Petition — Tamer v. United States

Supreme Court brief1981

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Text

Office-Supseme Covvt, U.S.

80-1979 |-#tEED

‘

No. ———

MAY 23 1981

pe Te OS ere ae

L. STEVAS,

LERK

IN THE

Supreme Court of the United States

OcToBER TERM 1980

JAMES TAMER, Petitioner,

Unitep States or AMERICA, Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

A. RAYMOND RANDOLPH, JR.

MicHAEL B. WAITZKIN

SHarP, RANDOLPH & GREEN

Suite 501

1800 Massachusetts Avenue, N.W.

Washington, D.C. 20036

(202) 659-2400

Attorneys for Petitioner

Press or Byron S. ADAMS PRINTING, INC,, WASHINGTON, D. C.

QUESTIONS PRESENTED °

1. Whether in a federal criminal trial a defendant

who is charged in one count of an indictment with two

separate offenses is entitled, upon request, to a una-

nimity instruction directed at that count in order to

protect his right to a unanimous verdict under the

Sixth Amendment.

2. The Travel Act (18 U.S.C. § 1952) makes it a

federal criminal offense to use the facilities of inter-

state commerce to engage in ‘‘unlawful activity’’ under

state law. The second question presented by this case

is whether, in a Travel Act prosecution, the federal

judiciary may, consistent with principles of federalism

and this Court’s interpretation of the Travel Act, de-

fine the predicate ‘‘unlawful activity’’ to include activ-

ity that the legislature of the state has chosen not to

make criminal under state law.

*In addition to petitioner, Charles Goldfarb, James Abraham,

Edward Monazyn and the Aladdin Hotel Corporation were ap-

pellants in the court of appeals.

Petitioner hereby joins in the Petition for a Writ of Certiorari

filed simultaneously with this Petition by codefendant Charles

Goldfarb, which raises three issues that affect the judgment of the

court below affirming petitioner’s conviction.

iii

TABLE OF CONTENTS

Page

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Reasons ror Grantinoe tHe Writ

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TABLE OF AUTHORITIES

Cases : Page

Albernaz v. United States, —— U.S. —— (1981) (101

as BRED Kad CRUD IN TON e cab ededanebeteceenee

Andres v. United States, 333 U.S. 740 (1948) ......... 14

Apodaca v. Oregon, 406 U.S. 404 (1972) ..........06. 14

Braverman v. United States, 317 U.S. 49 (1942) ..... 12, 15

Brown v. Louisiana, —— U.S. —— (1980) (100 S.Ct.

PGE a hduarnsdbakadceeceedse dnendh wens geet es

Burch v. Louisiana, 439 U.S. 925 (1979) ........5055. 14

Carter v. Kentucky, —— U.S. —— (1981) (101 S.Ct.

BRUM wield ou as.n0k0eneeanedsd tacketsvaeneeades 16, 17

Erlenbaugh v. United States, 409 U.S. 239 (1972) ..... 24

United States v. Gordon, 464 F.2d 357 (9th Cir. 1972). 11, 24

Johnson v. Louisiana, 406 U.S. 356 (1972) ........... 14

Perrin v. United States, 444 U.S. 37 (1979) ...... 19, 23, 24

Rewis v. United States, 401 U.S. 808 (1971) ...... 19, 24, 25

Taylor v. Kentucky, 436 U.S. 478 (1978) .........005 16

United States v. Bass, 404 U.S. 336 (1971) ........... 19

United States v. D’ Amato, 436 F.2d 52 (3rd Cir. 1970). 24

United States v. Gipson, 553 F.2d 453 (5th Cir. 1977) .. 10,

14, 15, 16, 18

United States v. Hiatt, 527 F.2d 1048 (9th Cir. 1975) .. 23

United States v. Kahn, 472 F.2d 272 (2d Cir.) ........ 24

United States v. Murray, 618 F.2d 892 (2d Cir. 1980) .. 13,

14, 17,18

United States v. Nardello, 393 U.S. 286 (1969) ... 21, 23, 24

United States v. Pavloski, 574 F.2d 933 (7th Cir. 1978). 17

United States v. Polizzi, 500 F.2d 856, cert. denied, 419

WdeT ED CUPPOE A Nc de bkabicccsedbengnssccceces

—_, * a v. Wilkinson, 601 F.2d 791 (5th Cir.

Table of Authorities Continued

Page

Constitution, STaTUTES AND REGULATIONS:

U.S. Constitution: Sixth Amendment ............. passim

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Gaming Comm. Reg. § 3.100 ............005. 2, 3, 5, 7, 10

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Fed. Rules of Criminal Procedure, Rule 8(a) ........ 13

Fed. Rules of Criminal Procedure, Rule 3l1(a) ....... 14

Law Review ArRtIcLEs:

Comment, United States v. Gipson, Duplicity Denies

a ht to Unanimous Verdict, 1978 Det. C.L. Rev. ‘i

No. ——

IN THE

Supreme Cowt of the United States

OctToBER TERM 1980

JAMES TAMER, Petitioner,

Vv.

Unttrep States or AMERICA, Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. A,

infra) is not yet reported. The opinion of the district

court denying defendants’ motions to dismiss (Pet.

App. B, infra) is reported at 464 F. Supp. 565. The

opinions of the district court entitled ‘‘Opinion Deny-

ing Motion to Dismiss No. 10’’ (Pet. App. C, infra),

‘‘Opinion: Multiplicity of Travel Act Counts’”’ (Pet.

App. D, infra) and ‘‘Opinion Denying Post-Trial Mo-

tions’ (Pet. App. E, infra) are not reported.

JURISDICTION

The judgment of the court of appeals was entered on

March 5, 1981 (Pet. App. F, infra). On April 1, 1981,

the court of appeals denied a timely petition for re-

hearing (Pet. App. G, infra). The jurisdiction of this

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

CONSTITUTIONAL PROVISION, STATUTES AND

STATE REGULATIONS INVOLVED

The Sixth Amendment to the Constitution provides

in pertinent part:

In ail criminal prosecutions, the accused shall

enjoy the right to a speedy and public trial, by an

impartial jury....

The pertinent portions of the Travel Act (18 U.S.C.

§ 1952) ; the federal conspiracy law (18 U.S.C. § 371) ;

the Nevada statutes (Nev. Rev. Stat. §§ 463.150,

463.160(1)(a), 463.335 and 463.360); and Nevada

Gaming Regulations §§ 3.100 and 3.110 are reprinted

in Pet. App. H, infra.

STATEMENT

After a jury trial in the United States District Court

for the Eastern District of Michigan, petitioner and

co-defendants Charles Goldfarb, James Abraham, Ed-

ward Monazyn and the Aladdin Hotel Corporation

were convicted of conspiracy to violate 18 U.S.C. § 1952

(the Travel Act), in violation of 18 U.S.C. § 371. Gold-

farb and Abraham were also convicted of violating the

Travel Act. The jury acquitted petitioner of a similar

charge. The court sentenced petitioner to three years’

imprisonment and a $10,000 fine (App. 5).’

1**App.’’ refers to the Joint Appendix filed in the court of

appeals.

The Travel Act prohibits the use of any facility of

interstate commerce with intent to promote, manage,

establish or carry on ‘‘any unlawful activity’? (18

U.S.C. § 1952(a)(3)). ‘Unlawful activity’ is defined

as ‘‘any business enterprise involving gambling’”’ in

violation of state law (18 U.S.C. § 1952(b)). The re-

vised Indictment ’ in this case described the ‘‘unlawful

activity’ as petitioner’s and Goldfarb’s ‘‘ownership,

operation, conducting and carrying on of gaming op-

erations’ of the Aladdin Hotel and Casino in Las

Vegas, Nevada, without obtaining a state license and

by concealing their interest in the Aladdin, in violation

of Nevada statutes and Nevada Gaming Commission

Regulations (App. 43-46). These alleged State law vio-

lations were accomplished ‘‘through the use of inter-

state telephone lines between Detroit and Las Vegas’’

(Pet. App. 55a).

During the relevant period in 1976 and 1977, peti-

tioner was a part-time employee of the Aladdin, serv-

ing as Director of Music and Entertainment. Petitioner

held the required work permit under Nevada law and

although the corporate licensee (the Aladdin) identi-

fied him to the Nevada Gaming Commission as a ‘‘key

employee’? under Gaming Commission Regulation

3.100, the Commission decided not to require the peti-

tioner to submit to a determination of suitability under

that regulation. App. 679, 687-692, 865-869. Defendant

Goldfarb became a part owner of the Aladdin in 1971,

but when the Aladdin applied to the Gaming Commis-

*The district court ruled that the original Indictment was

multiplicitous and the government then elected the counts on which

the defendants were tried (Pet. App. 49a-54a),

sion for a license, the Commission denied licensing

with respect to Goldfarb because of his ‘‘unsuitable’’

background and associations (App. 627-628). Goldfarb

thereupon disposed of his Aladdin stock, retaining an

option to repurchase, and reapplied to the Commission

for approval as a stockholder of the Aladdin (App.

628, 704). At the time of trial, his application was

still pending (App. 628-629). The Indictment also

named as defendants James Abraham, the Aladdin’s

vice-president and general manager, and Edward

Monazyn, a casino ‘‘host’’ employed by the Aladdin.

The government’s evidence at trial consisted mainly

of intercepted telephone conversations.’ These conver-

sations showed that defendant Goldfarb participated

in the affairs of the Aladdin by arranging for the hotel

to extend complimentary services (room, food and bev-

erages) and gambling credit to a large number of per-

sons (App. 497A, 697, 711) and by attempting to assist

the Aladdin Corporation in its efforts to refinance the

hotel to alleviate cash flow problems (ibid.).

With respect to petitioner, the government sought to

show that he ‘‘was acting in capacities over and above

that of Entertainment Director, as well as assisting

Defendant Goldfarb in his continued surreptitious

management of the Aladdin’’ (Brief for the U.S., at

13). The government introduced evidence of telephone

conversations in which petitioner discussed the sale or

*The government intercepted 14,000 of Goldfarb’s calls during

a 70-day period and 3,000 of petitioner’s calls during a 30-day

period (App. 714). At trial, the government introduced tape

recordings of 96 of these calls.

refinancing of the hotel,‘ management of the casino and

personnel matters. See, e.g., App. 505A-506A.

In its post-trial opinion the district court summar-

ized the government’s case against all defendants:

‘‘Goldfarb was charged with unlicensed operation of

the casino, while Tamer was charged with concealing

his true role there from Nevada authorities. Abraham

was both a co-conspirator and an accomplice to Gold-

farb’s crime. Monazyn was a co-conspirator’’ (Pet.

App. 55a).

As to the ‘‘unlawful activity’? under state law on

which the Travel Act charges rested, the revised In-

dictment charged in separate counts that petitioner

and Goldfarb had violated a state statute, Nevada Re-

vised Statutes § 463.160.1(a), and Nevada Gaming

Commission Regulations 3.100 and 3.110 (App. 43-45).°

The statute, which is set forth at Pet. App. 80a, pro-

hibited ‘‘any person, either as owner, lessee or em-

ployee’’ from operating or maintaining any game or

slot machine in Nevada without first procuring and

then maintaining any required state gaming license.

Under Nevada law, a violation of this provision

constitutes a gross misdemeanor. Nev. Rev. Stat.

§ 463.360(3).

One of the Gaming Commission Regulations cited in

the revised Indictment—Reg. 3.100—required that the

Aladdin submit an annual report identifying each in-

* The government also introduced financial reports of the Aladdin

recovered during a search of petitioner’s business premises in

suburban Detroit, Michigan,

5 The substantive count naming Goldfarb cited, in addition, Ne-

vada Revised Statutes § 463.335 and Regulation 8.060 (App. 43).

dividual involved in the supervision or administration

of gaming operations (Pet. App. 81a). Another cited

Regulation (Reg. 3.110) defined persons listed in the

casino’s annual report as ‘‘key employees”’ and author-

ized the Gaming Commission to decide whether the

public interest required that such key employees should

be licensed (Pet. App. 82a). The Nevada gaming stat-

utes authorized the Gaming Commission to adopt regu-

lations in the public interest (Nev. Rev. Stat. § 463.-

150). However, there was no state statute making vio-

lation of a Commission regulation a criminal offense.

As a result, the government conceded before trial in

this case that a violation of the Gaming Commission’s

regulations could not constitute ‘“‘unlawful activity’’

within the meaning of the Travel Act.*

The district court, however, refused to be bound by

the government’s pretrial concession regarding the

regulations. In its charge to the jury, the court in-

structed (App. 1205-1206) :

Now, as to the meaning of the phrase unlawful

activity in the Travel Act, the State of Nevada has

a comprehensive scheme of regulatory statutes.

Under those statutes a gaming commission and a

gaming board are established and they are com-

manded to and have enacted regulations which

have force of law. It is that law which defines

unlawful activity.

*See Brief in Support of Government’s Response in Opposition

to Defendants’ Joint Motion to Dismiss the Indictment For Failure

to State an Offense, reprinted at App. 138 (‘‘We do not quarrel

with the defense position that violations of the regulations in and

of themselvés are not criminal acts within the purview of the

Travel Act.’’),

Earlier in the case, the district court ruled that under

the Travel Act, a federal court is not bound by state

court interpretations of state law (Pet. App. 32a-35a).

During the trial, the court stated that even though

there may be no unlawful state activity from Nevada’s

perspective, a federal judge applying the Travel Act

was free to interpret the state laws from a federal point

of view and find the necessary ‘‘unlawful activity’’

under state law. See, ¢.g., App. 945-959.

After giving the portion of the instructions quoted

above, the court continued (App. 1206-1208) :

Now, against this general background, the fol-

lowing Nevada statutes are pertinent: Nevada

Revised Statute 463.530 requires that all persons

who require [sic] to become owners or sharehold-

ers in a gaming operation must have come before

the Nevada gaming authorities for determination

as to the suitability for license. The Nevada gam-

ing authorities then make a decision whether to

then issue a license to an applicant. If they deny

the re exaget a license, that person may not then

thereafter exercise any ownership of, operation,

conduct of the gaming affairs of the casino.

Another Nevada statute, NSR 463.130, states

that the violation of these Nevada ing statutes

is a crime, a gross misdemeanor. Thus, by conceal-

ment of his ownership or operation or conduct in

the gaming conspiracy, a person may violate the

Nevada laws.

Keep in mind it is not the concealment itself

which is the violation of the statute I have just

discussed but rather the violation is the unlicensed

ownership or operation of the gaming casino which

is accomplished by concealment.

I now take up another aspect of the Nevada laws

on gambling. One of the regulations, [3.100], which

is mandated by Nevada statute is required [sic],

all holders of non-restricted licenses to disclose to

the Nevada gaming authorities names of all per-

sons reso any Moca, maven control and influence

over gaming. Any rig 7 in such activities must

also be reported to the Nevada gaming authorities

because of a strong state policy requiring disclo-

sure of all persons who have significant control and

influence as to gaming, and because of the statu-

tory command that all gaming licenses which,

whether held by a corporation such as the Aladdin

Hotel or by individuals, must be maintained in

conformity with all relevant provisions.

I instruct you that it is illegal under Nevada

gaming laws for anyone exercising a significant

control and influence as to gaming to conceal that

control and influence from the Nevada gamin

authorities. The essence or gist of the violation

have just outlined is concealment, for which fail-

ure to disclose, this must be contrasted with the

first instance of violation I described earlier, that

violation having to do with an unlawful—or un-

lawful licensing violation of the Nevada casino,

where the concealment is a means to achieve the

violation but not itself the actual unlawful activity.

Petitioner objected to the foregoing instructions,

which related to the conspiracy count of the Indict-

ment, on the grounds that the court improperly deter-

mined that violation of a Nevada Gaming Commission

regulation could serve as the necessary ‘‘unlawful ac-

tivity’? under the Travel Act and that the court had

improperly instructed that concealment could consti-

tute a violation of the Nevada gaming ‘“‘laws’’. App.

377-381. (Although the court had instructed that con-

cealment was itself ‘‘illegal’? under Nevada law, see

also Pet. App. 58a n.1, the government earlier in the

case had conceded that ‘‘concealment is not a crime’’

(App. 943).)

Petitioner also objected to the court’s defining two

possible conspiracies on which the jury could convict

on Count 4 without at least giving petitioner’s proposed

instruction requiring the jury to be unanimous with

respect to a particular conspiracy (App. 382-383). The

two conspiracies defined in the court’s charge were, as

the court itself described them, (1) a ‘‘Goldfarb cen-

tered’’ conspiracy to operate the Aladdin through Gold-

farb’s unlicensed operation; and (2) a ‘‘Tamer cen-

tered’’ conspiracy to operate the Aladdin by conceal-

ing petitioner Tamer’s role (Pet. App. 62a, 58a n.1).

The court’s failure to give the requested charge, peti-

tioner argued, deprived him of his right to a unani-

mous verdict because, for example, six jurors could

have found that only the first conspiracy had occurred

while six could have found that only the second had

transpired and yet the jury could return a verdict of

guilty on the conspiracy count.

In post-trial proceedings, the government retreated

from its concession at trial that a violation of the

Nevada Gaming Commission regulations could not con-

stitute ‘‘unlawful activity’’ within the meaning of the

Travel Act. See p. 6 n.6 supra. After trial, the prose-

cutor took the position ‘‘that a violation of the Regu-

lations alone would predicate a Travel Act violation.’’'

