Petition — Davis v. United States

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IN THE 1 Miia

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1977

er eee eee eee eee

N.27-976

env ee ee eee eee eee

BILLY W. DAVIS,

Petitioner

THE UNITED STATES

OF AMERICA,

Respondent

nv er eeeeeeeee eee

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

eve ee eee eee eee ee

JACK PAUL LEON

189) Milam Building

San Antonio, Texas 78205

MAYO J. GALINDO

2019 San Pedro, P.0. Box 12,223

San Antonio, Texas 78212

COUNSEL FOR PETITIONER

TABLE OF CONTENTS

Page

Opinions Below. .....-s 06 ee 8 2

JUPTISGTCEION . «we wee ves Tee oo

Questions Presented ...... eo

Statutory Provisions Involved ..... 3

Statement of the Case .. 1... sues 12

Reasons For Granting The Writ ..... 15

THE DECISION BY THE COURT OF

APPEALS THAT THE TEXAS PENAL

CODE WAS NOT INCORPORATED

BUT SIMPLY DEFINITIONAL OF

A FEDERAL CRIME DEFINING

"UNLAWFUL DEBT" IS NOT IN

KEEPING WITH THE CONGRESSIONAL

INTENT TO EXCLUDE THE ACT

FROM LOCAL, TRANSITORY GAM-

BLING ACTIVITIES, LEAVING

THE REGULATION TO STATE AND

LOCAL AUTHORITIES... ... » |

THE DECISION BY THE COURT OF

APPEALS CONFLICTS WITH ITS

PREVIOUS HOLDINGS AND THOSE

OF OTHER CIRCUITS... . we 21

THE NOVEL INTERPRETATION BY

THE COURT OF APPEALS THAT

STATE ACTS PROHIBITING VAR-

IOUS ACTS OF GAMBLING IPSO

FACTO PROHIBIT THE BUSINESS

OF GAMBLING DEPRIVES THE PE-

TITIONER DAVIS OF HIS FIFTH

— RIGHTS TO DUE PRO-

CESS.

Table of Contents Continued

Page

GORSTUBIGR ow we cece eee. occe

Certificate of Service .....+se-s. 29

Appendix A - Order Dissmissing Count

One of the Indictment ....... la

Appendix B - Opinion of the Fifth

Circuit Court of Appeals ...... lb

TABLE OF AUTHORITIES

Cases:

Frost National Bank v. Mitchell, Tex. Civ.

App., 362 S.W. 2d 198 (1962) ... 25

Jordan v. DeGeorge, 72 S. Ct. 703, 341

U.S. 223, 95 L. Ed. 886, rehearing

denied, 72 S. Ct. 1011, 341 U.S.

3 2 5) ae eee ee ee

Nelson v. Powell, Tex. Civ. App., 434

ke © § =e 26

Oliphant v. Markham, 79 Tex. 543, 15

te fF. 3 eer ee 25

Panagitopoulos v. United States, 400 U.S.

904, 91S. Ct. 143, 27 L. Ed. 2d. . 19

Perkins v. Nevell, 58 S.W. 2d 50, (Tex.

a er ea 25

United States v. Berent, 523 F. 2d 1360,

(]. Ss 5 eee ee ee 24

United States v. Box, 530 F. 2d 1258,

1264, 1265 (§ Cir. 1976) ......

United States v. Brown, 555 F. 2¢ 407,

8 £9. SS , eee

United States v. Cerone, 452 F. 2d 274,

287 (7 Cir. 1971), cert denied,

(1972) 405 U.S. 964, 92 S. Ct. 1186,

a SS fF Fee eee eee

United States v. Conway, 507 F. 2d 1047,

or Gee «6 66 6 «6 68 616

United States v. Crockett, 506 F. 2d 759,

Jae ce aes. Eee st 6 oe 4 6 8 68

United States v. Forsythe, 560 F. 2d

So Bk. 3S |. re ee

United States v. Frumento, 559 Fed. 2d

gs SS, ee ee

United States v. Hawes, 529 F. 2d 472,

477, 478 (5 Cir. 1976). ......

United States v. Kariajinnis, 430 F. 2d

148, 150 (7 Cir. 1970), cert denied

(iover G6. GUM ccc sneseese

United States v. Nardello, 393 U.S. 286,

90 S. Ct. 534, 21 L. Ed 2d 487,

ts <6 6s whee eae 8 és

United States v. Prince, 515 F. 2d 564,

fi. ss | earrerrree

111

Cases Page

United States v. Rizzo, 419 F. 2d 71,

80 (7 Cir. 1969), cert denied

(1970) 397 U.S. 967, 90 S. Ct.

1006, 25 L. Ed 2d 260...... 19

United States v. Smaldone, 485 F. 2d

1333, 1345 (10 Cir. 1973) .... 23

United States v. Universal C.I.T.

Credit Corporation, 102 F. Supp.

179, (D.C. Mo.) affirmed, 73 S.

Ct. 227, 344 U.S. 218, 97 L. Ed.

sen eee 6s 668 86 6 6 @ 26

Winters v. People of State of New York,

68 S. Ct. 665, 333 U.S. 507, 92

L. Od. O40 2. ww we nev ves 27

Articles and Treatises

Lawrence Preuss, 26 Journal of American

Institute uf Criminal Law and

Criminology, 847 .. . «se es 28

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1977

ne eevee eee eee eee

NO.

eve eee eee eee He eee

BILLY W. DAVIS,

Petitioner

Vv.

THE UNITED STATES

OF AMERICA,

Respondent

“eve eee eee eee ee ee

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

“eve eee eee ee ee eee

The Petitioner, Billy W. Davis, hereby

requests the issuance of an order granting

certiorari to review the judgment and opinion

of the United States Court of Appeals for the

Fifth Circuit entered in this proceeding on

December 9, 1977.

OPINIONS BELOW

The decision for the United States

District Court for the Western District of

Texas dated July 30, 1976 is reprinted in

the appendix "A" hereto. The opinion for

the Court of Appeals for the Fifth Circuit

dated December 9, 1977 is reprinted in’ appen-

dix "B" hereto.

JURISDICTION

The indictment in this case was returned

against the Petitioner Billy W. Davis and An-

thony J. Salinas. It purportedly alleged vio-

lations of 18 U.S.C. 1962(c) and 18 U.S.C. 2.

The District Court found that count one failed

to allege a Federal offense and on July 30,

1976 dismissed the first count of the indict-

ment as to both Defendants.

The judgment of the Court of Appeals

reversing the District Court's decision was

entered on December 9, 1977. This petition

for certiroari is filed within thirty (30)

days of that date. The Court's jurisdiction

is invoked under 28 U.S.C. 1254(1).

QUESTIONS PRESENTED

1. Whether State penal laws which simply

prohibit acts of gambling ipso facto proscribe

the business of gambling.

2. Whether 18 U.S.C. 1961(6) defining an

unlawful debt as one incurred in violation of

State laws against gambling and the business

of gambling applies in a State that forbids

gambling but has no specific statutory pro-

scription of the business of gambling.

3. Whether in keeping with the congression-

al intent that only large scale gambling oper-

ations be reached under the Organized Crime

Act of 1970, State law is incorporated rather

than simply definitional of federal crimes.

