U.S. v. Eisner, 75-1908

• Decision Date: 14 April 1976
• Docket Number: No. 75-1908,75-1908
• Citation: 533 F.2d 987
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Callie Blaine EISNER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 987

533 F.2d 987

UNITED STATES of America, Plaintiff-Appellee, v. Callie Blaine EISNER, Defendant-Appellant.

No. 75-1908.

United States Court of Appeals, Sixth Circuit.

Argued Dec. 11, 1975.

Decided April 14, 1976.

Morris Weintraub, Newport, Ky., for defendant-appellant.

Eugene E. Siler, Jr., U. S. Atty., R. Burl McCoy, James E. Arehart, Asst. U. S. Attys., Lexington, Ky., for plaintiff-appellee.

Before EDWARDS and MILLER, Circuit Judges, and CHURCHILL, District Judge. ^*

CHURCHILL, District Judge.

The appellant was charged in a two-count indictment with violation of 18 U.S.C. § 1952, commonly known as the Travel Act. This Act makes it a federal crime to use a facility in interstate commerce to facilitate the carrying on of an unlawful activity and thereafter engage in the unlawful activity. The Act defines unlawful activity to include any business enterprise involving prostitution offenses as defined by state law. In both counts the alleged unlawful activity was prostitution, lewdness, and assignation in violation of Kentucky Revised Statutes § 436.075. In the first count the alleged interstate element of the offense was the use of the bank clearing system. In the second count the alleged interstate element was the transportation of a prostitute across state lines. After a bench trial the appellant was found guilty of the first count and not guilty of the second count. ¹

The testimony can be summarized as follows. The appellant between August 13, 1973, and February 22, 1974, the dates specified in the indictment, was the owner of a nightclub known as the Pink Pussycat located in Newport, Kentucky. Bernice Jones was the manager of the club. ² The club employed dancers of the exotic variety. The testimony of one of the dancers, Tracy Tippit, and one of the customers, Jack Trainer, established that various dancers engaged in a variety of sexual acts with various customers for a price. Bernice Jones handled the day-to-day operation of the club. Tracy Tippit testified that on one occasion the appellant was present at the club when other dancers went into the back room with customers. Bernice Jones testified that she had been hired by the appellant, that the appellant kept the daily ledgers, and that the appellant often paid the dancers.

Jack Trainer paid for his entertainment with checks drawn on a Cincinnati bank. A total of fifteen (15) checks were introduced at the trial. Five of these checks were made out to Cash, three were made out to the Pink Pussycat, and the remainder were made out to Bernice Jones. Two of the checks, in amounts of $333.50 and $839.25 respectively, were signed in the name of the appellant as the endorser. The checks were negotiated at the State Bank of Dayton in Kentucky. Three of the checks were deposited into the account of the Pink Pussycat. The remainder were cashed. The checks were then delivered to the maker's bank in Ohio, where they were charged to his account, and the funds were then remitted back to the Kentucky bank.

Appellant assigns four claims of error.

I. SUFFICIENCY OF EVIDENCE

The appellant asserts that certain findings of fact were not supported by the evidence. The appellant acknowledges that acts of prostitution did take place at the Pink Pussycat but asserts that there was insufficient evidence to support a finding that such acts took place with her knowledge and consent. In considering a contention that the evidence is insufficient to support a judgment of conviction, an appellate court will reverse the judgment only if it is not supported by substantial and competent evidence. United States v. Kubeck, 487 F.2d 1256 (C.A.6 1973). Where, as here, the evidence is wholly circumstantial, the same test applies; and it is not necessary that such evidence remove every reasonable hypothesis except that of guilty. United States v. Morgan, 469 F.2d 83 (C.A.6 1972). A review of the testimony summarized above indicates that there was substantial and competent evidence to support the court's finding that these activities took place with the knowledge and consent of the appellant. ³

II. EXTENT OF USE OF A FACILITY IN INTERSTATE COMMERCE

The appellant asserts that the mere deposit or cashing of an out-of-state customer's checks, knowing that the checks will travel from Kentucky to Ohio, is such a minimal and incidental use of an interstate facility that it cannot give rise to a violation of the Travel Act. The relevant statutory language reads as follows:

" § 1952. Interstate and foreign travel or transportation in aid of racketeering enterprises.

