Opinion ID: 1445081
Heading Depth: 2
Heading Rank: 3

Heading: Revocation Proceedings

Text: On January 26, 2007, [3] the district court held a hearing on the alleged violations. Mr. Neal admitted that he had failed to submit truthful monthly financial statements to his probation officer and that he had opened a new line of credit. He requested, however, that the court continue the revocation hearing on the other alleged violations pending trial on the state offenses. [4] The district court refused and heard evidence on the violations. At the hearing, Mr. Neal's probation officer, Troy Adamson, testified that, although Mr. Neal had filled out monthly reports, the information contained in the reports was inaccurate. Mr. Neal's monthly reports listed only a pension income of $5,988.42 per month, totaling $72,000 per year. However, Mr. Neal's federal tax returns listed income in excess of $200,000 per year for 2004 and 2005. Additionally, Mr. Neal's monthly report failed to identify bank accounts with balances in excess of $1 million and failed to reveal a large amount of cash  $1.6 million  found hidden in Mr. Neal's home. Also at the hearing, Officer Monty McMahan of the Indiana State Excise Police testified that, in the spring of 2004, he had begun an investigation of possible gambling violations at two bars in Anderson, Indiana. As the investigation progressed, Mr. Neal became one of its targets. Officer McMahan testified that he personally witnessed eleven vehicles, owned or registered to Mr. Neal or to Video Services (a company owned by Mr. Neal), transporting gambling machines and making collections. Officer McMahan also testified to the actions of a man named David Snow. According to Officer McMahan, Snow would go into various establishments owned by Mr. Neal and would leave carrying a bag of money. In September 2005, as part of the investigation, an undercover officer, April Tackett, had a conversation with Snow. During this conversation, Snow related that he worked for Mr. Neal and that he had collected money from gaming machines at different establishments. Officer McMahan testified that Officer Tackett had observed Snow open the video machines at Dolenski's Bar on June 9, 2006, read the machine's meter and obtain $2,295 in payment from the bar manager. Officer McMahan stated that, when excise police pulled trash from Mr. Neal's residence on June 15, 2006, they discovered what appeared to be a split sheet that contained meter readings from video gaming machines, and the split amount on that sheet was $2,295. Tr. (1/ 26/ 07) at 35. Officer McMahan further testified as to his personal observations of events at Big Baby's Bar. Big Baby's liquor license had been suspended temporarily due to the presence in the bar of illegal gambling devices, which had been removed during the suspension. The day after the suspension ended, Officer McMahan observed nine video gambling machines being delivered to the establishment. According to Officer McMahan, Mr. Neal was one of the incorporators of Big Baby's; the tax records for the business were sent to Mr. Neal's address, and the utility bills also were in his name. Finally, Officer McMahan testified that, on September 18, 2006, state excise officers executed a search warrant at Video Services. Gambling equipment, slot machines, pull tabs and other gambling paraphernalia were seized during the search. During the revocation hearing, counsel for Mr. Neal cross-examined the Government's witnesses. [5] However, Mr. Neal did not testify, nor did he offer any documentary or testimonial evidence in opposition to the revocation petition. After the evidence was presented to the court, the Government argued that, upon the completion of his prison sentence, Mr. Neal immediately had returned to his gambling enterprise. The Government believed that a preponderance of the evidence showed that Mr. Neal had violated the five conditions of his supervised release alleged in the Government's petition. Furthermore, the Government argued that, given the nature and circumstances of the offense and the history and characteristics of the defendant, the court should impose a term of 36 months' imprisonment. In reply, Mr. Neal's counsel conceded that Mr. Neal had violated the conditions of his release concerning opening lines of credit and reporting his income. Mr. Neal's counsel, however, stated that he believed that the court had hampered his efforts to refute the other alleged violations. [6] Counsel maintained that the Government's request of 36 months was excessive and urged the court to adhere to the guidelines range of 4 to 10 months. Counsel argued: [W]hile [the Government's counsel] didn't say these words, the impact of what she argues for is 36 months now, and then a lot more later on if he's guilty. It would seem to me, given the realities of the situation, that the court protect its interests, which could be served  satisfied in a number of ways other than a sentence of imprisonment: home detention, a shorter custodial sentence and the like. And then if Mr. Neal is guilty, the court trusts the state courts to impose a significant sentence for what the court, I think, believes to be the bad behavior. And it seems to me under those circumstances, justice is done. Id. at 107-08. After hearing arguments, the court advised the parties that it would rule on the petition on February 5, 2007. Three days after the hearing, on January 29, 2007, counsel for Mr. Neal filed a motion to reopen the evidentiary hearing, to present additional evidence and to obtain discovery. Counsel requested that the State of Indiana be ordered to produce information from the state investigation, including undercover police officer investigative reports, surveillance reports and photographs, the results of the trash pulls, case notes of the investigative officers and all exculpatory evidence pertaining to the investigation of Mr. Neal. The district court denied the motion for discovery but granted the motion to reopen the evidentiary hearing. The district court noted that [t]he Defendant was given an opportunity to present evidence at the hearing and chose to do so only through cross-examination. R.36 at 1. After reviewing the discovery sought, the court reviewed the Supreme Court's decisions involving the rights guaranteed to defendants in revocation hearings, namely notice of the claimed parole violations, disclosure of the evidence against the defendant, an opportunity to be heard and to present evidence, and the right to confront and cross-exam adverse witnesses. R.36 at 3 (citing Morrissey v. Brewer, 408 U.S. 471, 480, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972)). The court further noted that [t]he Defendant cites to no statute, rule, or case law that would . . . establish a right to the discovery he now seeks. . . . A general right to discovery of evidence  whether exculpatory or otherwise  was not one of the minimal due process rights identified in Gagnon [v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973)] or Morrissey.  