STAIUTORY PROVISIONS INVOLVED

Section 1961(6) of Title 18 U.S.C.:

(6) “unlawful debt" means a

debt (A) incurred or contrac-

ted in gambling activity which

was in violation of the law of

the United States, a State

or policitical subdivision

thereof, or which is enforce-

able under State or Federal

law in whole or part as to

principal or interest because

of the laws relating to usury,

and (B) which was incurred in

connection with the business

of gambling in violation of

the law of the United States,

a State or political subdivi-

sion thereof, or the business

of lending money or a thing of

value at a rate usurious under

State or Federal law, where

the usurious rate is at least

twice the enforceable rate.

Title 18, United States Code, Section 1962(c):

1962. Prohibited activities

any person employed by or asso-

ciated with any enterprise

engaged in, or the activities

of which affect, interstate or

foreign commerce, to conduct

or participate, directly or

indirectly, in the conduct of

such enterprise's affairs

through a pattern of racke-

teering activity or collection

of unlawful debt.

Title 18, United States Code, Section 1961:

1961. Definitions

As used in this chapter—

(1) “Racketeering activity"

means (4) any act or threat

invovling murder, kidnapping,

gambling, arson, robbery, bri-

bery, extortion, or dealing

in narcotic or other dangerous

drugs, which is chargeable un-

der State law and punishable

by imprisonment for more than

one year; (B) any act which is

indictable under any of the

following provisions of Title

18, United States Code: Section

201 (relating to bribery), Sec-

tion 224 (relating to sports

bribery), Sections 471, 472,

and 473 (relating to counter-

feiting), Section 659 (relat-

ing to theft from interstate

shipment) if the act indict-

able under Section 659 is fe-

loneous, Section 664 (relating

to embezzlement from pension

and welfare funds), Sections

891-894 (relating to extortion-

ate credit transactions), Sec-

tion 1084 (relating to the

transmission of gambling infor-

mation), Section 1341 (relating

to mail fraud, Section 1343 (re-

lating to wire fraud). Section

1503 (relating to obstruction of

justice), Section 1510 (relating

to obstruction of criminal inves-

tigations), Section 1511 (re-

lating to the obstruction of

State or local law enforcement),

Section 1951 (relating to inter-

ference with commerce, robbery,

or extortion), Section 1952 (re-

lating to racketeering), Section

1953 (relating to interstate

transportation of wagering

paraphernalia), Section 1954

(relating to unlawful welfare

fund payments), Section 1955

(relating to the prohibition

of illegal gambling businesses),

Sections 2314 and 2315 (relat-

ing to interstate transporta-

tion of stolen property), Sec-

tions 2421-23 (relating to white

slave traffic), (C) any act

which is indictable under Title

29, United States Code, Section

186 (dealing with restrictions

On payments and loans to labor

organizations) or Section 501(c)

(relating to embezzlement from

union funds), or (D) any offense

invovling bankrupty fraud, fraud

in the sale of securities, or

the felonious manufacture, im-

portation, receiving concealment,

buying, selling, or otherwise

dealing in narcotic or other dan-

gerous drugs, punishable under

any law of the United States.

Former Texas Penal Code:

Article 652(a). Bookmaking; definition; penalty

Accepting or placing wages; punishment

Section 1. Any person who takes

or accepts or places for another

a bet or wager of money or any-

thing of value on a horse race,

dog race, automobile race, motor-

cycle race or any other race of

any kind whatsoever, football]

game, baseball game, athletic

contest or sports event of what-

soever kind or character: or any

person who offers to take

or accept or place for another

any such bet or wager, or any

person who is an agent, ser-

vant or employee or otherwise,

aids or encourages another to

take or accept or place or

transmit any such bet or wager

shall be guilty of book making

and upon conviction be punished

by confinement in the State Pen-

itentiary for any term of years

not less than one (1) nor more

than five (5) or by confinement

in the county jail for not less

than ten (10) days nor more

than one (1) year and by a fine

of not less than One Hundred

($100.00) Dollars nor more than

One Thousand ($1,000.00) Dollars.

Section 2. Any persons who shall

within a period of one (1) year

next preceeding the filing of

the indictment commit as many as

three (3) acts which are prohi-

bited under Section 1 of this

Act shatl be guilty of engaging

in the business of book making

and upon conviction shall be pun-

ished as provided in Section 1 of

this Act.

applies only to offenses com-

mited on or after its effec-

tive date, and a criminal action

for an offense committed before

this Act's effective date is

governed by the law existing be-

fore the effective date, which

law is continued in effect for

this purpose, as if this Act

were not in force...

(b) Conduct constituting an

offense under existing law that

is repealed by this Act and

does not constitute an offense

under this Act may not be pro-

secuted after the effective date

of this Act. If, on the effec-

tive date of this Act, a crimi-

nal action is pending for conduct

that was an offense under the

laws repealed by this Act and

that does not constitute an of-

fense under this Act, the action

is dismissed on the effective

date of this Act...

1974 Texas Penal Code

Section 47.01 Definitions

In this chapter:

(1) "Bet" means an agreement that, de-

1974 Texas Penal Code: pendent on chance or even though accompanied

by some skill, one stands to win or lose some-

thing of value. A bet does not include:

(A) contracts of indemnity of

guaranty, or life, health,

property, or accident insur-

ance; or

(B) an offer of a prize, award,

or compensation to the actual

Preliminary Enacting Legislation, Acts 19/73,

63rd Leg., p. 883, ch. 339, sect. 6; V.T.C.S.

Penal Code, 1 Penal p. 3

Section 6. Saving provisions. (a)

Except as provided in Subsections (b)

and (c) of this section, this Act

contestants in a bona fide

contest for the determina-

tion of skill, speed, strength,

or endurance or to the owners

of animals, vehicles, water-

craft, or aircraft entered in

a contest.

(2) "Gambling place" means any real as-

tate, building, room, tent, vehicle, boat or

other property whatsoever, one of the uses of

which is the making or settling of bets, the

receiving, holding, recording, or forwarding

of bets or offers to bet, or the conducting of

a lottery or the playingof gambling devices.

(3) "Gambling device" means any mechani-

cal contrivance that for a consideration af-

fords the player an opportunity to obtain

anything of value, the award of which is de-

termined by chance, even though accompanied

by some skill, whether or not the prize is

automatically paid by the contrivance.

(4) “Altered gambling equipment" means

any contrivance that has been altered in some

manner, including, but not limited to, shaved

dice, loaded dice, magnetic dice, mirror rings,

electronic sensors, shaved cards, marked cards,

and any other equipment altered and designed

to enhance the actor's chance of winning.

(5) "Gambling paraphernalia" means any

book, instrument, or apparatus by means of

which bets have been or may be recorded or

registered; any record, ticket, certificate,

bill, slip, token, writing, scratch sheet, or

other means of carrying on bookmaking, wager-

ing pools, lotteries, numbers, policy, or

similar games.

(6) “Lottery” means any scheme or pro-

cedure whereby one or more prizes are distri-

buted by chance among persons who have paid

or promised consideration for a chance to win

anything of value, whether such scheme or pro-

cedure is called a pool, lottery, raffle,

gift, gift enterprise, sale, policy game, or

some other name.