"(a) Whoever travels in interstate or foreign commerce or uses any facility in interstate or foreign commerce, including the mail, with intent to

"(1) distribute the proceeds of any unlawful activity; or

"(2) commit any crime of violence to further any unlawful activity; or

"(3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity,

and thereafter performs or attempts to perform any of the acts specified in subparagraphs (1), (2), and (3), shall be fined not more than $10,000 or imprisoned for not more than five years, or both."

A number of cases have dealt with this issue.

In United States v. Wechsler, 392 F.2d 344 (C.A.4 1968), cert. denied 392 U.S. 932, 88 S.Ct. 2283, 20 L.Ed.2d 1389 (1968), the Fourth Circuit upheld a Travel Act conviction that was founded upon a local official depositing into his bank account an out-of-state check that had been received as a bribe. In United States v. Salsbury, 430 F.2d 1045 (C.A.4 1970), the Fourth Circuit upheld a Travel Act conviction that was founded upon the defendant cashing out-of-state checks in connection with a gambling operation. In both cases the court held that given the broad language of the statute, it was immaterial that the use of the interstate facilities was tangential to the illegal business.

Subsequently the Supreme Court in Rewis v. United States, 401 U.S. 808, 91 S.Ct. 1056, 28 L.Ed.2d 493 (1971), held that conducting a gambling operation frequented by out-of-state bettors does not, without more, constitute a violation of the Travel Act. The court began by noting that the ordinary meaning of the language of the Travel Act did not seem to cover the acts complained of:

"Section 1952 prohibits interstate travel with the intent to 'promote, manage, establish, carry on, or facilitate' certain kinds of illegal activity; and the ordinary meaning of this language suggests that the traveler's purpose must involve more than the desire to patronize the illegal activity." 401 U.S. at 811, 91 S.Ct. at 1059, 28 L.Ed.2d at 496.

The court then explored the legislative history and determined that Congress did not intend the Travel Act to apply to criminal activity solely because it is at times patronized by out-of-state customers. The court concluded as follows:

"In short, neither statutory language or legislative history supports such a broad-ranging interpretation of § 1952. And even if this lack of support were less apparent, ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity, Bell v. United States, 349 U.S. 81, 83 (75 S.Ct. 620, 99 L.Ed. 905) (1955)." 401 U.S. at 812, 91 S.Ct. at 1059, 28 L.Ed.2d at 497.

Subsequent to the Rewis decision the Seventh Circuit decided a number of cases dealing with whether a minimal and incidental use of an interstate facility can give rise to a violation of the Travel Act. United States v. Altobella, 442 F.2d 310 (C.A.7 1971); United States v. McCormick, 442 F.2d 316 (C.A.7 1971); United States v. Isaacs, 493 F.2d 1124 (C.A.7 1974), cert. denied 417 U.S. 976, 94 S.Ct. 3184, 41 L.Ed.2d 1146 (1974). In Altobella the victim of an extortion scheme cashed an out-of-state check in order to pay the defendants. The defendants knew that this check would have to be cashed, and the check did, in fact, travel interstate. In McCormick the defendant placed an advertisement in a local newspaper seeking salesmen to peddle lottery tickets. A number of copies of the ad were mailed to the newspaper's out-of-state subscribers. Isaacs involved a bribery scheme in which the government's proof supporting federal jurisdiction rested on evidence that three of the checks used to distribute a portion of the proceeds had traveled interstate after being deposited by the defendants. In each of these cases the Seventh Circuit reversed the Travel Act conviction, holding that there must be something more than a minimal and incidental use of a facility of interstate commerce to satisfy the jurisdictional element of a Travel Act offense. The Seventh Circuit based this interpretation of the Travel Act in part on certain language in Rewis and in part on a reluctance to impinge on sensitive federal-state relationships by interpreting the Act broadly. ⁴

The Second Circuit dealt with this problem in United States v. Archer, 486 F.2d 670 (C.A.2 1973), reh. denied, id., at 683 (per curiam). This case involved a bribery scheme in which the basis of jurisdiction was one phone call made by a government agent from Paris and received by one of the defendants in New York. The court reversed the convictions, and there is language in the court's opinion which indicates that it is adopting the Seventh Circuit's interpretation of the Travel Act. But in responding to the government's petition for a rehearing, the court explained its decision in very narrow terms:

"While the Government professes alarm at the precedential effect of our decision, we in fact went no further than to hold that when the federal element in a prosecution under the Travel Act is furnished solely by undercover agents, a stricter standard is applicable than when the interstate or foreign activities are those of the defendants themselves and that this was not met here. We adhere to that holding and leave the task of further line-drawing to the future." 486 F.2d at 685-686.

Subsequent...