U.S. v. Schaefer
| Decision Date | 19 May 1975 |
| Docket Number | 73--1611 and 73--1617,73--1577,73--1538,73--1578,73--1526,Nos. 73--1506,s. 73--1506 |
| Citation | 510 F.2d 1307 |
| Parties | UNITED STATES of America, Appellee, v. Eugene SCHAEFER, Appellant. UNITED STATES of America, Appellee, v. Angelo DEL PIETRO, Appellant. UNITED STATES of America, Appellee, v. Frank VINCERI, Appellant. UNITED STATES of America, Appellee, v. Clifford LANCASTER, Appellant. UNITED STATES of America, Appellee, v. James LONSBERRY, Appellant. UNITED STATES of America, Appellee, v. John Edward VOGT, Appellant. UNITED STATES of America, Appellee, v. William CHRISTOPHEL, Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Donald Wolff, Merle L. Silverstein, Clayton, Mo., Harold M. Weber, St. Louis, Mo., and Ray B. Marglous, Clayton, Mo., for appellants.
Marc P. Richman, Dept. of Justice, Crim. Div., App. Section, Washington, D.C., for appellee.
Before LAY, BRIGHT and STEPHENSON, Circuit Judges.
These consolidated criminal appeals concern review of convictions for conducting an illegal bookmaking business and conspiracy to conduct that business. We affirm the substantive charges and reverse the conspiracy charges.
All seven defendants (an eighth defendant died subsequent to conviction) were charged in two-count indictments. Count I charged violation of 18 U.S.C. § 1955, 'Prohibition of illegal gambling businesses.' Count II charged conspiracy to violate § 1955.
Jury trial was waived and the cases were tried to the court on essentially undisputed facts, including a lengthy stipulation. Two defendants, Lancaster and Lonsberry, chose not to stipulate regarding expert testimony of an F.B.I. agent as to bookmaking customs and procedures. Those defendants were severed and tried separately. They went to trial essentially on stipulated facts except for the expert testimony.
All defendants were convicted on both counts. The trial court 1 sentenced each defendant to a prison term and fine on Count I. All defendants received suspended sentences on Count II with a probation period to run consecutively to the sentence on Count I.
At the outset we must meet the argument raised by all appellants that the contents of the intercepted oral communications, which formed the greatest part of the government's case, should have been suppressed because the wiretap application was signed by a Deputy Assistant Attorney General and not the Attorney General or his specially designated Assistant Attorney General as required pursuant to 18 U.S.C. § 2516.
Since the United States Supreme Court decided United States v. Chavez,416 U.S. 562, 94 S.Ct. 1849, 40 L.Ed.2d 380 (1974), this court has twice considered Justice Department procedures almost identical to those which led to the wiretaps in the instant case. 2 United States v. Brick, 502 F.2d 219 (8th Cir. 1974); United States v. Schullo et al., 508 F.2d 1200 (8th Cir. filed January 3, 1975). As in those prior cases the record here indicates that Attorney General Mitchell initialed the wiretap authorization and submitted his affidavit reciting that he had authorized application for the specified interception order. Chavez and this court's opinions following Chavez have found this procedure to be sufficient. See also United States v. Cox,462 F.2d 1293 (8th Cir. 1972).
Certain of the appellants further argue that the pen register used by the government to record numbers dialed from certain telephones is not authorized by the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510--2520. We have held otherwise. United States v. Brick,supra, 502 F.2d at 223.
Several appellants claim that the affidavit of Robert J. Wilkinson, Special Agent of the F.B.I., was insufficient to demonstrate probable cause and need for the wire interception and the use of the pen register. Citing U.S.Const. Amend. IV; 18 U.S.C. § 2518(1)(c).
The affidavit in question is substantially similar to that approved in Brick, supra at 224. There we said:
The affidavit presented, that of Robert J. Wilkinson, Special Agent of the F.B.I., set forth in detail his personal observations concerning the investigations conducted, as well as those of two unnamed informants, one of whom had provided reliable information for several years to Special Agents 'on a continuous basis concerning gambling matters.' The affidavit described in detail the operations of the gamblers, and named certain of the persons involved, together with their places of meetings, movements and conversations. In addition it was stated that the informants, noted above, would not testify, nor, as evidenced by past experience, would the gambler's customers; that gambling raids had in the past proved ineffective, as had the telephone toll records.
