U.S. v. Milton
| Decision Date | 05 July 1977 |
| Docket Number | No. 75-4434,75-4434 |
| Parties | 2 Fed. R. Evid. Serv. 100 UNITED STATES of America, Plaintiff-Appellee, v. Maxie Eldon MILTON, Eugene L. Fowler, and Andrew Areaux, Defendants- Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Eugene L. Fowler, pro se.
Donice Alverson, New Orleans, La., court appointed for Fowler.
Maxie E. Milton, Lee R. Leonard, New Orleans, La., for Milton and Areaux.
Gerald J. Gallinghouse, U. S. Atty., Teresa Marie Black, U. S. Organized Crime Force, New Orleans, La., for plaintiff-appellee.
Appeals from the United States District Court for the Eastern District of Louisiana.
Before GOLDBERG, SIMPSON and FAY, Circuit Judges.
Maxie Milton, Eugene Fowler, and Andrew Areaux were among eleven persons charged in January 1973 with conducting an illegal gambling business in violation of 18 U.S.C. § 1955. 1 Of the ten defendants convicted after a jury trial, Milton, Fowler and Areaux have filed this appeal. Fowler contends chiefly that the government failed to show that the bookmaking operation in which he concededly participated comprised five or more persons as required by § 1955(b)(1)(ii). Milton and Areaux contend
solely that expert witnesses for the prosecution "invaded the province of the jury" by testifying with respect to ultimate facts in the case. We find both contentions meritless and accordingly affirm.
As we explained in United States v. Box, 530 F.2d 1258 (5th Cir. 1976), a successful bookmaker is not a gambler but a businessman. He makes his profits not from winning bets, but from collecting a certain percentage of the amount bet that the losing bettors must pay for the privilege of betting. This percentage, usually 10%, is called "juice" or "vigorish." 2 A bookmaker normally has a "line" or "point spread" on each game on which he is taking bets. The calculation is that an equal number of wagered dollars will be attracted to either side of the point spread. Thus, if the line in pro football is Washington by six over Dallas, 3 the bookmaker expects some bettors to wager as much on Dallas to win or to lose by six or fewer points as others will bet on Washington to prevail by more than six points. When this is true, the bookmaker is guaranteed a profit of exactly 10%. When it is not, he may win more than 10% or fail to clear 10%. When the bets placed with a bookmaker are unbalanced, the risk-averse entrepreneur will adopt one of two strategies. The bookmaker may adjust his line up or down until it reaches equilibrium. More likely he will seek to "lay off" a bet to another bookmaker or to a mere bettor. That is, the bookmaker will bet the more popular of the two teams in the amount (ideally) by which bets on that team exceed the sum bet on the disfavored team at a given point spread. If the popular team wins, he will thus pay out to his bettors more than he took in, but will offset this disbursement by his own lay off winnings. By this device the bookmaker seeks to balance his books and assure himself neither more nor less than a 10% profit.
If a bookmaker sets his line badly, he may find it difficult to lay off a sufficient number of bets to offset the risk of loss. Hence accurate "line information" regarding the expectations of his customers proves crucial. 4 Moreover, bookmakers in a relevant market will seek to set a common line. If a particular bookmaker gives the Cowboys 6 points when all others give the Cowboys 3 points, all rational Cowboys fans will bet with the bookie who was out of line, and the rational Redskin fan (possibly an oxymoron) with all others. A rational bettor, as opposed to a rational fan, however, will bet equal amounts on the Cowboys plus six and the Redskins minus three. At worst, this cynical but rational bettor will win one bet and lose the other, suffering a net loss of 10% of the losing bet; at best, he will win both wagers.
These hazards of the bookmaking business may be minimized, then, by lay off bets and frequent exchanges of line information among bookmakers. The difficult question in cases of this kind is typically whether lay off wagers and exchanges of line information among individuals or bookmaking operations suffices to create an illegal gambling operation comprising five or more persons.
For assessing appellant Fowler's claim that the bookmaking organization in which he participated lacked five members, we have our pick of seven conceded bookmaking operations from which potentially to fashion the critical mass of five individuals.
