U.S. v. Hawes

• Decision Date: 29 March 1976
• Docket Number: No. 75--1695,75--1695
• Citation: 529 F.2d 472
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William Norman HAWES, Albert Julius Hawkins, Robert Wesley Dean, Charles O. Borum, David Foshee, Charles F. Floyd, George J. Fay, and Joseph David Hawes, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 472

529 F.2d 472

UNITED STATES of America, Plaintiff-Appellee, v. William Norman HAWES, Albert Julius Hawkins, Robert Wesley Dean, Charles O. Borum, David Foshee, Charles F Floyd, George J. Fay, and Joseph David Hawes, Defendants-Appellants.

No. 75--1695.

United States Court of Appeals Fifth Circuit.

March 29, 1976.

Rehearing Denied May 5, 1976.

Denmark Groover, Jr., Macon, Ga., for all defendants-appellants except Joseph Hawes.

Clinch Heyward Belser, Charles E. Baker, Columbia, S.C., for Joseph David Hawes.

Ronald T. Knight, U.S. Atty., O. Hale Almand, Jr., Asst. U.S. Atty., Macon, Ga., for plaintiff-appellee.

Appeals from the United States District Court for the Middle District of Georgia.

Before BROWN, Chief Judge, GEWIN and RONEY, Circuit Judges.

RONEY, Circuit Judge:

Eight criminal defendants join in this multifaceted appeal from their convictions for conspiracy to participate in an illegal gambling enterprise, 18 U.S.C.A. § 1962(d), and from convictions of various defendants for conducting four separate but interrelated gambling businesses in violation of 18 U.S.C.A. § 1955. The case involved the manufacture, sale, rental and operation of coin-operated electrical machines used for gambling. Defendants challenge the constitutionality of the relevant statutes, both as enacted by Congress and as applied in this case; urge errors of statutory interpretation and application; challenge various aspects of the conduct of their trial, including errors in the jury charge and in a supplemental instruction; and argue insufficient probable cause for issuing a search warrant which resulted in the seizure of important evidence. One defendant questions the sufficiency of the evidence which supports his conviction. We hold for the Government on all issues, affirming all convictions.

I. FACTS

This case involves a six count indictment returned against ten defendants, charging them with operation of an illegal gambling business and conspiracy. Count One charged that W. Hawes, Hawkins and Dean constituted a gambling 'enterprise,' as defined by 18 U.S.C.A. § 1961(4), ¹ and engaged in 'a pattern of racketeering activity' ² affecting interstate commerce, which activity is illegal under Georgia gambling laws and is therefore in violation of 18 U.S.C.A. § 1955. ³ That count alleged the defendants utilized their interest in four different business entities in furtherance of the gambling activities of the enterprise. Count Two charged all defendants with conspiracy to violate 18 U.S.C.A. § 1962(c). ⁴ Such conspiracy being violative of 18 U.S.C.A. § 1962(d). ⁵ Counts Three through Six charged various combinations of the defendants with substantive violations of 18 U.S.C.A. § 1955 through associations with each of the four business entities involved.

W. Hawes, Hawkins and Dean owned and operated Peach State Distributing Co., doing business as Peach State Music Co., in the manufacture, sale, repair and lease of a variety of coin-operated electronic games. In addition to legitimate devices such as jukeboxes and penny arcade amusements, Peach State marketed devices known as 'Flashback' and 'Red Arrows,' electronic pinball and slot machine games of chance which awarded 'free' games to lucky players. Unlike the 'one-armed bandit' used in Las Vegas, Peach State's devices did not pay off in cash. But a lucky player who did not choose to play his 'free' games in the hope of greater winnings could cash in his winnings, receiving the cash value of the free games won from the club or establishment where the devices were located.

Peach State distributed its gambling devices through four jointly owned business entities. Ace Amusement Co., a subsidiary of Peach State, placed devices in middle Georgia men's clubs. Ace was divided into routes with 'route men' responsible for supervising maintenance and dividing revenues with the clubs. Bann Equipment Co., d/b/a Star Music Co., and the Club Music Co. leased equipment which they placed in bars and social clubs. Finally, a nightclub, the Golden Cadillac Club, leased electronic gambling machines and organized card games such as poker and keno.