The prosecutor explained that this is why the govern-

ment had not objected to the court’s instructions quoted

*Government’s Omnibus Response and Memorandum ‘1 Opposi-

tion to Defendant’s Post Trial Motions And Excepticus to the

Jury Charge, at p.10 n.1.

above, which defined ‘“‘unlawful activity” in terms of

the regulations alone."

In its opinion denying defendants’ post-trial mo-

tions, the trial court stated that if either one of its

theories of ‘unlawful activity’? was incorrect, the con-

victions on Count 4 (conspiracy) would have to be re-

versed because ‘‘it would be possible that the jury con-

victed on the basis of a conspiracy to do non-illegal

acts’’ (Pet. App. 62a, n.3). As to the instructions re-

garding the ‘‘Tamer centered’’ conspiracy, with con-

cealment in violation of Regulation 3.100 as the ‘‘un-

lawful activity’’ under the Travel Act (see Pet. App.

58a n.1), the court held that regulations were required.

under Nevada law, that the regulations had the force

of law and that unless an individual could be prose-

cuted there ‘‘would be a gap in the effect of the statu-

tory network”’ (Pet. App. 73a). The court also rejected

petitioner’s argument that the court’s instructions on

the conspiracy count deprived him of his right to a

unanimous verdict. Distinguishing United States v.

Gipson, 553 F.2d 453 (5th Cir. 1977), the district court

held that absent some evidence of impropriety, it must

be presumed that a verdict is regular (Pet. App.

60a-62a).

The court of appeals affirmed in a confusing opinion.

In regard to the jury instructions on ‘‘unlawful activ-

ity’’ within the meaning of the Travel Act, the court of

appeals first characterized the district court’s opinion

as holding that commission or attempted commission

of a state criminal offense is not an essential element

* Jd. The Government did not, however, withdraw its concession

that a violation of the Gaming Commission Regulations did not

constitute a crime under Nevada law, See p. 9 supra,

of a Travel Act violation (Pet. App. 6a). The appellate

court later indicated that it agreed with the district

court’s interpretation of Nevada law (id. at 17a). Nev-

ertheless, the court observed that a violation of a Gam-

ing Commission regulation could not ‘‘in and of itself’’

form the predicate state law violation under the Travel

Act (id. at 12a). The court then appeared to suggest

that because the government iad at one point dis-

claimed reliance on the regulations alone, the verdict

could be sustained on the basis that the jury had not

been instructed that non-criminal Nevada regulations

defined unlawful activity under the Travel Act (Pet.

App. 14a-15a).° (The jury, of course, had been so in-

structed and the government in its post-trial submis-

sion recognized as much, justifying its failure to object

on the basis that it had changed its view about whether

a non-criminal regulatory violation, without more,

could serve as ‘‘unlawful activity’? under the Travel

Act, see p. 9 supra; Pet. App. 58a n.1).

Although petitioner had devoted a significant portion

of his appellate brief to the argument that the court’s

instructions on the conspiracy count deprived him of

his constitutional right to a unanimous verdict, the

court of appeals never addressed the issue.”

* Adding to the confusion, the court of appeals seemed to express

disagreement with United States v. Gordon, 464 F.2d 357 (9th Cir.

1972), which held that violation of Nevada’s nonpenal gaming

regulations did not constitute ‘‘unlawful activity’’ under the

Travel Act, Pet. App. 14a,

The court disposed of a duplicity argument by codefendant

Goldfarb regarding his conviction on Count 1 of a substantive

violation of the Travel Act by stating merely that the jury had

been instructed its verdict had to be unanimous, Pet. App. 18a.

REASONS FOR GRANTING THE WRIT

The question whether petitioner was denied his right

to a unanimous jury is raised not by a construction of

the Indictment but by the trial court’s charge to the

jury. The court instructed that the jury could convict

on the conspiracy count if it found either an agreement

to operate the Aladdin in violation of state law through

concealment of petitioner’s role or an agreement to

operate the Aladdin illegally under state law because

of Goldfarb’s lack of a license.” In light of the instruc-

tions setting forth two different conspiracies under a

single count—one Tamer centered and one Goldfarb

centered (Pet. App. 62a)—petitioner requested * an

“In its opinion after trial, the district court held that it had

instructed the jury on two conspiracies. The court stated that the

jury was ‘‘told that either a Tamer-centered or a Goldfarb-centered

agreement could be found, or both. .. .’’ (Pet. App. 62a). The court

of appeals did not dispute the district court’s view of the jury

instructions.

This case is therefore not within the rule of Braverman v. United

States, 317 U.S. 49, 53 (1942), that ‘‘the one agreement cannot be

taken to be several agreements and hence several conspiracies be-

cause it envisages the violation of several statutes rather than one.’’

See United States v. Wilkinson, 601 F.2d 791 (5th Cir. 1979). Here,

the case went to the jury after a charge defining two agreements

that could serve as the basis for a conviction on a single conspiracy

count. Each alleged agreement constituted a separate offense. As

the Court held in Braverman (id. at 53), ‘‘the precise nature and

extent of the conspiracy must be determined by reference to the

agreement which embraces and defines its objects.’’

12 Before the close of the case, the court had indicated that it

would charge two conspiracies, The court denied petitioner’s motion

for judgment of acquittal, stating (App. 1161-1162) :

As to the defendant Tamer, there is evidence that the de-

fendant Tamer was involved in conduct, arranging—for ex-

instruction that the jury must be unanimous about the

particular agreement forming the basis for the con-

spiracy.”

The trial court’s refusal to give a unanimity instruc-

tion directed to the conspiracy count, we submit, vio-

lated the petitioner’s constitutional right to a unani-

mous verdict * and presents a question of recurring

importance in the administration of federal criminal

law. The issue, as Judge Feinberg recently stated for

the court in United States v. Murray, 618 F.2d 892,

897 (2d Cir. 1980), poses ‘‘difficulties’’ for the federal

courts and should “‘be authoritatively resolved at a

higher level before too long.”’”

tension of credit, for arranging for financing of the casino and

in conduct involving personnel decisions. Thus, it could be

found that he conspired with his co-defendants in concealing

his real role and his involvement with the casino, as well as

a conspiracy in which he joined to conceal the defendant

Goldfarb’s real role in the Aladdin.

8 Petitioner’s proposed instruction is set forth at App. 325.

Petitioner filed formal exceptions contesting the court’s failure to

give his proposed charge or any other instruction protecting peti-

tioner’s right to a unanimous verdict (App. 382-383).

Rule 8(a) of the Federal Rules of Criminal Procedure requires

that separate offenses be stated in separate counts of an indictment.

We do not claim, however, that this rule of pleading was violated.

The indictment itself appeared to charge a single conspiracy and

the government represented at trial that Count 4 alleged only one

conspiracy ‘‘against both [petitioner and Goldfarb] to own, manage

and operate’ (App. 1170). It was the district court, without the

concurrence of the prosecution or the defense, that devised instruc-

tions encompassing two separate conspiracies. See note 11 supra.

** Emphasis added. The question in Murray was whether a single

count charging a conspiracy to import and a conspiracy to dis-

tribute marijuana and cocaine (21 U.S.C. §§ 846, 963) deprived the

defendants of their right to a unanimous verdict. 618 F.2d at 896.

The difficulties mentioned in Murray do not stem

from any dispute about whether unanimous verdicts

are required. This Court has for many years adhered

to the view that in federal criminal cases the accused’s

Sixth Amendment right to trial by jury entails a right

to a unaminous verdict.’* However, as Judge Wisdom

stated in United States v. Gipson, 553 F.2d 453, 456

(5th Cir. 1977), ‘‘the scope of that right, unfortunately,

is not”’ clear.

In (Gipson two offenses were charged in a single

count ” and the court’s instructions allowed the jurors

to convict even if they did not agree about which of

The court observed that there was a conflict in the circuits regard-

ing whether these conspiracies, when charged in separate counts,

could serve as a basis for multiple punishment. This conflict, the

court stated, highlighted the difficulty and importance of the ques-

tion actually presented in Murray (and in this case). Jd. at -%7.

After the decision in Murray, this Court decided Albernaz v.

United States, US. (1981) (101 S.Ct. 1137), which held

that consecutive sentences could be imposed for a conspiracy to

import and a conspiracy to distribute marijuana. In light of Alber-

naz, there can be no doubt that Murray stands for the proposition

that two separate conspiracies may be charged in a single count

without violating the Sixth Amendment, Murray differs from the

instant case because the defendants there failed to make a timely

objection. See 618 F.2d at 899 n.8.

See Andres v. United States, 333 U.S, 740, 748-749 (1948) ;

Johnson v. Louisiana, 406 U.S. 356 (1972); Apodaca v. Oregon,

406 U.S. 404 (1972); and Justice Powell’s concurring opinion in

Johnson and Apodaca, 406 U.S. at 369-371; compare Burch v.

Louisiana, 439 U.S, 925 (1979) (state criminal trials). See also

Rule 31(a), Fed. R. Crim. Pro.

** The instant case, like Gipson, does not involve a single count

charging one offense committed by multiple means, Compare United

States v. Murray, supra, 618 F.2d at 896; and see note 11 supra.

the two offenses the defendant had committed, so long

as each juror thought that the defendant had commit-

ted one or the other offense. The court reversed Gip-

son’s conviction because ‘‘under the instruction, the

jury was permitted to convict Gipson even though there

may have been significant disagreement among the

jurors as to what he did.’’ 553 F.2d at 458-459.”

Discussing the ‘‘policy underlying the unanimous

jury right,’’ Judge Wisdom reasoned that the unanim-

ity rule, like the reasonable doubt standard, forces the

jury to focus on the need for reaching a degree of cer-

tainty about the facts and for deciding what the de-

fendant actually did before determining whether he is

guilty. 553 F.2d at 457-458. When, as in this case, a

single count encompasses two possible conspiracies, the

jury must be instructed to focus on the agreement

‘‘which embraces and defines [the conspiracy’s] ob-

jects.’’ Braverman v. United States, supra, 317 U.S. at

53. Unless the jury is so instructed, the defendant’s

right to a unanimous verdict is not secure.

A general unanimity instruction, such as that given

in this case near the end of the court’s lengthy charge,

cannot substitute for the specific charge petitioner re-

quested with respect to the conspiracy count. The court

told the jury (App. 1232-1233) :

Your verdict must represent the unanimous con-

sidered judgment of each juror. In order to return

your verdict, each of you must agree thereto, if you

ean. Your verdict must be unanimour

Under this general charge, the jurors could reasonably

have thought that so long as they were unanimous that

18 See generally Comment, United States v. Gipson: Duplicity

Denies Right to Unanimous Verdict, 1978 Det.C.L, Rev. 319,

petitioner entered into a conspiracy, their guilty ver-

dict on Count 4 complied with the court’s instructions

even though they disagreed on which of the two con-

spiracies set forth in the court’s instructions was

proven. As Judge Wisdom stated for the court in Gip-

son, supra, 553 F.2d at 458, ‘Requiring the vote of

twelve jurors to convict a defendant’’—which is all the

general unanimity charge did in this case—‘‘does little

to insure that his right to a unanimous verdict is pro-

tected unless this prerequisite of jury consensus as to

the defendant’s course of action is also required.”

In order to implement constitutional rights, the

Court in recent years has required trial judges, upon

request, to instruct that a defendant’s failure to testify

cannot be used against him (Carter v. Kentucky, ——

U.S. —— (1981) (101 S.Ct. 1112)); that a defendant

is presumed innocent (Taylor v. Kentucky, 436 U.S.

478 (1978); and that an indictment lacks evidentiary

significance (ibid.). ‘‘Jurors are not experts in legal

principles; to function effectively, and justly, they

must be accurately instructed in the law’’ (Carter v.

Kentucky, supra, 101 8.Ct. at 1120).

There is no sound reason why a federal defendant’s

Sixth Amendment right to a unanimous verdict should

stand on any different footing. When a defendant in a

federal criminal case faces a single count of an indict-

ment that encompasses two or more offenses, the defend-

ant should at least be entitled to a specific unanimity

charge with respect to that count. This Court’s reason-

ing with respect to the Fifth Amendment privilege ap-

plies as well to a defendant’s Sixth Amendment right:

‘A trial judge has a powerful tool at his disposal to

protect the constitutional [right to a unanimous ver-

dict]—the jury instruction—and he has an affirmative

constitutional obligation to use that tool where a de-

fendant seeks its employment.’’ Carter v. Kentucky,

supra, 101 §.Ct. at 1120.

The Seventh Circuit appears to agree. Although sus-

taining the conviction of a defendant who had not re-

quested a specific charge aimed at a count charging two

offenses, the court in United States v. Pavlosk:, 574

F.2d 933, 936 (7th Cir. 1978), indicated that it would

reach a different result when a defendant has tendered

‘fan appropriate instruction to the effect that the

jurors must agree on at least one act... .’’”® In the

instant case, petitioner tendered such an instruction

and neither the district court nor the court of appeals

offered any reason why it should not have been given

in order to protect petitioner’s Sixth Amendment right

to a unanimous verdict.

United States v. Murray, supra, and the cases there

cited, 618 F.2d at 898-899, sustained convictions on

counts charging two or more offenses on the basis that

it could be ‘‘assumed”’ the jury acted unanimously. But

a defendant’s Sixth Amendment right to a unanimous

verdict, which ‘‘fundamentally implicates’’ the integ-

rity of the fact-finding process,” should not be made

to rest on an assumption when the defendant has re-

quested specific protection through a jury instruction.

Without such an instruction there is simply no way

of assuring that the verdict is truly unanimous. The

jurors themselves may otherwise not even be aware of

1° One count of the indictment in Pavloski charged both convert-

ing and embezzling by means of forged checks, and skimming cash

dues and initiation fees, in violation of 29 U.S.C, § 501(c). 574

F.2d at 936.

*” Brown v. Louisiana, —— U.S. —— (1980) (100 S.Ct, 2214,

2223) (plurality opinion of Justice Brennan).

their differences. A vote of twelve to convict on the

conspiracy count would not reveal, for example, that

six jurors concluded petitioner had entered into an

agreement different from that found by the remaining

jurors. The growing complexity of federal criminal

trials, as illustrated by this case, increases greatly the

need for specific unanimity instructions in such situa-

tions and the danger that a verdict of guilty on a count

charging two offenses does not represent the conclusion

of all twelve jurors that the defendant committed the

same offense.

The issue presented is significant. Only this Court

can cure the ‘‘unfortunate”’ lack of clarity regarding

the scope of a federal defendant’s right to a unanimous

verdict.” The constitutional issue is squarely raised

and review by this Court is warranted.

The second important issue raised by this case is

whether a federal judge, in a Travel Act prosecution,

can substitute his judgment for that of a state legisla-

ture in defining the illegal conduct under state law that

serves as a basis for violation of the Act.”

*1 See Judge Wisdom’s opinion for the court in United States v.

Gipson, supra, quoted at pp. 14-16, supra; and Judge Feinberg’s

remarks about the need for Supreme Court review in United States

v. Murray, supra, quoted at p. 13 supra.

*? As set forth more fully above, pp. 12-13 supra, the conspiracy

count charged two district theories of illegality—a Goldfarb-cen-

tered conspiracy and a Tamer-centered conspiracy. Both theories

were grounded in the respective defendant’s alleged violation of the

Travel Act. The manner in which the trial court instructed the

jury required that both theories be valid. As the trial court con-

ceded, if either theory were incorrect, the verdict must be set aside

(Pet App. 62a, n.3), Thus, if the court’s interpretation of the

Travel Act respecting petitioner’s conduct is erroneous, his con-

spiracy conviction must be reversed.

The Travel Act is peculiar among federal statutes.

It prescribes the use of any facility of interstate com-

merce with the intent tg engage in ‘‘unlawful activity’’,

a phrase the Act defines as ‘‘ violation of the laws of the

State[s].” 18 U.S.C. § 1952(b). As this Court has ob-

served, “the federal [offenses] are defined by reference

to existing ... law.’’ Perrin v. United States, 444 U.S.

37, 42 (1979). In the Act, Congress struck a delicate

balance between the traditional initiatives of the states

and the interests of the federal government in a more

aggressive response to organized crime. In so doing,

Congress allowed federal law enforcement authorities

to undertake prosecutions in certain limited situations

where, although no substantive federal criminal stat-

utes had been violated, certain state offenses had been

committed through the use of the facilities of interstate

commerce. The statute represents a considerable in-

trusion into an area previously reserved to the states

and, accordingly, this Court has recognized the need for

a narrow interpretation in order to avoid altering

‘‘sensitive federal-state relationships.’’ Rewis v. United

States, 401 U.S. 808, 812 (1971). See also United States

v. Bass, 404 U.S. 336, 349-350 (1971).”

The view of the Travel Act adopted by the courts

below dramatically shifts this careful balance, granting

prosecutorial authority to the federal government and

criminal jurisdiction to the federal courts far beyond

that contemplated by Congress. The courts below aban-

doned the requirement that a defendant’s conduct must

**The Travel Act did not expand the category of proscribed be-

havior or make unlawful any conduct that had been previously

unregulated. Instead, it converted existing state criminal laws into

federal offenses. The Act thus enabled federal law enforcement

authorities to assist the states in enforcing their laws.

violate an “existing state law’’ as positively enacted by

the state legislature. Instead, the district court declared

what it thought the state law sought to be, and found

petitioner’s violation of that construction sufficient to

justify prosecution under the Travel Act.