The above representations in the affidavit, in conjunction with others more detailed contained therein, furnished ample probable cause for the order entered and were sufficient to demonstrate on a factual basis, as distinguished from a mere conclusion, that 'other procedures reasonably appear unlikely to succeed.' The statute does not require more. (Footnote omitted.)
The same holds true in the instant case.
The most serious problem before the court is whether the evidence shows activity which is proscribed by 18 U.S.C. § 1955. 3 That is, whether the facts of this case evidence the sort of illegal gambling business, 'involv(ing) five or more persons who conduct, finance, manage, supervise, direct or own all or part of such business,' that Congress sought to arrest.
The parameters of the Congressional intent when enacting § 1955 have now been fairly well defined. Congress sought to draw the line between large scale gambling operations and those that are relatively small. Brick, supra,502 F.2d at 224; Schullo, supra, 508 F.2d at 1204; 116 Cong.Rec. 603 (1970) (remarks of Senator Allot). The statute is not meant to reach gambling operations that are of insignificant monetary proportions or those that are only occasional or intermittent in operation. Schullo, supra at 1204 and citations. Only gambling that is continuous and substantial was to be proscribed. H.R.Rep.No.1549, 91st Cong., 2d Sess. (1970), 1970 U.S.Code Cong. & Admin.News at 4029.
It has further been established that the alleged violator of the statute need not know that the activity engaged in was composed of five or more participants. Brick, supra, 502 F.2d at 224; see also United States v. Smaldone, 485 F.2d 1333, 1348 (10th Cir. 1973), cert. denied, 416 U.S. 936, 94 S.Ct. 1934, 40 L.Ed.2d 286 (1974); United States v. Iannelli, 477 F.2d 999, 1002 (3rd Cir. 1973), cert. granted, 417 U.S. 907, 94 S.Ct. 2602, 41 L.Ed.2d 211 (1974). However, mere customers of the gambling business are not within the statute's intended reach. Schullo, 508 F.2d at 1205 and citations.
Congress was aware that it is oftentimes difficult to prove the workings of an organized gambling setup and surmised that the statute would often operate against gambling networks much larger than the statutory definition of 'five or more' would indicate. S.Rep.No.91--617, 91st Cong.1st Sess. 73 (1969); Schullo, supra at 1205.
In the context of the bookmaking business 4 this court has recognized that layoff betting 5 is the major link connecting independent operations into an effective gambling organization that will work profitably and well for all concerned. Schullo, supra at 1205; Brick, supra, 502 F.2d at 225; see also United States v. DeCesaro, 502 F.2d 604, 611 (7th Cir. 1974); United States v. McHale, 495 F.2d 15, 18 (7th Cir. 1974). The layoff system was studied by Congress before it enacted § 1955. See Hearings on S. 30 and related proposals before Subcom. No. 5 of the House Comm. on the Judiciary, 91st Cong. 2d Sess.
The government's case rested upon stipulations, the transcribed wiretap conversations (logs) taped from appellant Lancaster's telephone, gambling records seized from several of the appellants' premises, and the expert opinion of Special F.B.I. Agent Whitcomb.
The stipulated evidence and logs show that Lancaster and the other appellants were bookmakers. Lancaster received line 6 information from Angelo Del Pietro and Frank Vinceri. Lancaster also exchanged layoff bets with these men. Lancaster passed along the line information he received. At times he would adjust the line information himself before passing it along. 7 Lonsberry took bets from customers for Lancaster and relayed line information to those customers for him. Lancaster and Lonsberry had numerous customers of their own with whom they dealt directly. Vogt maintained customers of his own. He received line information from Lancaster and exchanged layoff bets with him. Christophel discussed line information and layoff betting with Lancaster. Schaefer received line information from Lancaster and discussed line adjustments. Schaefer also bet with Lancaster. The logs disclose that all appellants carried on conversations regarding the status of accounts.
Appellants all claim that the evidence does not show one gambling business but several. We disagree.
The stipulated evidence and especially the wiretap logs indicate to us that this is the type of sustained and substantial gambling activity which Congress sought to curb. Each appellant was involved in the network of gambling activity interlaced through the Lancaster operation. Compare Brick and Schullo, both supra.
We are not persuaded by the contention of appellants Lancaster and Lonsberry that they are 'independent businessmen' and are no different than independent hotel owners who refer customers back and forth and rely on cooperation from each other. 8 It is patently obvious from the legislative history of § 1955 that Congress was well aware that the gambling business is unlike the hotel business or any other business. Nowhere does Congress indicate...
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