U.S. v. Thomas, s. 73-1490

• Decision Date: 28 April 1975
• Docket Number: Nos. 73-1490,73-1544,s. 73-1490
• Citation: 508 F.2d 1200
• Parties: UNITED STATES of America, Appellee, v. Steve THOMAS, Appellant. UNITED STATES of America, Appellee, v. Frank SCHULLO and Anthony Petrangelo, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1200

508 F.2d 1200

UNITED STATES of America, Appellee, v. Steve THOMAS, Appellant.

UNITED STATES of America, Appellee, v. Frank SCHULLO and Anthony Petrangelo, Appellants.

Nos. 73-1490, 73-1544.

United States Court of Appeals, Eighth Circuit.

Submitted Feb. 12, 1974.

Decided Jan. 3, 1975, Certiorari Denied April 28, 1975, See

95 S.Ct. 1677.

Ronald I. Meshbesher, Minneapolis, Minn., for appellants Schullo and Petrangelo.

Robert J. Milavetz, Minneapolis, Minn., for appellant Thomas.

Thorwald H. Anderson, Jr., Asst. U.S. Atty., for appellee.

Before HEANEY and BRIGHT, Circuit Judges, and WANGELIN, District judge. ^*

BRIGHT, Circuit Judge.

Appellants Steve Thomas, Frank Schullo, and Anthony Petrangelo were tried before a jury in the United States District Court for the District of Minnesota (the late Judge Philip Neville, presiding), and convicted of a single violation of 18 U.S.C. 1955, ¹ which prohibits conducting as 'illegal gambling business.' This appeal followed.

At trial, the Government's evidence consisted primarily of recordings of wiretapped conversations between the appellants and three co-defendants not then on trial-- Messrs. Wolk, Capra, and Fishman-- who admittedly conducted an illegal 'bookmaking' operation in Minneapolis. Based on these telephonic communications and on the physical evidence of gambling paraphernalia found in appellants' possession, the Government painted a picture of the appellants as bookmakers who played an integral part in the conduct of the Wolk book by 'laying off' bets and by exchanging 'line' information with the Wolk book on sporting events. ²

On appeal, appellants raise the following issues:

(1) The contents of the intercepted oral communications 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 under 18 U.S.C. 2516;

(2) An evidentiary hearing should have been held to examine the truth of the Attorney General's affidavit in which he asserted that he personally approved a request for authority to apply for a wiretap order by initialing a memorandum to that effect;

(3) The evidence is insufficient to establish that defendants participated in the Wolk gambling business to the extent required to sustain a conviction under 18 U.S.C. 1955;

(4) The trial court erred in instructing the jury that a violation of 18 U.S.C. 1955 is eatablished if the Government shows that a defendant who is a bookmaker 'exchanges line or other information, or places or accepts layoff bets with another bookmaker;'

(5) The trial court erred in instructing the jury that the $2,000 per day gross revenue requirement of 18 U.S.C. 1955(b)(1)(iii) is met by counting the total amount of wagers placed in any single day; and

(6) The statute, 18 U.S.C. 1955, as construed by the trial court: (a) is an illegal Bill of Attainder, (b) is unconstitutionally vague, (c) contravenes the first, fifth, and sixth amendments, (d) is an improper delegation of legislative power under Article I, and (e) is an illegal usurpation of power specifically reserved to the states by the tenth amendment.

We find it unnecessary to fully discuss appellant's contentions numbered above as (1), (2), (5), and (6). We agree with the late Judge Neville's excellent discussion and proper determination of these issues in his district court opinion. United States v. Schullo, 363 F.Supp. 246 (D.Minn. 1973). As to the validity of the wiretap (issue 1), we note that United States v. Cox, 462 F.2d 1293 (8th Cir. 1972), on which Judge Neville relied, is in accord with the Supreme Court's decision in United States v. Chavez, 416 U.S. 500, 94 S.Ct. 1849, 40 L.Ed.2d 336 (1974), which affirmatively answered the question of whether Justice Department procedures, such as those in the instant case, comply with the wiretap authorization requirements of18 U.S.C. 2516. We have discussed this issue extensively in United States v. Brick, 502 F.2d 219 (8th Cir. 1974). Since the initials of Attorney General Mitchell appear on the authorization for the wiretap and his affidavit filed in this case recites that he 'approved a request for authority to apply for an interception order in this matter,' the appellants, challenge to the wiretap must be rejected as similar challenges were rejected in Chavez and Brick.

