Petition — Charles Goldfarb v. United States

Supreme Court brief1981

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MAY 26 1981

ALEXA i SteVAS,

In the Supreme Court of the Gnited States

OCTOBER TERM, 1980

CHARLES GOLDFARB, PETITIONER,

vs.

UNITED STATES OF AMERICA, RESPONDENT.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

N. C. Depay LARENE

Attorney for Petitioner

1500 Buhl Building

Detroit, Michigan 48226

(313) 962-3500

RENAISSANCE PRINTING COMPANY, 76 W. ADAMS

9TH FLOOR, DETROIT, MICHIGAN 48226 — PHONE 964-3185

QUESTIONS PRESENTED

WHETHER A CHANGE IN THE THEORY OF

ILLEGALITY IN AN INDICTMENT UNDER

WHICH THE DEFENDANT STANDS CHARGED

WHICH IS WORKED BY A TRIAL COURT’S

JURY INSTRUCTIONS CONSTITUTES A CON-

STRUCTIVE AMENDMENT OF THAT INDICT-

MENT, CONTRARY TO THE PROTECTIONS

AFFORDED BY THE FIFTH AMENDMENT TO

THE UNITED STATES CONSTITUTION?

Il.

WHETHER CONDUCT WHICH AT MOST VIO-

LATES NONPENAL STATE ADMINISTRATIVE

REGULATIONS CAN CONSTITUTE “UNLAW-

FUL ACTIVITY” UNDER AN INDICTMENT

CHARGING CONSPIRACY TO VIOLATE AND

VIOLATION OF THE TRAVEL ACT, 18 USC §

1952?

III.

WHETHER INSTRUCTIONS WHICH PRE-

SENT A JURY WITH ALTERNATE THEORIES

OF ILLEGALITY, BUT DO NOT CAUTION

THAT ALL JURORS MUST AGREE ON WHICH

‘THEORY IS THE BASIS OF ANY CONVICTION

DEPRIVES A DEFENDANT OF THE RIGHT TO

A UNANIMOUS VERDICT?

PARTIES TO THE PROCEEDINGS BELOW

Charles Goldfarb, James Tamer, James Abraham, Edward

Monazym and The Aladdin Hotel Corporation were indicted jointly

in the United States District Court for the Eastern District of

Michigan, and were all convicted in that court of, variously, viela-

tion of the Travel Act, 18 USC §1952, and/or conspiracy to violate

that statute. They each appealed those convictions as of right to the

United States Court of Appeals for the Sixth Circuit, which con-

solidated those appeals for hearing and decision. The within Peti-

tion seeks review of the decision of the Court of Appeals which af-

firmed all convictions. While it is .; Smitted by Charles Goldfarb

only, it is the understanding of petitioner herein that the other

defendants in the courts below either have filed or will file petitions

seeking writs of certiorari to review the propriety of their convictions

as well. The issues presented herein are relevant to the convictions of

all of the defendants in the court below (and petitioners in this

court), and certain of the issues to be presented by other of the

defendants below (and petitioners here), most notably by James

Tamer, are particularly relevant to the propriety of the conviction

of petitioner.’

' It is specifically the intention of the petitioner Goldfarb to adopt the

arguments put forward in the Petition for Certiorari being filed on behalf

of James Tamer, as well as such arguments advanced by other petitions

filed on behalf of individuals who were co-defendants in the proceedings

below which may be applicable to him.

TABLE OF CONTENTS

QUESTIONS PRESENTED ................ccceeeeeeeees

PARTIES TO THE PROCEEDINGS BELOW ..............

3. fy nn a ene

MI i ss Renn Coane ecen ere

PROVISIONS OF LAW AND REGULAYIONS INVOLVED .

STATEMENT OP TURGARE «65502650065 cv ecesvies.

REASONS FOR GRANTING THE WRIT

THE TRIAL COURT'S JURY CHARGE WORKED A

CONSTRUCTIVE AMENDMENT OF THE INDICT-

MENT, CONTRARY TO THE PROTECTIONS AF-

FORDED BY THE FIFTH AMENDMENT TO THE

UNITED STATES CONSTITUTION, BY EFFECTING

AN UNANTICIPATABLE CHANGE IN THE THEORY

OF ILLEGALITY UPON WHICH THE DEFENDANT'S

GUILT OR INNOCENCE WAS TO BE JUDGED BY THE

POR, Spike rey Papeete

THE TRIAL COURT'S INSTRUCTIONS PERMITTED

CONVICTION FOR VIOLATION OF THE TRAVEL

ACT. AND CONSPIRACY TO VIOLATE THAT STAT-

UTE, ON THE BASIS OF CONDUCT WHICH AT MOST

VIOLATED NONPENAL STATE REGULATIONS .....

THE TRIAL COURT'S INSTRUCTIONS PRESENTED

THE jURY WITH ALTERNATE THEORIES OF ILLE-

GALITY, BUT FAILED TO CAUTION THE JURORS

THAT THEY MUST ALL AGREE AS TO THE SUFFI-

CIENCY OF THE GOVERNMENT'S PROOF WITH RE-

SPECT TO ANY THEORY UPON WHICH A CONVIC-

TION WAS BASED, IN VIOLATION OF THE RE-

QUIREMENT OF AUNANIMOUS VERDICT .........

SCREEN bond. cr venckibccnveceahbicessadntabsee dae

vii

APPENDIX

OPINION OF THE SIXTH CIRCUIT COURT OF AP-

PEALS AFFIRMING PETITIONER'S CONVICTION ..... la

ORDER OF SIXTH CIRCUIT COURT OF APPEALS

DENYING PETITION FOR REHEARING .............. 24a

PROVISIONS OF FEDERAL AND STATE LAW AND REG-

CETTE OUTED voces icc eensivrerchvesersnse 25a

TABLE OF AUTHORITIES

CASES

Boute v. Columbia, 378 US 347, 353 (1964).........

Cole v. Arkansas, 333 US 196, 201 (1948) .........

Dunn v. United States, 442 US 100, 106(1979) ......

Ex Parte Bain, 121 US 1(1887).............ceeee

Gaither v. United States, 413 F2d 1061, 1071 (DC Cir.

BE aie de Me tad cee Gin Ocha EGOS Ss SP ees

Russell v. United States, 369 US 749, 770 (1962) .....

Singer v. United States, 323 US 338(1945)..........

Stirone v. United States, 361 US 212(1960).........

United States v. Eaton, 144 US 677, 688 (1892) ......

United States v. Gipson, 553 F2d 453 (5th Cir. 1977). .

United States v. Gordon, 464 F2d 357 (9th Cir. 1972) .

United States v. Grimaud, 220 US 506, 519(1910) ...

United States v. Howard, 352 US 212(1957) ........

United States v. Hyatt, 527 F2d 1048, 1051 (9th Cir.

SU Gs oa ae OW ins sc RON nae cs aaa See Se EIS

MN ORL dtd aR SVS i405 ehRED LES > ba paws

died havind G64 ok due hate Weee ence

Watson v. Jago, 558 F2d 330, 333 (6th Cir. 1977) ....