Appellant Fowler concedes that he was a clerk for James Kent's bookmaking operation, that Thais Nix was a runner for that operation, and that Joseph Mills was a commission bookmaker working for James Kent. Fowler denies that more than four people were involved in the enterprise. The jury disagreed.
Evidence at trial, including transcripts of conversations recorded by government wiretaps, indicated that James Kent's bookmaking operation exchanged lay off bets and line information with bookmaking organizations operated by Angelo (Uncle Lon) Nicotri, Victor Candiotto, Tony Martinez, Maxie (Fat Man) Milton, Andrew Areaux, and John (Rose) Kent. The jury's conclusion that the prosecution met its burden of establishing the jurisdictional five need only have rested on the premise that any one of these bookmakers was part of James Kent's operation.
Much of the government's evidence is, nevertheless, at best problematic and at worst insufficient to sustain the jury's conclusion, and we take this opportunity to reiterate why this should be so. Simply put, evidence that two bookmakers occasionally exchange line information does not itself warrant the conclusion that one bookmaker is a participant in the other's operation for purposes of § 1955. Rather, it must be shown additionally that the receipt of line information by one bookmaker substantially affects the other's business or that there is a constant exchange of line information between the two. See United States v. McCoy, 539 F.2d 1050, 1061-62 (5th Cir. 1976). Similarly, isolated and casual lay off bets between bookmakers may not be sufficient to establish that one bookmaker is conducting or financing the business of a second. See id. at 1061; United States v. Thomas,supra, 508 F.2d at 1206. Moreover, bets between bookmakers may be personal wagers that are not lay off bets. On the other hand, evidence of a consistent pattern of lay off betting or exchanging line information between two bookmakers may establish the essential link between them for purposes of § 1955. 5
We need not explore these complexities in the case at bar; even without considering the pattern and frequency of lay off betting and exchanging line information, the evidence showing Fowler's bookmaking organization to comprise the jurisdictional five excluded all reasonable contrary hypotheses. For example, evidence showed that appellant Andrew Areaux collected wagers from customers on behalf of James Kent's bookmaking organization and received commissions from James Kent for his efforts. 6 The evidence that Areaux was a commissioned bookmaker for James Kent may be broken down into four elements. First, the transcripts produced by the government's wiretap surveillance revealed that Areaux frequently called in bets to the Kent office, where Fowler received the calls. In at least some of these it is clear Third, the record discloses that Fowler telephoned Areaux to apprise him of line changes made by the Kent organization. An efficient bookmaking organization must constantly alert its commissioned agents to line updates. The main organization is obligated to honor all bets collected by its agents at the point spread the sub-bookies announce to their customers. The agent is often out of contact with the main organization and the line he peddles may thus lag dangerously behind market fluctuations. Hence the line updates Fowler offered Areaux are significant. Finally, police seized from Areaux the latter's "catch up" records, revealing the base amounts on which he expected to earn a commission. 9
that Areaux was calling in bets made by others. 7 Second, the transcripts show that Fowler and Areaux discussed customers of the Kent organization. Fowler admonished Areaux to make sure that the customers continued to bet. 8
In short, the evidence showed that James Kent's organization employed Areaux as a commissioned bookmaker. Areaux consistently passed on his customers' bets to Kent and expected in return a percentage of the profits. His efforts were not sporadic or casual, but rather evince a carefully planned and coordinated effort between Areaux and Kent's agent, Fowler. 10
We conclude that there was ample evidence to support Fowler's conviction for violating 18 U.S.C. § 1955. 11 The juice was
spread and Fowler and Areaux were spliced into the quintant arc of conduction. The circuits were serpentine and heavily insulated, but the conduction points equalled or exceeded the quintet required by § 1955.
The sole issue raised by appellants Milton and Areaux is that the government's expert witnesses "invaded the province of the jury" by interpreting transcripts of conversations among the defendants. Specifically, Milton and Areaux object to the witnesses' interpretation of certain bets as lay off bets, to the experts' inferences regarding each defendant's role in Kent's organization, and to expert testimony that a bookmaker who for commission passes wagers on to a central gambling operation becomes part of that operation.
We reject appellants' attack. Rule 704 of the Federal Rules of Evidence provides:
Testimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.
To be sure, Rule 704 does not paint with a broad brush, and expert opinion evidence may still be...
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