No. 5 of the House Comm, on the Judiciary, 91st Cong. 2d Sess.
The government's case rested upon stipulations, the transcribed wiretap conversations (logs) taped from appellant Lancaster's telephone, gambling records seized from several of the appellants' premises, and the expert opinion of Special F.B.I. Agent Whitcomb.
The stipulated evidence and logs show that Lancaster and the other appellants were bookmakers. Lancaster received line information from Angelo Del Pietro and Frank Vinceri. Lancaster also exchanged layoff bets with these men. Lancaster passed along the line information he received. At times he would adjust the line information himself before passing it along. Lonsberry took bets from customers for Lancaster and relayed line information to those customers for him. Lancaster and Lonsberry had numerous customers of their own with whom they dealt directly. Vogt maintained customers of his own. He received line information from Lancaster and exchanged layoff bets with him. Christophel discussed line information and layoff betting with Lancaster. Schaefer received line information from Lancaster and discussed line adjustments. Schaefer also bet with Lancaster. The logs disclose that all appellants carried on conversations regarding the status of accounts.
Appellants all claim that the evidence does not show one gambling business but several. We disagree.
The stipulated evidence and especially the wiretap logs indicate to us that this is the type of sustained and substantial gambling activity which Congress sought to curb. Each appellant was involved in the network of gambling activity interlaced through the Lancaster operation. Compare Brick and Schullo, both supra.
We are not persuaded by the contention of appellants Lancaster and Lonsberry that they are "independent businessmen" and are no different than independent hotel owners who refer customers back and forth and rely on cooperation from each other. It is patently obvious from the legislative history of § 1955 that Congress was well aware that the gambling business is unlike the hotel business or any other business. Nowhere does Congress indicate that it sought to regulate a "business" only in the sense of central bookkeeping, central cashiers, and central control. The bookmaking business does not operate that way, and the legislators were acutely informed of the fact.
The interdependence of the various individual components, including the sharing of line information and the exchanging of profits through layoff betting, outweighs the "independent businessmen" theory urged by appellants and satisfies us that there was one "illegal gambling business" here for the purposes of 18 U.S.C. § 1955. Brick, supra, 502 F.2d at 225; United States v. Sacco, 491 F.2d 995, 1003 (9th Cir. 1974) (en banc); United States v. Hunter, 478 F.2d 1019, 1022 (7th Cir. 1972), cert. denied, 414 U.S. 857, 94 S.Ct. 162, 38 L.Ed.2d 107 (1973).
Appellant Schaefer argues that the evidence does not support the finding that he was a bookmaker. He claims that his transactions with Lancaster were those of a mere customer. Christophel joins with Schaefer in arguing that no layoff betting has been shown as to them and that they should not be included in the business.
While the evidence of layoff betting as to these men is not as strong, we are satisfied that they were a part of the loose affiliation which, through continuous communication, conducted this gambling operation.
Lancaster and Christophel discussed layoff betting. Close examination of the transcribed conversations which Lancaster had with Schaefer and Christophel discloses discourse which could well be construed as layoff betting. Both men discussed line information with Lancaster and disseminated the line to customers. They also discussed the status of their accounts with Lancaster. These men continuously conferred with and advised each other with respect to various aspects of the gambling business. Viewing the evidence as a whole and in the light most favorable to the government, we are satisfied that Schaefer and Christophel, along with the other appellants, were bookmakers and were systematically and continuously involved in this gambling business.
We next turn to the question of whether the conspiracy to violate § 1955, charged in Count II of the indictments, is different in any material respect from the substantive charge of conducting the business. If it is not, the Constitutional provision against double jeopardy voids the conspiracy charge.
There are, of course, instances where a conspiracy charge may not be added to the substantive charge. One is where the agreement of two persons is necessary for the completion of the substantive crime and there is no ingredient in the conspiracy which is not present in the completed crime.
Pinkerton v. United States, 328 U.S. 640, 643, 66 S.Ct. 1180, 1182, 90 L.Ed. 1489 (1946). The United States Supreme Court has further held:
The applicable rule is that, where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one is whether each provision requires proof of [a] fact which the other does not. Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct. 180, 182, 76 L.Ed. 306 (1931).
An examination of the indictment and the record in this case leads to the conclusion that the conspiracy charge in Count II "comprehends nothing more than the agreement which [the appellants] necessarily performed by the commission of the substantive offense itself." United States v. Hunter, 478 F.2d 1019, 1025 (7th Cir. 1973); United States v. Manson, 494 F.2d 804, 808 (7th Cir. 1974). Seven individuals were charged with conducting a gambling business composed of five or more, and seven individuals were charged with conspiracy to conduct a gambling business of five or more. We find no element in the conspiracy which is not present in the completed crime. Pinkerton, supra, 328 U.S. at 643, 66 S.Ct. 1180; Hunter, supra, 478 F.2d at 1026. The Count II conspiracy charges are therefore reversed.
