United States v. Gebhart, 20425-20427.

• Decision Date: 07 May 1971
• Docket Number: No. 20425-20427.,20425-20427.
• Citation: 441 F.2d 1261
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. George Serian GEBHART, David Fleming Whitfield, Harold Cordell Smith, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

441 F.2d 1261 (1971)

UNITED STATES of America, Plaintiff-Appellee, v. George Serian GEBHART, David Fleming Whitfield, Harold Cordell Smith, Defendants-Appellants.

Nos. 20425-20427.

United States Court of Appeals, Sixth Circuit.

May 7, 1971.

Peter F. Beasley, Covington, Ky. (James L. Cobb, Jr., Covington, Ky., and Morris Weintraub, Newport, Ky., on the brief), for appellants.

Maurice K. Merten, Dept. of Justice, San Francisco, Cal. (Eugene E. Siler, Jr., U. S. Atty., Lexington, Ky., Mark W. Perrin, Robert Gary, Attys., Dept. of Justice, Washington, D. C., on the brief), for appellee.

Before CELEBREZZE and MILLER, Circuit Judges, and O'SULLIVAN, Senior Circuit Judge.

CELEBREZZE, Circuit Judge.

This is an appeal from the United States District Court for the Eastern District of Kentucky. Appellants were indicted on four counts of using and one count of conspiring to use the facilities of interstate commerce to promote gambling in violation of 18 U.S.C. §§ 1952(a) (3) and (b) (1954).¹ Appellants were convicted on each of the counts for which indicted and sentenced to concurrent sentences of one year and a day.

At trial, there was substantially unrebutted testimony that the Appellants managed, carried on and promoted the game of bingo at the Latin Quarter, Wilder, Kentucky, on a continuous basis since 1964. Further, in the operation of the bingo game, the Appellants utilized several thousand bingo cards and assorted bingo paraphernalia and equipment which had stamped upon it the trademark of Bingo King Company, Englewood, Colorado. The President and another employee of Bingo King Company testified that the Company's records showed that over a period of several years they had received in Englewood, Colorado, by telephone and by mail, orders for a variety of bingo equipment and materials from a person who represented himself to be one of the Appellants. There was direct testimony such orders were filled through the United States mails; and in the evidence seized at the time of the raid on the Latin Quarter, large amounts of materials and equipment bearing the Bingo King trademark and patents were found.

Several issues are raised on appeal. Before discussing these issues, we first consider the elements which the Government is required to prove to establish a violation of Title 18, Section 1952(a) (3). Title 18, Section 1952 (1964) provided that:

"(a) Whoever * * * uses any facility in interstate commerce or foreign commerce, including the mail, with intent to —

* * * * * *

"(3) otherwise promote, manage, establish, carry on or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity, and thereafter performs or attempts to perform any of the acts specified in subparagraphs (1), (2) and (3), shall be fined not more than $10,000 or imprisoned for not more than five years, or both.

"(b) As used in this section `unlawful activity\' means (1) any business enterprise involving gambling, liquor on which the Federal excise tax has not been paid, narcotics, or prostitution offenses in violation of the laws of the State in which they are committed or of the United States * * *."

To successfully prosecute one under the above statutory provision, the United States must prove the following elements: (1) that the accused voluntarily traveled in interstate commerce or used the facilities of interstate commerce; (2) that he attempted to or did in fact promote, manage, establish, carry on or facilitate the promotion, management, establishment or carrying on of any one of certain statutorily defined activities; and (3) that the accused formed a specific intent to promote, manage, establish, carry on or facilitate one of the prohibited activities.

We turn now to a consideration of the four issues raised on appeal. First, the Appellants contend that the District Court erred in permitting the United States to introduce evidence that the Appellants may have been "skimming" or embezzling funds from the bingo game which they were reputedly operating for the benefit of a charity known as the Speers Society.

The Government introduced evidence from an officer of the Speers Society that the Appellants were to operate the bingo games in behalf of the Speers Society and certain other charitable causes. Immediately thereafter the Government, over the Appellants' objections,² introduced testimony and evidence, in the form of accounting records compiled by the F.B.I., which showed an apparent discrepancy between the net profits the Appellants reported to the Speers Society and the net profits the witness believed the bingo operation actually generated. From this evidence, the jury may have reasonably inferred that the Appellants had retained for their own use income from the bingo operation which was to have gone to the Speers Society.

This testimony was relevant as cumulative evidence for the proposition that Appellants jointly operated a large bingo operation, and also as telling evidence that Appellants had actual control over the gambling operation and that they exercised their control over the gambling revenues with the requisite statutory specific intent to "promote, manage, establish, carry on or facilitate" a gambling operation. No other evidence introduced by the Government so plainly indicated the autonomy of control of the Appellants over the bingo games and the concomitant specific intent of the Appellants to establish a bingo operation as did the accounting evidence to which Appellants object.

Although we find the accounting evidence highly relevant to the instant indictments, it did also raise an inference that the Appellants were engaged in criminal conduct contemporaneous to and as an integral part of their bingo operation. As a general rule, evidence of marginally relevant prior or contemporaneous criminal conduct of an accused is not admissible in a trial of the accused because of its tendency to prejudice and inflame the jury and possibly deprive an accused of a fair trial on the substantive crime for which he is charged. See generally, Wignore On Evidence (3d ed.) §§ 194, 300-304, 305, 306(3). But here we are dealing with clearly relevant and important evidence on the issues of the degree of control, the scope of the operation and the existence of a specific intent to manage a gambling enterprise. The "accounting" testimony as it related to other criminal conduct was "part of" the gambling operation "and so closely related to the" elements of the indictment "that it could not be separated into two parts." United States v. Compton, 365 F.2d 1, 4 (6th Cir. 1966). Under such circumstances, we find the District Court did not abuse its discretion in permitting the Government to introduce its full accounting testimony.

Second, the Appellants contend the District Court erred in failing to charge the jury properly with regard to the limited uses they could make of the evidentiary inferences of "skimming" by the Appellants. See United States v. Bruni, 359 F.2d 802, 806 (7th Cir. 1966).

The District Court carefully instructed the jury that under the laws of the State of Kentucky bingo...