United States v. King, Case No. CR–13–063–F

• Decision Date: 03 July 2014
• Docket Number: Case No. CR–13–063–F
• Citation: 259 F.Supp.3d 1267
• Parties: UNITED STATES of America, Plaintiff, v. Bartice A. KING, et al., Defendants.
• Court: U.S. District Court — Western District of Oklahoma

259 F.Supp.3d 1267

UNITED STATES of America, Plaintiff,
v.
Bartice A. KING, et al., Defendants.

Case No. CR–13–063–F

United States District Court, W.D. Oklahoma.

Signed July 3, 2014

Travis D. Smith, John S. Han, Robert Don Evans, Jr., Scott E. Williams, Travis D. Smith, Wilson D. McGarry, US Attorney's Office–OKC, Oklahoma City, OK, for Plaintiff.

Nathan J. Mays, Dan B. Gerson, The Law Offices of Nathan J Mays PC, Houston, TX, James D. Henderson, Law Offices of James D Henderson, Santa Monica, CA, Robert M. Goldstein, Law Office of Robert Goldstein Boston, MA, Craig D. Corgan, Craig Corgan Attorney at Law Yukon, OK, J. Patrick Quillian, J Patrick Quillian PC, Paul A. Lacy, Federal Public Defender–OKC, David B. Autry, Perry W. Hudson, Perry W. Hudson, Robert S. Jackson, Oklahoma City, OK, Jerry W. Biesel, Dallas, TX, Steve T. Jumes, Varghese Summersett & Smith, Fort Worth, TX, for Defendants.

ORDER

STEPHEN P. FRIOT UNITED STATES DISTRICT JUDGE

The defendants named in the substantive money laundering counts in the Superseding Indictment in this case have moved to dismiss those counts, asserting that venue for those counts is not properly laid in this district. The question presented is whether an 18 U.S.C. § 1957 money

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laundering charge may be tried in this district when the government does not assert, and the record does not show: (i) that any of the specific transactions listed in the substantive money laundering counts had anything to do with the Western District of Oklahoma, or with any financial institution in this district, or (ii) that any of the transactions comprising the laundering offenses charged were begun, continued or completed in this district, or (iii) that any funds identifiably connected with the charged transactions were—by any person, money laundering defendant or not—transferred out of or through the Western District of Oklahoma to the recipients listed in the substantive money laundering counts.

The answer is no. The government's "commingling" theory of venue for the substantive money laundering courts is without merit. The government's related theory that, for venue purposes, substantive money laundering under § 1957 should, in essence, be treated as an adjunct of the underlying unlawful activity is equally without merit. Venue for the substantive money laundering counts is not properly laid in this district, and those counts must consequently be dismissed.

I.

Procedural Background

In Counts 4—16 of the sixteen-count Superseding Indictment, six of the fifty-six defendants in this case are charged with money laundering in violation of 18 U.S.C. § 1957, and as aiders and abetters of those offenses under 18 U.S.C. § 2. Five of those defendants, Bartice A. King, Serena Monique King, Starting 5, LLC, Spiros G. Athanas and William J. Bates, have moved¹ to dismiss the money laundering counts, asserting that venue for those counts is not properly laid in the Western District of Oklahoma.² The moving defendants originally filed motions³ to dismiss the money laundering counts, attacking venue based on the face of the Superseding Indictment. Those motions were denied because the Superseding Indictment did not, on its face, shed light one way or the other on the question of whether venue was properly laid in this district.⁴ See , doc. no. 649, at 4 (minutes of January 9, 2014 motion hearing). Because of the seriousness of the consequences which would flow from an erroneous determination of the venue issue, and because the right to be tried only in a legally authorized venue is obviously (to borrow the words of the Supreme Court from a different context) "a right not to be tried which must be upheld prior to trial if it is to be enjoyed at all," United States v. MacDonald, 435 U.S. 850, 861, 98 S.Ct. 1547, 56 L.Ed.2d 18 (1978) (internal quotation marks omitted), the court determined that the venue issue should be decided by way of a second set of motions to dismiss, to be filed after requiring the government to file a bill of particulars stating with specificity the facts upon which the government relies to support venue in this district as to the substantive money laundering counts.

