152 F.3d 443 (5th Cir. 1998), 97-10773, United States v. Truesdale
|Citation:||152 F.3d 443|
|Party Name:||UNITED STATES of America, Plaintiff-Appellee, v. James TRUESDALE; Ronald Hamilton; Richard E. Jones; Sandra Milner, Defendants-Appellants.|
|Case Date:||August 24, 1998|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
Delonia Anita Watson, Dallas, TX, for Plaintiff-Appellee.
Kenneth Frederick Hense, McGlynn, Reed, Hense & Pecora, Point Pleasant, NJ, Cheryl B. Wattley, Dallas, TX, for Truesdale.
Edgar A. Mason, Dallas, TX, for Hamilton.
Michael P. Carnes, David Michael Walsh, Dallas, TX, for Jones.
Robert Reddick Smith, Jr., Dallas, TX, for Milner.
Appeals from the United States District Court for the Northern District of Texas.
Before GARWOOD, JONES and WIENER, Circuit Judges.
GARWOOD, Circuit Judge:
Defendants-appellants James Truesdale (Truesdale), Ronald Hamilton (Hamilton), Richard E. Jones (Jones), and Sandra Milner (Milner) (collectively appellants) were convicted on multiple counts for their involvement in a gambling operation. Finding that there is insufficient evidence supporting the convictions, we reverse on all counts.
Facts and Proceedings Below
This case arises from a sports wagering operation that accepted bets in the Caribbean, but conducted some of the financial transactions related to those bets in the Dallas, Texas, area. The participants were indicted on various conspiracy, money laundering, travel in aid of racketeering, and gambling counts related to their involvement in this bookmaking operation. They were all convicted on multiple counts and sentenced to prison terms ranging from 15 to 46 months.
Jones was the head of an international sports wagering service, variously known as Spectrum or World Sportsbook (WSB), that operated in the Dominican Republic, Jamaica, and Dallas. WSB maintained offshore offices in order to provide a way for people in the United States to place bets on sporting events without running afoul of domestic gambling laws. In Jamaica and the Dominican Republic, a properly licensed company that complies with local laws can legally operate a bookmaking service, like WSB, as long as the service does not accept bets from local individuals. In Dallas, however, bookmaking is illegal under the laws of the State of Texas.
The offshore operation began in 1990 when Jones formed Spectrum SA in the Dominican Republic for the purpose of accepting international phone bets. Spectrum was formed with the assistance of a local attorney who filed the necessary paperwork and helped Spectrum obtain a license from the Dominican government that allowed it to accept wagers on sporting events via international phone calls. To facilitate this business, Spectrum had an office in the Dominican Republic, with eight phones and desks, that was staffed during regular business hours with persons who would answer the phones and process the wagers.
Later, the operation was moved to Jamaica because Jamaica had lower phone rates. In Jamaica, a new corporation was formed with the assistance of a local attorney who filed the required paperwork, making the operation legal under Jamaican law. WSB's office in Jamaica, like its office in the Dominican Republic, was set up with desks and multiple telephones for the purpose of receiving bets from offshore. The Jamaican office was staffed by persons from the Dominican Republic, Jamaica, and the United States.
Bettors in the United States could place bets at these foreign offices through toll-free numbers that WSB had set up. There were several toll-free numbers associated with the wagering service. Some of these numbers terminated at locations in the Dallas area, while others terminated in the offshore office of WSB.
The numbers that terminated in the Dallas area were "information only" lines and were not used to accept bets. Two of these information-only lines terminated at Jones's and Truesdale's homes. A potential bettor would first have to call one of these information lines. Thereafter a member of the operation would send an information packet to the bettor explaining the operation. The information packages gave general information about WSB, payoff information, information on how to set up a wagering account, etc. These information packages listed, among other things, two information-only numbers for contacting WSB.