We now turn to a consideration of the sufficiency of the evidence to sustain the conviction of each of the appealing defendants. The statute, 18 U.S.C. 1955, defines 'illegal gambling business' to mean, among other things, an operation which 'involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business * * *.' As noted, the government's case rested on transcribed logs of wiretapped conversations between each appellant and the Wolk gambling establishment and on proof that all three defendants were bookmakers.

The appellants strongly argue that the evidence is insufficient to bring them within the purview of the statute. ³ They claim that, even assuming they were laying off bets and giving line information to the Wolk organization, they were not 'involved' in the 'conduct' of the Wolk business. They assert that lay off bets, if actually made, constitute a form of insurance in which one bookmaker passes the risk of loss to another and that the interests of appellants, in fact, directly conflicted with the interests of the Wolk book.

As to anthony Petrangelo, the taped telephone conversations disclose that he furnished the Wolk book with his 'line' (point spreads on various sporting events) and received Wolk's lay off betting on a regular and consistent basis. In addition, the two parties discussed opportunities for Petrangelo to further lay off a particular bet to an unnamed third party bookmaker.

The evidence against Frank Schullo indicates that he frequently called the Wolk operation inquiring of Wolk's line and that he placed bets on selected athletic contests with Wolk on a fairly regular basis. The taped conversations indicate that some bets were lay offs although others may have been either lay offs or personal bets. In addition, the telephonic record indicates that Wolk made frequent lay off bets with Schullo based on Schullo's line.

The evidence shows that Steve Thomas functioned as an intermediary in placing Wolk's bets with an unnamed third party bookmaker. The transcribed conversations establish that Thomas complied with the requests of the Wolk book to obtain the line from the third party bookmaker on frequent occasions. If the odds were deemed favorable, Thomas placed Wolk's bets with this bookmaker. In addition, Thomas placed some of his own personal bets with this same bookmaker.

In examining the insufficiency of the evidence claims we must determine whether the activities of the appellants fall within the statutory term 'illegal gambling business.' Neither Congress nor the courts have precisely delineated the reach of the term 'business' within the phrase 'illegal gambling business.' Common usage does not offer a precise standard for the word 'business' since it may encompass anything from a single profit-seeking transaction to the overall activity of an entire industry. The statutory requirement that the 'business' must involve 'five or more persons who conduct, finance, manage, supervise, direct, or own' some portion of the business limits the definition somewhat but still leaves the term nebulous and elastic in scope. Thus, it is necessary to examine the ligislative history in order to further narrow the definition.

Section 1955 of Title 18 was enacted as part of the Organized Crime Control Act of 1970. ⁴ Title VIII of the Act was aimed at syndicated gambling which Congress found to have a pervasive effect upon interstate commerce. 1970 U.S.Code Dong. & Admin.News at 4028. Although Congress With this special finding, could arguably have proscribed all illegal gambling, ⁵ it evidently intended by use of the term 'business' to signify an organized operation or enterprise involving at least five or more persons similar to a single firm engaged in any other field of commerce. The House Judiciary Committee Report on this portion of the Crime Control Act states:

The intent of section 1511 and section 1955, below, is not to bring all illegal gambling activity within the control of the Federal Government, but to deal only with illegal gambling activities of major proportions. It is anticipated that cases in which their standards can be met will ordinarily involve business-type gambling operations of considerably greater magnitude than simply meet the minimum definitions. The provisions of this title to not apply to gambling that is sporadic or of insignificant monetary proportions. It is intended to reach only those persons who prey systematically upon our citizens and whose syndicated operations are so continuous and so substantial as to be of national concern, * * * (H.R.Rep.No.1549, 91st Cong., 2d Sess. (1970), 1970 U.S. Code Cong. & Admin.News at 4029 (hereinafter 'House Report').)

Similarly, the Senate Judiciary Committee Report emphasizes that the standards of 1955(b)(1) were designed to bring the federal power to bear only against 'illegal gambling activities of major proportions.'

It is anticipated that cases in which this standard can be met will ordinarily involve business-type gambling operations of considerably greater magnitude than this definition would indicate, however, because it is usually possible to prove only a relatively small proportion of the total operations of a gambling enterprise. (S.Rep.No.91-617, 91st Cong., 1st Sess. 73 (1969).)

Thus, given the congressional emphasis on fairly large organized gambling operations and the exclusion of small-scale operations through the five-person minimum, it appears that Congress intended some gambling businesses to remain beyond the scope of ...