Appellants Schaefer, Del Pietro, Lancaster and Lonsberry urge this court to review the sentences received by them. They claim abuse of trial court discretion. Woosley v. United States, 478 F.2d 139 (8th Cir. 1973) (en banc).
The severity of a criminal sentence will not be reviewed by this court unless there appears a manifest or gross abuse of discretion or a sentence which has been imposed on a mechanical basis. Woosley, supra; Thompson v. United States, 493 F.2d 480 (8th Cir. filed September 25, 1974).
This case is not at all like Woosley. The court obviously apportioned the sentences with care. Nothing in the circumstances or record of the instant case can be construed as an abuse of discretion. Indeed, the sentences reflect careful and logical consideration of each defendant's role in the "business."
The judgments of conviction on Count II aré reversed. The cases are affirmed in all other respects.
. The Honorable James H. Meredith, United States District Court, Eastern District of Missouri.
. This court delayed decision in several cases, including the instant case, pending the Su preme Court's disposition of Chavez.
. The statute provides in relevant part:
(a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined not more than $20,000 or imprisoned not more than five years, or both.
(b) As used in this section—
(1) "illegal gambling business" means a gambling business which—
(i) is a violation of the law of a State or political subdivision in which it is conducted;
(ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and
(iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.
(2) "gambling" includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.
. It was stipulated that "a bookmaker is an individual who is in the business of accepting bets and wagers from bettor-customers on the outcome of sporting events such as baseball, football, basketball, and hockey games, and on horse races. As compensation for the services which he renders, the bookmaker retains the difference between what a bettor-customer is required to risk in order to win a given amount of money and the amount which the bettor-customer can in fact win. The magnitude of the difference is determined by the line or odds issued by the bookmaker on the event which is the subject of the bet or wager."
. Layoff, it was stipulated, "is a bet or wager placed by one bookmaker with another bookmaker which is necessitated by the influx of an imbalance of bets and wagers on a given sporting event and which has the effect of distributing the said bets and wagers, thus minimizing the risk of substantial loss."
. As stipulated, "a line is an addition to or subtraction from the anticipated point scoring potential of each of the two participating teams which is designed to equalize the betting propositions and thereby to induce the placement of bets by customers on both teams."
. We reject the claim of appellants that the adjustment of line information negates the concept of one gambling business. The evidence shows that the adjustment of line information serves at times the same as layoff betting to balance books.
. Appellants Lancaster and Lonsberry called an expert in hotel management to the stand for the purpose of showing that hotels rely on cooperation in customer and information exchange but are nevertheless separate businesses.
. We reject the argument of appellants Christophel and Vinceri that since they stipulated to being in the business only from May 14 through May 28, 1971, the 30-day requirement of § 1955 is not met as to them. The 30-day requirement is an alternative to the $2000 gross revenue requirement. See § 1955(b)(l)(iii) quoted in note 3 supra. The evidence shows that the business had gross revenue in excess of $2000 on both May 18 and May 23, 1971. See United States v. Bridges, 493 F.2d 918, 922 (5th Cir. 1974).
. Before trial defendants moved to dismiss the indictments as duplicitous and violative of double jeopardy. They also moved that the government be required to elect between the counts, again claiming double jeopardy. On appeal the various appellants plead double jeopardy inferentially through their comments and case citations. They rely more heavily on Wharton's Rule. We view the double jeopardy claim as having been adequately raised.
Because we decide that the conspiracy charges in the case violate the Fifth Amendment command against double jeopardy, we need not consider the conflict that has begun to arise in the cases relying on Wharton's Rule and its third party exception as it relates to conspiracy pursuant to 18 U.S.C. § 1955. Compare United States v. Becker, 461 F.2d 230, 234 (2d Cir. 1972), with United States v. Figueredo, 350 F.Supp. 1031, 1032 (D.Fla.1972); see Hunter, supra 478 F.2d at 1024-1026; Comment, Gambling Under the Organized Crime Control Act: Wharton's Rule and the Odds on Conspiracy, 59 Iowa L.Rev. 452, 462-67 (1973).
. The sentences imposed on Count I were: Lancaster, 3 years imprisonment and $10,000 fine; Lonsberry, 2 years and $10,000 fine; Del Pietro and Vinceri, 18 months and $5,000 fine; Christophel, Schaefer and Vogt, 9 months and $5,000 fine.