77 F.3d 327 (9th Cir. 1996), 94-50631, United States v. E.C. Investments, Inc.

Docket Nº:94-50631.
Citation:77 F.3d 327
Party Name:D.A.R. 2135 UNITED STATES of America, Plaintiff-Appellant, v. E.C. INVESTMENTS, INC., aka Great Western Casino, Inc.; William C. Armstrong; Ira Englander; Gyorgy Hargitai; Roger Keesee, Defendants-Appellees.
Case Date:February 27, 1996
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 327

77 F.3d 327 (9th Cir. 1996)

D.A.R. 2135

UNITED STATES of America, Plaintiff-Appellant,

v.

E.C. INVESTMENTS, INC., aka Great Western Casino, Inc.;

William C. Armstrong; Ira Englander; Gyorgy

Hargitai; Roger Keesee, Defendants-Appellees.

No. 94-50631.

United States Court of Appeals, Ninth Circuit

February 27, 1996

Argued and Submitted Oct. 16, 1995.

Page 328

[Copyrighted Material Omitted]

Page 329

Daniel P. Collins, Assistant United States Attorney, Los Angeles, California, for plaintiff-appellant.

James D. Henderson, Crane, Rayle & Lennemann, Santa Monica, California, for defendant-appellee Keesee.

Richard P. Crane, Jr., Crane & McCann, Santa Monica, California, for defendant-appellee Englander and E.C. Investments.

Robert E. Courtney, Redondo Beach, California, for defendant-appellant Hargitai.

James T. Duff, Duff & Smith, Los Angeles, California, for defendant-appellee Armstrong.

Appeal from the United States District Court for the Central District of California.

Before: POOLE and O'SCANNLAIN, Circuit Judges; MARQUEZ, [*] District Judge.

O'SCANNLAIN, Circuit Judge:

We must decide whether California's prohibition against the use of slot machines may serve as the predicate offense for federal prosecution of gambling activities in Indian country that are in violation of state law.

I

Pursuant to a contract with the Tribal Council of the Morongo Band of Mission Indians (the "Morongo"), defendants E.C. Investments, Inc. ("ECI"), William C. Armstrong, Ira Englander, Gyorgy Hargitai, and Roger Keesee ("defendants") managed and operated a casino on the Morongo Indian Reservation in Riverside County, California. Englander was the president of ECI and the manager of the casino. Hargitai was the owner of ECI. Armstrong and Keesee were paid consultants for ECI.

On May 11, 1994, a federal grand jury returned an indictment charging the defendants with running an "illegal gambling business" in violation of 18 U.S.C. § 1955 (1984 & Supp.1995). Section 1955 prohibits the operation or ownership of "an illegal gambling business," which the section defines as "a violation of the law of a State or political subdivision in which it is conducted." 18 U.S.C. § 1955(a)(b)(1)(i). As the necessary predicate state law offense, defendants were charged with using slot machines in violation of section 330b of the California Penal Code. 1

Section 1955 also requires that the gambling business "involve[ ] five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business." 18 U.S.C. § 1955(b)(1)(ii). Violation of the statute carries a fine or imprisonment for not more than five years, or both. Id. § 1955(a). 2

The defendants moved to dismiss the indictment on the ground that the section 1955 count failed to state an offense and that the remaining counts were therefore also invalid. Granting the defendants' motion, the district court dismissed all but one of the twenty-three counts in the indictment. 3 The district

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court held that section 330b was not a proper predicate offense because California's public policy does not prohibit such gaming. The government filed a timely notice of appeal on November 14, 1994.

II

In reaching its decision that the federal government could not use section 1955 to prosecute the defendants' gambling activities on the Morongo Reservation, the district court applied the so-called "public policy test" that the Supreme Court recognized in California v. Cabazon Band of Mission Indians, 480 U.S. 202, 209, 107 S.Ct. 1083, 1088, 94 L.Ed.2d 244 (1987).

Prior to the enactment of the Indian Gaming Regulatory Act ("IGRA") in...

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