United States v. Kelly

• Decision Date: 26 February 1964
• Docket Number: No. 15209.,15209.
• Citation: 328 F.2d 227
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. George L. KELLY, Thomas Francis Kelly, Sr., Thomas Francis Kelly, Jr. and Louis Efkeman, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

328 F.2d 227 (1964)

UNITED STATES of America, Plaintiff-Appellee, v. George L. KELLY, Thomas Francis Kelly, Sr., Thomas Francis Kelly, Jr. and Louis Efkeman, Defendants-Appellants.

No. 15209.

United States Court of Appeals Sixth Circuit.

February 26, 1964.

Walter E. Gallagher, Washington, D. C., for appellants, J. Leonard Walker, Louisville, Ky., on the brief.

William E. Scent, U. S. Atty., Louisville, Ky., and Edward J. Joyce, Dept. of Justice, Washington, D. C., for appellee, Wayne J. Carroll, Asst. U. S. Atty., Louisville, Ky., on the brief.

Before WEICK, Chief Judge, PHILLIPS, Circuit Judge, and FREEMAN, District Judge.

WEICK, Chief Judge.

Appellants were convicted by a jury in the District Court on four counts of a 12-count indictment charging them with knowingly sending in interstate commerce paraphernalia, paper and writing used and to be used and adapted, devised and designed for use in bookmaking in violation of Title 18 U.S.C. § 1953 and Title 18 U.S.C. § 2. They were sentenced to pay fines and costs.

Section 1953 of Title 18 was a new criminal statute enacted by Congress in 1961. It was sponsored by the Attorney General, along with six other bills, in his program to curb organized crime and racketeering. The portion of the statute pertinent in this case is as follows:

"§ 1953. Interstate transportation of wagering paraphernalia

"(a) Whoever, except a common carrier in the usual course of its business, knowingly carries or sends in interstate or foreign commerce any record, paraphernalia, ticket, certificate, bills, slip, token, paper, writing, or other device used, or to be used, or adapted, devised, or designed for use in (a) bookmaking; or (b) wagering pools with the respect to a sporting event; or (c) in a numbers, policy, bolita, or similar game shall be fined not more than $10,000 or imprisoned for not more than five years or both.

"(b) This section shall not apply to * * * (3) the carriage or transportation in interstate or foreign commerce of any newspaper or similar publication. * *

Title 18 U.S.C. § 2 is the aider and abettor statute.

Count 1 of the indictment charged the appellants and Kentucky News Company, Inc., a corporation, with conspiracy in violation of Title 18 U.S.C. § 371. Paul Reeder Jacobs was named as a co-conspirator, but not a defendant. Counts 2 and 3 charged appellants with the substantive offenses of sending, on two different days, skids of paper from Chicago, Illinois to Louisville, Kentucky which were used for the production of a racing finger sheet known as the Louisville Daily Sports News; Counts 4 and 5 charged appellants with sending from Chicago to Louisville, on different days, copies of the Overnight Edition of the Illinois Sports News also used in the production of the alleged finger sheet. Counts 6, 7, 8, 9, 10, 11 and 12 charged appellants and Kentucky News Company, Inc. with sending on various dates the finished product, Louisville Daily Sports News, from Louisville to Jeffersonville, Indiana.

At the close of the evidence, the District Judge granted a motion for judgment of acquittal made by the corporate defendant Kentucky News Company, Inc. and it was dismissed from the case.

The case as to the remaining defendants was submitted to the jury. The jury returned verdicts of not guilty on Count 1 which charged conspiracy and not guilty on Counts 6 to 12 inclusive which alleged the sending of the finished sheet, namely, the Louisville Daily Sports News from Louisville, Kentucky to Jeffersonville, Indiana.

The verdicts of guilty were with respect to Counts 2 and 3 which charged sending in interstate commerce of the skids of paper and 4 and 5 which charged sending in interstate commerce of Illinois Sports News both of which were used in the composing and printing of Louisville Daily Sports News.

The Kellys resided in Illinois. They were a partnership. They owned Illinois Sports News which was acquired in 1946 and has been published in Chicago for many years. They have owned and published Louisville Daily Sports News¹ since 1948. Appellant Louis Efkeman was resident manager of LDSN for about ten years.