(7) “Private place" means a place to

which the public does not have access, and

excludes, among other places, streets, high-

ways, restuarants, taverns, nightclubs, schools,

hospitals, and the common areas of apartment

houses, hotels, motels, office buildings, trans-

portation facilities, and shops.

(8) "Thing of value" means any benefit,

but does not include an unrecorded and imme-

diate right of replay not exchangeable for

value.

1974 Texas Penal Code

Section 47.02. Gambling

(a) A person commits an offense if he:

(1) makes a bet on the partial or

final result of a game or contest

or on the performance of a parti-

cipant in a game or contest;

(2) makes a bet on the result of

any political nomination, appoint-

ment, or election or on the degree

of success of any nominee, appoin-

tee, or candidate; or

(3) plays and bets for money on

other thing of value at any

game played with cards, dice, or

balls.

(b) It is a defense to prosecution under this

section that:

(1) the actor engaged in gambling

in a private place;

(2) no person received any economic

benefit other than personal winnings;

and

(3) except for the advantage of skill

or luck, the risks of losing and the

chances of winning were the same for

all participants.

An offense under this section is a Class

C misdemeanor.

1974 Texas Penal Code

Section 47.03. Gambling Promotion

(a) A person commits an offense if

he intentionally or knowingly does

any of the following acts:

(1) operates or participates

in the earnings of a gambling

place;

(2) receives, records, or for-

wards a bet or offer to bet;

(3) for gain, becomes a cus-

todian of anything of value

bet or offered to be bet;

(4) sells chances on the par-

tial or final result of or

on the margin of victory in

any came or contest or on the

performance of any partici-

pant in any game or contest

or on the result of any poli-

tical nomination, appointment,

or election or on the degree

of success of any nominee, ap-

pointee, or candidate; or

(5) for gain, sets up or pro-

motes any lottery or sells or

offers to sell or knowingly

possesses for transfer, or

transfers any card, stub,

ticket, check or other device

designed to serve as evidence

of participation in any lottery.

(b) An offense under this section is a

felony of the third degree.

STATEMENT OF THE CASE

The indictment was returned February 12,

1976. It alleges that Defendant Salinas was a

customer of Main Bank and Trust, a banking cor-

poration, from September, 1971 through Novem-

ber 18, 1975. Until February, 1975 Petitioner

Davis was vice president of Main Bank and Trust

and assigned to the installment loan department;

in that capacity Davis loaned money to Salinas

and various members of the general public.

The indictment further alleges that Salinas

was engaged in the business of gambling in vio-

lation of the law of the State of Texas. The

gambling offenses occuring before January 1,

1974 were prohibited by Article 652a, Texas

Criminal Statutes; gambling offenses occuring

after January 1, 1974 were prohibited by Section

47.03 of the 1974 Texas Penal Code. Davis was

alleged to have been aware of Salinas’ gambling

activity, and Davis serviced Salinas’ banking

needs both as a depositor and a borrower.

Beginning on or about September 16, 1971

Salinas began to bring other individuals who

as gambling bettors had lost money to Salinas

to Main Bank and to Davis. These persons would

take out loans on which Salinas would pledge

collateral and/or cosign. These other indivi-

duals were not asked to nor did they fill out

loan applications. They were not asked the pur-

pose of the loans--which was to pay off gam-

bling debts owed to Salinas and/or others. The

loans were sometimes repaid in regular install-

ments and sometimes repaid by Salinas to off-

set later gambling lossess to these same indi-

viduals.

On various dates between 1971 and 1974

Salinas and Raymond L. Mozisek, Jesse Y. Moreno,

Carlos G. Zuniga, Jack L. Minice William J.

Cummings, Ronald W. Clark and Louis D0. Pedrotti

borrowed money from Main Bank and Trust through

its vice president, Petitioner Davis, for the

purpose of paying these gambling debts which

they had incurred as between themselves. The

collateral pledged onthese loans maintained by

Salinas at the bank at all times included stock

certificates, cash value life insurance, and

certificates of deposit.

The indictment embraced acts of gambling

for a period during which they were denounced

in part by the 1925 Penal Code (Article 652a)

and the 1974 Code (Section 47.03).

The District Court found (1) that 18 U.S.C.

1961(6) adopts and incorporates State law in a

manner analogous to the incorporation of the

State law into Federal law under the Assimila-

tive Crime Acts (18 U.S.C. 13); (2) the 1974

Texas Penal Code does not prohibit the business

of gambling; (3) since the savings provisions

of the 1974 Texas Penal Code vitiate and abate

pending prosecutions for acts no longer de-

nounced under the new Code the indictment failed

to allege a Federal offense under 18 U.S.C.

1962(c).

Noting that the question was one of first

impression the Court of Appeals held the indict-

ment alleged a Federal) violation under 18 U.S.C.

1962(c) for the collection of illegal gambling

debts holding that State penal laws which sim-

ply prohibit acts of gambling ipso facto pro-

scribe the business of gambling.

REASONS FOR GRANTING THE WRIT

THE DECISION BY THE COURT OF APPEALS

THAT THE TEXAS PENAL CODE WAS NCT IN-

CORPORATED BUT SIMPLY DEFINITIONAL OF

A FEDERAL CRIME DEFINING "UNLAWFUL

DEBT" IS NOT IN KEEPING WITH THE CON-

GRESSIONAL INTENT TO EXCLUDE THE ACT

FROM LOCAL, TRANSITORY GAMBLING AC-

TIVITIES, LEAVING THE REGULATION TO

STATE AND LOCAL AUTHORITIES.

The Fifth Circuit Court of Appeals has pre-

viously discussed the congressional intent be-

hind the Organized Crime Control Act of 1970.

Congress excluded local, tran-

sitory gambling activities from

the scope of the law, leaving

their regulation to State and

local authorities, but it as-

serted Federal jurisdiction

over racketeering and large-

scale gambling activities.

In 1976 the Court of Appeals enlarged upon the

congressional intent to exclude the operation

of the act to small time gambling activities.

U.S. v. Box, (5 Cir. 1976) 530 F. 2d 1258, 1264,

1265.

Clearly, the dominant concern

motivating Congress to enact

Section 1955 was that large-

scale gambling operations in

this country have been closely

intertwined with large-scale

organized crime, and indeed may

have provided the bulk of the

capital needed to finance the

operations of organized crime.

The target of the statute was

large-scale gambling operations-

local “mom and pop" book making

operations were to be left to

State law. In this connection,

the requirements of dollar vol-

ume ($2,000.00 gross on any day)

or duration (30 days or more)

and number of participants (5)

were drafted into the legisla-

tion. These requirements are

such that relative small-crime

can conceivably be ensnared in

the statutory strictures, but

apparently Congress was of the

opinion that the size of gam-

bling operations was often much

larger than could be proved,

and that law enforcement offi-

cials needed some flexibility

in order effectively to combat

the large-scale operations.

