U.S. v. Sims

Decision Date19 October 1995
Docket NumberNos. 95-5009,95-5010,s. 95-5009
Citation68 F.3d 476,1995 WL 620965
PartiesNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Stanley SIMS and Sam Sims, Jr., Defendants-Appellants.
CourtU.S. Court of Appeals — Sixth Circuit

Before: ENGEL, NELSON, and SUHRHEINRICH, Circuit Judges.

DAVID A. NELSON, Circuit Judge.

The defendants, two brothers associated in the operation of a "numbers" operation, were tried in federal court on charges of conducting an illegal gambling business and a related conspiracy charge. Asserting an "entrapment by estoppel" defense, the defendants testified that they had been told by representatives of the United States Treasury Department that the federal government would not prosecute them if they purchased gambling stamps and paid a two percent federal excise tax. On cross-examination, in an attempt to prove that the defendants knew that their business violated federal law notwithstanding their compliance with the gambling tax requirements, the prosecution brought out the fact that during the trial of a prior federal tax case one of the brothers had been cautioned by the court that he was admitting, in his testimony, to a violation of 18 U.S.C. Sec.1955. The prosecution further brought out that this defendant had understood his situation well enough, during the earlier trial, to have invoked his Fifth Amendment privilege against self-incrimination.

The defendants were convicted on one of three counts of the indictment -- a count addressing conduct that occurred subsequent to the trial of the tax case. They appeal their convictions here, contending, among other things, that the trial court erred in failing to grant a mistrial on the basis of the cross-examination about the prior assertion of the Fifth Amendment privilege. We conclude that the convictions must be affirmed.

I

Defendant Sam Sims, Jr., assisted by his younger brother, defendant Stanley Sims, ran a private lottery business for many years in Nashville, Tennessee. It is uncontested that the business violated Tennessee law.

Under 18 U.S.C. Sec.1955, it is a federal crime to conduct a gambling business that violates state or local law if the business involves five or more persons in capacities specified in the statute and has been in continuous operation for more than 30 days or has a gross revenue of $2,000 in any single day. The Sims' business appears to have met these criteria.

An indictment returned against the Sims brothers On September 3, 1992, charged them with conspiracy to violate Sec.1955 over a period of at least six years ending in or about December of 1991; with violating Sec.1955 from at least January of 1985 through September of 1990; and with violating Sec.1955 "[f]rom in or about at least May, 1991, and continuously thereafter up to and including at least December, 1991...."

This was not the first time Sam Sims had been a party to litigation with the federal government. Several years earlier he had sued the United States for a refund of withholding taxes paid on gambling winnings, and the government had counter-claimed for an unpaid balance of tax assessments totaling almost $1 million. The tax case was tried before Judge Thomas Wiseman in December of 1990. Mr. Sims prevailed both on his claim against the government and on the government's counter-claim. See Sims v. United States, 756 F. Supp. 1048 (M.D. Tenn. 1991).

Prior to the trial of the criminal case, which was conducted by Judge Robert Echols, the Sims brothers indicated that they intended to claim that they were the victims of a vindictive prosecution arising out of the tax case. The government filed a motion in limine asking the court, among other things, to prohibit the defendants from making such a claim before the jury. In a written opinion entered on May 9, 1994, the day before the trial started, the court denied this branch of the government's motion. On May 10, however, when counsel for Sam Sims told the court that he intended to refer to the tax case during opening statement, the court questioned the relevance of that case. There was no mention of vindictive prosecution during the colloquy that followed, and after the prosecutor stated that none of her witnesses would refer to the tax case, the court asked Sims' counsel not to mention the case in opening statement. The lawyer replied that he did not want the prosecutor to use the tax case in any way, "be it in our case or their case," and the prosecutor said that this was no problem, "I don't intend to touch it." The court then asked for an understanding that "we won't get into the matter of the prior lawsuit," adding that "[i]f it comes out in some way then any of the attorneys can ask to approach the bench and we'll try to deal with it at that time." 1 The court was not made aware, at this juncture, of the warning given by Judge Wiseman in the tax case.