OTHER AUTHORITIES

Nevada Gaming Commission Regulations:

Nevada Revised Statutes:

Coie bea V bind «ile 6's ba eiike

PG Pa cise s Leeda hes. ck ee Oe nee

hs pee DAES by Fads Kine ate Kees

Fe trae Ca had hanes Ae eR AN Re RO

eee GAG a alnsia's we du K4a4a na 88s

gata a lnk ade s wae Ve key ds HONS

| errr ret Tere ree ee

le Oy rt ite eee eee eee

Rule $1(a), Federal Rules of Criminal Procedure ....

Rule 17.1(c), Supreme Court Rules ...............

vii

JURISDICTION

The Opinion of the Sixth Circuit Court of Appeals affirming the

Petitioner's conviction in the United States District Court for the

Eastern District of Michigan was entered on March 5, 1981. His

timely filed Petition for Rehearing was denied by Order of that

court April 1, 1981. This Court's jurisdiction to review the decision

of the Court of Appeals by writ of certiorari is invoked under 28 USC

§1254(1).

PROVISIONS OF LAW AND REGULATIONS INVOLVED

The relevant provisions of federal constitution and statute, and of

state statute and regulation are as follows:

United States Constitution, Amendment V

United States Constitution, Amendment VI

18 USC §371

18 USC §1952

Nevada Revised Statutes 463.160.1(a)

Nevada Revised Statutes 463.335

Nevada Gaming Commission Regulation 3.100

Nevada Gaming Commission Regulation 3.110

Because they are lengthy, their pertinent text is not set forth here,

but, as suggested by Rule 21.1(f) of the Rules of this Court, are re-

produced as part of the Appendix to this Petition, following the

Opinion of the Sixth Circuit Court of Appeals affirming petitioner's

conviction, and the Order of that court denying rehearing.

No. 80-

In the Supreme Court of the Gnited States

OCTOBER TERM, 1980

CHARLES GOLDFARB, PETITIONER,

VS.

UNITED STATES OF AMERICA, RESPONDENT.

PETITION FOR A WRIT OF CERTIORARI

STATEMENT OF THE CASE

Petitioner, Charles Goldfarb, was charged by way of indictment

in the United States District Court for the Eastern District of

Michigan, with violation of the Travel Act, 18 USC §1952 and con-

spiracy to violate that statute, in violation of 18 USC §371.

The charges of which the petitioner was convicted grew out of his

involvement with the Aladdin Hotel and Casino, a licensed gaming

establishment in Las Vegas, Nevada. Also charged along with the

petitioner were James Abraham, the vice-president and general

manager of the Aladdin, Edward Monazym, a casino “host” em-

ployed by the Aladdin, the Aladdin Hotel Corporation itself, and

one James Tamer, who served as the entertainment director of the

hotel.

All defendants were charged in the conspiracy count, which

charged, essentially, a conspiracy to use the facilities of interstate

commerce (the telephone) to facilitate the carrying on of an activity

alleged to be in violation of Nevada state law — essentially, accord-

ing to the tenor of the indictment, the unlicensed ownership, opera-

tion and conduct of the gaming affairs of the Aladdin Hotel.

Additionally, the defendants Goldfarb, Tamer, Abraham and

Monazym were charged with substantive Travel Act violations on

the basis of specific telephone calls; each of these calls was also alleged

as one of the overt acts in the conspiracy count.*

A jury trial was conducted before the Honorable John Feikens,

Chief Judge of the District Court. As the evidence showed, Charles

Goldfarb had been part of a group which had bought the Aladdin

Hotel in 1971 from its then owner, the Recrion Corporation. The

hotel was operating at a loss and was purchased for the “bargain”

price of $5.1 million. Although the petitioner had previously been

licensed as a part owner of another Las Vegas casino, when the new

owners of the Aladdin applied to the Nevada Gaming Commission

(the administrative body which is empowered to grant or deny gam-

ing licenses in the State of Nevada) for licensure, that body rejected

the application as to the petitioner on the basis of a finding that he

possessed an “unsuitable background and unsuitable associations.”

Upon the rejection of his application, petitioner surrendered the

stock which had been issued him in the newly formed Aladdin Hotel

Corporation. However, he secured an option to purchase stock from

one of the stockholders whose application had been approved, and

reapplied to the Gaming Commission for approval as a stockholder

of the Corporation. That application was still pending at the time of

trial.

The bulk of the government's trial evidence was obtained

through the interception of wire communication on telephones

located at the petitioner Goldfarb's office and home telephones,

and the defendant Tamer's place of business.

* Two counts under the RICO statute (18 USC §1961 et seq), and a

number of Travel Act counts were dismissed prior to trial, pursuant to

unappealed pretrial orders of the District Court.

The telephone calls, together with hotel records and the

testimony of some witnesses, unquestionably showed a degree of in-

volvement in the affairs of the Aladdin Hotel on the part of the peti-

tioner Goldfarb. It was the nature and significance of that involve-

ment that was disputed by the government and defense.

For example, the evidence certainly showed that the petitioner

sent, or referred, a large number of persons to the Aladdin, and that

many of these people received complimentary services (room, food

and beverages) and were permitted to gamble on credit. “Comps”

and casino credit, the testimony showed, are freely given in Las

Vegas, but the significance of their extension in this case was a cen-

tral fact at issue at trial.

It was the contention of the government that Goldfarb was auth-

orizing these complimentary services and extending this credit; peti-

tioner, on the other hand, sought to show that he was merely refer-

ring customers to the hotel and making recommendations as to the

extension of complimentary privileges and gambling credit, which

the hotel sometimes followed, and sometimes did ot, but with

respect to which, the persons actually operating the Aladdin Hotel

retained the discretion to follow or not follow, and that where the

recommendations were followed it was because in the judgment of

the hotel employees it was in the best interests of the hotel.

The evidence also showed that petitioner was involved in discus-

sions of attempts to refinance or sell the hotel in order to alleviate

cash flow problems. (As the testimony demonstrated, although the

Aladdin was flourishing, and its worth had multiplied to something

over $100 million, expansion had burdened the corporation with

heavy debt service obligations.) Here again, the government con-

tended that the evidence suggested a degree of control over the af-

fairs of the hotel, while the defense argued that the conversations

showed no more than interest, concern for the security of his poten-

tial investment (and the expectancy of ultimate profit therefrom —

the option, for an eight percent interest, would potentially be worth

some four to eight million dollars if the Gaming Commission

permitted petitioner to exercise it), and a friendship with the per-

sons actually involved in the management of the hotel and casino.

Some of the telephone calls contained statements by the peti-

tioner to the effect that he had a “vested interest” in the hotel, or

that he, from time to time, discussed “policy” to be implemented, or

that he had caused changes to be made in certain hotel operations

(for example, a new system for ordering breakfast through room

service). Here again, there was no serious question as to whether or

not petitioner had some involvement with the hotel, but rather what

the nature of that involvement was: petitioner contended that his

interest in the hotel was represented by the expectancy which resided

in his unexercised option, as well as his friendship with the prin-

cipals in the corporation, that it would not be unusual or improper

for a member of the management team at the Aladdin (or anywhere

else) to discuss the ups and downs of the enterprise with someone

who was close to them, and who might one day soon sit among

them, and that, no matter what their maker might have thought,

the suggestions which petitioner made were only that — suggestions

— and were only followed (when they were followed) because, in the

independent judgment of the hotel management, it was in the in-

terest of the hotel to do so.