An examination of Box indicates that the

Defendant was engaged in rather extensive gam-

bling activity in violation of the laws of the

State of Louisiana. However, the evidence failed

to show that his gambling activities were of a

sufficient nature to constitute an illegal gam-

baling business, and consequently the prosecu-

tion was reversed and the indictment subsequently

dismissed. This decision is significant because

the definition of “unlawful debt" in 18 U.S.C.A.

1961(c) also includes an unlawful debt as a

debt (a) incurred or contracted in gambling ac-

tivity which was in violation of the law of the

United States..., and (b) which was incurred in

connection with the business of gambling in vio-

lation of the law of the United States.

Had the instant indictment alleged the un-

lawful debts to have been so incurred it would

have been incumbent upon the government to not

only ailege that the debts were incurred in

gambling activity in violation of the laws of

the United States but to allege and prove, the

second conjunctive requirement, that the business

of gambling meet the Federal statutory criteria

set out in Section 1955. Anything less would

not suffice.

The novel application and construction by

the Court in this case would simply mean that

unlawful debts under 18 U.S.C. 1961(6) require

only a generic violation of the laws of the

United States despite the clear language of the

Act to the contrary. Extending the decision by

the Court of Appeals to its logical conclusion

it is enough for the government to show that

the unlawful debts were incurred in connection

with the business of gambling in violation of

Federal law as that term is generally understcod

and thereby circumvent and ignore the federal

statutory standards of an illegal gambling busi-

ness.

The Court of Appeals' decision is strained

by its interpretation extending the appl ica-

tion of generic definitions of "racketeering

activity" to “unlawful debt". The Court relies

heavily on United States v. Nardello, 1969, 393

U.S. 286, 90 Sup. Ct. 534, 21 L. Ed. 2d 487,

where the Court held that a Defendant could be

convicted under the Travel Act if his conduct

included “acts prohibited by State law" which

would be generically classified as extortion-

ate i.d. at 290, 90 S. Ct. 536. The Court fur-

thur relied upon decisions by the Court and

other circuits in United States v. Brown, 5 Cir.

1977, 555 F. 2d 407, 418n.22; United States v.

Conway, 5 Cir. 1977, 507 F. 2d 1047; United

States v. Cerone, 7 Cir. 1971, 452 F. 2d 274,

287 cert. denied, 1972, 405 U.S. 964, 92 S. Ct.

1168, 31 L. Ed 2d 240; United States v. Rizzo,

7 Cir. 1969, 419 F. 2d 71, 80 cert. denied,

1970, 397 U.S. 967, 90 S. Ct. 1006, 25 .L. Ed.

2d 260; United States v. Kariajinnis, 7 Cir.

1970, 430 F. 2d 148, 150, cert. denied, 1970,

sub. nom.; Panagitopoulos v. United States, 400

U.S. 904, 91 S. Ct. 143, 27 L. Ed. 2d 141; Uni-

ted States v. Frumento, 3rd Cir. 1977, 559 Fed.

2d 1209; United States v. Forsythe, 3rd Cir.

1977, 560 F. 2d 1127.

Reliance on all of these cases is misplaced

because although admittedly arising under the

RICO statutes (The Racketeering Influence and

Corrupt Organizations Act), Title 9 of the Or-

ganized Crime Control Act of 1970, Chap. 96 of

Title 18 U.S.C. 1961-1968, they center upon acts

which constitute patterns of racketeering ra-

ther than unlawful debt.

18 U.S.C. 1961(1) provides that "racketeer-

ing activity" means (a) any act or threat in-

volving murder, kidnapping, gambling..., which

is chargeable under State law and punishable by

imprisonment for more than one (1) year; (b)

any act which is indictable under any of the

following provisions of Title 18, U.S.C.:. ..

U.S.C. Section 186 . . . or (d) any offense

involving bankruptcy fraud. .

Each one of these cases taken in its own

context is correct because the act by its very

terms makes but a generic reference to the var-

ious acts which constitute racketeering activi-

ties. As noted above a generic construction

to include the business of gambling overextends

the act beyond its stated congressional limits.

Il.

THE DECISION BY THE COURT OF APPEALS

CONFLICTS WITH ITS PREVIOUS HOLDINGS

AND THOSE OF OTHER CIRCUITS.

The decision by the Court of Appeals con-

flicts with its own holdinas and interpretations

of State law found in 18 U.S.C. 1952 (the Travel

Act) which this Court ana the Court of Appeals

have held “merely serves a definitional purpose”.

In United States v. Prince, (5th Cir. 1975)

515 F. 2d 564, 566 the Court stated:

This Court has recently held,

however, that in Section 1952

cases State law "merely serves

a definitional purpose", United

States v. Conwy, 5th Cir. 1975,

507 F. 2d 1047, 1051. There

is no need to prove a violation

of the State law as an essen-

tial element of the Federal

crime and therefore the failure

to define a generic term accor-

ding to State law is not error,

i.d. In Conway we look to

United States v. Nardello, 1969,

393 U.S. 286, 89 S. Ct. 534, 21

L. Ed 2d 487, where the Supreme

Court held that prosecution under

Section 1952 was not restricted

to state papers», but that A

attnds the sor eric’ tora charged.

A definitional reference to State law re-

quires no proof of its violation. However, a

different rule applies under the illegal busi-

ness of gambling prohibited by 18 U.S.C. 1955,

part of the Organized Crime Control] Act of 1970.

The following cases illustrate this point.

In United States v. Hawes, (5th Cir.) 1976,

529 F. 2d 472, 477, 478 the Court in affirming

an illegal gambling business operation under

Section 1955 reemphasized the incorporation of

State laws.

The Constitution is not vio-

lated when a Federal statute

incorporates the laws of the

State. See United States v.

Sharpnack, 355 U.S. 286, 78

S. Ct. 291, 2. L. Ed. 2d 282

(1958) (assimilative crimes,

18 U.S.C.A. Section 13); Ken-

tucky Whip and Collar Co. v.

Illinois C. R. Co., 299 U.S.

334, 57 S. Ct. 277, B81 L. Ed.

270 (1937) (convict-made goods);

Clark Distilling Co. v. Western

Maryland Ry. Co., supra, 242

U.S. 311, 37 S. Ct. 180, 61 L.

Ed. 326 (liquor transportation),

27 U.S.C.A. Sect. 122.

In United States v. Crockett, (5th Cir.

1975) 506 F. 2d 759, 761 the Court stated:

Thus, in order to violate

Federal law one must first be

guilty of violating State or

local law.

In United States v. Smaldone, (10th Cir.

1973) 485 F. 2d 1333, 1345 the Court held that

State gambling statutes are incorporated rather

than merely serving a definitional purpose.

It is well settled in the law

that Congress may adopt as

Federal laws the laws of the

the State, and such is not

an unconstitutional delega-

tion of congressional eutho-

rity. United States v.

Sharpnack, 355 U.S. 286, 78

S. Ct. 291, 2 L. Ed. 2d 282.

In United States v. Berent, (9th Cir. 1975)

523 F. 2d 1360 the Court upheld the dismissal

of an indictment which charged the operation of

an illegal gambling business alledgedly viola-

tive of the Nevada law since "sports pool" did

not include sports book making.

