United States v. $1,963 IN UNITED STATES MONEY

• Decision Date: 29 March 1967
• Docket Number: Civ. A. No. 4700.
• Citation: 270 F. Supp. 396
• Parties: UNITED STATES of America, Libelant, v. $1,963 IN UNITED STATES MONEY, Respondent [Matthew J. Robinson, Claimant].
• Court: U.S. District Court — Eastern District of Tennessee

270 F. Supp. 396

UNITED STATES of America, Libelant, v. $1,963 IN UNITED STATES MONEY, Respondent Matthew J. Robinson, Claimant.

Civ. A. No. 4700.

United States District Court E. D. Tennessee, S. D.

March 29, 1967.

John H. Reddy, U. S. Atty., Robert A. Scott, Asst. U. S. Atty., Chattanooga, Tenn., for libelant.

Carter Schoolfield, Chattanooga, Tenn., for respondent.

MEMORANDUM OPINION

NEESE, District Judge.

This is a proceeding by the libelant for the enforcement of a forfeiture to the United States, 26 U.S.C. § 7302, of certain currency seized by federal revenue agents from the person of the claimant Matthew J. ("Squirrel") Robinson and allegedly then possessed by Mr. Robinson when he had used or intended to use same in violating 26 U.S.C. §§ 4411 and 4412.¹ The evidence was received by the Court without a jury on January 27, 1967.

Mr. Robinson admitted under oath that he was in the business of accepting wagers² without having purchased the requisite wagering stamp or registering as a gambler at the time the aforesaid currency was seized from him following a search on authority of a search warrant. He claimed, however, that all of the currency thus seized had not been used, and was not intended by him to be used, in such violations. He insisted that $20 "* * * would be a good-size sic wager for me. * * *"

The aforementioned wagering statutes apply without particular reference to the size or number of bets taken. United States v. Simon, C.A.7 (1957), 241 F.2d 308, 3102. The issue confronting the Court, therefore, is: what portion of the currency involved had Mr. Robinson used, or did he intend to use, in his gambling operations?

Mr. Robinson was unable to state under oath what part of the currency seized from him as aforesaid had been thus used or what part he intended thus to use. In response to inquiries from the Court as to whether any of the monies taken from him by the agents were the proceeds of "up bets"³ or represented funds he intended to use in paying any bets he might have lost or lose, Mr. Robinson responded: "* * * It could have been, but I couldn't say specifically that it was * * *. * * * Well, honestly, I couldn't say * * * if one of them sic ten-dollar bills was a bet or wasn't; I don't know * * *" It appears that the following query and response summarize his contentions:

"THE COURT: You are not in position to say that any of the money seized was or was not gambling money. Is that your answer?

"A. Yes, sir. * * *"

The Court notices judicially that currency of the United States of America is ordinarily used for a legal purpose. "* * * Statutes authorizing the forfeiture of property ordinarily used for a legal purpose are drastic in their operation and are strictly construed. * * *" United States v. One 1960 Ford 4-Door Galaxie Sedan, D.C.Tenn. (1962), 202 F.Supp. 841, 843 1, 2, citing United States v. Ryan (1931), 284 U.S. 167, 176, 52 S.Ct. 65, 76 L.Ed. 224. "* * * `Forfeitures are not favored; they should be enforced only when they are within both letter and spirit of the law.' * * *" United States v. One 1936 Ford V-8 DeLuxe Coach (1939), 307 U.S. 219, 226, 59 S.Ct. 861, 865, 83 L.Ed. 1249, 1255 (headnote 4). "* * * Statutes to prevent fraud on the revenue are construed less narrowly, even though a forfeiture results, than penal statutes and others involving forfeitures * * *." United States v. Ryan, supra, 284 U.S. at 172, 52 S.Ct. at 67, 76 L.Ed. at 227.

Forfeiture is proper herein if Mr. Robinson had used the currency involved for proscribed gambling purposes, or if Mr. Robinson intended to so use such currency. It is seldom that intent may be proved by any means other than circumstantial evidence, but what Mr. Robinson did or did not do may indicate his intent or lack of intent, as the case may be. It is reasonable to infer that Mr. Robinson intended the natural and probable consequences of every act which he did and of every act which he failed to do. In determining Mr. Robinson's intent in the premises, the Court will consider any statements made, and not made, by Mr. Robinson, as well as all facts and circumstances in evidence herein which may aid the Court in determining his intent. Morisette v. United States (1952), 342 U.S. 246, 276, 72 S.Ct. 240, 255, 96 L.Ed. 288, 307. Mr. Robinson having admitted that he accepted wagers without having registered and paid the tax as required by the applicable federal statutes, the Court will also consider evidence of earlier conduct on his part in support of any inference as to Mr. Robinson's intention in the instant situation. Nye & Nissen v. United States (1949), 336 U.S. 613, 618, 69 S.Ct. 766, 769, 93 L.Ed. 919, 924.