The government, of course, contended these statements meant

more, and were indicia of ownership or control.

Evidence also was adduced regarding the petitioner's involve-

ment with co-defendant James Tamer, who was employed at the

time in question as the entertainment director of the hotel. It was

the government's theory that Tamer was in fact more than merely

involved in the entertainment activities at the hotel, and the govern-

ment presented at trial certain telephone conversations between

Tamer and Goldfarb (as well as Tamer and others) regarding the fi-

nancial affairs of the hotel, as wel! as evidence that Tamer and

Goldfarb were working together in order to secure the expungement

of an almost 40-year-old conviction of Tamer's, which was thought

to stand in the way of Tamer’s licensure or approval for involve-

ment in affairs of the Aladdin which went beyond the area of

entertainment.

On March 13, 1979, petitioner was convicted of both the substan-

tive and conspiracy counts.’ On July 9, 1979 he was sentenced to

serve concurrent terms of three years in the custody of the Attorney

General, and to pay a fine of $10,000 on each count of which he was

convicted.

He duly perfected an appeal as of right to the Sixth Circuit Court

of Appeals. On March 5, 1981, that court affirmed the convictions

of the petitioner (and those of his co-defendants). A Petition for

Rehearing was timely filed, and was denied by the Court of Appeals

by Order of April 1, 1981.

* James Tamer was acquitted of the substantive count against him, but

convicted of the conspiracy count. The trial court granted a motion for a

judgment of acquittal as to the substantive count against Edward

Monazym, but Monazym was convicted by the jury on the conspiracy

count. The defendant Abraham was convicted of both substantive and

conspiracy counts, and the Aladdin Hotel Corporation was convicted of

the conspiracy charge, the only charge against it.

REASONS FOR GRANTING THE WRIT

THE TRIAL COURT'S JURY CHARGE WORKED A CON-

STRUCTIVE AMENDMENT OF THE INDICTMENT,

CONTRARY TO THE PROTECTIONS AFFORDED BY

THE FIFTH AMENDMENT TO THE UNITED STATES

CONSTITUTION, BY EFFECTING AN UNANTICIPAT-

ABLE CHANGE IN THE THEORY OF ILLEGALITY

UPON WHICH THE DEFENDANT'S GUILT OR IN-

NOCENCE WAS TO BE JUDGED BY THE JURY

The Travel Act, 18 USC §1952, provides, in pertinent part, that:

(a) Whoever ... uses any facilities of interstate com-

merce ... with intent to —

(e) ... promote, manage, establish, carry on, or

facilitate the promotion, management, establish-

ment or carrying on, of any unlawful activity

and thereafter does any other act of promotion,

facilitation, and the like, shall be guilty of a felony.

The statutory definition of “unlawful activity” applicable to the

instant case is found in subsection (b) of the statute:

(b) As used in this section “unlawful activity” means (1)

any business enterprise involving gambling ... of-

fenses in violation of the laws of the state in which

they are committed.

The Travel Act counts of the Indictment defined the “unlawful

activity” which was the predicate for the charge of violation of §1952

as follows:

The ownership, operation, conducting and carrying on

of gaming operations of ... the Aladdin Hotel and

Casino, by a person 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 Statutes §§463.160.1(a) and 463.335, and

Nevada Gaming Commission Regulations 3.100 41, (b),

(d), (f), (g) and (i); 3.100 43, 3.110 ane 8.060.*

The conspiracy count charged a conspiracy to violate §1952 in

respect of such “ownership, operation, conducting and carrying

on.

Throughout the course of the proceedings in the trial court, peti-

tioner and the other defendants below sought to force the focusing

of the charges against them, and the theory of illegality comprised

by the indictment. The trial court's instructions to the jury,

however, swept away whatever foothold they might have thought

they had gained and redefined the “unlawful activity” charged by

the indictment in such a way as to constitute a constructive amend-

ment of the indictment, such as is forbidden by the Fifth Amend-

ment to the United States Constitution. Although the constructive

amendment worked by the trial court operated in a number of

ways, it is most easily seen with respect to the trial court's treatment

of the relationship between the Nevada state regulations referred to

in the indictment and the charge against the defendants.

Early on, the defendants jointly filed a motion to dismiss the in-

dictment for failure to charge an offense, the heart of which was

that the indictment failed to make out an offense against the laws of

the State of Nevada — a necessary predicate for Travel Act liability

— because of the vagueness of the references to Nevada law,

* This is the operative allegation of Count | of the indictment in its final

form, the only substantive count in which the petitioner was a defen-

dant. The substantive count against the defendant Tamer alleged viola-

tion of NRS 463.161(a) and Regulations 3.100 41, (i), 43, 3.110 and

8.060; the substantive count against the defendant Abraham NRS

463.161(a) and 463.355 and Regulations 3.100 41, (b), (f) and (i), 3.100

43, 3.110 and 8.060. Each of the dismissed Travel Act counts refer to

various permutations of what were basically the same array of statutes

and regulations.

because the conduct complained of would not constitute a violation

of the Nevada statutes set out in the indictment (NRS 463.160. 1(a)

and NRS 463.335), and because the regulations enacted by the

Nevada Gaming Commission, not being “penal” in nature, could

not form the predicate to a charge of violation of Nevada state law.

The cited statutes speak to the matter of what licenses and per-

mits are required to conduct gaming in Nevada. The first, NRS

463.160.1(a) provides that “it shall be unlawful for any person,

either as owner, lessee or employee ... to deal, operate, carry on,

conduct, maintain or expose for play . . . any game or slot machine

. without having first procured, and thereafter maintaining in

full force and effect, all ... gaming licenses as required by statute

or ordinance.” The second, NRS 463.335, requires that persons

classified as “gaming employees” procure “work permits” before being

employed. Regulations 3.100 and 3.110 require a gaming licensee to

disclose the identities of executives, employees or agents of a gaming

licensee “having the power to exercise a significant influence over

decisions concerning” its operations, or who are otherwise classified

as “key employees” because of their supervision or involvement in

gaming, or their participation in the formulation of “management

policy.” Regulation 8.060 forbids the involvement of a person with

an application pending (such as the petitioner) from participating

in the conduct of the gaming licensee of which he seeks to become a

part.

The question of whether the regulations cited in the indictment

formed an independent basis for the charge of the Grand Jury (so

that conduct which violated only the regulations could constitute a

basis for conviction) was of great significance from the first, because

the only regulatory provision which in terms required disclosure or

which in terms applied to the conduct of applicants for licensure

(such as the petitioner) which were referred to in the indictment

were the regulations, not the statutes cited.

