United States v. Bally Manufacturing Corporation

Decision Date21 June 1972
Docket NumberCrim. No. 71-530.
Citation345 F. Supp. 410
PartiesUNITED STATES of America v. BALLY MANUFACTURING CORPORATION et al.
CourtU.S. District Court — Eastern District of Louisiana

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Gerald J. Gallinghouse, U. S. Atty., Michael H. Ellis, Asst. U. S. Atty., New Orleans, La., John Wall, K. Eric Gisleson, Dept. of Justice, for plaintiff.

Paul R. Connolly, Robert L. Weinberg, John W. Vardaman, Jr., of Williams, Connolly & Califano, Washington, D. C., David Schippers, Chicago, Ill., A. R. Christovich, Jr., of Christovich & Kearney, New Orleans, La., for Bally and O'Donnell.

Guy Johnson, New Orleans, La., for Boasberg and Pace.

Philip A. Foto, New Orleans, La., for Boasberg.

Virgil M. Wheeler, Jr., New Orleans, La., for Callery, Rooney, and S. J. Marcello.

F. Irvin Dymond, New Orleans, La., for Elms.

Cecil M. Burglass, Jr., Lawrence L. Lagarde, Jr., New Orleans, La., for Lagarde, Sr.

Louis C. LaCour, Gerard H. Schreiber, New Orleans, La., for Nims.

Milton E. Brener of Garon & Brener, New Orleans, La., for Pierce.

A. G. Bucaro, D. T. Horton, New Orleans, La., for Caracci.

Eustace J. Shearman, III, New Orleans, La., for DiFatta.

Jack Wasserman, Washington, D. C., George S. Hesni, New Orleans, La., for V. J. Marcello.

CHRISTENBERRY, District Judge.

In this memorandum opinion the court rules on all pretrial motions thus far filed by these 14 defendants who were charged on December 1, 1971, in a 29-page indictment consisting of one conspiracy count and 15 substantive counts alleging violations of Title 18 U.S.C. §§ 371, 1952, 1955, and 2. Although defendants have filed slightly more than a hundred separate motions, generically there are far fewer and treatment here will be by generic category with all motions denied except where expressly granted.

The Setting

Count I charges all defendants with combining, conspiring, confederating and agreeing together and with each other to violate 18 U.S.C. § 19521 which makes it unlawful for a person to use interstate commerce with the intent to promote and facilitate an unlawful activity and thereafter to perform or attempt to perform acts to promote and facilitate this unlawful activity, all in violation of 18 U.S.C. §§ 371 and 2. Twenty-seven overt acts are alleged in furtherance of the conspiracy which is alleged to have existed from on or before December 2, 1966, until the defendants were charged on June 30, 1971. The definition of an "unlawful activity" includes a business enterprise involving gambling in violation of the law of the state in which the gambling offense is committed.

The conspiracy described in count I alleges that the Bally Manufacturing Corporation (hereafter Bally) and its president, William T. O'Donnell (hereafter O'Donnell), of Chicago, Illinois, would manufacture and cause to be manufactured machines designed primarily for gambling; that the gambling devices would be transported in interstate commerce from the place of manufacture in Illinois to the other defendants in Louisiana; that the other defendants would engage in separate business enterprises consisting of the owning and placing of the gambling devices in public places for use by the general public; that all defendants knew that illegal gambling would be conducted on these machines in violation of Louisiana Revised Statutes § 14:90 (La.Crim.Code art. 90); that defendants Bally and O'Donnell would also instruct the other defendants in the repair and upkeep of the machines and would also furnish parts therefor when required; and that defendants would otherwise aid and abet each other in this allegedly illegal scheme.

Counts II through IX are substantive in nature, each charging Bally, O'Donnell, Louis M. Boasberg, and at least one other defendant with a substantive violation of 18 U.S.C. §§ 1952 and 2 relative to a named business enterprise (different in each count), which enterprise is described as being an unlawful activity involving gambling on Bally "bingo" gambling-type pinball machines in violation of La.R.S. § 14:90.

Counts X through XVI each charge Bally, O'Donnell, Boasberg, and at least one other defendant with a substantive violation of 18 U.S.C. §§ 1955 and 2. Essentially, section 1955 makes it unlawful for one to conduct, finance, manage, supervise, direct or own an illegal gambling business. Here it is alleged that the unlawful gambling was consummated with Bally "bingo" gambling-type pinball machines in violation of La.R.S. § 14:90 and that these gambling businesses (a separate business enterprise is described in each of counts X through XVI) had been in substantially continuous operation for more than 30 days and that each business had five or more persons involved in its conduct, management, financing, supervision, direction, and ownership.