For a period of thirty-eight months, i. e., until November, 1963, Mr. Robinson, who is a professional gambler, possessed a federal wagering tax stamp. While so armed with this indication of his compliance with the applicable federal internal revenue laws, Mr. Robinson aggressively and consistently sought wagers, visiting various bars and automobile filling stations regularly for that purpose.

The claimant kept records of his wagering activities in coded form, using various letters, figures, nicknames, etc., to provide himself with information he might need in futuro, but which would be troublesome for state policing authorities to decipher. This wagering usually took the form of parlays.⁴ At one time in his career, Mr. Robinson operated a newsstand. He earned profits of from $5,000 to $7,000 annually from his gambling pursuits.

Mr. Robinson surrendered his wagering stamp and ceased his monthly reports of wagering activities as aforesaid and then transferred his presence to Florida shortly after Christmas, 1963. He planned to become employed as a bartender in Florida, but for some undisclosed reason, he changed his employment plans and busied himself at three horse racetracks where he "* * * played the horses * * *" and visited the dog-racing tracks. In April, 1964, he "* * * acquired * * *" a $1,000 bill "* * * at probably Gulf Stream just before I left there—maybe within a week or ten days. * * *"

Returning to Tennessee thereafter, Mr. Robinson confined his activity in the ensuing six months period, according to his testimony, to negotiating for a site at which to open a news-stand. In the latter part of October, 1964, however, Mr. Robinson acquired the Victory Bar in Chattanooga, Tennessee. There, Mr. Robinson dispensed beer, light lunches, magazines and second-hand books. He dealt with "* * * fifty or a hundred customers a day. * * *" He estimated that he averaged cashing "* * * between 12 and 25 checks a week * * *, pay checks, mostly. * * *"

Mr. Robinson described as the "nucleus" of his business the patronage of sheetmetal workers whose labor union hall was near his bar. Most of the checks he cashed ranged from slightly over $130 to $190. He attempted to be prepared to cash from two to five payroll checks after the banks had closed on Friday evenings.

According to the stipulated testimony of the teller with whom Mr. Robinson customarily transacted his banking business, he "* * * usually asked for some silver and small bills. * * *" This teller also cashed for Mr. Robinson an unspecified number of payroll checks from customers of the Victory Bar on Friday, October 8, 1965.

Prior to this date, and unknown to Mr. Robinson, special intelligence agents of the Internal Revenue Service, federal Treasury Department, had received information that Mr. Robinson was accepting wagers at the Victory Bar sans compliance with the applicable statutes relating to the wagering business. These agents conducted surveillances of activities within this Bar from September 16, 1965 through the following October 13. They accumulated from the surveillance sufficient information to provide the necessary affidavits to cause warrants to be issued for the search of the Victory Bar and Mr. Robinson's person. These warrants were executed by agents James W. Ledbetter and E. L. Keene in the early afternoon of Friday, October 8, 1965.

In the surveillance process, Agent Willard M. Cummings overheard a conversation in which a patron of the Victory Bar offered to bet Mr. Robinson "* * * another hundred * * *" on the Army-Tennessee football game if Mr. Robinson would give him "* * * Tennessee and eight points * * *", the "line" on that gridiron contest having been previously announced to this patron by Mr. Robinson as being "* * * Tennessee and 6½ * * *."⁵ Strangely, Mr. Robinson was receiving through the United States mail each Monday morning from an unknown benefactor a form "line-sheet"⁶ which Mr. Robinson filled in himself from quotations of betting odds on sporting events appearing in the (then) two Chattanooga newspapers. Mr. Robinson utilized these line-sheets in accepting wagers over the telephone as well as negotiating for them in person within the Victory Bar.

As a result of the search of his person, the revenue agents seized coded notations of bets Mr. Robinson had made theretofore from his shirt pocket, a line-sheet on football games to be played that weekend from his right front trousers pocket, and from the left front pocket of Mr. Robinson's trousers, the following bills of United States currency:

                quantity       denomination     aggregate
                 1             $1,000              $1,000
                 8

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