The response of the Government to a great extent mooted serious

debate on the effect of the regulations, however. In its response to

the motion to dismiss the indictment for failure to state an offense,

the prosecution took the position that violations of the regulations

could indeed not constitute “criminal acts within the purview of the

Travel Act”:

The predicate “unlawful activity” in this prosecution

arises from the violations of the cited Nevada statutes in

each count (Government's response p. 7)

Or, as the government elsewhere put it:

The citation in each count to the regulations violated by

the Defendants, therefore, does not intend or constitute

an attempt to charge “unlawful acts” independent of the

criminal statutes concomitantly cited. We do not quarrel

that the Defendants would be entitled to a charge that in

order to find a defendant guilty of a particular count that

it must find that the defendant violated the provisions of

the Nevada statute cited and described therein. (Govern-

ment’s response p. 8)

Indeed, when jury instructions came to be discussed, both

government and defense submitted requests to charge which would

have cautioned the jury against convicting the defendants on the

basis of conduct which they found merely to violate the regulations

enacted by the Gaming Commission, and not the statutes

themselves.°

> The Government's proposed special instruction No. 14 suggested that

the court instruct the jury that they “must distinguish Statutes from

Regulations in your deliberations. The unlawful activity must be of a

kind which furthers the violation of a State Statute, not just a Regula-

tion. Put another way, if you find the defendant's conduct furthered the

violation of a Regulation, but not a Statute, that element of the offense

has not been proven.” The Government's proposed instruction permit-

ted the jury to consider the regulations in only two ways — neither of

which allowed the Regulations any definitional significance with respect

to “unlawful activity” — first, “the same conduct which furthers the viola-

tion of a Regulation may also further the violation of a Statute,” and, sec-

ond, “with respect to the conspiracy count ... you may consider a viola-

tion of the Regulations . . . to be an act in furtherance of the conspiracy.”

continued on next page

However, the court not only declined to give either of these in-

structions, but rather instructed the jury that the regulations

“define” the unlawful activity charged:

[THE COURT]: 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 commanded to and

have enacted regulations which have force of law. It is

that law which defines unlawful activity. [Trial

Transcript (hereafter “TT”) pp. 3973-3974. |

The court specifically delineated the nature of the regulations’

commands:

[THE COURT]: I now take up another aspect of the

Nevada laws on gambling. One of the regulations. 300.

100, which is mandated by Nevada statute is required,

all holders of non-restricted licenses to disclose to Nevada

gaming authorities names of all persons exercising signi-

ficant 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 re-

quiring disclosure of all persons who have significant

control and influence as to gaming, and because of the

continued from previous page

The defendants put forward an instruction tailored to the treatment

given Gaming Commission Regulations in United States v. Polizzi, 500

F2d 856, 875 (9th Cir. 1974): the defendants proposed that the jury be

instructed that evidence of a knowing and willful violation of a regula-

tion could be considered on the question of the defendants’ “specific in-

tent to engage in an unlawful activity in violation of Nevada law.

However, the fact that the particular conduct of a defendant may have

constituted a violation of a Nevada regulation cannot form the basis for a

finding that the conduct of the defendants constituted an ‘unlawful ac-

tivity,’ as charged by the Government.” (Goldfarb and Tamer Requested

Jury Instruction No. 9.)

statutory 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. [TT p 3975]

While the above instructions were addressed specifically to the

conspiracy count, the court directly incorporated them into its in-

structions on the substantive charge:

[THE COURT]: Heretofore I have discussed with you

in considering the charge of conspiracy as to entail the

meaning of the phrase unlawful activity. Without re-

peating those instructions that I gave you then [but] with

the request that you keep them in mind here . .. [TT, p.

3982]

Beyond this unanticipatable treatment of the regulations, the

trial court additionally reached beyond the four corners of the in-

dictment and instructed the jury not only as to what it perceived to

be the general scheme of Nevada's regulation of gaming, but also,

to specifically define duties and standards of conduct with reference

to Nevada statutes which were not referred to in the indictment,

and which had not previously been the subject of proof or accusa-

tion in any other manner,

Thus, for example, the trial court instructed the jury on what it

perceived to be the “gist” of the Nevada regulatory scheme:

[THE COURT]: In order to regulate gambling under

Nevada law these statutes require full disclosure. Only

through full and accurate disclosure of all persons who

are connected with gambling in Nevada can the Nevada

gaming authorities properly perform their functions in

excluding from that industry all who are, in the authori-

ties’ opinions, unsuitable or undesirable for any number

of reasons. [TT, p. 3974]

Significantly, the court's instructions to the jury on some Nevada

statutes not mentioned in the indictment went to the very basis of

the theory of illegality derived by the trial judge regarding unlicensed

operation or conduct of a gaming establishment:

[THE COURT]: Now, against this general back-

ground, the following Nevada statutes are pertinent:

Nevada Revised Statute 463.530 requires that all persons

who require to become owners or shareholders in a gam-

ing 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 ownership of, operation or

conduct of the gaming affairs of the casino.

Another Nevada statute, NSR 463.130 [NRS 463.360]

states that the violation of these Nevada gaming statutes

is a crime, a gross misdemeanor. Thus, by concealment

of his ownership or operation or conduct in the gaming

conspiracy, a person may violate the Nevada laws. [TT,

pp. 3974-3975]

Petitioner argued at all points that, among other things, the jury

instructions constituted a judicial amendment of the indictment.

The trial judge turned away this argument upon the basis that its in-

terpretation of Nevada law “presented Defendants with no new fac-

tual charges that they were required to meet.” (Opinion Denying

Post-Trial Motions, p. 5.) The Court of Appeals, in affirming peti-

tioner’s conviction, merely quoted the trial court's decision in this

regard, and indicated its concurrence with that opinion.

The question which this Court should grant certiorari to resolve

is, as simply stated as possible, whether a divergence from the theory

of illegality alleged in a grand jury indictment constitutes a con-

structive amendment of that indictment, notwithstanding the fact

that that change presents the defendant with no new allegations of

fact. While this Court h2* neverly squarely stated such a rule, the

position of the petitioner is strongly suggested by a number of its

previous decisions, as well as by the basic concept of amendment.

The rule against constructive amendment, most frequently

associated with the decisions of this Court in Ex Parte Bain, 121 US

1 (1887) and Sterone v. United States, 361 US 212 (1960), is a prod-

uct of the Fifth Amendment's guarantee of prosecution by grand

jury, but is also implicated by due process considerations. As this

Court wrote in Dunn v. United States, 442 US 100, 106 (1979): “few

constitutional principles are more firmly established than a defen-

dant’'s right to be heard on the specific charges of which he is

accused.”

The rule against constructive amendment, simply stated, is that

the charges in an indictment may not be amended, either through

their literal change or constructively, through events at trial. As the

Sixth Circuit Court of Appeals put in Watson v. Jago, 558 F2d 330,

333 (6th Cir. 1977):

Under the Fifth Amendment's provision that no person

shall be held to answer for capital crime unless on the in-

dictment of a grand jury, it has been the rule that after

an indictment has been returned its charges may not be

broadened except by the grand jury itself.

Or, as the Distict of Columbia Circuit stated the principle in

Gaither v. United States, 413 F2d 1061, 1071 (DC Cir. 1969), “an

amendment of the indictment occurs when the charging terms of

the indictment are altered, either literally or in ef-

fect, by prosecutor or court after the grand jury has last passed upon

them.”

The right to be tried only upon the charge of the grand jury, and

to fair notice of the nature of that charge is the essence of the protec-

tion afforded by the rule against constructive amendment, and it is

no answer to the petitioner's complaints regarding the jury instruc-

tions, which reframed the theory of illegality upon which the indict-

ment was returned and the case tried to say that the trial court's in-

structions worked no change in the facts. Indeed, such a response

seems to misconceive the basic thrust of the rule.

As this Court noted in Cole v. Arkansas, 333 US 196, 201 (1948):

No principle of procedural due process is more clearly

established than that of notice of the specific charge, and

a chance to be heard in a trial of the issues raised by that

charge, if desired, are among the constitutional rights of

every accused in a criminal proceeding in all courts, state

or federal.