III,

THE NOVEL INTERPRETATION BY THE COURT

OF APPEALS THAT STATE ACTS PROHIBITING

VARIOUS ACTS OF GAMBLING IPSO FACTO

PROHIBIT THE BUSINESS OF GAMBLING DC-

PRIVES THE PETITIONER DAVIS OF HIS

FIFTH AMENDMENT RIGHTS TO DUE PROCESS.

In this case of first impression the Court

of Appeals has held that in States where acts

of gambling are illegal the business of gambling

is ipso facto illegal although the latter may

not be prohibited by statute. Such a holding

presents a novel, nursling theory never urged

by the government at any stage of these proceedings.

For certain the Petitioner Davis could hardly

anticipate that his conduct would violate the

act as so interpreted since the decision by the

Court of Appeals is as much a surprise to the

government as the Petitioner.

The Texas law does not take such a juan-

diced attitude towards loans made to third per-

sons for the purpose of either paying or col-

lecting gambling debts. Quite to the contrary

the Texas Courts have long recognized in an un-

broken line of decisions that loans evidenced

by promissory notes made to a loser to pay his

gambling lossess are collectible even though

the lender knew the purpose of the loan. Stated

otherwise, the lender is a holder in due course,

although the original debt had its inception

in illegal gambling transactions. Oliphant v.

Markham, 79 Tex. 543, 15 S.W. 569 (Tex. S. Ct.);

Perkins v. Nevell, Tex. Comm. App., 58 S.W. 2d

50; Frost National Bank v. Mitchell, Tex. Civ.

App., 362 S.W. 2d 198 (1962); Nelson v. Powell,

Tex. Civ. App., 434 S.W. 2d 165 (1968).

At best the Petitioner Davis is guilty of

a constructive criminal offense arrived at by

Strained logic. Certainly in the act in ques-

tion there is no clear and positive expression

by legislative fiat or definition that by en-

gaging in one act of gambling one necessarily

becomes a wholesale gambler. Under these cir-

cumstances any banker could act on one concep-

tion of the statute and the Court on another.

The act as so construed is not sufficiently ex-

plicit nor does it inform the Petitioner Davis

nor any person of ordinary intelligence notice

that his contemplated conduct is forbidden by

the statute since no man should be held crimi-

nally responsible for conduct which he cannot

reasonably understand to be proscribed. United

States v. Universal C.I.T. Credit Corporation,

D.C. mo., 102 F. Supp. 179, affirmed, 73 S. Ct.

227, 344 U.S. 218, 97 L. Ed. 260; Winters v.

People of State of New York, 68 S. Ct. 665, 333

U.S. 507, 92 L. Ed 840; Troutman v. United or which is deserving of

punishment according to the

States, 59 S. Ct. 590, 306 U.S. 649, 83 L. Ed. fundamental idea of a penal

; law and the sound perception

1047; Jordan v. DeGeorge, 72 S. Ct. 703, 341 olla people shall be pun-

shed.

U.S. 223, 95 L. Ed. 886, rehearing denied, 72

The effect of the legislation was accu-

S. Ct. 1011, 341 U.S. 956, 95 L. Ed. 1377.

rately summed up by Lawrence Preuss writing in

Despite the numerous cases arising under

26 Journal of American Institute of Criminal

this act in the various circuits, this Court has

Law and Criminology, 847,

yet to entertain a petition for certiorari in-

. The right of the Courts

volving the construction of the various provi- to punish without a written

law destroys the last defense

sions of the Crime Control Act of 1970. This of the individual against the

totalitarian national social-

case represents the farthest outreach by any ist state.

Court in the constructionof the Statute and CONCLUSION

takes us dangerously close to the Third Reich's For these various reasons this Petition for

"National Conscience" Act of June 28, 1935. Writ of Certiorari should be granted.

* The act had striking similarities to the Respectfully submitted,

generic definitions found in the Crime Control] JACK PAUL LEON

1800 Milam Building

Act of 1970. (Acts involving murder, rape. . . San Antonio, Texas 78205

chargeable under State law or acts indictable MAYO J. GALINDO

2019 San Pedro, P.O. Box 12,223

under Federal Law. ) San Antonio, Texas

The act provided: ; COUNSEL FOR PETITIONER

Whoever commits an action which

the law declared to be punishable,

ERTIFICATE OF SERVICE

—

In accordance with the rules of the Court,

true and correct copies of the foregoing Peti-

tion for Certiorari have been served upon the

following counsel by personal delivery to their

law offices:

Mrs. Leroy Morgan Jahn

Assistant U.S. Attorney

655 E. Durango Blvd.

San Antonio, Texas 78205

Mr. Fred A. Semaan

Mr. Charles 9. Butts

Mr. Gary Howard

1200 Tower Life Building

San Antonio, Texas 78205

To further certify that copies of the

Petition for Certiorari have been served upon

the following counsel by placing same in the

United States mail with first class, air mail,

postage prepaid on this _—_—- day of January, 1978:

Hon, Wade McCree

Solicitor General

Department of Justice

Washington D.C. 20530

Mr. Edward C. Weiner

Special Attorney

Department of Justice

Box 571, Ben Franklin Station

Washington D.C. 20044

APPENDIX A

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

UNITED STATES OF AMERICA

VS.

ANTHONY J. SALINAS AND

)

SA-76-CR-25

BILLY W. DAVIS

ORDER DISMISSING COUNT ONE OF THE INDICTMENT

Defendants’ Motions to Dismiss Count One

of the Indictment questions whether an indict-

ment brought alleging a federal crime under

18 U.S.C. 1962(c), which incorporates State

criminal statutes is valid when a State in-

dictment could no longer be brought under the

law. The Court finds that Count One of the

indictment does not allege a federal offense

and therefor> orders dismissal of that Count.

Count One of the Indictment alleges that

the Defendants from the fall of 1971 to about

the end of 1975 engaged in the collection of

unlawful debts by being associated with an Texas law. Section 1961(6) takes its meaning

enterprise engaged in interstate commerce in both as to "gambling" and "business of gambling"

violation of 18 U.S.C. 1962(c). 18 U.S.C. by adopting and incorporating the Texas law of

1962(c) provides: , "business of bookmaking". When 18 U.S.C.

It shall be unlawful for any 1961(6) adopts and incorporates State law it

person employed by or associated

with any enterprise engaged in... does so in a manner analogous to the incorpor-

interstate...commerce, to conduct

or participate directly or indi- ation of State law into federal law under the

rectly, in the conduct of such

enterprise's affairs through... Assimilative Crimes Act (18 U.S.C. 13; c.f.

collection of unlawful debts.