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The second set of venue motions has now been filed and fully briefed. In addition, the court has the benefit of the arguments presented in the January 9 hearing with respect to the first set of venue motions. The motions are ripe for determination.

II.

The Superseding Indictment

The Superseding Indictment, doc. no. 354, was filed on August 21, 2013.⁵ All of the individual defendants are charged in Count 1 with racketeering conspiracy in violation of 18 U.S.C. § 1962(d), in Count 2 with operating an illegal gambling business in violation of 18 U.S.C. § 1955 (and aiding and abetting under 18 U.S.C. § 2 ), and in Count 3 with conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(h). There are twenty-two corporate defendants charged in Counts 1 and 3, but not in Count 2. Counts 4—16, the counts addressed in this order, charge substantive money laundering under 18 U.S.C. § 1957, and aiding and abetting under 18 U.S.C. § 2. Venue is not challenged with respect to Count 3—money laundering conspiracy.

The government asserts that the RICO enterprise and illegal gambling operation "operated in over 40 states, including the Western District of Oklahoma." Doc. no. 694, at 2. Taking the government's allegations as true, it is fair to say that the defendant Bartice A. "Luke" King was unquestionably the boss of the gambling enterprise and that the enterprise generated very large amounts of money by taking bets, primarily on sporting events, by telephone and over the internet. The operation—commonly known as Legendz Sports—was initially based in Costa Rica, but the headquarters moved to Panama in 2003. Mr. King had a substantial staff in Panama and an extensive network of runners, bookies, agents and subagents in the United States. As alleged in the Superseding Indictment:

63. Legendz Sports operated a number of Internet websites, hosted on servers primarily located outside the United States, which did business in the United States by, among other things, offering, facilitating and conducting unlawful computer and telephone service-based sports betting, and other forms of gambling. Legendz Sports caused the operation of toll-free telephone services to facilitate sports gambling and to take sports bets.

64. Legendz Sports also used bookmakers ("bookies") located in the United States to illegally solicit and accept sports wagers from individuals residing in the United States. Legendz Sports further used bookmakers ("bookies") to settle gambling debts with individuals residing in the United States.

Superseding Indictment, doc. no. 354, at 15—16.

As for the substantive money laundering counts, various combinations of defendants (not more than four in any one count) are charged in Counts 4—16. Because those counts are the subject of this order, they are shown here their entirety.⁶ The Superseding Indictment states:

COUNTS 4 TO 16

(Money Laundering—Monetary Transactions)

108. The Grand Jury realleges and incorporates by reference Paragraphs 1–86 and 90–105 of this Superseding Indictment

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as though fully set forth herein.

109. On or about the dates set forth below, within the United States, using funds, in part, representing the proceeds of racketeering activity in the Western District of Oklahoma, defendants LUKE KING, SERENA KING, SPIROS G. "THE GREEK" ATHANAS, WILLIAM JAMES "BILL" "BILLY" "WILD BILL" BATES, STARTING 5, LLC , and OLMOS OVERSEAS, LTD. , did knowingly engage and attempt to engage in the following monetary transactions, by, through, or to a financial institution, affecting interstate and foreign commerce, in criminally derived property of a value greater than $10,000.00, that is, the transfer of funds, such property having been derived from a specified unlawful activity, that is, a racketeering conspiracy and operating an illegal gambling business, in violation of Title 18, United States Code, Sections 1962(d) and 1955 :

Property Taxes for Home

COUNT	DEFENDANT	DATE	AMOUNT	PAYEE	SOURCE OF FUNDS
4	LUKE KING	11/8/10	$42,142.26	JR. Moore, Jr. Property Taxes (2 Palmer Crest)	Banco General CC#372280411

Purchases of Rental Properties

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COUNT

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