The trial court's instructions in the case at bar shifted the con-

tours of the charge against the petitioner and, while adding no new

“factual charges,” impaired his ability to defend against the charge

of the grand jury by altering the legal consequences of that defense.

Thus, for example, in the court's central instruction regarding the

effect of Gaming Commission Regulation 3.100, set forth above, the

trial judge instructed the jury that the regulation that “defines

unlawful activity” in the context of the case at bar requires the

reporting of the “names of all persons exercising significant control

and influence over gaming.” The court, building upon this inter-

pretation of the regulation, elsewhere instructed the jury that such

unreported control and influence was an element of the charge of

“unlawful activity” against the petitioner.

Any person who is an extremely large bettor, or who refers large

numbers of gamblers to a casino can exercise “significant control

and influence over gaming,” for obvious reasons, merely by virtue of

such gaming, and without having any proprietary interest or

authority over the affairs of the gaming establishment. A significant

portion of what had started out to be petitioner's defense was aimed

at establishing that, rather than being an “owner or operator” of the

Aladdin, the deference which was shown him by Aladdin employees

was due in significant part to his own gambling activities, and his

introduction of high stake gamblers to the hotel. Such a theory of

defense is obviously confounded when, at the eleventh hour, the

trial court instructs the jury on a reading of the regulation which

turns the defense proffered into a virtual confession of guilt and

makes that regulation a principal determiner of the charge against

the defendant, notwithstanding all previous understandings that a

mere violation of the regulations would not constitute “unlawful

activity.”

It is no answer to say, as the trial court did, and the Court of Ap-

peals repeated, that it does not matter that the “grand jury did not

pass upon the exact shape of the illegal acts in Nevada,” since all it

needed to know was “enough of the Nevada gaming laws to make

the indictment sufficient.” (Trial Court's Opinion Denying Post-

Trial Motions, quoted at Slip Opinion, p. 20.) It is not the function

of federal trial courts to fill in the pieces of an unformed mosaic in

an indictment, but rather, to assure that the charge upon which a

defendant is tried is indeed the charge of the Grand Jury.

As this Court wrote in Russell v. United States, 369 US 749, 770,

(1962):

To allow the prosecutor, or the court, to make a subse-

quent guess as to what was in the minds of the grand jury

at the time they returned the indictment would deprive

the defendant of a basic protection which the guarantee

of the intervention of a grand jury was designed to

secure.

Although the Court there wrote in a different context, its percep-

tion of the guarantees of the Fifth Amendment is instructive as to

the question here posed. Identical conduct may or may not be

criminal under different charges which a grand jury may frame. It

would seem that the intertwined protections of the Fifth Amend-

ment's guarantee of prosecution by grand jury, and of fair notice of

the charges against one, as contemplated by the due process clause

of that Amendment, must be seen as protecting against an after-

the-fact reinterpretation of the grand jury's charge, where such a

reinterpretation alters the basis upon which criminal liability may

or may not attach.

This Court's holding in Bouse v. Columbia, 378 US 347, 353

(1964), to the effect that the due process clause protects a defendant

against “an unforeseen judicial enlargement of a criminal statute,”

seems to suggest such a conclusion. Indeed, so does the Sixth Cir-

cuit’s own decision in Watson v. Jago, supra, which holds that a con-

structive amendment took place where a state court indictment

charging first degree murder on the theory of premeditation was

tried on the theory that the killing was first degree murder because

committed in the course of a felony. In both cases — the unforeseen

enlargement of a criminal statute, or the change in the premise

upon which particular conduct is seen to come within a previously

defined statute — there occurs the same kind of unfairness: a defen-

dant indicted on the basis of one theory of illegality may be con-

victed under a different theory as to why the same conduct is illegal.

Notwithstanding what seems to petitioner to be the clear import

of those decisions of this Court which define the nature of the pro-

tections implicated by the Fifth Amendment rights to prosecution

by grand jury indictment and fair notice of the charges against one,

the decision of the court below bespeaks a need for guidance as to

the benchmarks by which these protections are to be enforced. The

question is a clear and clearly defined one: whether a change in the

theory of illegality, which adds no new factual material but which

changes the basis upon which a defendant may be convicted of a

violation of federal law, constitutes a constructive amendment of a

grand jury's indictment? The question is an important one, im-

plicating as it does basic constitutional protections, and striking as it

does at the very core of the adversarial system of criminal justice. It

should receive a clear and definite answer by this Court, and the

case at bar provides an eminently appropriate vehicle for this Court

to furnish that answer.

THE TRIAL COURT'S INSTRUCTIONS PERMITTED

CONVICTION FOR VIOLATION OF THE TRAVEL ACT,

AND CONSPIRACY TO VIOLATE THAT STATUTE, ON

THE BASIS OF CONDUCT WHICH AT MOST VIOLATED

NONPENAL STATE REGULATIONS.

As noted above, the trial court's instructions defined a theory of

illegality by reference to Nevada Gaming Commission regulations.

It specifically synthesized one prong of its definition of unlawful ac-

tivity with reference to disclosure requirements which it derived

from the Gaming Commission regulations cited in the indictment.

(Indeed, as noted previously, of the provisions referred to in the in-

dictment, only the regulations deal with disclosure.)* Under the

Court's instructions, the jury could find petitioner guilty by finding

that his actions were aimed at violating these disclosure re-

quirements, which were defined on the basis of the requirements of

the regulations only — on the basis that is, that his conduct only

violated the regulations’ commands, as interpreted by the trial

judge.

The effect which the trial court thus gave to the regulations is in

conflict with those decisions of this Court which clearly define the

extent to which violations of federal law may be premised upon a

finding that conduct is in contravention of mere administrative

regulations, as opposed to legislative enactments.’

* Thus, for example, the trial court instructed the jury in part as follows:

[THE COURT]: I instruct you that it is illegal under

Nevada gaming laws for anyone exercising a significant con-

trol and influence as to gaming to conceal that control and

influence from the Nevada gaming authorities. The essence

or gist of the violation I have just outlined is concealment for

which failure to disclose, this must be contrasted 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 violation but not itself the actual unlawful activ-

ity. (TT, pp. 3975-3976]

” It is the understanding of the petitioner that it is the intention of James

Tamer, who was a co-defendant in the proceedings below, to file a Peti-

tion for Certiorari which advances an argument that is to a degree con-

centric with the argument put forth here. Petitioner Goldfarb wishes to

adopt and join in that argument, inasmuch as it is directly applicable to

his conviction of the conspiracy count, (under which Mr. Tamer was

convicted) and, because of the trial court's incorporation by reference of

its definition of “unlawful activity” in its conspiracy instructions to the

jury's consideration of the substantive counts (see discussion supra), it is

applicable as well to his conviction of the substantive count in which he

was charged (in which Mr. Tamer was not a defendant.)

The indictment alleged that the petitioner conspired to and in

fact violated that portion of the Travel Act which prohibits the use

of a facility of interstate commerce with intent to promote, manage,

establish, carry on or facilitate an “unlawful activity” involving

gambling “offenses in violation of the laws of the state in which they

are committed.”

As the Second Circuit Court of Appeals wrote in United States v.