United States v. Hawes, 529 F. 2d 472, 478

18 U.S.C. 1961(6) defines “unlawful debt" as

(5th Cir. 1976)). This means that Section

follows:

"unlawful debt' means a debt (A) 1961(6) necessarily becomes subject to every

incurred or contracted in gambling

activity which was in violation of subsequent change in State law, including its

the law of..., a State or political

subdivision thereof...and (B) which repeal. c.f. United States v. Sharpnack, 355

was incurred in connection with the

business of gambling in violation U.S. 286 (1958).

of the law of..., a State or poli-

tical subdivision thereof...1/ During the course of conduct alleged in

Under the allegations of this Indictment, the the Indictment, the Texas law of “business of

conduct alleged in Count One of the Indictment, bookmaking" (Tex. Pen. Code Art. 652a, section

to constitute a violation of 18 U.S.C. 1962(c) 2, repealed Acts, 63rd Leg., p. 883, ch. 399)

must necessarily constitute a violation of was repealed. Where an article in the 1925

Penal Code is repealed, the savings provisions

1/ There is no allegation that the "business of Section 6 of the 1974 Texas Penal Code

of gambling" in the Indictment refers to

federal law 18 U.S.C. 1955.

prohibited prosecution of certain offenses

under the old Code after January 1, 1974. 2/

An additional reason for dismissal is

that State prosecutionwould also be barred by

the terms of Art. 652a, section 2, (repealed)

even if it had notbeen repealed. Article 652a,

section 2, provided as follows:

2/ "'Sec. 6 Saving provisions. (a) Except

as provided in Subsections (b) and (c)

of this section, this act applies only

to offenses committed on or after its

effective date, and a criminal action

for an offense committed before this

Act's effective date is governed by law

existing before the effective date,

which law is continued in effect for

this purpose, as if this Act were not

in force.

""(b) Conduct constituting an offense

under existing law that is repealed by

this Act and that does not constitute

an offense under the Act may not be

prosecuted after the effective date of

this Act. If, on the effective date

of the Act, a criminal action is pend-

ing for conduct that was an offense

under the laws repealed by this Act

and that does not constitute an of-

fense under this Act, the action is

dismissed on the effective date of

this Act. . . ." (Acts, 63rd Leg.,

p. 883, ch. 399).

“Any person who shall within a

period of one (1) year next pre-

ceeding the filing of the indict-

ment commit as many as three (3)

acts which are prohibited under

Section 1 of this Act shall be

guilty of engaging in the busi-

ness of book making and upon con-

viction shall be punished as pro-

vided in Section 1 of this Act."

The indictment in this case was brought more

than one year after the Act alleged in para-

graph 5a of Count One. Although United States

v. Revel, 493 F. 2d 1 (5 Cir. 1974) held that a

federal prosecution was not barred where facts

constituting a violation of State law was an

element in the federal crime even though the

federal indictment was brought after the State

statute of limitations had run on the prosecu-

tion of the State offense, the Court finds that

Revel (supra.) is not controlling, because the

one year limitation in Article 652a, section 2

(repealed), is an essential element of the

State offense and not merely a limitation on

State prosecution. The Court therefore dis-

misses Count One of the Indictment for this

ground also.

SO ORDERED this 30th day of July, 1976.

/S/ D. W. SUTTLE

UNITED STATES DISTRICT

JUDGE

APPENDIX B

UNITED STATES of America,

Plaintiff-Appel lant,

Vv.

Anthony J. SALINAS and Billy W.

Davis, Defendants-Appel lees.

NO. 76-3398.

United States Court of Appeals,

Fifth Circuit.

Dec. 9, 1977.

A count charging defendants with collecting

unlawful debts for an enterprise engaged in in-

terstate commerce in violation of a federal

antiracketeering statute was dismissed by the

United States District Judge for the Western

District of Texas at San Antonio, DorwinW. Suttle

J., and the Government appealed. The Court of

Appeals, Wisdom, Circuit Judge, held that in a

state where gambling is illegal, the business

of gambling is also illegal, and thus no speci-

fic statutory ban of the business of gambling

is necessary for prosecution under the statute.

Reversed and remanded.

1. Commerce - 82.10

Inquiry in prosecution for collecting un-

lawful debts for enterprise engaged in inter-

state commerce in violation of federal anti-

racketeering statute was not manner in which

states classify their criminal prohibitions

but whether particular state involved prohibi-

ted the activity charged. 18 U.S.C.A. 1952,

1961(6), 1962(c); V.T.C.A., Penal Code 47.03;

Vernon's Ann. Tex. P.C. art. 652a.

2. Commerce - 82.10

Where no provision parallel to former

state statute had been carried forward into

new Penal Code, no federal prosecution under

federal antiracketeering statute could be based

on repealed statute. Vernon's Ann. Tex. P.C.

art. 652a, sect. 2; 18 U.S.C.A. 1962(c).

3. Gambling - 62

In state where gambling is illegal, busi-

ness of gambling is also illegal, and therefore

no specific statutory ban of business of gambling

is necessary for prosecution under federal

antiracketeering statute. 18 U.S.C.A 1952,

1955, 1955(a,b), (b)(1), 1961, 1961 note,

1961(6), 1962, 1962(c); V.T.C.A., Penal Code

47.03; Vernon's Ann. Tex. P.C. Art. 652a.

Appeal from the United States District

Court for the Western District of Texas.

Before WISDOM, GEWIN and AINSWORTH, Circuit

Judges.

WISDOM, Circuit Judge;

This appeal presents an issue of statutory

construction: whether 18 U.S.C. 1961(6), de-

fining an unlawful debt as one incurred in vio-

lation of state laws against gambling and the

business of gambling, applies in a state that

forbids gambling but has no specific statutory

proscription of the business of gambling. We

believe that 1961(6) applies, and reverse the

district court's judgment.

This case arises out of an appeal by the

government from dismissal of one count of an ; 1961(6). On appeal, Salinas and Davis contend

indictment. The dismissed count charged Anthony that they may be prosecuted under 1962(c) only

J. Salinas and Billy W. Davis, defendants/ ' if their activities violated state laws speci-

appellees, with collecting unlawful debts for fically prohibiting both gambling and the

an enterprise engaged in interstate commerce business of gambling. We hold that in a state

in violation of 18 U.S.C. eset). For the where gambling is illegal, the business of gam-

purpose of 1962(c), "‘unlawful debt' means a bling is also illegal; therefore no specific

debt (A) incurred or contracted in gambling statutory ban of the business of gambling is

activity which was in violation of the law of... necessary for the prosecution under the statute.

a State..., and (B) which was incurred in con- I.

nection with the business of gambling in vio- The dismissed count of indictment alleges

lation of the law of...State..." 18 U.S.C.

2. 18 U.S.C. 1961(6) provides in full:

(6) “unlawful debt" means a debt (a) in-

1. 18 U.S.C. 1962 (c) provides: curred or contracted in gambling activity

which was in violation of the law of the

It shall be unlawful for any person United States, a State or political sub-

employed by or associated with any — division thereof, or which is unenforce-

enterprise engaged in, or the activi- able under State or Federal law in whole

ties of which affect, interestate or or in part as to principal or interest

foreign commerce, to conduct or parti- because of the laws relating to usury,

cipate, directly or indirectly, in and (B) which was incurred in connection

the conduct of such enterprise's af- with the business of gambling in viola-

fairs through a pattern of racketeer- tion of the law of the United States, a

ing activity or collection of unlawful State or political subdivision threof, or

debts : the business of lending money or a thing

of value at a rate usurious under State or

Federal Law, where the usurious rate is

a at least twice the enforceable rate.

that from 1971 to 1974 Salinas was engaged in

the business of gambling. Davis was a vice-

president of the Main Bank and Trust of San

Antonio, Texas, and was assigned to its Install-

ment Loan Department. Davis allegedly knew

that Salinas was in the business of gambling.