Such an expansive interpretation of the Travel Act

far exceeds the intentions of Congress, misinterprets

the decisions of the Court, raises serious questions

about the vagueness of the statute, and has significant

federalism implications. Here there was no Nevada

criminal statute proscribing petitioner’s conduct. None-

theless, the trial court held the Travel Act to be appli-

cable because petitioner’s conduct offended the policy

underlying Nevada’s statutory and regulatory frame-

work. The court found, that viewed from a ‘‘federal

point of view,” petitioner’s conduct was unlawful and

could therefore provide the necessary predicate for a

Travel Act violation.“ A federal court in Michigan

thus read into Nevada law a statute the Nevada legis-

lature had never enacted.

The ‘‘crime’’ petitioner ostensibly committed was

conspiring to conceal his role in the management of the

Aladdin Hotel from the Nevada Gaming Commission.

Pet. App. 58a n.1. Such concealment is not a crime

under the Nevada Revised Statutes, as the government

** As the court explained in colloquy with counsel (App. 945) :

I would say it is the unlawful activity within the state viewed

from the federal point of view.

That’s different from saying the unlawful state activity. There

may not be any unlawful state activity if you look at it from

her standpoint, simply from the way a Nevada judge would

at it.

conceded.” The district court, in its instructions and

in its post-trial opinion described ‘‘the illegal conduct

alleged against Tamer [as] causing to be concealed or

aiding in the concealment of his true role at the casino—

in violation of Regulation 3.100.1” (Pet. App. 58a

n.1). The Nevada Gaming Commission is authorized by

* The following colloquy occurred during argument on motion

for judgment of acquittal (App. 932-933) :

Tue Court: [I]f this prosecution were going on in Nevada, if this

were not a Travel Act violation, if this were not Federal Court,

if this were a State prosecution, there would be a great difficulty

in this, would there not? There is a hole in the Nevada statute,

is that not right?

[Derense Counset]: Absolutely.

[Prosecutor]: There are a lot of holes in the Nevada statute.

Tue Court: No, there is a significant hole in the Nevada statute

as a state procedure?

[Prosecutor]: Yes, and that is entirely irrelevant to this Court’s

determination,

At a later point, the court inquired further (App. 940-941) :

Tue Court: If I hear you correctly, what you are saying is that

even though this may not be a violation under Nevada law, that

under federal law, under Nardello [United States v. Nardello, 393

U.S. 286 (1969)], the concealment by the defendants here is a

crime here, because otherwise the whole statutory scheme could be

evaded.

[Prosecutor] : That’s correct.

The government reaffirmed this position in a submission to the

court at the conclusion of trial, entitled Government’s Theory of

the Case (App. 283) :

[E]ven though concealing the name of a person who is in

fact a gaming _— is not a violation of a specific Nevada

statute, the ‘strong State policy on gaming’ has disclosure as

its linchpin. Unless those charged with regulating gaming

know who is conducting gaming, the entire investigative and

review process at the State level becomes meaningless charade.

The Nevada law pertinent to this case cannot reasonably be

interpreted to have been enacted as an empty gesture.

statute to promulgate regulations in the public interest

(Nev. Rev. Stat. § 463.150) and has certain authority

to enforce its regulations, but a violation of those regu-

lations is not a criminal offense, as the government also

conceded (see pp. 8-9 supra).

Although there was thus no state statute on which to

base petitioner’s federal offense, the trial court held

that it was not bound by the limitations of the state

criminal code in defining ‘‘unlawful activity’? under

the Travel Act:

Ney are concerned with a question of federal

aw; namely, the existence or non-existence of a

Travel Act violation. I am not directly concerned

with the content of the Nevada Gaming law.

{ <.y Denying Motion to Dismiss, Pet. App.

Instead, the trial court ruled that the state law must

be examined from :a ‘‘federal view”’ and from that per-

spective the court must make a judgment whether a

‘‘violation of the laws of the State’’ had occurred:

The federal judiciary is empowered to declare the

governing law in areas that are substantially re-

lated to a program of national governmental oper-

ation. ... I view the issue as federal incorporation

of state law by reference. That is, the Travel Act

incorporates Nevada state law in the area of

— ing. Considered thus, even more latitude in-

She) in the federal judiciary. (Pet. App. 34a-

The trial court examined the policies underlying

Nevada’s regulation of gambling and concluded that

the kind of conduct engaged in by petitioner could re-

sult in the evasion of the entire statutory scheme.

Therefore, although no specific state statute made con-

cealment unlawful, it was nonetheless ‘‘unlawful activ-

ity’’ when considered from a ‘‘federal viewpoiut.”’

In the trial court’s view, the federal governinent was

thus not to be restricted by either the state legislature

or the state courts:

To saddle the federal government with the state’s

interpretation would allow the state to eviscerate

the Travel Act and frustrate a federal solution to

a problem of national scope. ... It would be self-

defeating for the federal government to adopt

state notions of illegality. (Pet. App. 35a.)

In adopting this broad notion of the authority of fed-

eral courts, the trial court relied upon this Court’s de-

cision in United States v. Nardello, 393 U.S. 286 (1969),

which it interpreted as holding that state law does not

control and that ‘‘the essential question is whether the

type of activity under prosecution is generally or usu-

ally of a type subject to criminal sanctions” (Pet.

App 36a), an interpretation the court adhered to

throughout the trial. See n.25 supra.

The lower court’s reading of Nardello constitutes an

unwarranted and extraordinary expansion of the

Travel Act. Nardello held only that the determination

whether a defendant’s conduct is ‘‘unlawful activity’’

under the Travel Act does not turn on the particular

label a state legislature attaches to a criminal statute,

but whether the conduct involved is, in fact, in viola-

tion of an existing state Jaw. (The indictment charged

‘‘extortion’’; the statute was labeled ‘‘backmail.’’) 393

US. at 539. The premise of Nardello—and the Travel

Act—is that the defendant’s conduct or intended con-

duct must be proscribed by some state criminal statute.

See Perrin v. United States, supra, 444 U.S. at 48;

United States v. Hiatt, 527 F.2d 1048 (9th Cir. 1975) ;

United States v. Kahn, 472 F.2d 272 (2nd Cir.), cert.

denied, 411 U.S. 982 (1973) ; United States v. D’ Amato,

436 F.2d 52 (3rd Cir. 1970). In the absence of such a

state penal law there can be no federal offense, as the

court held in United States v. Gordon, 464 F.2d 357

(9th Cir. 1972), a prosecution based on a violation of

Nevada Gaming Regulations and a case the court of

appeals here sought to distinguish (Pet. App. 14a).”

Neither Nardello nor any other decision of this

Court has held—as the district court stated—that the

issue underlying the applicability of the Travel Act is

whether the ‘‘unlawful activity” is of a type ‘‘gen-

erally or usually ... subject to criminal sanctions’

(Pet. App. 36a). In every case the question has been

whether the violation of a specific, existing state crimi-

nal statute may form the predicate for a Travel Act

violation. See United States v. Nardello, supra (Penn-

sylvania blackmail statutes); Rewis v. United States,

supra (Florida anti-lottery laws); Hrlenbaugh v.

United States, 409 U.S. 239 (1972) (Indiana book-

making statute); Perrin v. United States, supra

(Louisiana commercial bribery statute).

*° Both the trial court and the court of appeals relied heavily on

another Ninth Cireuit decision, United States v. Polizzi, 500 F.2d

856, cert. denied, 419 U.S, 1120 (1975). Unlike this case, the

prosecution there was based on a violation of a specific section of

the Nevada code, (Nev. Rev. Stat. § 463.170), which required that

‘fall persons having any direct or indirect interest [in a corpora-

tion holding a gaming license] . . . whether financial, administra-

tive, policy making or supervisory’’ be qualified to be licensed.

While that statute might arguably have addressed petitioner’s

conduct, it has since been repealed, Contrary to the court’s holding

here, Polizzi held that ‘‘[a] violation of § 1952 . . . must be prem-

ised upon another distinct violation of state or federal law’’ Id.

at 869,

The contrary view, adopted by the trial court here in

its opinions and its instructions—a view sanctioned by

the court of appeals—expands the Travel Act to en-

compass not only state criminal offenses but also state

non-penal regulatory violations that a federal court

believes ought to be criminal offenses. Such an un-

bounded interpretation of the authority of the federal

judiciary in Travel Act prosecutions is incons.stent

with the intention of Congress, is a serious threat

to “sensitive federal-state relationships’ (Rewis v.

United States, supra, 401 U.S. at 812), and is com-

pletely at odds with this Court’s decisions seeking to

contain the Travel Act within its proper limits.

CONCLUSION

For the foregoing reasons, the petition for a writ

of certiorari should be granted.

Respectfully submitted,

A. RayMonp RANDOLPH, JR.

MicHakEL B. WaItzKIN

SHarp, RANDOLPH & GREEN

Suite 501

1800 Massachusetts Avenue, N.W.

Washington, D.C, 20036

(202) 659-2400

Attorneys for Petitioner

May 1981

APPENDIX

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Nos. 79-5255, 79-5317, 79-5318, 79-5319, 79-5320

Unrrep States or America, Plaintiff-Appellee,

Cuar.es Gotprars, JaMEsS TAMER, JAMES ABRAHAM, Epwarp

Monazym, and Tue Atappin Hotei Corporation,

Defendants-A ppellants.

Appeal from the United States District Court

for the Eastern District of Michigan.

Decided and Filed March 5, 1981.

Before: Weick, Livery and Brown, Circuit Judges.

Weick, Circuit Judge. Appellants Charles Goldfarb and

James Abraham appeal from judgments of conviction en-

tered upon jury verdicts of guilty of the substantive of-

fense prescribed by the Travel Act, 18 U.S.C. § 1952." All

218 U.S.C. § 1952 provides in pertinent part that:

(a) Whoever travels in interstate or foreign commerce or uses

any facility in interstate or foreign commerce, including the

mail, with intent to—

(3) ... promote, manage, establish, carry on, or facilitate the

promotion, management, establishment, or carrying on, of any

unlawful activity,

and thereafter performs or attempts to perform any of the

acts specified in subparagraphs (1), (2), and (3) shall be fined

not more than $10,000 or imprisoned for not more than five

years, or both.

(b) As used in this section ‘‘unlawful activity’’ means (1)

any business enterprise involving gambling . . . in violation

of the laws of the State in which they are committed or of the

United States, . . .

of the appellants appeal from judgments of conviction for

conspiracy to violate the Travel Act, 18 U.S.C. § 371.’ The

appeals were consolidated for oral argument.

The appellants raise a number of issues on appeal® in

their separate briefs. Each appellant assigns errors which

218 U.S.C, § 371 provides:

If two or more persons conspire either to commit any offense

against the United States, or to defraud the United States, or

any agency thereof in any manner or for any purpose, and

one or more of such persons do any act to effect the object of

the conspiracy, each shall be fined not more than $10,000 or

imprisoned not more than five years, or both,

If, however, the offense, the commission of which is the object

of the conspiracy, is a misdemeanor only, the punishment for

such conspiracy shall not exceed the maximum punishment

provided for such misdemeanor,

* These include the following:

(a) Appellant Tamer raises issues dealing with the denial of

his right to a unanimous verdict, the trial court’s failure to

exclude certain evidence, the court’s instructions to the jury

and denial of his motion to suppress.

(b) Aladdin contends that the conspiracy against it was a legal

and factual impossibility; that the indictment should have

been dismissed for vagueness or in the alternative that the

court erred in failing to grant the motion for a bill of particu-

lars; and that the court erred in failing to grant its motion for

severance.

sufficient to support his conviction ; that certain evidence of an

uncharged conspiracy should not have been admitted; that

certain in camera proceedings conducted to the exclusion of

Abraham constitute reversible error; and that he was entitled

to a mistrial as a result of the prosecution’s allegedly irrele-

vant and prejudicial questioning of a character witness.

(d) Monazym challenges the sufficiency of the evidence against

him ; alleges the existence of multiple conspiracies and preju-

pertain specifically to the government’s case against him,

and the appellants together present a number of common

arguments. One such common argument has several facets

and is variously formulated by each appellant. It relates

to the treatment by the court of Gaming Regulations

promulgated by the Nevada Gaming Commission pur-

suant to statutory authority, violations of which appel-

lants claim do not constitute unlawful activity as prohibited

by the Travel Act.

Disrict Judge Feikens carefully considered all of these

issues in his “Opinion Denying Post Trial Motions” for

judgments of acquittal, new trial, and arrest of judgment.

App. 438-458. We agree with his decision and affirm the

judgments of conviction for the reasons set forth therein

on which we will elaborate hereinafter.

Judge Feikens denied a pretrial motion of the defandants

to dismiss the indictment in an opinion reported in United

States v. Goldfarb, 464 F. Supp. 565 (E. D. Mich. 1979) in

which he ruled upon the constitutionality of the Nevada

Gaming Control Act and held it was not unconstitutional as

being violative of the due process rights of defendant Gold-

farb who was denied a gaming license.

dicial variance; and claims violations of his 6th Amendment

right to counsel as a result of the in camera proceedings which

were conducted to his exclusion.

(e) Other aspects of the ‘‘common argument’’ involve vari-

ance and amendment of the indictment, and misstatements and

misconstructions of Nevada statutes and regulations.

(f) Each appellant expressly adopts the arguments of his co-

appellants to the extent they apply pursuant to the Federal

Rules of Appellate Procedure, Rule 28(i).

All of these issues were carefully considered by District Judge

Feikens in his ‘‘Opinion Denying Post Trial Motions’’ for

judgments of acquittal, new trial, and arrest of judgment.

App. 438-458,

In these appeals, the parties have filed four volumes of

appendices, 4,000 pages of transcripts, and tapes recording

conversations played for the jury but not included in the

transcripts.

Mostly issues of law are raised in the briefs. The brief of

Goldfarb’s counsel commendably states: “The sufficiency of

the evidence to sustain the jury verdict is not in question

here.”

Goldfarb had a remedy in the state court of Nevada

which he invoked to compel the issuance of a license to him

but he dismissed the suit. The trouble here is that Gold-

farb and the other defendants, by concealment and viola-

tion of Nevada statutes and their implementing regulations

authorized by the statutes, were actually engaged in the

illegal unlicensed management, maintenance, control and

operation of the hotel and casino.

Defendant-appellant Charles Goldfarb was a bondsman

who resided in Birmingham, Michigan. In 1971, he and a

small group of investors purchased the Aladdin Hotel and

casino, located in Las Vegas, Nevada, which at that time

was owned by the Recrion Corporation. Goldfarb then ap-

plied to the State Gaming Control Board/Nevada Gaming

Commission for licensure as a stockholder-officer of the new

corporation, Aladdin Hotel Corporation. His request was

denied when the Navada Gaming Commission determined

that he had an “unsuitable background and unsuitable asso-

ciations.” Goldfarb then divested himself of his eight per-

cent (8%) interest in the hotel-casino. He later acquired an

option to purchase stock from a licensed stockholder of the

new corporation and reapplied for a stockholder’s license.

That application is still pending and has not been ruled

upon by the Commission. Apparently, it has not been

pressed.

The bulk of the evidence presented against the appellants

consisted of over 100 telephone conversations intercepted

by the government agents pursuant to court authorization.

In all, approximately 15,000 calls were intercepted. The

conversations introduced at trial were between Goldfarb

and his co-defendants: James Tamer, the Entertainment

Director of the Aladdin; James Abraham, the Executive

Vice-President and General Manager of the Aladdin, and

Edward Monazym, a Casino employee, as well as some calls

between third parties and the various co-defendants.

The evidence adduced at trial showed that Goldfarb, hav-

ing failed in his attempt to become a licensee owner of the

hotel casino, did with the aid of the other defendants, main-

tain a secret and illegal role in the ownership, operation,

conducting and carrying on of the gaming operations of the

hotel casino. He recommended complimentary services, in-

cluding free accommodations, for certain customers and

had a hand in arranging for the extension of credit for

individuals whom he sent to the hotel. His advice and as-

sistance was sought and given concerning certain financial

problems of the hotel as well, including arrangements for

emergency financing with false net worth statements to an

unnamed bank or banks and also possible sale or lease of

the hotel. He finally arranged for a loan from the Team-

sters Pension Fund. The government contended that this

was in keeping with the defendants’ scheme to engage in

the clandestine ownership, conducting and carrying on of

the gaming operations of the Aladdin by persons not li-

censed to do so and whose interest in the casino had been

concealed from the state in violation of certain Nevada

statutes and regulations.

The defendants contended that the evidence was per-

fectly consistent with the fact that Goldfarb was a valued

customer of the casino; a former investor, and possibly a

future stockholder-officer of the corporation; a close asso-

ciate of the management personnel of the hotel; and an

individual who had used his contacts to direct many so-

called “highrollers” to the hotel, many of whom then became

regular customers who lost large sums in gambling.

This was a disputed issue of fact requiring resolution by

the jury.

The Travel Act, as applied to the instant case, required

that a facility of interstate commerce (here a telephone) be

used to promote, establish, carry on, etc., an unlawful activ-

ity. “Unlawful activity” is defined as any business enter-

prise involving gambling offenses in violation of the laws

of the state in which they are committed.‘

There is some dispute as to the nature and essentiality of

the underlying state law violation, although most decisions

agree that it is the violation of federal law which is the

gravamen of a Travel Act offense. United States v. Prince,

529 F. 2d 1108 (6th Cir. 1976), cert. den., 429 U.S. 838;

United States v. Polizzi, 500 F. 2d 856 (9th Cir. 1974), cert.

den., 419 U.S. 1120 (1975). Some courts hold that proof of

the commission or attempted commission of a state defined

criminal offense is an essential element of a Travel Act

conviction, United States v. Hiatt, 527 F. 2d 1048 (9th Cir.