Kahn, 472 F2d 272, 277 (2d Cir. 1973), “the initial inquiry in a

Travel Act case is whether the underlying activity violates a state

law.” There must be an underlying “unlawful activity,” and that

“unlawful activity” must involve state law offenses. In the words of

Ninth Circuit in United States v. Hyatt, 527 F2d 1048, 1051 (9th

Cir. 1976), “the existence of a state law violation is an element of the

violation of the Travel Act.”

There can be no “violation of law” sufficient to form the basis of

criminal liability by virtue of conduct which merely violates a

nonpenal administrative regulation. This has been clear ever since

this Court's decision in United States v. Eaton, 144 US 677, 688

(1892), where, in holding that a violation of regulations promul-

gated by the Commissioner of Internal Revenue under the

Oleomargarine Act of 1886 did not submit a defendant to criminal

prosecution, the Court wrote:

It is a principle of criminal law that an offense which may

be the subject of criminal procedure is an act committed

or omitted “in violation of a public law, either forbidding

or commanding it” ... It would be a very dangerous

principle to hold that a thing prescribed by the Commis-

sioner of Internal Revenue, as a needful regulation

under the Oleomargarine Act, for carrying it into effect,

would be considered a thing “required by law” in the car-

rying on or conducting of the business ... Regulations

prescribed by the President and by the heads of depart-

ments, under authority granted by law, so as lawfully to

support acts done under them and in accordance with

them, and may thus have, in a proper sense, the force of

law; but it does not follow that a thing required by them

is a thing so required by law as to make the neglect to doa

thing a criminal offense in a citizen, where a statute does

not distinctly make the neglect in question a criminal

offense.

Similarly, in United States v. Grimaud, 220 US 506, 519 (1910),

the Court made clear the distinction that would divide regulations

the violation of which may be the basis for criminal liability from

those in which it may not be — whether the legislative body which

authorizes the promulgation of regulations specifically provides that

a violation of the rules or regulations of the administrative body is

criminal:

But the very thing which was omitted in the Oleomargar-

ine Act has been distinctly done in the Forest Reserve

Act, which, in terms, provides that “any violation of the

provisions of this Act or such rules and regulations (of the

Secretary) shall be punished” as proscribed ...

Under this test, which has been adhered to by subsequent deci-

sions of this Court, see e.g., United States v. Howard, 352 US 212

(1957), Singer v. United States, 323 US 338 (1945), the regulations

of the Nevada Gaming Commission are clearly not penal in nature,

and therefore are not such that their violation constitutes a “viola-

tion of the laws of the state.” This is because while Chapter 463 of

the Nevada Revised Statutes, entitled “Licensing and Control of

Gaming,” does indeed authorize the promulgation of gaming regu-

lations (NRS 463.150(1) ), the penalty section of Chapter 463 (NRS

463.360(3) ) does not incorporate the regulations of the Nevada

Gaming Commission, but rather only provides that “the violation of

any of the provisions of this chapter” shall constitute a “gross misde-

meanor.” Indeed, in United States v. Gordon, 464 F2d 357 (9th Cir.

1972), the Ninth Circuit Court of Appeals specifically held that a

violation of Nevada Gaming Commission regulations “can only lead

to civil sanctions.”

The treatment of this issue by the Sixth Circuit Court of Appeals

recognizes but avoids the impact of this Court's decisions in such

cases as Eaton and Grimaud, supra. While agreeing that instruc-

tions which would permit a finding of “unlawful activity” to be

predicated upon conduct which the jury found violative only of

Gaming Commission Regulations, and not necessarily of statutes,

would be “prejudicial error,” the Court of Appeals nonetheless

wrote that the trial judge “did not instruct the jury at any place that

a violation of a regulation, in and of itself, constituted an ‘unlawful

activity.’ " (Slip Opinion, pp. 11-12.)

It is true, although a matter of no consequence whatsoever, that

the trial judge never spoke the words “a violation of a regulation in

and of itself can constitute ‘unlawful activity.’ " Without using those

words, however, there is simply no question that that is precisely

what his instructions told the jury.

The first words which the trial judge used in his instructions to the

jury with respect to the definition of “unlawful activity” were the

following:

[THE COURT]: 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 commanded to and

have enacted regulations which have the force of law. It

is that law which defines unlawful activity. [TT, pp.

3973-3974] (Emphasis supplied.)

Thus, in specific and unambiguous terms, the trial judge told the

jury that the Nevada regulations have the force of law and that it is

“that law which defines unlawful activity.” How much more specific

could the .structions have been? A trial judge does not instruct in a

vacuum — rather his instructions come against the background of

the testimony at trial. In the instant case, the jury had heard exten-

sive testimony regarding Gaming Commission Regulations 3.100

and 3.110, and had had the text of the regulations published to it

during the course of the trial, and explained to it by an “expert” on

Nevada Gaming law who had been called by the government.

Within moments after giving the portion of the instruction set

forth above, the trial court instructed the jury as follows:

[THE COURT]: I now take up another aspect of the

Nevada laws on gambling. One of the regulations, 300.

100 [sic], which is mandated by Nevada statute is re-

quired [sic], all holders of non-restricted licenses to

disclose to the Nevada gaming authorities the names of

all persons exercising significant control and influence

over gaming. (TT, p. 3975}

This statement, and the explanation of the contents of that

regulation which immediately followed were themselves immediately

followed by an instruction from the court 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 gaming authorities.” This formulation of what is “il-

legal” exactly parallels and mirrors the court's explanation of the

disclosure which it instructed the jury Regulation 3.100 requires —

“names of all persons exercising significant control and influence

over gaming.” How could the jury have thought other than that it

was the Nevada regulations, rather than anything else, which defined

the duty of disclosure, and the parameters of the theory of

“unlawful activity” being explained to it by the court, and which

controlled what was “legal” and “illegal”?

When the court came to the substantive counts, it first instructed

the jury that it should keep in mind the instructions given with

respect to the conspiracy charge (from which the above quoted por-

tions are taken) with respect to the meaning of the phrase “unlawful

activity.”

In defining the charge of “unlawful activity” in the substantive

count against the defendant Tamer, the court again summarized

what it took to be a disclosure requirement alleged by the Indict-

ment to have been violated, and told the jury:

[THE COURT]: 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. [TT, p. 3988] (Emphasis supplied.)

This instruction not only repeats the court's previous error of ascrib-

ing to a regulation “the force of law,” but, perhaps more significantly,

specifically equates statutes and regulations, by referring to the

regulations as compared with “other Nevada gaming statutes.” In

terms and in context, the instruction of the court tells the jury that

regulations are the same as statutes — how could the jury have failed

to have concluded that a violation of a regulation was the same as a

violation of some “other Nevada gaming statute"?*

Additionally, it seems clear, at the very least from the trial court's

rejection of both government and defense requests for cautionary

instructions as to the effect of the regulations (see footnote 5 supra)

that the trial judge intended to instruct the jury that a violation of

the regulations, without more, could form the predicate for a find-

ing of “unlawful activity.”

The Sixth Circuit also approved the trial court's instructions on

the basis that “the disclosure provisions required by Regulation

3.100 are cumulative to those contained in the Nevada statutes.