Before a bettor could place bets, he would first have to send money to open a betting account with WSB. To open an account or to replenish an existing account, bettors would wire money via Western Union or send it with Federal Express. Two gamblers testified at trial that they made their checks payable to S.K. Milner. The government also presented evidence that Truesdale and
Hamilton would go to the Western Union office to pick up the money transfers and deposit the money in various bank accounts belonging to Truesdale, Jones, or Milner, in the Dallas-Fort Worth area.
Not all bettors were required to pay up front. Those that did not maintain betting accounts with WSB would mail large amounts of cash to Jones, listing Milner as the return addressee. Milner was listed as the return addressee so that if the packages got lost in the mail they would still reach a member of the operation. Postal inspectors seized several of these packages; Jones admitted that two of the packages were gambling proceeds and a third was money connected to gambling.
Once a betting account had been opened with WSB, a bettor could call the information lines to get balance information about his account. However, he could only place a bet by calling one of the betting lines in the Dominican Republic or Jamaica. The payoffs to winners were made from accounts in the Dallas-Fort Worth area belonging to Truesdale and Hamilton.
In addition to their involvement with WSB's financial transactions and information lines, Hamilton and Truesdale both maintained their own sports information telephone lines through which they promoted WSB by advertising the wagering service and giving out information-only toll-free numbers to call. In exchange for this advertisement, they were given fifty percent of the profits that WSB derived from bettors that they brought in.
Milner was even more involved in the organization. In addition to mailing out information packages, Milner also received money from bettors. Milner also had access to Jones's bank account and post office box, which were used for WSB-related business. And she handled many of the accounting matters related to the bettors' accounts.
Jones, as the head of WSB, traveled frequently to Jamaica to oversee the operation. He could also monitor the operation from his home in Dallas where he had access to the betting information. From his home in Texas he could access the Jamaican computer to view betting information. The computer in Jones's home was equipped with a modem that not only allowed him to view information, but also allowed Jones to input information directly into the Jamaican computer.
On December 8, 1992, Jamaican police, with the cooperation of United States law enforcement personnel, searched WSB's Jamaican office. After the search in Jamaica, the operation was moved back to the Dominican Republic and continued there.
On June 18, 1993, law enforcement officials moved to shut down the WSB organization in Dallas. The search of Jones's home revealed that Jones maintained an office in his home that contained a computer, office-size photocopier, shredding machine, two desks, multi-line telephone, a fax machine, and a bank of televisions. A safe was found in the floor of the master bedroom. Agents seized documents, including a tally sheet indicating that more than $2 million were wagered from April 15, 1993, to June 15, 1993. They also found some black ashes floating in the toilet. While the agents were searching the home, the phone rang several times with callers asking for "line information" and checking their deposits. Three of the callers also asked to place bets.
When agents searched Hamilton's home they found a tally sheet of bets placed with the operation similar to the sheet from Jones' home. The agents also received a call from a person wanting to know the line on a sporting event, and when asked whether he wanted to place a bet, he replied "Yes." The agents also seized a list of bettors.
At Truesdale's and Milner's residences the agents seized numerous WSB documents, cashiers checks, and Western Union transfer receipts and money order receipts totaling $473,114.
The appellants were indicted for conspiring to commit various violations in connection with their gambling operation. Additionally, they were each charged with various substantive offenses including operating an illegal gambling business, traveling in aid of racketeering, and money laundering.
The jury found Truesdale, Hamilton, and Milner not guilty of conspiracy, but guilty on
several counts of money laundering and guilty of illegal gambling. Jones was convicted of conspiracy, illegal gambling, and money laundering, but found not guilty on most of the "traveling in aid of racketeering" counts.
At sentencing, the court granted a downward departure for all appellants. Truesdale and Hamilton's base offense levels were reduced from 20 to 12, and Milner and Jones's levels were reduced from 23 to 16.
Truesdale was sentenced to 15 months in jail and 3 years' supervised release, fined $10,000, and ordered to pay a special assessment of $250.
Hamilton was also sentenced to 15 months in jail with 3 years' supervised release, fined $7500, and ordered to pay a special assessment of $100.
Jones was sentenced to 46 months in jail with 3 months' supervised release, fined $12,500, and ordered to pay a special...
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