Kentucky News Company, Inc., was a Kentucky corporation engaged as a wholesale distributor of newspapers, magazines, paperback books, etc. It made deliveries of LDSN and a publication called Daily Racing Form to newsstands in Louisville where they were sold to the public. It also distributed Illinois Sports News to some newsstands in Louisville.

The skids of paper mentioned in Counts 2 and 3 of the indictment were blank sheets of white paper with the masthead Louisville Daily Sports News imprinted thereon. The blank sheets were used by appellants in Louisville for printing the publication LDSN which was made up of (1) material copied from the Overnight Edition of Illinois Sports News sent there from Chicago each night by air-mail, rail and bus and (2) early morning information as to scratches,² weather conditions at tracks and names of jockeys obtained by its reporters at race tracks and sent to Louisville from Chicago over a private teletype circuit.

LDSN was printed on both sides of a single sheet of heavy white paper about 12½" × 19". The front side was filled in mostly by undated news of sporting events principally relating to horses and horse racing. The back side listed the days racing entries at four or five major race tracks, the names of the jockeys, the weight each horse will carry, track conditions, post time for each race, distance of each race, the class and value, late scratches, "picks" for each race that will appear in official programs published by the respective tracks and the finger³ "picks" selected by employees of appellants, and probable odds. The front side contained an alphabetical index of the horses that were scheduled to race, the name of the track, the number of the races along with the number of starts, firsts, seconds and thirds for the past twelve months or more. It also listed the "Trackman's Overnight Selections" for some of the tracks and contained some of the previous day's racing results, together with the mutuel prices and scratches. Where a particular issue covered five tracks there was little or no room for filling in news items of other sporting events.

LDSN was distributed by Kentucky News Company and three of the employees of LDSN, in their spare time, acting as independent distributors. The Government offered proof tending to show that, during a portion of the period covered by the indictment, Kentucky News Company accounted for about 45% of the total distribution and the three employees 55%. This was without allowance for returns and without considering distribution by another employee named Schneider. Many of the issues were purchased by bookmakers and were given by them to their customers who were bettors. Subsequent to the indictment, the entire distribution of LDSN was handled by Kentucky News Company.

It was the claim of the Government that the skids of blank white paper with the LDSN masthead, the Illinois Sports News and the finished publication Louisville Daily Sports News were paraphernalia, paper, and writing used and designed for use in bookmaking and hence came within the proscription of Section 1953 which made unlawful their interstate transportation.

The appellants' first contention was that their publication LDSN and the component parts used in assembling it were not paraphernalia, paper, or writing used or designed for use in bookmaking. They did not deny that their publication, like the sports pages of many newspapers of general circulation, was extremely valuable to persons who bet on horse races or even bookmakers, but contended it was not any implement of the bookmaking operation such as the bookmaker's record book, or as numbers slips, punch boards, roulette wheels or other gambling apparatus or devices would relate to other types of gambling operations.

Appellants' second defense was that their publication was expressly exempted from the operation of the statute by the language which excludes "any newspaper or similar publication." Appellants contend that if the statute is construed to prohibit their publication, it is unconstitutional in violation of the Fifth and Sixth Amendments to the Constitution of the United States.

Appellants made motions for judgments of acquittal at the close of the Government's case and renewed them at the close of all the evidence. The motions were denied by the court. These rulings by the court are the principal grounds of this appeal.

There was no evidence that appellants were engaged in bookmaking or in the business of receiving or accepting bets or wagers. The Government admitted that appellants' operations did not violate state law. It has been held that the transmission by teletype of the early morning news of scratches, jockeys and weather conditions at the track did not violate federal or state law.

In the recent case of Thomas F. Kelly, Sr. etc. et al. v. Illinois Bell Telephone Co., et al., 325 F.2d 148 (CA 7, 1963), the Court of Appeals held that the activities of the appellants in receiving and transmitting gambling information to be published in publications sold and distributed to the general public through newsstands, agency news distributors, inside race track enclosures and to individual subscribers did not violate 18 U.S.C. § 1084, 18 U.S.C. §§ 1952 or 1953 or any law of the state of Illinois. In that case, the Government cited the conviction in the case at bar as authority for the proposition that appellants violated 18 U.S.C. § 1953. The Court of Appeals, however, as well as the District Court, regarded the convictions and acquittals in the present case as being "equally susceptible of diametrically opposed inferences with respect to the basic issue here," namely, whether in that case the wire facilities were used for transmitting or receiving gambling information in violation of Federal, State or local law.

It would seem...