NRS 463.165, 463.339, 463.520, 463.530, 463.560." (Slip Opinion,

p. 13.) However, the fact of the matter is that the provisions of Reg-

ulation 3.100 which requires the disclosure of “every individual who

is directly or indirectly engaged in the administration or supervision

of the gaming operations or physical security activities” of a licensee

is far broader than any of the disclosure requirements of the statutes

cited, Additionally, the statutes referred to by the Court of Appeals

were never referenced by the indictment, and, indeed, were not

relied on by the trial court in its instructions. Rather, those instruc-

tions, and the proofs at trial were aimed solely and specifically at the

disclosure requirements of the nonpenal regulations promulgated

by the Nevada Gaming Commission, and at no other provision. As

such, those instructions, and the approval of them by the Court of

* It is true that Tamer was acquitted of the substantive count. However,

the court's instructions must be taken as a whole, and there is no question

but that this instruction had the capacity to influence and mislead the

jury as to the totality of its deliberations, particularly in view of the fact

that the court, as noted in the text, cross-referenced its instructions on

the “unlawful activity” portions of both substantive and conspiracy

counts. Moreover, the confusion could not help but spill over to affect

the petitioner.

Appeals run clearly afoul of the clear authority of this Court's

previous decisions which forbid such reliance on administrative

regulations of this sort, and call for the invocation of this Court's

authority on certiorari to correct such departures from “applicable

decisions of this court.” Rule 17.1(c), Supreme Court Rules.

III.

THE TRIAL COURT’S INSTRUCTIONS PRESENTED

THE JURY WITH ALTERNATE THEORIES OF IL-

LEGALITY, BUT FAILED TO CAUTION THE JURORS

THAT THEY MUST ALL AGREE AS TO THE SUFFICIEN-

CY OF THE GOVERNMENT'S PROOF WITH RESPECT

TO ANY THEORY UPON WHICH A CONVICTION WAS

BASED, IN VIOLATION OF THE REQUIREMENT OF A

UNANIMOUS VERDICT.

With respect to both the substantive and conspiracy counts

against the petitioner, the trial judge instructed the jury on alter-

nate theories of “unlawful activity.” With respect to the conspiracy

count, the court's instructions defined two species of violations of

what it perceived to be the provisions of Nevada law: under one

theory, “the violation is the unlicensed ownership or operation of

the gaming casino which is accomplished by ... concealment,”

while, under the other theory, “the essence or gist of the violation

... isconcealment . . . contrasted with the first instance of violation

I described earlier, that violation having to do with ... unlawful

licensing violation . . . where the concealment is a means to achieve

the violation but not itself the actual unlawful activity.” [TT, pp.

3975-3976]

Indeed, in its post-trial Opinion denying motions for new trial

and the like, the trial judge recognized that he had specifically in-

tended to define two species of unlawful activity — one being opera-

tion through concealment and the other concealment of operation.

(Opinion Denying Post-Trial Motions, p. 7.)

Moreover, since the court's instructions defined separate poten-

tial areas of interest which might have been concealed (the allegedly

concealed interest of the defendant Tamer or the allegedly concealed

interest of the defendant Goldfarb), the court's instructions with

respect to the conspiracy count permitted the petitioner to be con-

victed upon a finding that he conspired to conceal his own interest

in or operation of the casino, or that the object of the conspiracy was

the concealment of the interest in or operation of the casino by

James Tamer — as the trial judge put it, a “Goldfarb-centered” or

“Tamer-centered” conspiracy. (Opinion Denying Post-Trial Mo-

tions, p. 7.)°

With respect to the substantive count, the trial judge specifically

instructed the jury that they might find petitioner guilty on the basis

of conduct which constituted unlicensed operation or control over

gaming, or alternatively, on the basis that his conduct violated the

“work permit” statute, NRS 463.335, which is not a licensing re-

quirement, and which is wholly separable from the first theory. The

trial judge referred to the alternative theories as the “operator-

manager theory” as contrasted with the “gaming employee theory.”

[TT, pp. 3525-3526]

In submitting the charges against the petitioner to the jury on

alternate theories of liability, the trial court's instructions undercut

petitioner's right to a unanimous verdict.

Thus, with respect to the substantive count, six jurors could have

found the defendant guilty upon the basis that they were convinced

beyond a reasonable doubt that his conduct violated NRS 463.335,

but did not constitute unlicensed operation, as the court defined it,

and six jurors might have found him guilty on precisely the opposite

basis — that his conduct constituted unlicensed operation, but did

not violate NRS 463.335. With respect to the conspiracy count, half

the jurors might have found him guilty upon the basis that his con-

* It is the understanding of the petitioner that the Petition for a Writ of

Certiorari to be filed on behalf of Mr. Tamer will raise this argument

with respect to the conspiracy count, and will do so at some length. That

argument is directly relevant to petitioner, and petitioner would, with

leave of the Court, adopt and join in it.

duct violated the “operation by concealment” aspect of Nevada law

as defined by the trial court, but not “concealment of operation,”

and six on precisely the opposite reasoning. Similarly, with respect

to the conspiracy count, six of the jurors might have found the

defendant guilty on the basis that he had conspired to conceal his

own interest in the casino, but not the defendant Tamer’s and six

jurors on the basis that he had conspired to conceal the defendant

Tamer'’s interest, but not his own.

Such a situation runs clearly afoul of the fundamental guarantee

of a unanimous verdict upon which a defendant in a federal

criminal case has a right to rely, if for no other reason than by virtue

of the provisions of Rule 31(a), Federal Rules of Criminal Pro-

cedure. See e.g., United States v. Gipson, 553 F2d 453 (5th Cir.

1977).

Once the trial court's view of the case became clear to the peti-

tioner, and the possibility for alternate bases of a jury finding of

unlawful activity manifest, he, along with the defendant Tamer,

submitted a jointly requested jury instruction (No. 12) which would

have cautioned the jurors that, while they might find either defen-

dant guilty on the basis of varying theories of illegality, they must all

agree as to the sufficiency of the evidence to support any particular

theory of illegality before that theory could form the basis for a con-

viction. The trial court, however, refused the request and instead

gave only a standard instruction which advised the jurors that their

verdict “must represent the unanimous considered judgment of

each juror,” (TT, p. 3999] but which did not in any way address the

question of differing theories of “unlawful activity.” There is simply

no way in which any juror would have known or understood from

any portion of the trial court’s instructions that they must all agree

upon one or another of the various theories of criminal liability

which were submitted to them before such a theory could form the

basis for a conviction. Thus, the Court of Appeals’ disposition of this

issue upon the basis that “the jury was also instructed that its verdict

had to be unanimous,” (Slip Opinion, pp. 16-17) in no way is

responsive to the issue raised, or the state of the record below.

In United States v. Gipson, supra, the Fifth Circuit Court of Ap-

peals specifically held that a trial court's instruction which perimit-

ted a jury to convict a Dyer Act defendant charged in an indictment

with receiving, concealing, storing, bartering, selling or disposing of

a stolen motor vehicle without all twelve jurors agreeing on the way

in which the defendant violated the statute to offend the require-

ment of unanimity. Gipson has been the subject of much comment,

see e.g., United States v. Gipson: Duplicity Denies Right to

Unanimous Verdict, II DCL Law Review 319 (1978), and the issue

which it discusses is one which has never received the direct atten-

tion of this Court. Because of the way in which federal statutes and

indictments are ordinarily drafted, and because of the fundamental

nature of the rights and values involved, the question there and here

at issue is of great moment to the federal criminal jurisprudence.