1975); United States v. Polizzi, supra; United States v.

Kahn, 472 F. 2d 272 (2d Cir. 1973), cert. den., 411 U.S. 982,

while others hold that it is not. United States v. Prince, 515

F.2d 564 (5th Cir. 1975), cert. den., 423 U.S. 1032; United

States v. Goldfarb, 464 F. Supp. 565 (E. D. Mich. 1979). It

is certainly true that the state crime need not be actually

accomplished. United States v. Pomponio, 511 F. 2d 953

(4th Cir. 1975), cert. den., 423 U.S. 874.

It is abundantly clear that as a predicate to a Travel Act

conviction, absent a distinct violation of a law of the United

States, the defendants must have engaged in some form of

unlawful activity prohibited by the law of the State of Ne-

* See footnote 1, supra,

vada. This contention is beyond dispute and amply sup-

ported by the language of the Act and by the case law.

The defendants-appellants were indicted on a four-count

Revised Indictment.’ In Count One of the indictment, Gold-

farb was charged with a substantive violation of the Travel

Act. The alleged “unlawful activity” was the

ownership, operation, conducting and carrying on of

gaming operations of a Las Vegas, Nevada gaming ca-

sino, the ALADDIN HOTEL AND CASINO, by a per-

son who was not licensed by and whose interest in the

gaming casino had been concealed from agencies of the

State of Nevada in violation of Nevada Revised Sta-

tutes, Sections 463.160.1(a)*® and 463.335,’ and Nevada

* The original indictment consisting of 22 counts was found to be

multiplicitous by the trial court.

*NRS § 463.160(1)(a) provides:

License required.

1. It is unlawful for any person, either as owner, lessee or

employee, whether for hire or not, either solely or in conjunc-

tion with others:

(a) To deal, operate, carry on, conduct, maintain or expose

for play in the State of Nevada any game or slot machine as

defined in this chapter, or to operate, carry on, conduct or

maintain any horserace book or spots pool ;

* eo @

without having first procured, and thereafter maintaining in

full force and effect, all federal, state, county and municipal

gaming licenses as required by statute or ordinance or by the

governing board of any unincorporated city or town.

*NRS § 463.335 provides in pertinent part:

Gaming employees required to hold work permits; hearings

and review; confidential records; expiration of work permits.

Gaming Commission Regulations 3.100 paragraph 1, (b),

(d), (f), (g) and (i), 3.100 paragraph 3,* 3.110° and 8.060."°

1. As used in this section:

(a) ‘‘Gaming employee’’ means any person connected directly

with the operation of a nonrestricted establishment, and in-

cludes without limitation :

(1) Boxmen;

(2) Cashiers;

(3) Dealers;

(4) Floormen ;

(5) Hosts or other persons empowered to extend credit or

complimentary services ;

(6) Keno runners;

(7) Keno writers;

(8) Machine mechanics;

° (9) Seeurity personnel ;

(10) Shift or pit bosses ;

(11) Shills; and

(12) Superivsors or managers.

‘‘Gaming employee’’ does not include bartenders, cocktail

waitresses or other persons engaged in preparing or serving

food or beverages. . . .

* Nevada Gaming Commission Regulation 3.100 provides in perti-

nent part:

Employee report.

1. Annually, on or before the 15th of July, each nonrestricted

licensee, as defined in Reg. 4.030.1(b), shall submit an em-

ployee report to the board on a form to be furnished by the

board, The report shall identify every individual who is direct-

ly or indirectly engaged in the administration or supervision

of the gaming operations or physical security activities of such

nonrestricted licensee. The following classes of gaming em-

ployees are presumed to be actively and directly engaged in

the administration or supervision of gaming:

(b) All individuals who may approve or extend gaming credit

in any amount, or whose recommendations in this regard are

The indictment alleges specific acts committed by Goldfarb

in the course of the performance of the unlawful activity.

ordinarily sought or followed :

direct a shift of any gaming or security activity, including

but not limited to supervision or direction of the pit area,

keno or bingo games, slot machines, race or sports books, pari-

mutuel operations, or any persons having authority to super-

vise or direct such persons ;

(f) All individuals who may approve or extend to casino

patrons complimentary house services other than beverages

only ;

(g) All individuals who supervise or direct other employees

engaged in the control of gaming assets and revenues and

record keeping, including the recording of cash and evidences

of indebtedness, and the maintenance, review or control of the

records, accounts, and reports of transactions which are re-

quired to be kept pursuant to Reg. 6;

(i) All individuals who individually or as a part of a group

formulate management policy,

3. Any changes, additions, or deletions to any information

contained within the annual employee report which occurs sub-

sequent to the filing of the report and prior to the filing of the

report for the next calendar year shall be reported to the board

in writing no less than 10 days after the end of the calendar

quarter during which the change, addition, or deletion occurred.

* Nevada Gaming Commission Regulation 3.110 provides in perti-

nent part:

Key employee.

1. Any executive, employee, or agent of a gaming licensee

having the power to exercise a significant influence over deci-

sions concerning any part of the operation of a gaming licensee

10a

Appellant Tamer was acquitted by the jury of the sub-

stantive Travel Act count but was convicted of conspiracy.

Count Three charged appellant Abraham with a substan-

tive violation of the Travel Act in much the same language

or who is listed or should be listed in the annual report re-

quired by Reg. 3.100 is a key employee.

2. Whenever it is the judgment of at least 3 members of the

commission that the public interest and the policies set forth

in Nevada Revised Statutes Chapter 463, the Nevada Gaming

Control Act, will be served by requiring any key employee to

be licensed, the commission shall serve notice of such determi-

nation upon the licensee. The commission shall not be restricted

by the title of the job performed but shall consider the func-

tions and responsibilities of the person involved in making its

decision as to key employee status, Grounds for requiring

licensing of a key employee which are deemed to serve the

publie interest and the policies of the Nevada Gaming Control

Act include but are not limited to the following:

(a) The key employee is new to the industry, the particular

gaming establishment, the position, or the level of influence or

responsibility which he has and the board or commission has

little or outdated information concerning his character, back-

ground, reputation, or associations, or

(b) Information has been received by the board or commission

which, if true, would constitute grounds for a finding of un-

suitability to be associated with a gaming enterprise.

*° Nevada Gaming Commission Regulation 8.060 provides:

Participation in operations. Except as and to the extent pro-

vided in these regulations pertaining to emergency situations,

or on written approval of the commission, no person who pro-

poses to acquire an interest in any licensed gaming operation,

in a licensee or in a holding company shall in connection there-

with take any part or be permitted to take any part whatever,

as an employee or otherwise, in the conduct of such gaming

operations or in the operation of the establishment wherein

such gaming operations are conducted during the pendency of

his application for license or to be permitted to acquire such

interest.

lla

as the charge against Goldfarb. The alleged unlawful activ-

ity was based upon the same Nevada Statutes and Regula-

tions.’ Abraham was alleged to have discussed with Gold-

farb the extension of complimentary privileges to patrons

of the Aladdin which constituted, directly or indirectly, the

administration, supervision and influence of Goldfarb over

the gaming operations of the Aladdin with the consent and

assistance of Abraham and in violation of the aforemen-

tioned statutes and regulations. Abraham was convicted on

this count.

Count Four is the conspiracy count of the indictment on

which all of the defendants were convicted. It charged that

the defendants willfully and knowingly conspired to use

tf vilities of interstate commerce to promote, manage, estab-

lish, carry on and facilitate the promotion, management,

establishment and carrying on of an unlawful activity,

namely, the ownership, operation, conducting and carrying

on of gaming operations of a Las Vegas, Nevada gan..ng

Casino by persons who were not licensed to do so and whose

interest in the gaming casino had been concealed from the

State of Nevada and did thereafter commit acts in order to

promote this unlawful activity, all in violation of 18 U.S.C.

§ 1952, 18 U.S.C. § 371.

As before stated, the appellants filed two joint motions

to dismiss the original indictment. Those motions apply

equally to the revised four-count indictment. In the motion

the appe!lants argued, inter alia, that Nevada Gaming Com-

mission Regulations are not “law” for the purposes of crim-

inal prosecutions. From the earliest stages of the proceed-

ings, the defendants objected to and expressed concern

over the notion that a violation of a Nevada Gaming Com-

mission regulation could form the predicate state law viola-

" The statutes and regulations relied upon are identical except

that Count Three omits Nevada Gaming Regulation 3.100(1)(b)

and (g).

12a

tion required for a federal prosecution under the Travel

Act. It could not in and of itself.

In response to the motion to dismiss, the government

stated that:

... the predicate “unlawful activity” in this prosecution

arises from the violations of the cited Nevada statutes

in each count. The additional citation to the regulations

is solely to provide additional particularity in indicat-

ing the application of the statute to the specific activity

described in each count. We do not quarrel with the de-

fense position that violations of the regulations in and

of themselves are not criminal acts within the purview

of the Travel Act....

We do not quarrel that the defendants would be en-

titled to a charge that in order to find a defendant

guilty of a particular count that it must find a defend-

ant violated the provisions of the Nevada statute cited

and described therein.

(Government's Response to Motion to Dismiss Appen-

dix p. 138-39.)

Still claiming inability to comprehend and therefore de-

fend against the charges, the defendant’s filed a joint mo-

tion for a bill of particulars. The court requested the

parties to agree among themselves as to the particulars

which they apparently did.

The court instructed the jury as follows:

Now as to the meaning of the phrase unlawful activity

in the Travel Act, the State of Nevada has a compre-

hensive scheme of regulatory statutes. Under those

statutes a gaming commission and a gaming board are

established and they are commanded to have enacted

regulations which have the force of law. It is that law

which defines unlawful activity.

13a

In Berman v. Riverside Casino Corp., 247 F. Supp. 248,

248 (D. Nev. 1964), aff’d 354 F. 2d 43 (9th Cir. 1965), the

court held that regulations promulgated by the Nevada

Gaming Commission “have the force and effect of law.” Cf.

United States v. Polizzi, 500 F. 2d 856, 875 (9th Cir. 1974),

cert. den., 419 U.S. 1120 (1975).

N. R. S. 463.1594 specifically provides that the regula-

tions are intended to implement the provisions of the stat-

utes requiring disclosure of a corporate licensee’s key per-

sonnel. Also, N.R.S. 463.150(2)(a) provides that the regu-

lations shall prescribe “the method and form of application

which any applicant for a gaming license . . . shall follow

and complete ....” The court was thus required to include

an instruction on regulations so that the jury would not

completely disregard them. The court did not instruct the

jury at any place that a violation of a regulation, in and of

itself, constituted an “unlawful activity.” To give such an

instruction would have been prejudicial error. United

States v. Eaton, 144 U.S. 677 (1892); Singer v. United

States, 323 U.S. 338 (1944).

In United States v. Grimaud, 220 U.S. 506, 517 (1910)

the court stated:

From the beginning of the Government various acts

have been passed conferring upon executive officers

power to make rules and regulations—not for the gov-

ernment of their departments, but for administering

the laws which did govern. None of these statutes could

confer legislative power. But when Congress had legis-

lated and indicated its will, it could give to those who

were to act under such general provisions “power to

fill up the details” by the establishment of administra-

tive rules and regulations, the violation of which could

be punished by fine or imprisonment fixed by Congress,

or by penalties fixed by Congress or measured by the

injury done.

l4a

Reliance by appellants on United States v. Gordon, 464

F. 2d 357 (9th Cir. 1972) is misplaced. That case held that

bookmakers and their employees do not engage in illegal

gambling business within the prohibition of federal law by

violating nonpenal regulations of state gaming commission.

Gordon appears to be somewhat in conflict with the subse-

quent decision of the Ninth Circuit in Polizzi and is not even

cited or discussed in Polizei.

In United States v. Seelig, 622 F. 2d 207, 210 (6th Cir.

1980), we considered violations of the Controlled Sub-

stances Act, 21 U.S.C. § 841(a)(1) and regulations promul-

gated thereunder which were authorized by Congress. There,

as here, the defendants contended that violations of the

regulations did not constitute an offense. We stated:

The combination of § 829(c) and § 822(b) thus requires

a person to dispense or distribute a schedule V drug

for a medical purpose and to be within the authority

of their registration as determined by the Attorney

General. Section 822(a) requires every person who dis-

tributes or dispenses controlled substances to register

with the Attorney General. Section 821 authorizes the

Attorney General to promulgate rules and regulations

relating to the registration and control of the manu-

facture, distribution, and dispensing of controlled sub-

stances. Section 871(b) authorizes the Attorney Gen-

eral to promulgate and enforce rules, regulations and

procedures that he deems necessary for the efficient

execution of his functions.

Although Congress was not as clear in this statute as

in the one involved in Grimand, this Court is satisfied

that the statute does expressly, albeit in a convoluted

fashion, provide that a violation of the promulgated

rules constitutes an unlawful act under the Controlled

Substances Act. Thus, counts 1-165 do charge crimes.

During the presentation of evidence to the jury in re-

sponse to the defendants’ and the trial court’s desire to

lia

have the legal theory of the case made clear, the govern-

ment filed a document entitled “Government’s Theory of

the Case.” Here again, the government disclaimed reliance

upon the Nevada Gaming Regulations alone, stating that:

“to be sure, a violation of the Regulations which is not

concomitant with a statutory violation will not support a

Travel Act violation.” (Appendix, p. 283)

Thus the violation of the Nevada statutes and implement-

ing regulations would constitute unlawful activity under

the Travel Act. The disclosure provisions required by Regu-

lation 3.100 are cumulative to those contained in the Ne-

vada statutes. N. R. S. 463.165, 463.339, 463.520, 463.530,

463.560.

In any event, under the conspiracy count, the violation of

the regulations alone would certainly be considered as overt

acts by the defendants committing them which are ingredi-

ents of the crime of conspiracy

With this principle in mind, we now turn to the trial

court’s instruction to the jury on the meaning of “unlawful

activity” and the significance of the Nevada Gaming Regu-

lations.

The court first instructed the jury on Count IV of the

indictment, the conspiracy charge. After preliminary mat-

ters of defining conspiracy and its elements to the jury, the

court began to instruct on the application of the Travel

Act. After reading the Act, in pertinent part, the court in-

structed on the meaning of the phrase “unlawful activity.”

As a general background, the court instructed as follows:

... the state of Nevada has a comprehensive scheme of

regulatory statutes. Under these statutes a gaming

commission and a gaming board are established and

they are commanded to and have enacted regulations

l6a

which have the force of law. It is that law which de-

fines unlawful activity.

In order to regulate gambling under Nevada law these

statutes require full disclosures. Only through full and

accurate disclosure of all persons who are connected

with gambling in Nevada can the Nevada gaming au-

thorities perform their functions in excluding from

the industry all who are in the authorities’ opinions,

unsuitable or undesirable for any number of reasons.

(Appendix 1205-06)

The court further instructed the jury on unlawful activity

based upon a violation of Nevada statutory law as follows:

Nevada Revised Statute 463.530 requires that all per-

sons who require [sic] to become owners or sharehold-

ers in a gaming operation must have come before the

Nevada gaming authorities for determination as to the

suitability for license. The Nevada gaming authorities

then make a decision whether to then issue a license to

an applicant. If they deny the applicant a license, that

person may not then thereafter exercise any owner-

ship of, operation, conduct of the gaming affairs of the

casino.

Another Nevada statute, NSR 463.130, states that the

violation of these Nevada gaming statutes is a crime, a

gross misdemeanor. Thus, by concealment of his owner-

ship or operation or conduct in the gaming conspiracy,

a person may violate the Nevada laws.

Keep in mind it is not the concealment itself which is

the violation of the statute I have just discussed but

rather the violation is the unlicensed ownership or

operation of the gaming casino which is accomplished

by concealment. (Appendix, p. 1206-07)

17a

The court then continued:

I now take up another aspect of the Nevada laws on

gambling. One of the regulations, [3].100, which is

mandated by Nevada statute is required, [sic] all

holders of non-restricted licenses to disclose to the

Nevada gaming authorities names of all persons exer-

cising significant control and influence over gaming.

Any changes in such activities must also be reported

to the Nevada gaming authorities because of a strong

state policy requiring disclosure of all persons who

have significant control and influence as to gaming,

and because of the statutory command that all gaming

licenses which, whether held by a corporation such as

the Aladdin Hotel or by individuals, must be main-

tained in conformity with all relevant provisions.

I instruct you that it is illegal under Nevada gaming

laws for anyone exercising a significant control and

influence as to gaming to conceal that control and influ-

ence from the Nevada gaming authorities. The essence

or gist of the violation I have just outlined is conceal-

ment, for which failure to disclose, this must be con-

trasted with the first instance of violation I described

earlier, that violation having to do with an unlawful

or unlawful licensing violation of the Nevada casino,

where the concealment is a means to achieve the viola-

tion but not itself the actual unlawful activity. (Appen-

dix, p. 1207-08)

This in our opinion correctly stated the Nevada law.

In the instruction on the substantive offense charge

against Goldfarb, the court stated that:

[hjeretofore I have discussed with you in considering

the charge of conspiracy as to entail the meaning of the

phrase unlawful activity. Without repeating those in-

18a

structions that I gave you then with the request that

you keep them in mind here, I specifically charge you

that the unlawful activity which it is alleged the de-

fendant Goldfarb engaged in is as follows:...

