United States v. Hunter

• Decision Date: 11 April 1973
• Docket Number: No. 72-1700,72-1701.,72-1700
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Earl Christopher HUNTER et al., Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Hyland HILL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

478 F.2d 1019 (1973)

UNITED STATES of America, Plaintiff-Appellee, v. Earl Christopher HUNTER et al., Defendants-Appellants.

UNITED STATES of America, Plaintiff-Appellee, v. Hyland HILL, Defendant-Appellant.

Nos. 72-1700, 72-1701.

United States Court of Appeals, Seventh Circuit.

Argued January 7, 1973.

Decided April 11, 1973.

Rehearing Denied June 13, 1973.

James W. Bradford, James Manahan, William J. Dougherty, Indianapolis, Ind., for defendants-appellants.

Stanley B. Miller, U. S. Atty., William F. Thompson, Asst. U. S. Atty., Indianapolis, Ind., for plaintiff-appellee.

Before DUFFY, Senior Circuit Judge, and KILEY and STEVENS, Circuit Judges.

STEVENS, Circuit Judge.

Fourteen defendants were indicted as joint participants in an Indianapolis gambling operation. Count I charged a conspiracy to conduct an illegal gambling business in violation of 18 U.S.C. § 371; Count II charged that the same defendants engaged in the same illegal gambling business "in concert with each other" in violation of 18 U.S.C. § 1955. Shortly after the trial commenced, the charges against one defendant were dismissed and 11 defendants pleaded guilty. Appellants Hunter and Hill were tried and found guilty on both counts. Their appeals principally question: (1) the constitutionality of § 1955; (2) whether their gambling was "conducted by five or more persons" within the meaning of the statute; and (3) whether the two counts properly charged two different offenses.¹

I.

There is no evidence that appellants' gambling activities had any effect whatsoever on interstate commerce. Accepting the government's interpretation of the facts, however, their business was large enough to satisfy the minima specified in 18 U.S.C. § 1955. That statute, enacted on October 15, 1970, as § 803(a) of the Organized Crime Control Act of 1970, provides, in material part:

"§ 1955. Prohibition of illegal gambling businesses

"(a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined not more than $20,000 or imprisoned not more than five years, or both.

"(b) As used in this section —

"(1) `illegal gambling business\' means a gambling business which —

"(i) is a violation of the law of a State or political subdivision in which it is conducted;

"(ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and

"(iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day." 84 Stat. 922, 937.²

The Organized Crime Control Act contains a statement of findings relating to the impact of organized crime on the nation's economy. See 84 Stat. 922-923. With respect to Title VIII dealing with syndicated gambling, Congress made a special finding "that illegal gambling involves widespread use of, and has an effect upon, interstate commerce and the facilities thereof." 84 Stat. 936. It is fair to interpret the legislation as a whole as reflecting a broad finding by Congress that the class of gambling enterprises described in § 1955 has a sufficient impact on the interstate economy to warrant prohibition by federal criminal legislation. As we interpret the holding in Perez v. United States, 402 U.S. 146, 91 S.Ct. 1357, 28 L.Ed.2d 686, that finding, which we do not question, is sufficient to support the statute even when applied to individual members of the class whose own activities may not have any demonstrable impact on interstate commerce.³

United States v. Bass, 404 U.S. 336, 92 S.Ct. 515, 30 L.Ed.2d 488, and Rewis v. United States, 401 U.S. 808, 91 S.Ct. 1056, 28 L.Ed.2d 493, on which appellant Hunter relies, presented questions of statutory construction; in neither of those cases did the Court find a want of constitutional power to legislate. In short, we agree with the position uniformly adopted in other circuits on this constitutional issue. United States v. Becker, 461 F.2d 230, 233-234 (2d Cir. 1972); United States v. Harris, 460 F. 2d 1041, 1043-1048 (5th Cir. 1972); United States v. Riehl, 460 F.2d 454, 458 (3rd Cir. 1972); Schneider v. United States, 459 F.2d 540 (8th Cir. 1972); United States v. Palmer, 465 F.2d 697 (6th Cir. 1972), cert. denied 409 U.S. 874, 93 S.Ct. 119, 34 L.Ed.2d 126.

II.