At the outset, it is noted that most of the defendants by motion have asked that they be allowed to adopt all motions of their codefendants and that they be permitted to file subsequent motions as deemed necessary. These perfunctory motions are granted and in the following discussion the court's reference to "defendants" is meant to include all of the 14 defendants charged in this case.

I. MOTIONS TO DISMISS THE INDICTMENT Alleged Federal and State Statutory Conflicts

First the court will deal with defendants' motion to dismiss the indictment on the ground that an erroneous view of the Louisiana anti-gambling statute, La.R.S. § 14:90,2 was presented to the grand jury by the government. This is a threshold question of no small importance as the "unlawful activity" proscribed by 18 U.S.C. §§ 1952 and 1955 is described in every count as arising from defendants' violation of La.R.S. § 14:90. Both § 1952 and § 1955 are directed only at gambling enterprises which violate state law and thus it will be incumbent upon the government to prove that the defendants conspired to violate or violated Louisiana law. No other state law than La.R.S. § 14:90 is referred to in any count.

Defendants argue at length that other Louisiana statutes, i. e., La.R.S. § 47:- 375(E) and La.R.S. § 15:31,3 specifically regulate the use of pinball machines and provide that they are not unlawful gambling devices; that the government misinformed the grand jury as to the proper Louisiana law by portraying state law as proscribing merchandise and cash payoffs on Bally gambling-type pinball machines while, according to the defendants, only cash payoffs are illegal; that as a result of misinterpreting state law to the grand jury, the indictment is defective by charging the commission of acts both legal and illegal; and that the applicable federal statute is not 18 U.S.C. § 1952 (the "Travel Act"), but 15 U.S.C. §§ 1171-1178 (the "Gambling Devices Act of 1962") which permits the importation of gambling-type pinball machines into a state if that state specifically allows such machines to become operative. As this argument goes, since Louisiana permits machines which pay off in merchandise, the proviso in 15 U.S.C. § 1172 governs and, accordingly, the indictment must fall for lack of the "illegal activity" essential to a charge brought under 18 U.S.C. § 1952 and § 1955.

After careful study, the court is convinced that defendants' motions for dismissal of counts I through IX of the indictment due to allegedly conflicting state and federal laws are without merit and must be denied. I find that La.R.S. § 14:90 proscribes gambling on gambling-type machines where payoffs are in merchandise or cash or both if the payoffs are determined by an element of chance.

First, La.R.S. § 15:31 and § 47:375(E) are inapplicable to the machines allegedly involved in this indictment because for those state statutes to come into operation, the payoffs must be due to "the exercise of the skill of the operator or player," La.R.S. § 47:375(E) or occur "where there is an element of skill involved in the playing." La.R.S. § 15:31(B). The indictment in describing the machines, however, states in count I, paragraph C. (1) that these machines were "designed and manufactured primarily for use in connection with gambling, and which when operated may entitle a person to receive, as a result of the application of an element of chance, any money or property." Whether the government can sustain its burden of proof on this issue is a question of fact to be submitted to the jury; it does not present a basis for dismissing the indictment.4

The important point is that these allegedly gambling-type pinball machines do ostensibly at least, come within the prohibitory sweep of La.R.S. § 14:90. In Gandolfo v. Louisiana State Racing Commission, 227 La. 45, 78 So.2d 504 (1954), the Louisiana Supreme Court addressed itself to the state's anti-gambling statutes. It held that the provision in the state constitution which provides that "lotteries and the sale of lottery tickets are prohibited in this State," La. Const. art. 19, § 8, is self-executory and constitutes a prohibitory law on the subject of lotteries. Furthermore, the state supreme court noted that it is La.R.S. § 14:90 that attaches criminality to any activity involving the prohibited lotteries. That court, the highest in the state, then definitely brought pinball machines within the sweep of § 14:90 in the following statement:

"Lottery has been defined as a scheme for the distribution of prizes by lot or chance. It is upon that theory that this court has held slot machines, pinball machines and bank nites sic lotteries within the meaning of certain state statutes and city ordinances. State v. Barbee, 1937, 187 La. 529, 175 So. 50; City of New Orleans v. Collins, 1900, 52 La.Ann. 973, 27 So. 532; State v. Lasselle, 1923, 154 La. 168, 97 So. 389. . . ."

227 La. at 59, 78 So.2d at 509.

Concerning the alleged statutory conflict between 18 U.S.C. § 1952 and the Gambling Devices Act of 1962, 15 U.S.C. §§ 1171-1178, the court has examined these statutes,...

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