The court then described a statutory theory based on Ne-

vada Revised Statutes § 463.335 as was done in the con-

spiracy charge. In concluding the instruction, the court

again offered the jury the elements of unlawful activity:

Additionally, in order for you to find the Defendant

Goldfarb guilty of the charges contained in Count I of

the indictment, the Government must also prove beyond

a reasonable doubt either that:

(1) Defendant Goldfarb willfully engaged in the own-

ership, operation or conducting or carrying on of gam-

ing operations of the Aladdin Hotel and Casino with-

out a license from the Nevada Gaming Authorities to

do so, or;

(2) Defendant Goldfarb willfully concealed his owner-

ship, operation or conducting or carrying on of gaming

operations of the Aladdin Hotel and Casino from the

Nevada Gaming Authorities for which he was not li-

censed.

Or both of these elements. (Appendix pp. 1217-18)

This instruction was not duplicitous as claimed for either

or both elements constitute an offense under Nevada law.

The jury was also instructed that its verdict had to be

unanimous.

In its opinion denying post trial motions, the court relied

on the Nevada statutes which it stated were broad enough

to encompass Goldfarb’s conduct. (App. 440)

The indictment charged Tamer with violating NRS 463.-

160.1(a) and Nevada Gaming Commission Regulations

19a

3.100(1)(i), 3.100(3) and 3.110. He was charged with per-

forming as a “key employee” without being licensed to do

so. Tamer was acquitted of the substantive Travel Act

violation.

After reading the indictment and summarizing the Travel

Act, the court instructed on the meaning of “unlawful

activity” as follows:

Under Nevada gaming laws a casino (or non-restricted

licensee as it is called) must report to the Nevada

Gaming Authorities the identity of anyone who is di-

rectly or indirectly involved in the casino’s administra-

tion, that is, anyone who has a significant influence and

control at the casino. The regulation that requires this

disclosure has the force of law and its requirement of

disclosure is in harmony with a number of other Nevada

gaming statutes. Thus, under Nevada gaming law, it is

required that the casino disclose the identity of any-

one exerting significant influence and control at the

casino. The disclosure is necessary so that the Nevada

Gaming Authorities can regulate gambling by deter-

mining that such a person should be licensed, if he is to

continue the exercise of significant control and influ-

ence at the casino. Now, the Aladdin itself is not

charged with the violation. However, defendant Tamer

is; it is charged in this indictment that defendant

Tamer did, in concert with the Aladdin, cause his true

role at the casino to be concealed from the Nevada

Gaming Authorities, in violation of Nevada gaming

laws.

As to Abraham, the district court in instructing on Count

III of the indictment again carried through its interpreta-

tion of “unlawful activity.” The court charged the jury as

follows:

The unlawful activity here charged is a certain kind of

unlawful activity as is charged in Count I against De-

20a

fendant Goldfarb, although the telephone call alleged

in the indictment between defendant Goldfarb and de-

fendant Abraham occurred on March 15, 1977. (Appen-

dix pp. 1226-27)

* ® e

Additionally, in order for you to find defendant Abra-

ham uilty of the charges contained in Count III of the

indictment, the Government must also prove beyond a

reasonable doubt that defendant Abraham aided and

abetted defendant Goldfarb in either willfully engag-

ing in the ownership, operation, or conducting or car-

rying on of gaming operations of the Aladdin Hotel

and Casino without a license from the Nevada Gaming

Authorities to do so, or in aiding and abetting the de-

fendant Goldfarb in willfully concealing his ownership,

operation or conducting or carrying on of gaming

operations of the Aladdin Hotel and Casino from the

Nevada Gaming Authorities for which he was not li-

censed; or both of these elements. (Appendix p. 1229)

Thus the district court instructed the jury on the unlaw-

ful activities; one based on the unlicensed operation of the

Aladdin; the other based on concealment which found its

origin in the court’s construction of the Nevada Statutes

and Gaming Regulations, especially 3.100. In our opinion

these instructions were correct.

Goldfarb contends that there was a variance between the

allegations in the indictment and the evidence which re-

sulted in a judicial amendment of the indictment. Judge

Feikens correctly dealt with these issues in his opinion

denying post trial motions stating:

It appears Goldfarb alludes to principles of variance

and amendment. The two concepts are closely related.

Variance refers to the failure of the government’s

2la

proofs to conform to the indictment. A variance is not

fatal to the prosecution unless the defendant could not

reasonably have anticipated from the indictment what

evidence would be presented at trial or unless the in-

dictment is so vague as not to bar subsequent prosecu-

tion on the same offense. United States v. Knuckles,

581 F 2d 305, 309-311, (2nd Cir), cert. denied 99 S Ct

581 (1978) ; United States v. Fruehauf Corp., 577 F 2d

1038, 1056 (6th Cir), cert. denied 99 S Ct. 349 (1978);

United States v. Dunn, 577 F 2d 119, 123 (10th Cir

1978) ; Watson v. Jago, 558 F 2d 330, 333-34 (6th Cir

1977) ; United States v. Maselli, 534 F 2d 1197, 1201-

1202 (6th Cir 1976). A variance is not ground for re-

versal unless the defendant’s substantial rights are

abridged. United States v. Berger, 295 U.S. 78, 82

(1934). In this case I find no prejudicial variance.

The apparent amendment claim needs more analysis,

but it too is without merit. It is settled since Ex Parte

Bain, 121 U.S. 1, 10 (1887) that neither the court nor

the prosecutor may substantially change the indict-

ment to “suit its own notions of what it ought to have

been or what the grand jury would probably have made

it if their attention had been called to suggested

changes .. .” This is in keeping with the principle that

a court may not establish standards of conduct upon

pain of imprisonment; such is the legislature’s domain.

An amendment to the indictment is per se reversible

error. United States v. Crocker, 568 F 2d 1049, 1059

(3rd Cir 1977), United States v. Fruehauf, supra, at

1056. An amendment may be express or “constructive”

(effective). Jd. In determining whether there has been a

constructive amendment inquiry should focus on wheth-

er any essential element of the crime was proved by

facts different than those alleged. Stirone v. United

States, 361 U.S. 212 (1960). Thus, if the indictment al-

leges one sort of false testimony but the government is

permitted to prove another sort, false testimony being

22a

necessary for conviction, an amendment has occurred.

United States v. Crocker, supra. Similarly, in a Hobbs

Act case, if a grand jury alleges one sort of interstate

nexus while proof and argument show another, an

amendment has occurred. Stirone v. United States,

supra. See United States v. Prejean, 494 F 2d 495, 497

(5th Cir 1974) ; United States v. Vesaas, 586 F 2d 101,

103 (8th Cir’ 1978).

In this case, there were three elements the government

was required to prove: (1) the use of an interstate

facility ; (2) actual or attempted promotion, etc. of an

unlawful activity; (3) specific intent. United States v.

Prince, 529 F 2d 1108, 1112 (6th Cir), cert. denied 429

U.S. 838 (1976). The proofs did not diverge from the

course established by the requirement of these ele-

ments. The only apparent argument available to Gold-

farb (and the other Defendants) is that the grand

Jury did not pass upon the exact shape of the illegal

acts in Nevada, which it is their constitutional right to

have done. I find this contention without merit. The

grand jury needed to know enough of the Nevada gam-

ing laws to make the indictment sufficient, which it did.

My interpretation of Nevada gaming law presented

Defendants with no new factual charges that they were

required to meet, to use variance phraseology, nor did

it ailow either proof or argument of a new factual

basis for any element of the crime, to use amendment

terminology. Moreover, the allegation as to the Ne-

vada offense was broad enough to include the specific

crime I have already explained. It has often been held

that one way to guard against a constructive amend-

ment claim is to draft an indictment with generality,

United States v. Crocker, supra, at 1059, so long as it

contains the necessary specificity.

23a

Vil

We find no prejudicial error in the court’s denial of

Abraham’s motion to declare a mistrial because of improper

cross-examination of a character witness. One of the char-

acter witnesses was General Ralph G. Taylor retired from

the United States Air Force. Attempts were made by Abra-

ham’s attorney to introduce into evidence Abraham’s gal-

lantry as an officer and pilot, his two tours in Vietnam and

his communications with the White House. The court ex-

cluded such evidence. We agree that it was not admissible

except upon conviction to be considered in mitigation of

the sentence. Error was assigned as to the cross-examina-

tion of the character witness Lovell, a former city attorney

in Las Vegas, who volunteered that Abraham enjoyed a

good reputation with Nevada’s “law enforcement com-

munity.” He was asked upon cross-examination whether he

had heard that in order for a shop or store to do business

with Aladdin Hotel Corporation to obtain store space in

the area that payments were made personally to Abraham,

not to the corporation. Lovell answered, “No, I don’t know

that.” Before asking the question at a side bar conference

with the court not in the presence of the jury, the govern-

ment produced evidence showing justification namely, the

cancelled check and the court permitted the question to be

answered and gave proper instruction to the jury as to its

purpose. Further proceedings developed thereafter includ-

ing rebuttal and surrebuttal evidence and when it appeared

to everyone that this was creating a trial within a trial,

the government moved to withdraw the question, in which

counsel for Abraham joined. The trial court granted the

motion finding that “... the spirit of Michelson v. United

States, 335 U.S. 469 (1948) had been observed and the pre-

judice, if any, was dissipated in Abraham’s favor.” App.

452, 453. We find no abuse of discretion on the part of the

District Judge in his handling of these issues.

24a

Abraham and Monazym assign error because the trial

court held certain in camera proceedings to which they

were not admitted. Abraham and Tamer assign error in the

admission of evidence of tape recorded conversations and

documents tending to prove that Goldfarb and Tamer used

their influence with Leonard, the Prosecuting Attorney of

Genesee County in local court proceedings which Tamer

believed would assist him in securing a license in Nevada.

A special Grand Jury sought to return an indictment

against Mr. Leonard which was not signed by the United

States Attorney. Chief Judge Kennedy who conducted the

im camera proceeding, wrote an opinion ordering the files

sealed. The trial judge ordered that the defendants who

had not participated in the in camera proceedings be given

access to them.

The government had issued a subpoena for the testimony

of Mr. Leonard but obtained a stipulation from all defense

counsel which obviated the necessity for its production.

We find no abuse of discretion on the part of the trial

judge nor any prejudice to Abraham and Monazym (See

Opinion Denying Post Trial Motions, (App. 456)), nor

was there any abuse of discretion in denying the motions

for a severance or Tamer’s motion to suppress evidence.

Vill

Appellant Monazym challenges the sufficiency of the evi-

dence to support his conviction by the jury. The evidence is

detailed by the District Judge in his Opinion Denying Post

Trial Motions. (App. 449, 450). The evidence and the in-

ferences to be reasonably drawn therefrom must be viewed

in the most favorable light in favor of the government.

Glass v. United States, 315 U.S. 60 (1942); United States

v. Dye, 508 F. 2d 1226 (6th Cir. 1974); United States v.

Green, 548 F. 2d 1261 (6th Cir. 1977). So viewed, we are of

the opinion that the verdict of the jury is supported by

25a

abundant evidence. In our opinion, the indictment charged

only a single conspiracy.

Aladdin contends that the district court erred in denying

its motion for a severance. It alleges that it could not de-

fend itself except through the testimony of its alleged

agents, who, as defendants in this joint trial, had counter-

vailing Fifth Amendment rights not to testify.

The trouble with this argument is that the proof at the

trial showed that conspiratorial acts were committed by at

least six other officers, agents and employees of Aladdin

who were not defendants. Aladdiu did not call any of them

to testify in its behalf. No showing was made by Aladdin

that any of its officers, agents or employees were willing to

testify in its behalf or exculpate it. There was no showing

that in separate trials any defendant would waive his Fifth

Amendment privilege.

This matter was addressed entirely to the sound discre-

tion of the district court. Aladdin had a heavy burden to

overcome which it was unable to do. Cf. United States v.

Vigil, 561 F. 2d 1316 (9th Cir. 1977).

Conclusion

The judgments of conviction are affirmed.

26a

APPENDIX B

UNITED STATES DISTRICT COURT,

E. D. MICHIGAN, 8S. D.

Crim. A. No. 8-80572.

Jan. 2, 1979.

Unrrep Srates or Amenica, Plaintiff,

Cartes B. Gotprars, James Tamer, Epwarp Monazym,

James ApranaM, and Atappin Horen Corporation,

Defendants.

Opinion Denying Defendant Goldfayb’s First Motion

to Dismiss Indictment (16)

Ferkens, District Judge.

Several individuals and the Aladdin Hotel Corporation

were indicted in August of 1978 on one count of violating

18 U.S.C. §371 (conspiracy), 19 counts of violating 18

U.S.C. § 1952 (“Travel Act”), and two counts involving 18

U.S.C. § 1962 (“RICO”).

The indictment charges that between December of 1976

and March of 1977 the defendants used interstate telephone

lines to own and operate the Aladdin Hotel & Casino with-

out having procured licenses required under Nevada law.

Relevant Statutes and Regulations

Under Nevada law it is unlawful for any person either

as an owner or employee to operate or maintain any gam-

bling establishment without first procuring and thereafter

maintaining all permits and/or licenses which the state or

local government may require. Nev.Rev.Stat. § 463.160.1(a)

27e.

Two other sections define exactly who must possess a

license. Under Nev.Rev.Stat. § 463.530 certain “key em-

ployees” of gaming licensees (such as the Aladdin) may be

required to apply for licenses before the Nevada Gaming

Commission if in the Commission’s opinion the public in-

terest will thereby be served. The Commission learns who

it should require to submit to licensure scrutiny by requir-

ing an annual report from each licensee identifying every

individual directly or indirectly engaged in the administra-

tion or supervision of the gaming operations. Certain em-

ployees are presumptively so engaged. They are, any in-

dividual who: may approve or extend gaming credit or

whose recommendations in this respect are ordinarily fol-

lowed; supervises or directs or who has the authority to

supervise or direct a gaming shift; may approve or extend

complimentary house services; supervises those who con-

trol gaming assets or records; and, anyone who helps to

formulate management policy. Nevada Gaming Commission

and State Gaming Control Board Regulation 3.100.1(b),

(d), (f), (g) & (i).

Regulation 3.110.1 defines any employee or agent having

significant influence over the licensee’s operations or who

is listed in the annual report as a “key employee” who may

be required to submit for licensure. Regulation 3.110.2 sets

forth the criteria upon which the Commission decides which

key employees must be licensed. Regulation 8.060 provides

that no one who proposes to acquire an interest in a gam-

ing operation shall take any part in the management

thereof during the pendency of his application for li-

censing.

Under Nev.Rev.Stat. § 463.335 persons defined as “gam-

ing employees” may not be employed unless they hold all

work permits required by the city or county in which the

work is performed. Persons empowered to extend credit or

complimentary services are considered “gaming employ-

ees.” Nev.Rev.Stat. § 463.335.1.

28a

The penalty provision of the Gaming Control Act pro-

vides :

The violation of any of the provisions of this chapter,

the penalty for which is not herein specifically fixed,

is a gross misdemeanor. Nev.Rev.Stat. §463.360.

The relevant federal statute is 18 U.S.C. § 1952 (Travel

Act) which provides:

(a) Whoever travels in interstate or foreign com-

merce or uses any facility in interstate or foreign

commerce, including the mail with intent to—

(3) otherwise promote, manage, establish, carry on,

or facilitate the promotion, management, establish-

ment, or carrying on, of any unlawful activity, and

thereafter performs or attempts to perform any of the

acts specified in subparagraphs (1), (2), and (3), shall

be fined not more than $10,000 or imprisoned for not

more than five years, or both.

(b) As used in this section “unlawful activity” means

any business enterprise involving gambling .. . in vio-

lation of the laws of the State in which they are com-

mitted or of the United States .... [emphasis added]

The government’s theory appears to be that Tamer, one

of the defendants and the Entertainment Director at the

Aladdin, maintained such influence there that he would

have been required to hold a license under Nevada law had

the extent of his control been known to the Nevada gaming

authorities; that he concealed that control; that he was not

so licensed and thus violated § 463.160(1). Secondly, the

government alleges that Goldfarb maintained a hidden in-

terest in the Aladdin, exercising such control over its activi-

ties that had his interest been disclosed, he, too, would

have been required to submit to licensure and hold a license

under aither § 463.160 or § 463.335; that he did not so sub-

contains the necessary specificity.

29a

mit nor was he licensed. The government claims that the

other defendants conspired and acted to aid and facilitate

this unlawful conduct, were inextricably bound up in what

amounted to an illegal business enterprise to violate the

Nevada gaming laws, and that they used interstate tele-

phone lines to commit those violations.

As factual background, in 1971 Goldfarb applied for per-

mission to become an incorporator of the Aladdin under a

Nevada statute which at that time so provided. His appli-

cation was denied. Subsequently, he applied for licensure

as a shareholder, but protested a “waiver of rights” form

that was required as a part of the application. The result

was that the Nevada Gaming Control Board failed to proc-

ess the application until in June of 1974 a suit was insti-

tuted in the 8th Judicial District of Nevada, the district

which includes Las Vegas. In June of 1978 the suit was dis-

missed without prejudice when the Board agreed to with-

draw the waiver. At no time relevant to these proceedings

was Goldfarb licensed either to be employed by, own or

manage the Aladdin. Tamer held a permit to be employed

as the Entertainment Director of the Aladdin but is not

licensed to otherwise participate in its management.

Defendants move the indictment be dismissed because

the Nevada Gaming Control Act is unconstitutional.