The contention that appellants' gambling was not "conducted" by five or more persons raises a question of law and also a question of fact. They argue that the statutory language requires five persons in a supervisory or ownership capacity, and therefore mere runners, telephone clerks, salesmen, and the watchman may not be counted as part of the required five persons. They also argue that each of them conducted a separate business which did not, in any event, employ as many as five persons. We reject both arguments.

Our study of the legislative history persuades us that the substitution of the words "five or more persons who conduct, finance, manage, supervise, direct, or own" for the language in Senate Bill 30 which had referred to five or more persons "who participate in the gambling activity" was merely designed to exclude customers of the illegal venture. As the House Committee Report stated, the term "conducts" is broad enough to include both "high level bosses and street level employees." In short, we again accept Judge Mansfield's analysis of the issue. See United States v. Becker, 461 F.2d 230, 232-233 (2d Cir. 1972).

Appellants' claim that the record discloses three separate businesses rather than one is by no means frivolous. Three different kinds of lottery tickets —"dailies," "moon and lightning tickets," and "bank slips"—each owned by a different "banker," were sold at the same place of business. Those premises were managed by two partners (Haering and Ferdinand) who employed about 12 persons in various capacities.⁴ Haering and Ferdinand were the proprietors of the "dailies" business and received a commission of 25% on gross sales of "moon and lightning tickets" and 35% on sales of "bank slips" made from their premises. Appellant Hunter owned the "moon and lightning" business and appellant Hill owned the "bank slips." Hunter and Hill had no contact with one another, and each employed his own runners to make deliveries to, and pick-ups, from, the premises operated by Haering and Ferdinand.⁵

In familiar commercial terms, Haering and Ferdinand operated a retail outlet at which they sold their own product as well as the products of two other suppliers, Hunter and Hill. Although, as appellants plausibly argue, the three businesses are readily identifiable as separate commercial ventures, we are satisfied that the three entrepreneurs had a sufficient common interest in the development of sales, the maintenance of security, the efficient performance of services, and the solvency of all three ventures, to make it proper to regard them as a single criminal enterprise for purposes of the statutes here involved.⁶ Since it is fair to charge each of the three principals with knowledge of the basic features of the total operation, it was proper to treat Hunter and Hill as participants in the same venture even though they had no direct contact with one another.

We therefore conclude that all of the defendants participated in the same conspiracy charged in Count I of the indictment and in the same "illegal gambling business" charged in Count II. The question which remains is whether there was any material difference between that conspiracy and that illegal business.

III.

Two offenses may be separately prosecuted and punished if each requires proof of an element which the other does not.⁷ The Blockburger test, though easily stated, is sometimes difficult to apply. Thus, on facts comparable to those before us, the Second Circuit held that seven participants in an illegal gambling venture may be prosecuted both for conspiracy to violate § 1955 and for the violation of § 1955 itself, United States v. Becker, 461 F.2d 230, 234 (1972); whereas two district courts, relying on Wharton's Rule, have reached a contrary result in cases involving thirteen and eight defendants, respectively, United States v. Greenberg, 334 F.Supp. 1092 (N.D.Ohio 1971); United States v. Figueredo, 350 F.Supp. 1031 (M.D.Fla. 1972).

If a substantive offense may be committed by a single individual, a conspiracy to commit that offense, unlike an attempt, does not merge with the completed offense. This rule, which stems from the common law distinction between felonies and misdemeanors,⁸ is supported by the notion that conspiracy is an especially grave offense⁹ and is consistent with the constitutional objection to double jeopardy.¹⁰

The rule is different, however, if the substantive offense requires the concerted action of two wrongdoers and they are indicted for both conspiracy and the completed crime.¹¹ Neither history, policy, nor the Blockburger formula justifies two punishments of persons who both agree to engage, and do in fact engage, in acts such as adultery,¹² bribery,¹³ or a prohibited rebate transaction.¹⁴ In such cases a two-person conspiracy to commit a two-person crime is like an individual attempt to commit an individual offense.

It has been said, however, that the conspiracy to commit adultery is a separate offense when a third person participates in the arrangement;¹⁵ obviously, such a third party is a conspirator though not guilty of the substantive offense. The status of the two principal offenders is less clear; if their agreement encompassed only a single transaction, it is difficult to see why the involvement of the matchmaker should affect their own culpability. In any event, as we read the cases presenting the question whether the participants in a consummated multi-person offense may be charged with conspiracy, they do not turn on the number of participants in the conspiracy, but rather on whether or not the conspiracy charged depends on proof of...