United States v. Currency in Total Amount of $2,223.40, Civ. A. No. 6648.

• Court: United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
• Writing for the Court: Anthony F. Caffrey, Syracuse, N. Y., for claimant, David Armour McCarthy
• Citation: 157 F. Supp. 300
• Docket Number: Civ. A. No. 6648.
• Decision Date: 26 November 1957
• Parties: UNITED STATES of America v. CURRENCY IN THE TOTAL AMOUNT OF $2,223.40, consisting of Moneys of the United States of America, bills and coins, in the sum of $2,220.40 and $3.00 in moneys of the Dominion of Canada.

157 F. Supp. 300

UNITED STATES of America
v.
CURRENCY IN THE TOTAL AMOUNT OF $2,223.40, consisting of Moneys of the United States of America, bills and coins, in the sum of $2,220.40 and $3.00 in moneys of the Dominion of Canada.

Civ. A. No. 6648.

United States District Court N. D. New York.

November 26, 1957.

157 F. Supp. 301

Theodore F. Bowes, U. S. Atty., Syracuse, N. Y., Andrew J. Culick, Asst. U. S. Atty., Amsterdam, N. Y., of counsel, for the U. S.

Anthony F. Caffrey, Syracuse, N. Y., for claimant, David Armour McCarthy.

BRENNAN, Chief Judge.

This is a civil proceeding which seeks to enforce the forfeiture to the United States of the currency described in this title. The proceeding is based upon the provisions of the Internal Revenue Code (26 U.S.C.A. § 7302) in that said currency was intended for use in violating the provisions of the Internal Revenue Laws or which had been so used.

The libel charges generally that the alleged offending currency was intended to be used in violation of the Internal Revenue Laws by one, David Armour McCarthy, who was engaged in the business of accepting wagers at Syracuse, N. Y., from July 1, 1956, to November 10, 1956 and who wilfully failed to pay the special tax imposed under Sections 4401(a) and 4411 of the Internal Revenue Code of 1954, 26 U.S.C.A. §§ 4401(a), 4411, to the District Director of Internal Revenue at Syracuse, N. Y. See also Title 26 U.S. C.A. 4901.

No question is raised as to the preliminary proceedings taken herein. Claimant McCarthy filed an answer to the libel which admits the seizure of the moneys in dispute from his personal possession, custody and control. He alleges that same was and is his property. That said moneys were intended to be used or had been used in violating the provisions of the Internal Revenue Law is put in issue by the denial in the answer. A hearing was held before the court. Documentary and oral evidence was offered by the United States. The claimant offered no evidence. Motions to dismiss the libel were made and decision thereon reversed. The parties have submitted their briefs and the problem is before the court for determination.

157 F. Supp. 302

Findings of Fact

On March 18, 1957, claimant McCarthy entered a plea of guilty in this court to certain counts of an indictment. Count III is pertinent here and is set out below:

"That on or about July 1, 1956, at Syracuse, State and Northern District of New York, David Armour McCarthy, the defendant herein, who did engage in the business of accepting wagers at and near Syracuse, New York, from on or about July 1, 1956, to on or about November 10, 1956, did unlawfully, knowingly and wilfully fail to pay the special tax imposed under Section 4411 of the Internal Revenue Code of 1954, to the District Director of Internal Revenue for the Syracuse Internal Revenue Collection District of New York, at Syracuse, New York. (Sections 4411 and 7203 of the Internal Revenue Code of 1954 26 U.S.C.A. §§ 4411, 7203)."

The undisputed oral evidence discloses that one, Mascari, a special agent of the Internal Revenue Service, entered or visited the premises known as the Auditorium Cigar Store at Syracuse, New York, on eight different dates, between October 29, 1956 and November 7, 1956, inclusive. On each occasion, he placed a bet or wager on the result of certain horse races, using a betting slip on which the names of the horses were written and the amount of the wagers noted thereon. Transactions were had with claimant McCarthy and with persons named Beck and Murray. The findings here will relate only to the transactions with McCarthy, the claimant, because of the particular facts of this case and because he is the individual claimant of the moneys involved.

After visiting the cigar store on October 29, 1956 and October 30, 1956, when Mascari made wagers with Beck, he again entered the store on October 31, 1956; sat at a table in the rear room and claimant McCarthy paid Mascari $3.80, the proceeds of a wager made with Beck on October 30, 1956. The agent then wrote out a betting slip with the names of two horses thereon indicating a bet of $6. The slip was handed to McCarthy, the claimant, and the $6 paid to him. On November 1, 1956, the agent again entered the store; went into the back room; prepared a betting slip showing a $6 combination bet. McCarthy paid Mascari $7.20, due on the wager made the day before, and the $6 betting slip and the $6 in cash were placed with McCarthy. On November 3, 1956, the agent followed a similar procedure of entry and claimant McCarthy paid to him the sum of $21.50 which represented the agent's winnings on a wager placed with Beck on November 2, 1956. The agent then prepared a betting slip; handed same to McCarthy, together with the sum of $6 representing the amount wagered. On November 6, 1956, on the occasion of the agent's visit to the above premises, he was handed $6 by McCarthy which represented a wager made on November 3, 1956, with one Murray. The agent...