The Defendants’ Theory

The Nevada Gaming Control Act has been definitively

construed by the Nevada Supreme Court as setting forth

a scheme in which gaming is viewed

as a matter reserved to the states within the meaning

of the Tenth Amendment to the United States Consti-

tution. Within this context we find no room for feder-

ally protected constitutional rights. This distinctively

state problem is to be governed, controlled and regu-

lated by the state legislature and, to the extent the

30a

legislature decrees, by the Nevada Constitution. It is

apparent that if we were to recognize federal protec-

tions of this wholly privileged state enterprise, neces-

sary state control would be substantially diminished

and federal intrusion invited. [footnotes omitted]

State v. Rosenthal, 599 P.2d 830, 836 (Nev. 1977). How-

ever, the court distinguishes between applicants and li-

censees.

A reasonable distinction exists between the status of

one who seeks to acquire a license, and the status of

one who possesses a work permit as a gaming em-

ployee. The former does not have existing privileges,

but is attempting to acquire them. The latter does have

an existing privilege, and is entitled to receive notice

and a hearing before his privilege to work as a gaming

employee can be nullified.

Id., at 837.

Goldfarb claims that Rosenthal, as the pronouncement of

the court of last resort in Nevada, binds this court, citing,

inter alia, Quong Ham Wash v. Industrial Accident Com-

mission, 255 U.S, 445, 41 S.Ct. 373, 65 L.Ed. 723 (1921);

Truax v. Corrigan, 257 U.S. 312, 42 S.Ct. 124, 66 L.Ed, 254

(1921) and United States v. Twelve Two Hundred Foot

Reels, 413 U.S. 123, 93 S.Ct. 2665, 37 L.Ed.2d 500 (1973) ;

and that the Rosenthal case is, with the statute it construes,

a unitary piece of law, the case and statute are inseparable.

Goldfarb next contends that one in his position—that of

a license applicant—has certain constitutional rights which

may not be so cavalierly abridged. He emphasizes the in-

terpretation of the due process which holds that “the touch-

stone of due process is protection . . . against arbitrary

action of government.” Wolff v. McDonnell, 418 U.S. 539,

558, 94 S.Ct. 2963, 2976, 41 L.Ed.2d 935 (1974), and notes

that due process protections are not dependent upon

3la

whether the interest at issue is characterized as a right or

a privilege. Graham v. Richardson, 403 U.S. 365, 374, 91

S.Ct. 1848, 29 L.Ed.2d 534 (1971).

Goldfarb claims that the right to engage in a lawful oc-

cupation is a “fundamental one” whose denial should be

attended by due process protections. New State Ice Com-

pany v. Liebmann, 285 U.S. 262, 52 S.Ct. 371, 76 L.Ed. 747

(1932) ; Hampton v. Mow Sum Wong, 426 U.S. 88, 102, 96

S.Ct. 1895, 48 L.Ed.2d 495 (1976); Cafeteria Workers v.

McElroy, 367 U.S. 886, 894, 81 S.Ct. 1743, 6 L.Ed.2d 1230

(1961). More specifically, Goldfarb characterizes it as

either an interest in “property”, as defined in Board of

Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33

L.Ed.2d 548 (1972) (protected interests are claims to a

benefit to which the holder has “more than an abstract

need or desire ... more than a unilateral expectation...

[but] instead ... a legitimate claim of entitlement . . .”)

and Perry v. Sundermann, 408 U.S. 593, 92 S.Ct. 2694, 33

L.Ed.2d 570 (1972), or in “liberty” under either the inter-

pretation which describes government actions which fore-

close a range of opportunity as implicating protected in-

terests, Schware v. Board of Bar Examiners, 353 U.S. 232,

77 S.Ct. 752, 1 L.Ed.2d 796 (1967) (denial of admission to

the practice of law); Goldsmith v. United States Board of

Tax Appeals, 270 U.S. 117, 46 S.Ct. 215, 70 L.Ed. 494

(1926) (denial of accountant’s right to practice before the

Board of Tax Appeals) ; or the interpretation explained in

Wisconsin v. Constantineau, 400 U.S. 433, 437, 91 S.Ct. 507,

27 L.Ed.2d 515 (1971).

Goldfarb concludes that because the Nevada Gaming

Control Act has been construed in a manner violative of his

1 Nev.Rev.Stat, § 463.130(2) states:

Any license issued pursuant to this chapter shall be deemed to

be a revocable privilege and no holder thereof shall be deemed

to have acquired any vested rights therein or thereunder.

32a

and other license applicants’ constitutional rights it is un-

constitutional and, therefore void. As a logical concomit-

ant, he believes there can be no prosecution under the

Travel Act.

Findings and Conclusions

I cannot agree that I am bound by the Nevada Supreme

Court’s pronouncements in Rosenthal with respect to the

Gaming Act. The Rosenthal decision is not inextricably

bound to that statute.

There are many cases which say that a state court’s con-

struction of its own statute is conclusive upon federal

courts. See, for example, Quong Ham Wah v. Industrial

Accident Commission, supra, 255 U.S. at 448, 41 S.Ct. at

374, where the Court states:

It is elementary that this court is without authority

to review and revise the construction affixed to a state

statute as to a state matter by the court of last resort

of the state.

However, the crucial distinction between that situation and

the instant one is that in Quong Ham the question involved

the substance of state law.

Here, we are concerned with a question of federal law;

namely, the existence or non-existence of a Travel Act vio-

lation. I am not directly concerned with the content of the

Nevada gaming law. The Travel Act is violated when acts

illegal in Nevada are performed. The content of state law

is a state matter under Quong Ham; but that does not

mean that I am bound by Nevada’s pronouncements as to

the constitutional ramifications of that content.’

*To further illustrate this distinction, consider a situation in

which it is claimed that a statutory scheme is unconstitutional] be-

cause it fails to provide sufficient judicial review of an administra-

tive body’s determination, The nature and extent of the judicial

33a

Defendants maintain that the operative distinction in

this case is between situations where the federal court is

applying state law and those in which the federal court is

interpreting state law (page 3 of Defendant’s Supplemental

Memorandum) ; the former situation being the one in which

the federal court is “bound”. I agree. Defendants err in

characterizing this case as one in which I am applying

state law. Due to the overriding federal purpose served by

the Travel Act, I must interpret all of the laws implicated

by this prosecution, including Nevada law. I am, therefore,

not bound by the Rosenthal decision, whatever its consti-

tutional merits or infirmities.

The case of Angel v. Bullington, 330 U.S. 183, 189, 67 S.

Ct. 657, 91 L.Ed. 832 (1947) illustrates this principle. Angel

was a diversity suit in which the Court acknowledged that

North Carolina’s construction of a jurisdictional statute

was binding insofar as the state court had determined the

statute’s meaning and application to the suit’s parties. The

statute operated to bar the plaintiff’s claim. He argued that,

as such, it constituted an unconstitutional limitation on the

state court’s jurisdiction. The defendant responded that the

state court had found no violation and that this was a mat-

ter upon which the state court’s conclusion was preclusive.

The Supreme Court disagreed and explained “[w]hen an

asserted federal right is denied, the sufficiency of the

grounds of denial is for this Court to decide.” Jd., at 189,

67 S.Ct. at 660. Elaborating, the Court stated:

. where resort is had to a federal court not on

grounds of diversity of citizenship but because a fed-

eral right is claimed, the limitations upon the courts of

a State do not control a federal court sitting im the

review available would be a question of state law. However, the

effect severely restricted judicial review would have on the statute’s

constitutionality would not be a state but federal question. In the

latter, what the state court says is not binding on a federal court.

34a

state. Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct.

582, 90 L.Ed. 743. Id., at 192, 67 S.Ct. at 662. [emphasis

supplied]

I believe the instant case is analogous to Angel. The federal

court is the forum here because federally created rights

and liabilities are at issue. The Travel Act implements a

federal solution to a federal problem.

This principle was dealt with perhaps more perceptively

in P. Mishkin, “The Variousness of Federal Law: Compe-

tence and Discretion in the Choice of National and State

Rules for Decision,” 105 U.Pa.L.Rev. 797 (1957) (herein-

after “Mishkin”).*

The author observes that state enactments are not self

sufficient for all purposes. The federal judiciary is empow-

ered to declare the governing law in areas that are sub-

stantially related to a program of national governmental

operation. Jd., at 800. The Travel Act’s legislative history

demonstrates clearly its purpose to combat a problem of

uniquely national scope: organized racketeering and crime.

United States v. Nardello, 393 U.S. 286, 292, 89 S.Ct. 534,

21 L.Ed.2d 487 (1959); Rewis v. United States, 401 U.S.

808, 811, & n. 6, 91 1056, 28 L.Ed.2d 493 (1970). The Travel

Act, in effect, implements such a program. Therefore, this

is a suitable case for Mishkin’s principle.

As Professor Mishkin observes, the clear implication of

the Clearfield* doctrine is that any issue bearing a sub-

stantial relationship to an established national govern-

mental function should be determined by reference to fed-

eral law. The constitutionality of the Gaming Control Act

is a federal question.

5 Although this article deals with choice of law in the civil con-

text, I think it deals with concepts so fundamental to our federal-

ism that they transcend the civil-criminal distinction.

* Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct.

573, 87 L.Ed. 838 (1943).

35a

I become more firmly convinced of this conclusion when

1 view the issue as federal incorporation of state law by

reference. That is, the Travel Act incorporates Nevada

state law in the area of gambling. Considered thus, even

more latitude inheres in the federal judiciary. For example,

in F.R.C. v. Beaver County, 328 U.S. 204, 208-9, 66 S.Ct.

992, 90 L.Ed. 1172 (1946), a federal statute granted an ex-

ception to the R.F.C.’s tax immunity. It allowed the state to

tax “real property.” The question was whether a state or

federal definition of “real property” would apply in decid-

ing whether certain federally owned machinery was tax-

able under a state law which taxed such fixtures as realty.

The Court rejected the government’s assertion that a more

universally accepted definition of realty must obtain, but

noted that this was true only because the state definition

did not impair the purposes of the Act nor work a discrimi-

nation against the government.

To saddle the federal government with the state’s inter-

pretation would allow the states to eviscerate the Travel

Act and frustrate a federal solution to a problem of na-

tional scope. As Mishkin notes:

The extent of incorporation and the techniques for

ascertaining what local law is must be determined by

the particular considerations which established the

advisability of adopting that law. Mishkin, at 803. [em-

phasis added]

It would be self-defeating for the federal government to

adopt state notions of illegality only to be bound by state

courts which may have considered the law in circumstances

which do not present the purposes and considerations sur-

rounding the federal enactment. Such self-defeating intent

should not be presumed and will not be found.

The Supreme Court has given the Travel Act this kind

of preferential treatment. In United States v. Nardello,

supra, the District Court dismissed a § 1952 indictment on

the grounds that the conduct alleged was not technically

36a

extortion in Pennsylvania, the relevant state. The Supreme

Court reversed. Because the Travel Act’s aim is to combat

organized crime operating across state lines, the Act must

be construed to equal the task. The Court declined to be

bound by the state’s definition; it would have nullified the

Act. Instead, the Court applied a broader definition of ille-

gal extortion, emphasizing that the essential question is

whether the type of activity under prosecution is generally

or usually of a type subject to criminal sanctions. Nardello,

supra, 393 U.S. at 293-6, 89 S.Ct. 534; see, United States v.

Polizzi, 500 F.2d 856, 873 (9th Cir. 1974), cert. denied, 419

U.S. 1120, 95 S.Ct. 802, 42 L.Ed.2d 820 (1975); United

States v. Prince, 515 F.2d 564 (5th Cir. 1975), cert. denied,

sub nom., Craft, aka Woods, et al. v. United States, 423

U.S. 1032, 96 S.Ct. 563, 46 L.Ed.2d 406 (1975).

The distinction between the view defendants proffer and

the approach I adopt is the distinction between applying

state law for reasons of state-federal comity and interpret-

ing it to effectuate a far-ranging federal program.

The next question is whether there are federal rights

implicated when one applies for a Nevada gaming license,

and whether without Rosenthal the statute abridges them.

The defendants claim first that the right to enter a law-

ful business is so fundamental its denial should comply

with due process. Cafeteria Workers v. McElroy, supra,

(dealt with plaintiff’s right to a due process hearing upon

revocation of a security clearance necessary to work at a

governmental installation) ;* Hampton v. Mow Sun Wong,

supra, 426 U.S. at 102, 96 S.Ct. 1895.

This interpretation of “liberty interests” is expounded by

Justice Marshall, dissenting in Massachusetts v. Murgia,

427 U.S. 307, 322-3, 96 S.Ct. 2562, 49 L.Ed.2d 520 (1976).

5 The Court held in the negative, finding the plaintiff was free to

look elsewhere for employment and that merely foreclosing one

small field of employment did not implicate liberty.

37a

However, this view has not received the approval of a ma-

jority of the Supreme Court which has limited the scope of

Fourteenth Amendment protection in this regard to cases

where the foreclosure of opportunities is considerably

greater than here. As the Court stated in Board of Regents

v. Roth, supra, 408 U.S. at 575, 92 S.Ct. at 2708:

It stretches the concept of liberty too far to suggest

that a person is deprived of ‘liberty’ when [one] simply

is not rehired in one job but remains as free as before

to seek another.

The defendant Goldfarb is a man of substantial means and

abilities. He kas numerous opportunities for a variety

of occupations before him. The Nevada Gaming Commis-

sion’s denial was hardly of the magnitude required to trig-

ger the Fourteenth Amendment.’

*The defendant also cites a number of cases which deal with

constitutional deprivations which occur when applicants are de-

nied admission to professions. For example, in Schware v. Board

of Bar Examiners, 353 U.S. 232, 77 S.Ct. 752, 1 L.Ed.2d 796 (1957)

the Supreme Court held that the New Mexico Board of Bar Exami-

ners had wrongfully denied Schware a license to practice law

allegedly because of former communist party affiliations. The Court

found a due process violation, not in the abstract nor because of

any protected liberty or property interest, but because the criteria

applied by the Board were not rationally related to the ends to be

served by them and because the criteria impinged upon protected

First Amendment rights. No mention of a liberty or property in-

terest in practicing law was made. Therefore, whatever these cases

say about entrance requirements and substantive due process, they

do not address the question at hand. Moreover, I think that the

“legitimate claim of entitlement’’ of one in the plaintiff Schware’s

position is considerably stronger than Goldfarb’s, if indeed Gold-

farb can be said to have any claim at all in this regard. I think that

the other cases defendant cites in this vein may be similarly distin-

guished. See Goldsmith v. Board of Tax Appeals, 270 U.S. 117, 123,

46 S.Ct. 215, 70 L.Ed, 494 (1926); Shaw v. Hospital Authority,

507 F.2d 625 (5th Cir. 1975) ; Don v. Okmulgee Memorial Hospital,

443 F.2d 234 (10th Cir. 1971).

38a

More troublesome is Hornsby v. Allen, 326 F.2d 605 (Sth

Cir. 1964). There, an unsuccessful liquor license applicant

claimed she met all the requirements for a license yet was

denied arbitrarily, without a statement of reasons. Noting

that merely calling a liquor license a privilege does not ex-

empt the state from the Fourteenth Amendment in its deal-

ings wvith license applicants, the court held that one who

satisfies the requirements for a license is entitled to a due

process hearing upon denial thereof. On its face, it seems

that Hornsby is support for Goldfarb’s position although

he has not, as yet, shown he meets the requirements for a

gaming license (nor does it seem that he could, given the

subjective and complex criteria applied by the Nevada

state agencies). Id., at 610. However, in Atlanta v. Allen,

389 F.2d 713 (5th Cir. 1968), the Fifth Circuit reconsidered

Hornsby and stated that where the state sets forth specific

criteria upon which the decision to grant a license will be

based, there arises a due process right to have the agencies

act only upon those criteria. The court emphasized it does

not sit as a super-Liquor Control Board. There has been

no showing here that Nevada authorities did not act upon

their published criteria, nor do I sit to review their decision.

I have recently reviewed the Hornsby line in connection

with a Michigan liquor license applicant’s suit charging

that the City of Pontiac acted arbitrarily in denying a li-

quor license. Shamie v. City of Pontiac, 443 F.Supp. 679,

684 (E.D.Mich.1977). I held there that the Hornsby case

should not be followed, reasoning that liquor license appli-

cants have no claim of entitlement under Roth. See Lewis

v. City of Grand Rapids, 356 F.2d 276, 285-6 (6th Cir.

1966) ; Medina v. Rudman, 545 F.2d 244 (1st Cir. 1976),

cert. denied, 434 U.S. 891, 98 S.Ct. 266, 54 L.Ed.2d 177

(1976).’

™I do not believe the Supreme Court’s mention of Hornsby in

Goldberg v. Kelly, 397 U.S. 254, 296. n.9, 90 S.Ct. 1011, 25 L.Ed.2d

287 (1970) as an example of a situation in which courts had

39a

Moreover, Nevada has gone to great lengths to deny the

kind of claim of entitlement to a gaming license that Roth

requires of one claiming a protected property interest.

Nev.Rev.Stat. § 463.140(2) provides, “The commission

shall have full and absolute power and authority to deny

any application or to limit, condition, restrict, revoke or

suspend any license.” Regulation 4,010.1 provides:

Any gaming license .. . shall be deemed to be a revo-

cable privilege and no person holding such a license

. is deemed to have acquired any vested rights

therein."

Without deciding the validity of such statutes and regu-

lations, they are nonetheless excellent evidence of the

status of a gaming license under Nevada law and practice.

They make explicit no applicant should expect a license.