Neither side mentioned the tax case in its opening statement to the jury. The government's opening statement described the elements of the crimes charged and summarized the evidence that would be offered to establish these elements. The defendants' opening statements focused on the Sims' brothers participation in a gambling tax "compliance program" promoted by the government. Counsel for defendant Sam Sims told the jury that the evidence would show that an agent of the Treasury Department's Bureau of Alcohol, Tobacco and Firearms called on Mr. Sims, explained the compliance program to him, and told him in substance that "if you pay these taxes and you go buy this license, you won't be prosecuted by the federal government. That is, ... you will be square. You will be legal. You will be in compliance with the federal law." Defendant Stanley Sims' lawyer described the compliance program as "sort of an amnesty plan ...."

After the government presented its case in chief -- a presentation in which no reference was made to the tax case -- Sam Sims took the stand as the first witness for the defense. In keeping with his counsel's opening statement, Mr. Sims testified, among other things, that an ATF agent had come to see him in the mid-1970s; that the agent had told him that he needed to buy a gambling stamp and would have to pay a two percent excise tax; and that the agent had "said that if we bought the stamp, we would not be prosecuted by the federal government. That we would be in line with the federal government laws." In reliance on what the agent had told him, Mr. Sims testified, he purchased gambling stamps and paid his excise taxes year after year.

On cross-examination the government suggested to Sam Sims that federal agents, accompanied by the prosecutor herself, had met with him as early as March of 1991 and discussed the possibility of his being prosecuted for gambling. Mr. Sims replied that he had been told that an investigation was going on, but asserted that "I don't remember hearing anything about gambling." The prosecutor then asked Sims if he had not been in court before Judge Wiseman on December 11 and 12, 1990, and if his attorney had not objected at that time to his being questioned about his gambling activities. 2 Mr. Sims acknowledged having had a case before Judge Wiseman, but said that he did not remember his attorney objecting to inquiry about his gambling activities.

Under further questioning, Mr. Sims agreed that if he had heard it stated in open court, during the trial of the prior case, that "everybody knows that numbers is a violation of Tennessee law," and that "if it is big enough and [has] got enough people involved it is a violation of federal law," such a statement would have put him on notice. The prosecutor then handed Mr. Sims a transcript provided by the defense as an exhibit to a pre-trial motion in the criminal case. Mr. Sims was asked to read aloud the following objection that his lawyer in the tax case, Mr. Alfred Knight, had raised when Mr. Sims was asked if he had been conducting numbers operations in September of 1990, a time when his establishment had been raided by the metropolitan police:

"MR. KNIGHT: Please the Court, I object. Number one, the ground of relevance and, number two, since it is irrelevant I think we have a Fifth Amendment problem about this. There is a pending case involving that raid ...."

His current lawyer interposing no objection, Mr. Sims read aloud from the transcript as requested. He then went on to read (still without objection) a passage in which Judge Wiseman had said "everybody knows that numbers is a violation of Tennessee law," adding that "if it is big enough and [has] got enough people involved, it is a violation of federal law." And from a different section of the transcript, Mr. Sims read this sentence: "You know, everything you ask him to tell you on the tax return makes him guilty of a violation of 18 United States Code, Section 1955, and makes everything he has subject to forfeiture."

The prosecution then had another transcript marked as an exhibit and asked Sam Sims if he had been present when the court addressed Stanley Sims in the trial of the tax case. Mr. Sims replied in the affirmative, whereupon he was handed the transcript and asked to state what Judge Wiseman had told Stanley Sims. Without objection, Sam Sims read the following excerpt from the transcript:

"THE COURT: Mr. Sims ... by the testimony you are giving right now you are admitting to a violation of United States Code 18, Section 1955a in that you are admitting to being one of those persons who conducts, finances, manages, supervises or actually owns all or part of an illegal gambling business which subjects to a possible fine of not more than 25,000 dollars -- "

This rendition was followed, in the criminal trial, by the following question and...

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