II. CONSTITUTIONAL ISSUES

A. The Constitutionality of 18 U.S.C.A. § 1955: The Commerce Clause

The defendants urge this Court to reexamine and overrule United States v. Harris, 460 F.2d 1041 (5th Cir.), cert. denied, 409 U.S. 877, 93 S.Ct. 128, 34 L.Ed.2d 130 (1972), which held that Congress acted within its power under the Commerce Clause in promulgating 18 U.S.C.A. § 1955. See also United States v. Marrifield, 496 F.2d 1278 (5th Cir. 1974); United States v. Pacheco, 489 F.2d 554 (5th Cir. 1974), cert. denied, 421 U.S. 909, 95 S.Ct. 1558, 43 L.Ed.2d 774 (1975); and United States v. Thaggard, 477 F.2d 626 (5th Cir.), cert denied, 414 U.S. 1064, 94 S.Ct. 570, 38 L.Ed.2d 469 (1973). We note that all other courts of appeal that have faced this particular issue have ruled in favor of the statute. United States v. Becker, 461 F.2d 230 (2d Cir. 1972), vacated and remanded on other grounds, 417 U.S. 903, 94 S.Ct. 2597, 41 L.Ed.2d 208 (1974); United States v. Riehl, 460 F.2d 454 (3rd Cir. 1972); United States v. Hunter, 478 F.2d 1019 (7th Cir.), cert. denied, 414 U.S. 857, 94 S.Ct. 162, 38 L.Ed.2d 107 (1973); Schneider v. United States, 459 F.2d 540 (8th Cir.), cert. denied, 409 U.S. 877, 93 S.Ct. 129, 34 L.Ed.2d 131 (1972); United States v. Sacco, 491 F.2d 995 (9th Cir. en banc 1974); United States v. Smaldone, 485 F.2d 1333 (10th Cir. 1973), cert. denied, 416 U.S. 936, 94 S.Ct. 1934, 40 L.Ed.2d 286 (1974). See also Annot., Validity, Construction, and Application of 18 U.S.C.A. § 1955 Prohibiting an Illegal Gambling Business, 21 A.L.R.Fed. 708, 717 (1974). In any event, prior decisions of this Circuit are binding on this panel so we need not reconsider this issue.

B. Section 1955: Equality Under the Due Process Clause

Defendants contend that § 1955 is a denial of equality under the law guaranteed by the due process clause of the Fifth Amendment because it applies only in states where gambling is made illegal by state law. They admit that this argument has been rejected on several occasions. See United States v. Wolk, 466 F.2d 1143 (8th Cir. 1972); Schneider v. United States, supra, 459 F.2d 540; United States v. Sacco, supra, 491 F.2d 955; United States v. Smaldone, supra, 485 F.2d 1333. Defendants assert, however, that this Circuit and the Supreme Court have not passed on the question and urge that Congress has not here exercised its power in a manner which comports with the equal protection concepts of the Fifth Amendment.

There is no doubt that the commerce power is subject to the due process clause of the Fifth Amendment. See Secretary of Agriculture v. Central Roig Refining Co., 338 U.S. 604, 70 S.Ct. 403, 94 L.Ed. 381 (1950); Currin v. Wallace, 306 U.S. 1, 59 S.Ct. 379, 83 L.Ed. 441 (1939); Virginian R. Co. v. System Federation No. 40, 300 U.S. 515, 57 S.Ct. 592, 81 L.Ed. 789 (1937); Railroad Retirement Bd. v. Alton R. Co., 295 U.S. 330, 55 S.Ct. 758, 79 L.Ed. 1468 (1935); United States v. Chicago, M. St. P.P.R. Co., 282 U.S. 311, 51 S.Ct. 159, 75 L.Ed. 359 (1931). It is also now established that the basic concepts of equal protection apply to the federal Government through the due process clause of the Fifth Amendment. Johnson v. Robison, 415 U.S. 361, 94 S.Ct. 1160, 39 L.Ed.2d 389 (1974). Thus, the argument goes, the applicability of the statute only to those who conduct 'illegal' gambling businesses must meet the rational basis test of equal protection applicable to a statute creating a criminal offense. Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 274 (1972). The defendants then argue that Congress' decision to make only illegal gambling the subject of the statute has no rational basis in light of the object of the legislation, i.e., to prevent gambling revenue from flowing into the hands of the organized criminal element. Defendants argue that there is no justifiable basis for the exclusion of legal gambling as a source of revenue for organized crime. Thus, defendants would have us fault Congress for finding that 'illegal' gambling furnished a source of revenue for organized crime while ignoring what defendants assert to be an 'undoubted and demonstrable fact' that organized crime has infiltrated and receives funds from legal gambling.

While this argument is intriguing, to say the least, it carries little weight. The law is clear that there is no requirement of national uniformity when Congress exercises its power under the Commerce Clause. See Currin v. Wallace, supra, 306 U.S. 1, 59 S.Ct. 379, 83 L.Ed. 441; Secretary of Agriculture v. Central Roig Refining Co.,supra, 338 U.S. 604, 70 S.Ct. 403, 94 L.Ed. 381; Clark Distilling Co. v. Western Md. Ry. Co., 242 U.S. 311, 37 S.Ct. 180, 61 L.Ed. 326 (1917). The Constitution is not violated when a federal statute incorporates the laws of the states. See United States v. Sharpnack, 355 U.S. 286, 78 S.Ct. 291, 2 L.Ed.2d 282 (1958) (assimilative crimes, 18 U.S.C.A. § 13); Kentucky Whip & Collar Co. v. Illinois C.R. Co., 299 U.S. 334, 57 S.Ct. 277, 81 L.Ed. 270 (1937) (convict-made goods); Clark Distilling Co. v. Western Md. Ry. Co.,supra, 242 U.S. 311, 37 S.Ct. 180, 61 L.Ed. 326 (liquor transportation,27 U.S.C.A. § 122). The argument that there is no rational basis for excluding legal gambling from the 'Organized Crime Control Act' falls for the obvious reason that if gambling is legal in a state, there is no crime in the gambling activity and thus no 'organized crime' to control. It is not the purpose of § 1955 to prohibit gambling, but only to prohibit 'illegal' gambling of such a size as would affect interstate commerce. The defendants forget that they are the organizers of the illegal gambling activities here involved and therefore the organized criminal elements targeted by Congress. The flow of funds from illegal gambling to the organized criminal element is obvious...