Property rights—legitimate claims of entitlement—are

within the state’s authority to create or deny. For example,

in Bishop v. Wood, 426 U.S, 341, 345, 96 S.Ct. 2074, 2077,

48 L.Ed2d 684 (1975), the Supreme Court held that the

existence of “an enforceable expectation of continued pub-

lic employment,” a property right, was to be determined by

whether under state law or custom such an interest existed,

Nevada has explicitly disclaimed the interest claimed; its

determination is conclusive, For these reasons, I find the

abjured the ancient notion of property interests as rights in a

tangible thing amounts to a tacit approval of that case, as Goldfarb

contends.

* Regulation 4,010.2 provides

An applicant for a state gaming license is seeking the grant-

ing of a privilege, and the burden of proving his qualification

to receive any license is at al) times on the applicant, An ap-

plicant must accept any risk of adverse public notice, embar-

rassment, criticism, or other action or financial loss which may

result from action with respect to an application and expressly

waive any claim for damages as a result thereof.

40a

Nevada statutes under attack are constitutional. The indict-

ment will not be dismissed on this ground.

However, I also find that even assuming the unconstitu-

tionality of the Nevada statutes in question, the defendants’

claim must fail.

The overriding federal nature of the Travel Act dictates

that an offexise thereunder is primarily federal in nature.

United Stetes v, Polizzi, supra, 500 F.2d at 869 (9th Cir.

1974) ; United States v. Prince, 529 F.2d 1108, 1111-2 (6th

Cir. 1976), cert. denied, 429 U.S, 838, 97 S.Ct. 108, 50 L.Ed.

2d 105 (1976). The gravamen of the offense is the interstate

nexus itself. Polizzi, supra, at 869. In § 1952 cases the state

law serves merely a definitional purpose—there is no need

to prove a violation of state law as an essential element

of the federal crime. United States v. Prince, 515 F.2d 564,

566 (5th Cir. 1975); United States v, Nardello, supra;

United States v. Conway, 507 F.2d 1047, 1051 (5th Cir.

1975) ; but see United States v. Brown, 505 F.2d 261, 262-3

(4th Cir, 1974). Thus, I do not think the unconstitutionality

of the underlying state statute would necessarily be a de-

fense to prosecution under § 1952.

One case has dealt with this question. United States v.

Hiatt, 527 F.2d 1048 (9th Cir. 1975), There the defendant

in a Travel Act prosecution argued that the underlying

Alaska prostitution statute was unconstitutional as a de-

nial of equal protection to women and, therefore, he could

not be prosecuted. The court stated:

The constitutional infirmity asserted against the

Alaska statute was that it denied equal protection of

laws to females, as enforced. This defense in the ab-

sence of a .etermination that the Alaska statute was

void in its entirety, would not be available to males

prosecuted for prostitution, Under these circumstances,

it is doubtful that Hiatt can utilize this infirmity to

defeat prosecution pursuant to the statutes under

which he was here convicted. Jd., at 1051.

4la

This statement points out, moreover, a crucial feature of

a holding of unconstitutionality, had one been secured here.

Even if the instant Nevada statute was held violative of

the defendants’ due process rights, either on its face or in

operation, it would not necessarily result in a defense to

§ 1952. The alleged unconstitutional aspect of the statute

has no relationship to the defendant’s rights in his posture

as a criminal defendant, The statute, in some respects, may

be viewed as severable, That is, an improper infringement

of a license applicant’s due process rights may yet retain

sufficient vitality in its criminal prohibitory effect to sup-

port a prosecution under the Travel Act, especially given

the overriding federal nature of a Travel Act prosecution.

To illustrate, consider a prosecution for violating an

obscenity law. If the law is held unconstitutional as an in-

fringement of the defendant’s First Amendment rights, that

would constitute a defense to the prosecution, Once the un-

constitutional portion of the statute is stricken, the statute

retains no prohibitory vitality. This is essentially the situa-

tion presented in Shuttlesworth v. Birmingham, 394 U.S.

147, 89 S.Ct, 935, 22 L.Ed.2d 162 (1969). Reverend Shuttles-

worth was prosecuted for violating an anti-parade ordi-

nance, It was a direct prohibition of his First Amendment

rights. Holding the law unconstitutional thus removed the

offense completely. Holding the Nevada statutes attacked

here unconstitutional in the license-applicant context would

not so remove the offense.’

In this case, the alleged unconstitutionality of the Nevada

law does not directly concern the defendants’ asserted right

to engage in gambling activities. It does not proscribe con-

duct protected under the Constitution. The alleged infirmity

is incidental to the defendants’ rights. This is a difficult

* Consider also Moore v, City of Rast Cleveland, 431 U.S, 494,

97 S.Ct, 1932, 52 L.Ed.2d 531 (1977), where the unconstitutionality

of a zoning law on Ninth Amendment and substantive due process

grounds precluded conviction thereunder,

42a

distinction to draw because the rubric “due process” is ap-

plied to rights that surface in both civil and criminal con-

texts. However, the due process rights that apply in the

license denial context are distinct from the due process

rights which obtain in a criminal context. The fact that

Goldfarb may have a 42 U.S.C. § 1983 action against Ne-

vada does not necessarily confer immunity from prose-

cution.

This conclusion points out that Goldfarb should have

tested the constitutionality of the regulation or statute in

question before he embarked on a course of violating it—

if he did indeed violate it. See generally: McGee v. United

States, 402 U.S. 479, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971);

McKart v. United States, 395 U.S. 185, 197-202, 89 S.Ct.

1657, 23 L.Ed.2d 194 (1969); Falbo v. United States, 320

U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305 (1943) ; Estep v. United

States, 327 U.S. 114, 66 S.Ct. 423, 90 L.Ed. 567 (1946);

Mulloy v. United States, 398 U.S. 410, 416, 90 S.Ct. 1766,

26 L.Ed.2d 362 (1970); Witmer v. United States, 348 US.

375, 380-1, 75 S.Ct. 392, 99 L.Ed. 428 (1955).

The defendants stress the absence of a forum in which

to appeal the Commission’s denial. Assuming, arguendo,

that this is true, there was nonetheless a judicial forum to

challenge the validity of the denial. Goldfarb availed him-

self of it when he filed suit in the 8th Judicial District. If

Goldfarb thought the regulations or procedures were

faulty, the suits should have been continued to its conclu-

sion. The cases of St. Joseph Stock Yards Co. v. United

States, 298 U.S. 38, 51-52, 56 S.Ct. 720, 80 L.Ed. 1023 (1936)

and Ohio Valley Water Co. v. Ben Avon Borough, 253 U.S.

287, 289, 40 S.Ct. 527, 64 L.Ed. 908 (1919) are distinguish-

able because at stake there were protected constitutional

interests.

Having considered defendants’ other claims, I find them

without merit. The motion to dismiss the indictment is

hereby denied.

43a

APPENDIX C

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

Souruern Drvision

Criminal Action: 8-80572

Unrtep States or Amenica, Plaintiff,

Cuarves Goiprars, et al., Defendants.

Opinion Denying Motion To Dismiss

#10

The instant motion to dismiss the indictment proceeds

on three theories.

I. The Travel Act (18 U.S.C. § 1952) makes it unlawful

to use any interstate facility to “promote, manage, estab-

lish or carry on... any unlawful activity.” 18 U.S.C.

§ 1952 (a)(3). “Unlawful activity” is defined as “any busi-

ness enterprise involving gambling . . . offenses in violation

of the laws of the state in which they are committed ....”

18 U.S.C. § 1952 (b) (1).

The indictment charges that the defendants participated

in the ownership and management of the Aladdin Hotel

and Casino without licenses required by Nevada law. The

defendants claim that because the Aladdin is a lawful

business in Nevada, there can be no violation of the Travel

Act; only where the business that the defendant is alleged

to have operated is wholly illegal under state law is the

Travel Act violated. Merely operating a lawful business

in violation of state regulations thereof, they claim, is not

conduct at which the Travel Act is aimed. In support of

this claim the legislative history is invoked.

doa

The crucial question is whether the phrase “business

enterprise” is confined to businesses wholly illegal under

Nevada law or has a broader meaning, namely, a course

of conduct designed to violate the law. The latter inter-

pretetion is correct.

In the hearings before the House and Senate Judiciary

Committees (Legislation Relating to Organized Crime:

Hearings on H.R. 468 et al., Before Subcomm, No. 5 of

the House Comm. on the Judiciary, 87th Cong., 1st Sess.

(1961) (hereinafter “House Hearings”) and Attorney

General’s Program to Curb Organized Crime and Racke-

teering: Hearings on S. 1653 et al., Before the Senate

Comm. on the Judiciary, 87th Cong., 1st Sess. (1961) (here-

inafter “Senate Hearings”), the phrase “business enter-

prise” was explained to mean “a continuous course of

conduct sufficient for it to be termed a business enterprise.”

Statement of Attorney General Robert F. Kennedy at the

Senate Hearings. The House Report (H.Rep. No. 966, 87th

Cong., Ist Sess. (1961), reprinted in (1961) U.S. Code

Cong. & Ad. News 2664, 2666) states:

The use of the term “business enterprise” requires

that the activity be a continuous course of conduct.

Thus, individual or isolated violations would not come

within the scope of this bill since they do not constitute

a continuous course of conduct so as to be a business

enterprise.

Likewise, when Deputy Attorney General Herbert Miller

explained the Travel Act to the House Judiciary Com-

mittee he stated:

The use of the term “business enterprise” limits the

application of this section to a continuous and or-

ganized course of conduct in these activities .... House

Hearings at 336.

45a

The legislative history is not unambiguous, however. On

two occasions Chairman Celler of the House Judiciary

Committee posed a hypothetical question in which an in-

dividual crossed state lines with the intent to operate a

liquor store after legal hours and did thereafter so operate

it. Before the House Committee, Attorney General Ken-

nedy stated that in his opinion the Act would not be

violated. Chairman Celler, however, thought it would be.

House Hearings at 36. See also House Hearings at 146.

Moreover, on numerous occasions, the exact problem at

hand was brought to the legislature’s attention. Professor

Louis B. Schwartz stated that in his opinion the Act ap-

plied to

Combinations of lawful and unlawful activities (and)

. . applies even to travel to promote lawful aspects

of a business which involves “unlawful” activities ...

House Hearings at 50.

Professor Schwartz thought that the Act “would cover a

vast range of regulations, violation of which entails only

fines or very limited imprisonment under state law.” Id.

And similarly, several other commentators brought this

problem to the Committee’s attention. House Hearings at

75 (statement of Professor Herbert Wechsler) ; Zd., at 162

(statement of Richard A. Green) ; /d., at 173-175 (statement

of Martin M. Nelson). These people unanimously thought

that the fact that the Act would prohibit such conduct was

a deficiency ; the proposed legislation was too broad. There-

fore, the Congress was aware of the wide scope of the

Travel Act and passed it anyway. Had Congress desired

to narrow the Act, it would have done so.

The defendant, however, cites testimony before the Com-

mittees which points to the narrower reading. Deputy At-

torney General Miller told the House Committee that “H.R.

6572 bans unlawful business—not incidental illegal acts

46a

done in the course of legal business.” House Hearings at

336. And at House Hearings 341 Miller stated:

Any business enterprise can have an employee or the

president or someone down the line commit some act

which is in violation of a statute and therefore, a

crime .. . he might be rolling dice in the back room

for example, which is a violation of State law. Now,

that does not make the business enterprise, itself an

unlawful one.

However, this does not necessarily conflict with the notion

of a course of conduct to operate the Aladdin without a

license being itself, apart from the Aladdin Hotel, an illegal

business enterprise. Likewise, the Attorney General’s ex-

planation of the bill (H.R. 6572) as being directed at “the

business itself as being an illegal business”, House Hear-

ings at 342, may be reconciled with the broader interpre-

tation of the phrase “business enterprise” if a course of

conduct is considered as the business itself. See Miller,

“The Travel Act: A New Statutory Approach to Organized

Crime in the United States,” 1 Duquesne L. Rev. 181, 194

(1963).

Moreover, the proponents of the narrower reading were

equivocal. For example, when Robert F. Kennedy re-

sponded to Chairman Celle ’s liquor store hypothetical,

he intimated that where a person habitually crossed state

lines to operate his business after hours this would be a

violation of the Act. House Hearings at 35.

Finally, the testimony cited by defendant was all made

to the Congress rather than by it or its members. The

legislative intent is found in what the Congress intended

not in what proponents or opponents believed.’ Clearly, the

*Simply because the bill’s proponents may have painted the

Travel Act as a narrower statute in order to speed its passage does

not mean that the Act is confined to their interpretation. Congress

surely was aware of the potential of the language it passed.

47a

Congress knew the breadth of the proposed legislation yet

enacted it notwithstanding.

II. The defendants’ second claim relates to the indict-

ment’s specificity as to the acts “thereafter performed” in

furtherance of the illegal business. 18 U.S.C. § 1952 (a).

The indictment states that the defendants “thereafter did

perform and attempt to perform (such) acts.”

Although an indictment must specifically state the facts

of the alleged offense, this indictment is not deficient in that

regard. In United States v. Nichols, 421 F.2d 570, 573-74

(8th Cir. 1970) the indictment charged that the defendant

violated the Travel Act and “thereafter, .. . did perform

acts to... facilitate the ... carrying on of said unlawful

activity ....” The court held that “(the) indictment here

meets (the) necessary standards.” In United States v.

Levine, 457 F.2d 1186, 1189 (10th Cir. 1972) the court

approved language in a §1952 indictment which merely

“tracked” the statute. In United States v. Maselli, 534 F.3d

1197, 1199 (6th Cir. 1976) the court approved an indictment

which charged that the defendant “thereafter” .. . did per-

form and cause to be performed acts to promote, manage.

”

*-*

The defendants’ claim that if the “thereafter acts” are

allowed to consist of subsequent telephone calls then the

First Amendment is abridged, is clearly without merit. In

United States v. Smith, 209 F. Supp. 907, 918 (E.D. Ill.

1962) the court stated:

While the First Amendment provides freedom of

speech, it does not guarantee or protect criminal con-

duct. . . . These statutes do not restrict freedom of

speech; they merely prohibit the use of interstate com-

merce to [sic] certain conduct which the Congress has

declared to be illegal.

III. Defendants’ third claim is that those counts of the

indictment which are premised upon the receipt of a tele-

48a

phone call, rather than the placing, should be dismissed

because the mere receipt of a call does not constitute the

affirmative use of an interstate facility and thus does not

violate the Travel Act. It has no merit. By speaking in

response to the call the defendants made the requisite

affirmative use of an interstate facility.

For these reasons the motion to dismiss the indictment

is denied. An appropriate order may be submitted.

/s/ Joun Ferkens

John Feikens

United States District Judge

Date: December 28, 1978,

Detroit, Michigan.

49a

APPENDIX D

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SoutHern Division

Criminal Action: 8-80572

Unrtep States or Amenica, Plaintiff,

Vv.

Cuar.es Gotprars, et al., Defendants.

Opinion: Multiplicity of Travel Act Counts

This opinion supplements a thorough discussion of this

issue which was had on the record on November 30, 1978.

At oral arguments and in the briefs, the defendants

raised various issues as to whether there were multipli-

citous counts in the indictment. I raised the more specific

question as to whether the Travel Act (18 U.S.C. § 1952)

counts against each defendant were multiplicitous. That is,

do the separate counts, each alleging a single interstate

telephone call involving one or more of the defendants,

fragment a unitary offense into several. I find the indict-

ment multiplicitous in this respect. Before trial the govern-

ment must elect one count of § 1952 violation upon which

to proceed to the jury against each defendant.

Discussion

Multiplicity is the charging of a single offense in several

counts. 1 Wright, Federal Practice and Procedure, 4 142

(1969). The problem has arisen in a variety of situations

involving the relationships between several types of crimi-

nal statutes and several different kinds of illegal conduct.

In Bell v. United States, 349 U.S. 81 (1955) the defend-

ant transported two women across state lines, in violation

50a

of the Mann Act, on a single journey. The Supreme Court

held that only one conviction could be obtained, noting that

the punishment appropriate in a federal offense is a matter

for the discretion of Congress. The Court stated:

When Congress has the will it has no difficulty in ex-

pressing it— . . . that is, of defining what it desires

to make the unit of prosecution and, more particularly,

to make each stick in a faggot a single criminal unit.

349 U.S. at 83.

In Ladner v. United States, 358 U.S. 169 (1958) the

Court held that only one violation of 18 U.S.C. § 254 was

committed when the defendant fired a single shotgun blast

injuring two federal officers.

In United States v. Universal C.1.T, Credit Corp., 344

U.S. 218 (1952) the government prosecuted on an indict-

ment which alleged one violation of the minimum wage law

for each of six weeks in which it was claimed that the

employer had paid sub-standard wages. Id., at 244. The

Court held that in this situation only one conviction was

proper on the rationale that the offense of paying sub-

standard wages was by definition only intended to cover

a course of conduct, and, this being so, it would be improper

to fragment a single course of conduct into multiple of-

fenses without some clear expression of Congressional in-

tent in that direction.

The common thread between these cases is that each

involved a prosecution for several violations of a single

wtatutory section where the conduct engaged in by the

defendant was either a single act or a connected series of

acts. Cases involving the question of whether a single act

may violate several distinct statutory prohibitions, Gore v.

United States, 357 U.S. 386 (1968), or several closely re-

lated statutory provisions, Prince v. United States, 352 U.S.

322 (1957), thus are not directly on point. They involve

considerations somewhat different than those involved here.

5la

The question here is multiple violations of a single statute

by a single or close related sequence of acts.

From the foregoing cases, several propositions emerge.

