United States v. Whitaker

• Decision Date: 28 February 1974
• Docket Number: Crim. No. 022273-1.
• Citation: 372 F. Supp. 154
• Parties: The UNITED STATES v. Matthew WHITAKER et al.
• Court: U.S. District Court — Middle District of Pennsylvania

372 F. Supp. 154

The UNITED STATES v. Matthew WHITAKER et al.

Crim. No. 022273-1.

United States District Court, M. D. Pennsylvania.

February 28, 1974.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Laurence Kelly, Scranton, Pa., for the U. S.

Joseph F. Orso, Jr., Ronald C. Travis, Martin M. Fine, Williamsport, Pa., H. Russell Smouse, Joseph Rosenthal, Baltimore, Md., for defendants.

OPINION

MUIR, District Judge.

On February 22, 1973, Defendants Matthew Whitaker, Stephen Santai, John Joseph Pancerella, Charles Nicola, and Benito Mione were charged in a two-count indictment with conducting an illegal gambling business in violation of 18 U.S.C. § 1955,¹ and conspiracy to do so in violation of 18 U.S.C. § 371. Following a jury trial beginning September 6, 1973 and ending September 18, 1973, all of the Defendants were adjudged guilty of both counts. Before the Court are several motions by all Defendants for a new trial and for judgment of acquittal. The issues presented by the various motions will be discussed seriatim.

1. DID THE GOVERNMENT PROVE THAT THE CRIME OF CONDUCTING AN ILLEGAL GAMBLING BUSINESS WAS COMMITTED WITHIN THE MIDDLE DISTRICT OF PENNSYLVANIA?

The basic constitutional provisions contained in Art. III, § 2 and in the Sixth Amendment of the United States Constitution are implemented by F.R. Crim.P. 18 which provides:

"Except as otherwise permitted by statute or by these rules, the prosecution shall be had in a district in which the offense was committed."

The indictment charged the Defendants with conducting a gambling business within the Middle District of Pennsylvania. The bulk of the evidence introduced by the Government consisted of recordings of telephone conversations by and between the several Defendants in furtherance of the gambling business. The evidence, if believed, demonstrated that Defendant Whitaker in Pottsville, Pennsylvania, furnished the daily "line" on sporting events by telephone calls to and from Defendant Pancerella in Mt. Carmel, Pennsylvania. Pancerella would thereafter transmit the "line" information, by telephone, to Defendants Mione and Nicola in the Mt. Carmel-Shenandoah area. At the end of the day, Mione and Nicola would notify Pancerella of the bets which had been taken. Pancerella would transmit by telephone the total of the bets to Defendant Santai in Pottsville. While the Mt. Carmel-Shenandoah area is within the Middle District of Pennsylvania, Pottsville is in the Eastern District of Pennsylvania. Defendants argue that any conduct in furtherance of the gambling business by Santai and Whitaker consisted only in placing or receiving telephone calls from outside this District to Mount Carmel, within the District. Therefore, Defendants contend, as to Santai and Whitaker, this Court had no venue because they did not commit the offense charged in the indictment within the Middle District. And, Defendants argue, since it was improper to prosecute Santai and Whitaker in this District, the charges against the other three Defendants should also be dismissed because there would no longer be the requisite 5 or more persons participating in the gambling business as required by 18 U.S.C. § 1955.

It has long been held that where a conspiracy is comprised of many transactions in various districts, venue as to all conspirators is proper in any district in which any act in furtherance of the conspiracy was committed by any of the conspirators. Hyde v. United States, 225 U.S. 347, 32 S.Ct. 793, 56 L. Ed. 1114 (1912); United States v. Cohen, 197 F.2d 26 (3d Cir. 1952). Similarly, operating an illegal gambling business is a crime which may include conduct in several different districts. To cover the venue requirements for this type of crime, Congress enacted 18 U.S. C. § 3237 which was derived from an 1867 statute defining conspiracy, see Wright and Miller, Federal Practice and Procedure, § 303, and which provides in pertinent part:

"(a) Except as otherwise expressly provided by enactment of Congress, any offense against the United States begun in one district and completed in another, or committed in more than one district, may be inquired of and prosecuted in any district in which such offense was begun, continued, or completed.

"Any offense involving the use of the mails, or transportation in interstate or foreign commerce, is a continuing offense and except as otherwise expressly provided by enactment of Congress, may be inquired of and prosecuted in any district from, through, or into which such commerce or mail matter moves."