Id. at 3-4. With respect to the discovery, therefore, the court held: [W]hat the Defendant is seeking by way of discovery appears to be far more than what he would be entitled to in a full-blown federal criminal prosecution. His cross-examination disclosed that he has already conducted some discovery (at least a deposition) in a pending state court criminal or civil matter related to the gambling allegations. He is submitting the current wide-ranging discovery request in the matter before the court very late in the process, after several continuances and after the evidence was closed. It also appears to the court that what the Defendant is seeking to accomplish through his requested discovery is to belatedly poke holes in the government's presentation after gaining the benefit of an extended delay subsequent to hearing that evidence. The combined motion (doc. No.119) is accordingly DENIED to the extent it seeks discovery. Id. at 4. However, the district court granted the motion to reopen the evidentiary hearing to allow the defendant to present evidence relevant to whether he had committed the alleged violations of supervised release. At the reopened hearing, Mr. Neal presented the testimony of Officer Joel Sanderrfur of the Anderson Police Department, Stephen Pelletrino and John Snow. Officer Sanderrfur testified to his conversation with Snow after Snow's arrest; in that statement, Snow had told Officer Sanderrfur that he worked for Vicky Massey, but that he had been inside Video Services and that he had taken money and placed it on a desk there. Tr. (2/ 5/ 07) at 9. [7] Mr. Neal then called Pelletrino, who testified that he owned a bar located on property previously owned by Mr. Neal. Pelletrino testified that he paid Mr. Neal in weekly installments for the purchase of the property; the payments were made in cash from the receipts of the bar. He also stated that the bar had amusement machines  pool tables, a juke box and a video golf game  supplied by Video Services and gambling machines supplied by Ziggy's Amusement. Mr. Neal's final witness was John Snow. Snow testified that he had been employed by Muncie Coin to make collections on gambling machines. He further stated that all of the money collected went to Muncie Coin; Snow denied that he ever had told Officer Tackett that he worked for John Neal. After presenting this evidence, counsel for Mr. Neal argued that the only evidence tying Mr. Neal to gambling activities was the alleged statement by Snow, which had been refuted. With respect to the violations concerning reporting and opening lines of credit, counsel believed that these violations warranted a sentence at the lower end of the guidelines range and that the Court should fashion a sentence that allows Mr. Neal to be available for the defense of his state court prosecutions and that took Mr. Neal's health conditions into consideration. In response, the Government argued that Snow in all likelihood had perjured himself, that the evidence showed that Mr. Neal had been operating an illegal gambling business probably during the time he was in prison and certainly since he got out, and that Mr. Neal had accumulated between three and four million dollars in cash since the time he was sentenced on the original charges and had offered no explanation for where that money came from. Id. at 56-57. The Government believed that Mr. Neal's violations were significant and urged the Court to impose a very significant sentence. Id. at 57. Before imposing sentence, the court explained how the reporting requirements were designed to alert the court to any possible criminal activity by tracking closely the amount and source of Mr. Neal's income. The court stated that the violations of the monthly reporting requirements and the obtaining credit are serious in and of themselves, given the context of this particular case and the purpose for the regimen that was in place for this defendant and would have deserved in and of themselves a substantial period of incarceration. Id. at 59-60. The court then recounted the other evidence presented at the hearing and concluded that [t]he bottom line is that the preponderance of the evidence convinces me that Mr. Neal very shortly after completing his period of incarceration on this underlying case returned back to the very same gambling enterprise from which I attempted to remove him when I sentenced him in 2000. I infer from this evidence that in fact he's returned to his role as the invisible man. . . . . . . He's returned to gambling and not in a light way, he's not going down to some illegal card game. He returned to this machine gambling with a vengeance. He has flouted the requirements imposed on him. He acts as some sort of puppet master so he can operate these numerous locations, essentially just thumbing his nose at the law, at law enforcement, and at this Court. Id. at 61-62. The court found that the Government had proven by a preponderance of the evidence that all five grounds of supervised release had been violated. The court considered the policy statements set forth in the sentencing guidelines at U.S.S.G. § 7B1.1 and the factors set forth at 18 U.S.C. § 3553(a) in determining the sentence. The court observed that [t]his particular offense is especially egregious. . . . The atmosphere in which this is done in this three or four county area is notorious. It is very clear that Mr. Neal doesn't get it, and it is inspirational to others in a very negative way. There is simply no deterrence unless a substantial sentence would be imposed on this defendant, both specifically to him and generally to others. Id. at 64-65. Although the court acknowledged that the Government's request for the maximum 36 months sentence [was] well justified, the court imposed a sentence of 24 months' incarceration followed by an additional 12 months' of supervised release. Id. at 66. In doing so, the court considered Mr. Neal's current age, his health and the need to have a punitive and deterrent effect. Id. Mr. Neal timely appealed.