United States v. Smaldone

Decision Date12 October 1973
Docket NumberNo. 72-1854 thru 72-1863.,72-1854 thru 72-1863.
PartiesUNITED STATES of America, Plaintiff-Appellee. v. Eugene SMALDONE, aka Checkers, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Eugene Louis SMALDONE, aka Young Gene, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Guy McNULTY, aka Mickey, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Melvin Daniel HANNERS, aka Mel, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Leo Edward LANE, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Dennis Michael VALLEY, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Michael J. VALLEY, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Josef Richard ERNER, aka Rick, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Frank Joseph GARCEO, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Harry Anthony VILLANO, Defendant-Appellant.
CourtU.S. Court of Appeals — Tenth Circuit




John J. Flynn, Phoenix, Ariz. (Flynn, Kimerer, Thinnes & Galbraith and Richard L. Parrish, Phoenix, Ariz., on the brief, for defendants-appellants Eugene Smaldone, Eugene Louis Smaldone and Harry Anthony Villano ; Leland S. Huttner, Denver, Colo., on the brief, for defendant-appellant Melvin Daniel Hanners; Paul E. Vranesic, II, Denver, Colo., on the brief, for defendant-appellant Josef Richard Erner), for defendants-appellants Eugene Smaldone, Eugene Louis Smaldone, Melvin Daniel Hanners, Josef Richard Erner, Leo Edward Lane, and Harry Anthony Villano.

Richard T. Spriggs, Denver, Colo., for defendant-appellant Josef Richard Erner.

H. D. Reed, Denver, Colo., for defendant-appellant Michael J. Valley.

Walter L. Gerash, Denver, Colo. (Gerash & Gerash, and Louis M. Fischer, Denver, Colo., on the brief), for defendant-appellant Dennis Michael Valley.

Leland S. Huttner, Denver, Colo., for defendant-appellant Melvin Daniel Hanners.

Morris W. Sandstead, Jr., Boulder, Colo., for defendants-appellants Guy McNulty and Frank Joseph Garceo.

Richard J. Spelts, Asst. U. S. Atty., Denver, Colo. (James L. Treece, U. S. Atty., and W. Allen Spurgeon, Asst. U. S. Atty., with him on the brief), for plaintiff-appellee.

Before LEWIS, Chief Judge, LARAMORE*, Judge, Court of Claims, and McWILLIAMS, Circuit Judge.

Rehearing Denied in No. 73-1857 October 25, 1973.

Rehearing Denied in Nos. 72-1854, 72-1855, 72-1858, 72-1860, 72-1861 and 72-1863 October 26, 1973.

LEWIS, Chief Judge.

This was a criminal prosecution brought on a three-count indictment filed in the United States District Court for the District of Colorado. Counts I and II of the indictment charged fifteen defendants with knowingly and wilfully conducting, financing, managing, supervising and directing an illegal gambling business contrary to Colorado law and in violation of 18 U.S.C. §§ 1955 and 2.

Count I covered the time period October 16, 1970 to on or about June 30, 1971 and named eight defendants. Count II covered the time period August 1, 1971 to on or about January 31, 1972 and named thirteen defendants. On count I the jury convicted appellants Eugene Louis Smaldone (Young Gene), Guy McNulty, and Melvin Daniel Hanners. On count II the jury convicted appellants Young Gene, McNulty, Eugene Smaldone (Checkers), Leo Edward Lane, Dennis Michael Valley (Dennis), Michael J. Valley (Mike), Josef Richard Erner, Frank Joseph Garceo, and Harry Anthony Villano.1 In this consolidated appeal under 28 U.S.C. § 1291 there are ten appellants, two of whom were convicted on both counts of the indictment.2



Title 18 U.S.C. § 1955 states :

(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.
(2) "gambling" includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.
(3) "State" means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States.

At trial the government attempted in each of the two counts to link five or more persons including some of the appellants to an illegal gambling business which was in operation "in excess of thirty days or had a gross business revenue of $2000.00 in any single day." In an attempt to meet the necessary elements of section 1955 the following evidence was produced at trial :

A widespread bookmaking operation involving a number of people in the Denver, Colorado area was in operation between October 16, 1970 and January 31, 1972. The government introduced evidence showing that at the apex of this operation was Checkers Smaldone with Young Gene Smaldone and Michael Tomeo (severed from the original trial) acting as the central bookmakers. The illegal gambling business centered around bookmaking on certain sporting events including college and professional football, basketball, baseball, and horseracing. Because of the seasonal nature of sporting events the indictment was divided into two counts. The first count covered gambling activities beginning with the fall of 1970 and ending June 30, 1971. The second count commenced with the start of the 1971 football season and ended January 31, 1972.

The bookmaking operation encompassed a number of different conductors3 including: (1) runners (individuals who handled payoffs and collected from betting customers) ; (2) phone men (the middlemen who received bets from customers and exchanged betting information such as the "line" or point spread) ; (3) relay or pickup men (higher echelon functionaries who received and consolidated betting information from phone men, enabling phone men to then destroy any tangible evidence); (4) bookkeepers (men who acted as accountants for the gambling operation) and (5) managers (those individuals in supervisory and ownership positions). The purpose of having various categories of conductors was to insulate the more important individuals from the actual operation, and to maintain secrecy through limited encounters between participants.4

The gambling operation was of a complex nature. Generally, bets were made at a ratio of 11 to 10 with the odds in favor of the bookmaker. The customer could pyramid his bets by selecting as necessary winners a number of teams, called a parlay, or by reducing or enlarging the point spread established by the "line." A point spread or "line," which often was the basis of betting on football games, was given to customers who were usually also assigned "code numbers."

Weekly sports schedules listing games chronologically by starting times commencing on the east coast and moving west were distributed to participants. These schedules not only identified the teams involved but provided code numbers for the teams and blank boxes for scoring. Though published for sports enthusiasts, these special schedules were very helpful to the gambling operation in keeping track of numerous wagers and improving the exchange of information. With the help of sophisticated sports schedules, bets were placed with phone men and, after the relay men consolidated the various wagers, they were passed on to "management." The customer would then have his account tallied on a weekly basis, at which time he would either receive his winnings or pay his losses.

The various conductors were paid according to their importance within the organization. Some were provided salaries plus expenses including attorney's fees, bonds, and fines if apprehended by the police. Others were given a percentage of the profits from the customers with whom they dealt and of course the owners of the operation shared in the profits generated by the total gambling enterprise.

A. Count I.

Under count I the government offered evidence showing that the three appellants—Young Gene, McNulty and Hanners—jointly operated a gambling business with at least seven other conductors during the fall and winter of 1970-71. The government produced an array of witnesses including four who played personal roles in the alleged gambling operation. The thrust of their testimony revealed a number of links between various participants in a single gambling operation under the direction of Young Gene.

Larry Laningham, one of the government's major witnesses, testified that he had been hired by Young Gene and McNulty to be a "runner" in a bookmaking organization. Laningham was later elevated by Young Gene to be a relay man and eventually took over as a bookkeeper for the operation. Laningham stated that at various times during the count I period he had contact with all of the appellants as they pursued various aspects of the gambling operation. He also linked the appellants to each other and to other conductors.

The testimony of other witnesses painted the picture of a gambling organization that included a number of participants at various levels and with various degrees of involvement. The gambling activity generally centered around Young Gene Smaldone with appellants McNulty and Hanners playing lesser roles in the total...

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