First, the most important consideration in determining

multiciplicity is the ascertainment of the appropriate unit

of prosecution; the smallest unit of misconduct which Con-

gress intended to merit prosecution. Determining the ap-

propriate unit is a matter of Congress’ intent. Bell, supra,

at 82; Ladner, supra, at 178; Heflin v. United States, 358

U.S. 415, 419 (1958). See also United States v. Woods,

568 F.2d 509, 513 (6th Cir. 1978) and United States v.

Nichols, 401 F. Supp. 1377 (E. D. Mich. 1977). Secondly,

each case of this nature is different and must be resolved

with reference to the particular statute and facts involved.

Precedent is of little more than illustrative value. Univer-

sal C.1.T. Credit Corp. .p~a, at 222. Thirdly, doubts as to

Congress’ intent to iItiple acts or consequences

multiple violations / gle act a multiple violation)

should be resolved ot the government under the prin-

ciple of lenity. In Gore the Court stated:

When Congress has not explicitly stated what the unit

of offense is, the doubt will be resolved in favor of

lenity. 357 U.S. at 391

See also Ladner, supra, at 177; Universal, supra, at 221.

It is only when Congress’ intent is clear will multiple

violations by a single act be found. Likewise, when the

offense at issue is arguably comprised of a series of acts

or a course of conduct, then multiple violations will only

be found from a course of conduct when Congress’ intent

is clear.

To illustrate these principles, consider Gore, supra.

There the Court found that on three separate occasions

Congress has enacted penalties for the sale and distribution

of narcotics as part of a continuing and progressive

strategy to curb illicit narcotics trade by imposing cumu-

52a

lative and overlapping penalties. Therefore, the Court

allowed three prosecutions for a single act by the defend-

ant. 357 U.S. at 390. But in Heflin, supra, the Court found

that in enacting two statutes which could cover the same

conduct, Congress was merely trying to fill gaps in the law

and reazh new groups of offenders rather than increase

the penalties for the conduct at issue. Thus, the Court did

not allow prosecution for both taking and possessing stolen

property. 18 U.S.C. § 2113 (c) and (d).

In this case, the government claims that each of some

nineteen interstate telephone calls is a separate Travel Act

violation, emphasizing that it is the travel itself which is

prohibited and, thus each separate call must be a separate

violation.

I disagree. The legislative history of the Travel Act, as

exhaustively discussed in the opinion on Motion No. 10

(motion to dismiss based on the claim that the Act was

directed only at unlawful activities conducted as businesses

rather than at courses of conduct in violation of law) is

clear that the Travel Act was designed to reach illegal

courses of conduct only and that isolated instances of

violation of state law were not within its ambit. Although

a single act of travel will suffice to support a violation,

it is clear that the i!!erval conduct at which the Act was

aimed was a continuous course of activity. The evi’ at which

the Act was directed was organized activity, not the use of

interstate facilities. Thus, the travel provides the federal

nexus but is not the essence of the offense.

This analysis demonstrates where the court in United

States v. Polizzi, 500 F. 2d 856 (9th Cir. 1974), cert. denied,

419 U.S. 1120 (1975) errs in its analysis. Polizzi conceived

that the essence of the offense is travel while I believe it

to be business enterprise itself, with the federal nexus only

ancillary. The case of United States v. Teemer, 214 F.

Supp. 952, 958 (N.D. W. Va. 1963) is likewise in error on

this issue.

53a

Several other factors weigh in my decision, The purpose

of the Act is to supplement the efforts of local law en-

forcement authorities. This aim may be accomplished with-

out the dubious device of making each separate telephone

call a separate offense. In addition, the legislative history

indicates grave concern on the part of Congress with re-

spect to the Act’s wide scope. To allow this already broad

statute to support the multiple counts presented in this

indictment would be contrary to those concerns.

The case of United States v. Woods, 568 F. 2d 509 (6th

Cir, 1978) is particularly instructive in this regard. There

the defendant was convicted of three counts of violating a

narcotics possession statute based on his possession of a

drug at the same time but at three separate locations, The

court held that the counts charging the separate posses-

sions were multiplicitous, reasoning that the relevant stat-

ute’s legislative history did not indicate a Congressional

intent to make the possession of drugs kept separately

packaged and stored more than one offense. The analogy

between the separate packages of drugs and the separate

telephone calls at issue here is clear.

The Woods case also voiced two other considerations

which are relevant to this prosecution. First, the court

reasoned that where sufficient penalties for the offense

charged are available under conviction on one count, multi-

ple counts are not indicated, Jd., at 515. Where the purpose

of the statute will be served as well by one count as by

many, this purpose, when found, weighs against multiple

counts, In this connection the government’s concessions

that each defendant may be punished only through a uni-

tary sentence is relevant. Here, the purpose of the Travel

Act is to enable federal law enforcement to bear upon

illegal businesses operated across state lines, This purpose

is as well served by one count as many. Second, the Su-

preme Court has expressed the belief that where multiple

counts expose a defendant to punishment out of proportion

54a

to the crime, they should not be allowed, Ladner, supra

at 177,

In concluding that the Travel Act counts are multipli-

citous, I reach a result which is directly contrary to United

States v, Poligei, supra, and United States v. Teemer, su-

pra. However, scrutiny of the legislative history of the

Act compels my conclusion, I find no evidence to suggest

that Congress was interested in making criminal each

telephone call across state lines. Considering the Act’s

focus on a course of conduct as the real evil, Congress

would have indicated more clearly its intent to punish

separate acts of travel had it so desired. The language of

the statute is ambiguous and thus the balance must tip in

favor of the defendants,

A necessary result of the conclusion that the Travel Act

counts are multiplicitous is that the RICO counts 21 and

22, involving 18 U.S.C. $1962 (b) and (c), must be dis-

missed,

The government must, therefore, elect among counts

1—8 and 14—19 as to defendant Goldfarb; among counts

1—4, 8, 11, 138 and 15 as to defendant Abraham; and,

among counts 5, 9—13, 18 and 19 as to defendant Tamer.

Count 14 against defendant Monazym is allowed to stand.

If not elected as to Goldfarb, it must be dismissed as to

him,

An appropriate order is entered herewith.

/s/ Joun Farkens

United States District Judge

Date: December —, 1978,

Detroit, Michigan,

55a

APPENDIX E

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

Sournern Division

Criminal Action: 8-80572

Unirep States or America, Plaintiff,

Cuarves Gotprars, et al., Defendants,

Opinion Denying Post-Trial Motions

(Filed June 18, 1979)

Defendants Charles Goldfarb, James Tamer, James

Abraham, Edward Monazym and the Aladdin Hotel Cor-

poration were convicted by a jury of conspiring to violate

18 U.S.C. § 1952, in violation of 18 U.S.C. § 371, Goldfarb,

Abraham and the Aladdin were convicted also of violating

18 U.S.C, § 1952. Tamer was acquitted of a similar charge.

These convictions arose from Defendants Goldfarb and

Tamer’s hidden operation of the Aladdin Hotel and Casino

in Las Vegas, Nevada through the use of interstate tele-

phone lines between Detroit and Las Vegas, Goldfarb was

charged with concealing his true role there from Nevada

authorities, Abraham was both a co-conspirator and an

accomplice to Goldfarb’s crime, Monazym was a co-

conspirator,

Kach Defendant now moves for some or all of the fol-

lowing relief: (1) a judgment of acquittal (Rule 29(c)

F.R. Crim,P.); (2) a new trial (Rule 33); (3) arrest of

judgment (Rule 34); and (4) a judgment of acquittal sub-

sequent to the taking of all proofs (Rule 29(b)). Pursuant

to the policy I instituted at the inception of this case, any

motion by one of the Defendants is, if applicable, a motion

by all.

56a

Each Defendant has also filed written objections to the

jury charge. These objections were all raised before the

charge was delivered, either on the record in court or by

written requests, and all may be taken to have been denied.

I will not review them further at this point. (See Tr.

4006-7)

Rather than to attempt to treat these motions by subject

matter, they are dealt with by reference to the Defendant

on whose behalf they are made. This is because there is

overlap as to the points raised, and one asserted error

might form the basis for several types of relief.

Defendant Goldfarb

Goldfarb’s motion does not purport to raise new issues.

Rather, it urges a review of several adverse rulings made

before and during the trial.

The first claim is that neither of the two Nevada statutes,

Nev. Rev. Stat. §§ 463.160.1(a) and 463.335, referred to in

the indictment describe any offense which encompasses the

conduct in which Defendants were alleged to have engaged.

In Goldfarb’s motion, this argument has two parts. Section

463.335.3 prohibits one from being a “gaming employee”

unless he is the holder of a valid work permit issued in

accordance with the applicable local ordinances or regula-

tions, or, if none is required thereunder, by the Gaming

Control Board. The statute enumerates a number of occu-

pations, the practitioners of which are “gaming employ-

ees.” Citing the principle of ejusdem generis Goldfarb

argues that the conduct he is alleged (or proved) to have

engaged in does not fall within the ambit of the phrase

“gaming employee.” He argues the thrust of the govern-

ment’s allegations and proofs was control and ownership,

not employment, or at least not employment in the low-

level sense which the statute seems to contemplate.

57a

The second aspect of Goldfarb’s motion is that though

§ 463.160 makes it unlawful for anyone to operate or con-

duct any gambling operation without first having procured

and thereafter maintained all gaming licenses as required

by statute or ordinance, he was not a “person required to

be licensed,” even if all the government claims about his

conduct are true. He argues that a § 463.335 work permit

is not a “license” under § 463.160.1; therefore, failure to

have it is not criminal. He also claims that there is no

statute that requires one in his position to be licensed, and

that the licensing requirement in cases like his is, if it

exists at all, purely an administrative one. And, even if an

administrative requirement that one must hold a license

would render it criminal thereafter to operate a casino

without it, Goldfarb contends that such a requirement was

never made applicable as to him; he says that the closest

the Nevada Gaming Commission came to such a require-

ment was its denial of the license 4 463.530 mandated him

to have if he was to be an officer of the Aladdin, (In 1971

Goldfarb applied to be licensed as the putative Secretary-

Treasurer of the Aladdin. He was denied that license be-

cause of “unsuitable associations.”)

An extended response to this argument is not appropri-

ate. My interpretation of the Nevada gaming laws, with my

explanation of what acts constitute crimes under Nevada

law, is set forth fully in my charge to the jury. [Tr. 3978-

3983] It is sufficient to say that I find § 463.335 broad

enough to encompass Goldfarb’s conduct. I rely especially

upon the phrase: “connected directly with the operation

of a nonrestricted establishment, and includes without

limitation . . .” contained in § 463.335.1(a). Additionally,

with respect to § 463.160.1(a), I hold that if a person ap-

plies for a license under § 463.530 as an owner or officer

and is denied such a license (for whatever reason) and

continues thereafter to exert significant influence and con-

trol over the operations of a casino, that person is in viola-

tion of § 463.160.1(a). Such a person is “required to be

58a

licensed” within the meaning of that section and is one who

is “dealing, operating, ete.” a gaming operation without

“first having procured and thereafter maintaining” the

license he/she is required to possess. To hold otherwise

would make this law meaningless; a person desiring to

operate a casino without being licensed to do so could use

the simple expedient of concealing his/her real influence

from the Nevada authorities.’

Goldfarb next argues that by interpreting the Nevada

statutes referred to in the indictment as I did, I “went far

beyond the allegations of the indictment to sustain the

validity of the government’s charge.” (Goldfarb brief at

p. 2) It is Goldfarb’s argument that even if my interpreta-

tion of Nevada law is correct and the conduct claimed is

criminal, the nature and dimensions of such a crime are so

different from what is described in the indictment that he

and the other Defendants were significantly disadvantaged

thereby.

It appears Goldfarb alludes to principles of variance and

amendment, The two concepts are closely related. Vari-

ance refers to the failure of the government’s proofs to

conform to the indictment. A variance is not fatal to the

prosecution unless the defendant could not reasonably have

anticipated from the indictment what evidence would be

presented at trial or unless the indictment is so vague as

not to bar subsequent prosecution on the same offense.

United States v Knuckles, 581 F 2d 305, 309-311, (2nd Cir),

cert. denied 99 S Ct 581 (1978) ; United States v Fruehauf

Corp., 577 F 2d 1038, 1056 (6th Cir), cert. denied 99 S Ct

* Note here the distinction I make between the illegal conduct

alleged against Goldfarb—continued functioning as a de facto

casino officer after being denied a license to do so [Tr. 3982-3985] —

and the illegal conduct alleged against Tamer—causing to be con-

cealed or aiding in the concealment of his true role at the casino—

in violation of Regulation 3.100.1 [Tr. 3988-3990] (See also Tr.

3973-3982)

59a

349 (1978) ; United States v Dumn, 577 F 2d 119, 123 (10th

Cir. 1978); Watson v Jago, 558 F 2d 330, 333-334 (6th Cir

1977) ; United States v Maselli, 534 F 2d 1197, 1201-1202

(6th Cir 1976). A variance is not ground for reversal un-

less the defendant’s substantial rights are abridged. United

States v. Berger, 295 U.S. 78, 82 (1934). In this case I find

no prejudicial variance.

The apparent amendment claim needs more analysis, but

it too is without merit. It is settled since Ex Parte Bain,

121 U.S. 1, 10 (1887) that neither the court nor the prose-

cutor may substantially change the indictment to “suit its

own notions of what it ought to have been or what the

grand jury would probably have made it if their attention

had been called to suggested changes. . .” This is in keep-

ing with the principle that a court may not establish stand-

ards of conduct upon pain of imprisonment; such is the

legislature’s domain. An amendment te the indictment is

per se reversible error. United States v Crocker, 568 F 2d

1049, 1059 (3rd Cir 1977), United States v Fruehauf, supra,

at 1056. An amendment may be express or “constructive”

(effective). Id. In determining whether there has been a

constructive amendment inquiry should focus on whether

any essential element of the crime was proved by facts

different than those alleged. Stirone v United States, 361

U.S. 212 (1960). Thus, if the indictment alleges one sort of

false testimony but the government is permitted to prove

another sort, false testimony being necessary for convic-

tion, an amendment has occurred. United States v Crocker,

supra. Similarly, in a Hobbs Act case, if a grand jury

alleges one sort of interstate nexus while proof and argu-

ment show another, an amendment has occurred. Stirone v

United States, supra. See United States v Prejean, 494 F 2d

495, 497 (5th Cir 1974); United States v Vesaas, 586 F 2d

1%i, 103 (8th Cir 1978).

In this case, there were three elements the government

was required to prove: (1) the use of an interstate facility;

60a

(2) actual or attempted promotion, ete. of an unlawful

activity; (3) specific intent. United States v Prince, 529

F 2d 1108, 1112 (6th Cir), cert. denied 429 U.S. 838 (1976)

The proofs did not diverge from the course established by

the requirement of these elements, The only apparent argu-

ment available to Goldfarb (and the other Defendants) is

that the grand jury did not pass upon the exact shape of

the illegal acts in Nevada, which it is their constitutional

right to have done. I find this contention without merit.

The grand jury needed to know enough of the Nevada

gaming laws to make the indictment sufficient, which it did.

My interpretation of Nevada gaming law presented De-

fendants with no new factual charges that they were re-

quired to meet, to use variance phraseology, nor did it

allow either proof or argument of a new factual basis for

any element of the crime, to use amendment terminology.

Moreover, the allegation as to the Nevada offense was

broad enough to include the specific crime I have already

explained. It has often been held that one way to guard

against a constructive amendment claim is to draft an

indictment with generality, United States v Crocker, supra,

at 1059, so long as it contains the necessary specificity.

Goldfarb’s third point is that the conspiracy count in the

indictment is duplicitous. In support he cites United States

v Gipson, 553 F 2d 453 (5th Cir 1977).? His argument is

that in both the indictment and the charge to the jury two

distinct types of illegal conduct were described: operation

of the casino by Goldfarb who was not, but should have

been, licensed (accomplished by hiding his real role from

the Nevada gaming authorities) and concealment from the

authorities of Tamer’s real role in the operation of the

casino.

* See also United States » Gipson: Duplicity Denies Right to

Unanimous Verdict, 1978 Det. Coll. L. Rev. 319, cited by Defendant

Tamer.

6la

The conspiracy count charges an agreement among the

defendants to conduct and operate the casino by persons

who were not licensed, whose roles were concealed from the

Nevada gaming authorities, in violation of §§ 463.160.1(a)

and 463.335. Goldfarb contends that because I instructed

the jury that a conviction could be based on their finding

that there was an agreement to operate the Aladdin in

violation of Nevada law either by concealing the role of

Tamer or by the mechanism of Goldfarb’s operation, or

both, he was deprived of his right to a unanimous jury

verdict. He argues it is possible that six of the jurors

agreed on a Tamer centered conspiracy while the other six

agreed on a Goldfarb centered conspiracy.

The Defendant’s position is not persuasive. The first

difference between this case and Gipson is that this case

(at least insofar as duplicity is concerned) involves a con-

spiracy, rather than a substantive offense. The importance

of this distinction is explained in United States v Bolts,

558 F 2d 316, 325-326 (5th Cir 1977), cert. denied 99 S Ct

262 (1978). The charge there was that the defendant had

conspired to traffic in narcotics, in violation of several

related drug laws. The indictment was challenged as du-

plicitous but the court disagreed. It said it was unnecessary

for the jury to decide which specific statutory provision the

defendant-appellant had agreed to violate, so long as he

had joined an agreement to traffic in narcotics. In a fo

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