The indictment charges that Salinas brought

people who owed him gambling debts to Davis

to apply for loans. Davis allegedly granted

the loans without asking the recipients

ther purpose in seeking the loan and without

requiring them to fill out loan applications.

Salinas cosigned or pledged collateral for

these loans. The government alleges that

proceeds of the loans went to pay gambling

debts to Salinas. The loans were later

repaid.

Texas Penal Code 47.03 proscribes gambling.

3. Texas Penal Code 47.03 provides:

Gambling Promotion

(a) A person commits an offense if he

That statute became effective January 1, 1974.

Before that date the only reference to the bus-

iness of gambling was a prohibition of "the

business of bookmaking", which, of course,

intentionally or knowingly does any of the

following acts:

(1) operates or participates in the earnings

of a gambling place;

(2) receives, records or forwards a bet or

offer to bet;

(3) for gain, becomes a custodian of anything

of value bet or offered to be bet;

(4) sells chances on the partial or final re-

sult of or on the margin of victory in any

game or contest or on the performance of any

participant in any game or contest, or on

the result of any political nomination, ap-

pointment, or election or on the degree of

success Of any nominee, appointee or candi-

date; or

(5) for gain, sets up or promotes any lottery

or sells or offers to sellor knowingly pos-

sesses for transfer, or transfers any card,

stub, ticket, check, or other device designed

to serve as evidence of participation in

any lottery.

(b) An offense under this section is a felony

of the third degree.

4. Former Texas Penal Code Art. 652a provided:

Art. 652a. Bookmaking; definition, penalty

Accepting or placing wagers; punishment

Section 1. Any person who takes or accepts

or places for another a bet or wager of

is narrower in scope than the business of gam-

bling. Tex. Penal Code, Art. 652a (repealed

January 1, 1974). Since 1974 there has been

no specific use of the term "business" in any

of the anti-gambling laws of Texas.

money or anything of value on a horse race,

dog race, automobile race, motorcycle race

or any other race of any kind whatsoever,

football game, baseball game, athletic con-

test or sports event of whatsoever kind or

character; or any person who offers to

take or accept or place for another any

such bet or wager; or any person who as an

agent, servant or employee or otherwise,

aides or encourages another to take or ac-

cept or place or transmit ary such bet or

wager shall be guilty of book making and

upon conviction be punished by confinement

in the State Penitentiary for any term of

years not less than one (1) nor more than

five (5) or by confinement in the county

jail for not less than ten (10) days nor

more than one (1) year and by a fine of not

less than One Hundred ($100.00) Dollars nor

more than One Thousand ($1,000.00) Dollars.

Section 2. Any person who shall within

a period of one (1) year next preceding the

filing of the indictment commit as many as

three (3) acts which are prohibited under

Section 1 of this Act shall be guilty of en-

gaging in the business of book making and

upon conviction shall be punished as pro-

vided in Section 1 of this Act.

Il.

The question whether a prosecution under Sec-

tion 1962(c) for the collection of illegal gam-

bling debts may be maintained in a state that

forbids gambling but that does not specificaily

bar the business of gambling is apparently one

of first impression. Congress did not define

the term "business of gambling" in Section

1961(6). It did, however, provide that content

should be given to the term by resort to state

law.

Other federal anti-racketeering statutes

make reference to state law. Courts constru-

ing the racketeering statutes have found that

the references to state law serve a definitional

purpose, to identify generally the kind of

activity made illegal by the federal statute.

In United States v. Nardello, 1969, 393 U.S.

286, 89 S. Ct. 534, 21 L. Ed. 2d 487, the Sup-

reme Court construed the Travel Act, 18 U.S.C.

1952. Section 1952 bars travel with the in-

tent to carry out "extortion ... in violation

of the laws of the State in which committed or

5. 18 U.S.C. 1952 provides:

Interstate and foreign travel or trans-

portation in aid of racketeering enterprises

(a) Whoever travels in interstate or for-

eign commerce or uses any facility in inter-

state or foreign commerce, including the

mail, with intent to—

(1) distribute the proceeds of any unlaw-

ful activity; or

(2) commit any crime of violence to further

any unlawful activity; or

(3) otherwise promote, manage, establish,

carry on, or facilitate the promotion, man-

agement, establishment, or carrying on, of

any unlawful activity,

and thereafter performs or attempts to per-

form any of the acts specified in the sub-

paragraphs (1), (2), and (3), shall be fined

not more than $1,000.00 years or imprisoned

for not more than five years, or both.

(b) As used in this section “unlawful ac-

tivity" means (1) any business enterprise

involving gambling, liquor on which the Fed-

eral excise tax has not been paid, narcotics,

or prostitution offenses in violation of the

laws of the State in which they are committed

or of the United States, or (2) extortion,

bribery, or arson in violation of the laws

of the State in which commited or of the

United States.

10b

of the United States". The defendants in

Nardello allegedly lured their victims into

compromising homosexual situations and threat-

ened them with exposure if they did not pay

the defendants. Pennsylvania law characterized

such activity as “blackmail” rather than “ex-

tortion". Nevertheless, the Supreme Court

allowed the prosecution to proceed. The Court

found that "the inquiry is not the manner in

which States classify their criminal prohibi-

tions but whether the particular State involved

prohibits the extortionate activity charged".

393 U.S. at 295, 89 S. Ct. at 539. The Court

found that there was great variance among the

states in the terms used to describe and to

forbid extortion, and found that Congress could

not have intended to apply tne Travel Act if

his conduct included "acts prohibited by State

law which would be generally classified as

section involving liquor of narcotics shal]

be conducted under the supervision of the

Secretary of the Treasury.

11b

extortionate". Id. at 290, 89 S. Ct. at 536.

Thus, the nomenclature in the state statute

need not match that of Section 1952 precisely.

(1) Although Nardello construed a different

statute, its logic is persuasive here. We

must look not to “the manner in which States

classify their criminal prohibitions but whether

the particular State involved prohibits the...

activity charged". 393 U.S. at 295, 89 S. Ct.

at 539.

(2) States making gambling illegal differ-

entiate among levels of gambling activity.

First, a state may enact a statute forbidding

gambling and may enact a supplementary statute,

perhaps with more severe penalties, against

extensive gambling activity or against "com-

mercial gambling". Second, a state may have

a single statute, and may seek to proceed

against extensive violations of the same of-

fense. The latter situation prevails in Texas,

where no current sta.ute expressly forbids the

12b

business of gambling. The particular means

a State chooses to deal with the problem of

commercial gambling, like the choice between

the words “extortion” and "bribery" in Nar-

dello, should not control the applicable fed-

eral anti-gambling law.

(3) The defendants do not seriously con-

tend that the business of gambling is legal in

Texas. If a single act of gambling is illegal,

then gambling as a means of livelihood or és

an ongoing commercial operation must be ille-

gal as well. The defendants seek to seize

6. The single statute situation also applies

to the alleged violations that occured prior

to January 1, 1974. The savings provision

of the 1974 Penal Code provides that "Con-

duct constitution an offense under existing

law that is repealed by this Act and that

does not constitute an offense under this

Act may not be prosecuted after the effec-

tive date of this Act." Preliminary Enact-

ing Legislation, Acts 1973, 63d Leg., p.