Thus, prosecutions of crimes under the securities acts consisting of using the mails to employ a scheme to defraud purchasers of securities may be brought in the district of the mailing, the district of receipt, and in the district where the scheme was formed. See United States v. Cashin, 281 F.2d 669 (2d Cir. 1960). It has been held that 18 U.S.C. § 3237 applies to crimes involving interstate telephone calls either on the rationale that the crime began in one district and was completed in another, or the rationale that the statutory language "transportation in interstate commerce" encompasses the use of wire facilities for the transmission of messages. United States v. Spiro, 385 F.2d 210 (7th Cir. 1967); United States v. Synodinos, 218 F.Supp. 479 (D.Utah 1963). In the case at bar, prosecution of all of the Defendants in this District was proper where it was proven that in conducting an illegal gambling operation each Defendant placed or received telephone calls in or to points within the Middle District of Pennsylvania.

2. CAN DEFENDANTS BE CONVICTED OF BOTH A VIOLATION OF 18 U.S.C. § 1955, AND CONSPIRACY TO VIOLATE THAT STATUTE?

Defendants point out that in order to prove a violation of 18 U.S.C. § 1955, the Government must prove that five or more persons conducted a gambling business illegal under state law. They cite "Wharton's Rule" which provides:

"An agreement by two persons to commit a particular crime cannot be prosecuted as a conspiracy when the crime is of such a nature as to necessarily require the participation of two persons for its commission."

1 Wharton's Criminal Law and Procedure, § 89, p. 191 (Anderson Ed.1971). The principle of Wharton's Rule has been accepted by the federal courts where it has been held that a conspiracy charge may not be added to the substantive charge "where the agreement of two persons is necessary for the completion of the substantive crime and there is no ingredient in the conspiracy which is not present in the completed crime." Pinkerton v. United States, 328 U.S. 640, 643, 66 S.Ct. 1180, 1182, 90 L.Ed. 1489 (1946).

Courts have divided on the applicability of Wharton's Rule to facts similar to those in the case at bar. Two district courts, in cases involving thirteen and eight defendants respectively, held that the defendants could not be prosecuted both for conspiracy to violate § 1955 and for violation of § 1955 itself. United States v. Greenberg, 334 F.Supp. 1092 (N.D.Ohio 1971); United States v. Figueredo, 350 F.Supp. 1031 (M.D.Fla. 1972). A contrary result was reached in United States v. Becker, 461 F.2d 230 (2d Cir. 1972), petition for cert. filed, 41 U.S.L.W. 3160 (U.S. July 28, 1972) (72-158) where it was stated:

". . . in this case an additional two persons, or seven in all, were named in the indictment as having engaged in the conspiracy, whereas the substantive offense required the participation of only five . . .. As we have recently reiterated, as long as the conspiratorial concert of action and the substantive offense underlying it are not coterminous and fewer participants are required for the commission of the substantive offense than are named as joining in a conspiracy to commit it, there is no infirmity in the conspiracy indictment."

461 F.2d at p. 234. From this language, it would appear that the Becker court would allow convictions for conspiracy and the substantive offense only when there were more than five persons engaged in the illegal gambling business. In the most recent of this line of cases, the court in United States v. Hunter, 478 F.2d 1019 (7th Cir. 1973) cert. denied, 414 U.S. 857, 94 S.Ct. 162, 38 L. Ed.2d 107, eschewed the numbers game and found a conspiracy violation improper because the proof of intent required for the violation of § 1955 was not different from the evidence required to sustain the charge of conspiracy:

". . . Even though five or more persons are named in the indictment, a charge of conspiracy to violate § 1955 may not be maintained if it comprehends nothing more than the agreement which those persons necessarily performed by the commission of the substantive offense itself."

478 F.2d at p. 1026.

While I find the reasoning in Hunter more persuasive, this Court is bound by a recent decision of the Court of Appeals for this circuit which followed the Becker rationale. United States v. Iannelli, 477 F.2d 999 (3d Cir. 1973), cert. denied, 409 U.S. 980, 93 S.Ct. 310, 34 L.Ed.2d 243. However, the Iannelli case involved more than 5 participants and the Court specifically avoided a decision on the applicability of Wharton's Rule where, as here, only five participants in the gambling business are named. In my view, the conspiracy conviction in the case at bar is improper under the rationale of either Hunter or Becker.

The Government contends that the requirement of § 1955 that at least five persons conduct the gambling business is a jurisdictional element as differentiated from an element of criminality. It argues that group activity is not part of the crime itself, but is only included in the statute as a ground for federal jurisdiction. I fail to grasp the significance of this point. While the 5 person requirement may be jurisdictional, unless it is met no federal crime has been committed. Although a jury need not find knowledge on the part of a defendant of such a jurisdictional element, United States v. Iannelli, supra, it must...