883, ch. 399, Sect. 6(b); V.T.C.S. Penal

Code, 1 Penal 3. No provisions parallel to

the business of bookmaking statute, former

Texas Penal Code Art. 652a(2), quoted in

note 4, was carried forward into the new

13b

upon the state's rot classifying gambling as

precisely as does the federal statute. But

it was not the intent of Congress to attack

gambling only in states that classify gambling

along the federal model. The reason for the

Congressional conjunctive requirement that a

debt be incurred in connection with gambling

and with the business of gambling was that it

sought to punish only large scale gambling

operations involving “organized crime" as con-

trasted with small time gambling. Pub. L.

91-452, Sect. 1, Oct. 15, 1970."

This Court has extended the logic of the

Nardello case to the language of other provi-

sions of the federal anti-racketeering statutes.

Penal Code. Therefore, no federal prosecu-

tion can be based on the repealed statute.

Cf. United States v. Sharpnack, 1958, 335

U.S. 286, 78S. Ct. 291, 2 L. Ed. 2d 282.

- Congress also provided that. "The provi-

sions of this title (18 U.S.C. 1961-1968).

shall be liberally construed to effectuate

its remedial purposes". Pub. L. 91-452,

Sect. 904(a).

14b

In United States v. Revel, 5 Cir. 1974, 493

F. 2d 1, we faced the question whether the

federal or the state statute of limitation

applies in a prosecution under 18 U.S.C. 1955.

8. Section 1955(a)-(b) provides:

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 $20,000.00 or imprisoned not

more than five years, or both.

(b) As used in this section—

(1) "illegal gambling business" means a gam-

bling business which—

(i) is a violation of the law of a State or

political subdivision in which it is con-

ducted;

(ii) involves five or more persons who con-

duct, 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 inany 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 num-

bered games, or selling chances therein.

(3) "State" means any State of the United

States, the District of Columbia, the Com-

monwelath of Puerto Rico, and any territory

or possession of the United States.

15b

That section, like Sections 1961 and 1962,

was enacted as part of the Organized Crime

Control Act of 1970, Pub. L. 91-452, 84 Stat.

922. It forbids the operation of an “illegal

gambling business". It defines “illegal gam-

bling business" as one involving five or more

persons, operating for over thirty days or

grossing at least $2,000.00 on one day, in

"violation of the law of a Stateor political

subdivision in which it is conducted". 18

U.S.C. 1955(b)(1). We cited Nardello and held:

"Just as in 18 U.S.C. 1952, the so-called

Travel Act, the reference to state law in the

federal statute is for the purpose of defining

the conduct prohibited and for the purpose of

supplementing, rather than pre-empting, state

gambling laws". Id. at 2-3 (emphasis in ori-

ginal) (footnote omitted). We decided that

we should usr. "federal standards in enforcing

the federal law" and we held that the defendant

could be convicted even though the applicable

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state limitation period had expired. Id. at

3. See also United States v. Brown, 5 Cir.

1977, 555 F. 2d 407, 418 N. 22.

In United States v. Crockett, 5 Cir. 1975,

506 F. 2d 759, another Sect. 1955 prosecution,

we found that the trial judge did not err in

failing to give the jury the Georgia statu-

tory language making it illegal to conduct a

gambling business in the state. We found no

error in the trial court's statement that "the

law of the state of Georgia prohibits commer-

cial gambling enterprises" without further ex-

planation. Id. at 761. We found no need for

recourse to the specific language of the state

statute. See also United States v. Brown, 5

Cir. 1977, 555 F. 2d 407, 418 n. 22; United

States v. Conway, 5 Cir. 1975, 507 F. 2d 1047;

United states v. Cerone, 7 Cir. 1971, 452 F.

2d 274, 287, cert. denied 1972, 405 U.S. 964,

92 S. Ct. 1168, 31 L. Ed. 2d 240; United

States v. Rizzo, 7 Cir. 1969, 418 F. 2d 71,

80, cert denied 1970, 397 U.S. 967, 90 S. Ct.

1006, 25 L. Ed. 2d 260; United States v. Kari

giannis, 7 Cir. 1970, 430 F. 2d 148, 150,

cert. denied 1970 sub nom. Panagitopoulos v.

United States, 400 U.S. 904, 91S. Ct. 143, 27

L. Ed. 2d 141.

United States v. Frumento, 3 Cir. 1977,

F. 2d , is similar to the instant case.

There, the defendants were charged under the

same statute, 18 U.S.C. 1962(c). They were

charged under the racketeering activity provi-

sions of that statute. Section 1961(1) defines

“racketeering activity" to include “bribery

(and) extortion ... chargeable under State

law and punishable by imprisonment for more

than one year". The court upheld the defen-

dants' conviction even though they had been

acquitted in state court "on the very state

law charges which formed the basis of their

indictment under 18 U.S.C. 1961 et seq.". The

Court found that "The state offense referred

9. Quoted in note 1.

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to in the federal act are definitional only".

F. 2d at . The Court said"

The gravamen of section 1962 is a violation

of federal law and “reference to state law

is necessary only to identify the type of

unlawful activity in which the defendant

intented to engage." United States v.

Cerone, 452 F. 2d 274, 287 (7th Cir. 1971),

quoting Mr. Justice Clark in United States

v. Karigiannis, 430 F. 2d 148, 150 (7th Cir.

cert. denied sub nom. Panagitopoulos v.

United States, 400 U.S. 904, (91 S. Ct.143,

27 L. Ed. 2d 141) (1970).

F. 2d at

In another case, the Third Circuit followed

our holding in Revel that the federal statute

of limitations, not the statute of limitations

of the state statute used to indentify the ac-

tivity proscribed by federal law, applies in

a federal prosecution under the Organized

Crime Control Act of 1970. United States v.

Forsythe, 3 Cir. 1977, 560 F. 2d 1127, The

Court stated:

RICO (the Racketeer Influenced and

Corrupt Organizations Act, Title IX of

the Organized Crime Control Act of 1970,

Chapter 96 of Title 18 U.S.C. 1961-68)

19b

is a federal law proscribing various rack-

eteering acts which have an effect on in-

terstate or foreign commerce. Certain of

those racketeering, or predicate acts vio-

late state law and RICO incorporates the

elements of those state offenses for defi-

nitional purposes. State law offenses are

not the gravamen of RICO offenses. RICO

was not designed to punish state law viola-

tions; it was desianed to punish the im-

pact on commerce caused by conduct which

meets the statute's definition of racke-

teering activity. To interpret state law

offenses to have more than a definitional

purpose would be contrary to the legisla-

tive intent of Congress and existing state

law.

560 F. 2d at 1135. See also id. at 1136-38

These cases buttress our conclusion that the

trial court erred in dismissed the debt collec-

tion count. The references to state law in

Section 1961(6) are defintional only: viola-

tion of Section 1962(c) may occur in a state

that has no specific ban of a “business of gam-

bling".

REVERSED AND REMANDED.

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