The decision of the Sixth Circuit in the case at bar is in essential con-

flict with that of the First Circuit in Gipson, supra. For these

reasons, as well as the fundamental wrong done to the petitioner,

the Court should grant certiorari in the instant case to review the

decisions below.

CONCLUSION

The instant Petition presents important questions of federal

statutory and constitutional law, which have received treatment in

the courts below which is not only inconsistent with applicable deci-

sions of this Court, and in some respects in conflict with the deci-

sions of other circuits, but which has also worked a fundamental in-

justice to the petitioner.

The Court should issue a writ of certiorari to review the questions

presented, and should reverse the decision of the Sixth Circuit Court

of Appeals and petitioner's convictions and sentence.

Respectfully submitted,

N.C, DEDAY LaRENE

Attorney for Petitioner

1500 Buhl Building

Detroit, Michigan 48226

(313) 962-3500

APPENDIX

OPINION OF THE SIXTH CIRCUIT COURT OF

APPEALS AFFIRMING PETITIONER’S CONVICTION

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

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Unrrep STATES OF AMERICA,

Plaintiff-Appellee,

APPEAL from the

United States District

Cartes GoLprarns, JAMES TAMER,} (Court for the Eastern

James ApranAM, Epwarp Mona-| pistrict of Michigan.

ZYM, AND THe ALApvIN Hore. Cor-

PORATION,

Vv.

Defendants-Appellants.

Decided and Filed March 5, 1981.

Before: Weick, Live.y and Brown, Grout udges.

CHAAL

Weick, Circuit Judge. Appellants James Goldfarb and

James Abraham appeal from judgments of conviction entered

upon jury verdicts of guilty of the substantive offense pre-

scribed by the Travel Act, 18 U.S.C. § 1952." All of the

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

(a) Whoever travels in interstate or foreign commerce or

uses | facility in interstate or foreign commerce, including

the mail, with intent to—

@ @ oe

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

the ion, management, establishment, or carrying on, of

any unlawful activity,

and thereafter performs or attem to perform any of the

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

2 United States v. Goldfarb, et al. Nos. 79-5255, 79-5317-20

appellants appeal from judgments of conviction for conspiracy

to violate the Travel Act, 18 U.S.C. § 371.2 The appeals were

consolidated for oral argument.

The appellants raise a number of issues on appeal? in their

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 a ... in violation of the

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

United States, ...

218 U.S.C. §371 provides:

If two or more persons conspire either to commit yo ye

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

any agency thereof in any manner or for ye Rg oy

one or more of such persons do any act to effect 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 r only, the punishment for

such conspiracy shall not exceed the maximum punishment pro-

vided for such misdemeanor.

3 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 ex-

clude 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 particulars;

and that the court erred in failing to grant its motion for sev-

erance.

an uncharged conspirac

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 irrelevant

and prejudicial questioning of a character witness.

(d) Monazym chall of the evidence against

; existence of multiple es preju-

po = Py mm Bop fee gy wy : proceedi: hich

asa camera whic

were to his exclusion. so

(e) Other aspects of the “common ” involve variance

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

Nos. 79-5255, 79-5317-20 Uniied States v. Goldfarb, et al. 3

separate briefs. Each appellant assigns errors which 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 pursuant to statutory authority, viola-

tions of which appellants claim do not constitute unlawful

activity as prohibited by the Travel Act.

District Judge Feikens carefully considered all of these

issues in his “Opinion Denying Post Trial Motions” for judg-

ments 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 defendants

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 Gam-

ing Control Act and held it was not unconstitutional as being

violative of the due process rights of defendant Goldfarb who

was denied a gaming license.

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

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 jue:

mente of acquittal, new trial, and arrest of judgment. App.

4 United States v. Goldfarb, ct al. Nos. 79-5255, 79-5317-20

dismissed the suit. The trouble here is that Goldfarb and

the other defendants, by concealment and violation of Nevada

statutes and their implementing regulations authorized by the

statutes, were actually engaged in the illegal unlicensed man-

agement, 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 applied 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 Nevada Gaming Commission determined that he had an

“unsuitable background and unsuitable associations.” Gold-

farb then divested himself of his eight percent (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 conver-

sations 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, having

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 5

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

casino, did with the aid of the other defendants, maintain 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, including free ac-

commodations, for certain customers and had a hand in arrang-

ing for the extension of credit for individuals whom he sent

to the hotel. His advice and assistance 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 Teamsters Pension Fund. The government con-

tended that this was in keeping with the defendants’ scheme

to engage in the clandestine ownership, conducting and carry-

ing on of the gaming operations of the Aladdin by persons

not licensed 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 perfectly

consistent with the fact that Goldfarb was a valued customer

of the casino; a former investor, and possibly a future stock-

holder-officer of the corporation; a close associate of the man-

agement 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 activity.

“Unlawful activity” is defined as any business enterprise in-

volving gambling offenses in violation of the laws of the state

in which they are committed.*

4See footnote 1, supra.

6 United States v. Goldfarb, ct al. Nos. 79-5255, 79-5317-20

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 crim-

inal 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 engegad in some form of

unlawful activity prohibited by the law of the State of Nevada.

This contention is beyond dispute and amply supported 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 gam-

ing operations of a Las Vegas, Nevada gaming casino,

the ALADDIN HOTEL AND CASINO, by a person who

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

multiplicitous by the trial court.

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 7

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 Statutes, ——

463.160.1(a)* and 463.335,” and Nevada Gamin veges tes

mission Regulations 3.100 paragraph 1, (b), « ) i,

(g) and (i), 3.100 paragraph 3,° 3.110° and 8

6NRS § 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, rate, 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 main-

tain any horserace book ed sports pool;

without having first oes and thereafter a =

pn force and effect, all federal, state, county and ~ £44 + -.

—. licenses as required by statute or erdinanee

— ng board of any unincorporated city or town.

7NRS § 463.335 provides in pertinent part:

Gaming employees uired to hold work rmits;

and review; confidential records; expiration of work permits.

1. As used in this section:

(a) “Gaming emplo means any n connected directly

with the cpevuten yl a memsustrited etal establishment, and in-

cludes pa ae limitation:

(1) Boxmen;

(2) Cashiers;

(3) Dealers;

(4) Floormen;

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

pg d services;

Shills; and

(12) Supervisors or managers.

“Gaming employee” does not include bartenders, cocktail “it

ae in preparing or serving food

or beverages. .

nah Nevada Gaming Commission Regulation 3.100 provides in pertinent

3 Employee report.

1. Annually, on or before the 15th of J h

y uly, each nonrestricted

. as defined in 4.030.1(b), shall submit

report to the board Ly yy ty Ey Fe be te bone

8 United States v. Goldjarb, et al. Nos. 79-5255, 79-5317-20

The indictment alleges specific acts committed by Goldfarb in

the course of the performance of the unlawful activity.

Appellant Tamer was acquitted by the jury of the substan-

tive Travel Act count but was convicted of conspiracy.

ind Ey ee By Ttupervision the

eng on or su rs)

operations or —— security activities of such non-

Sout licensee. The ‘ollo A

classes of gaming gaming employes

are presumed to be asevey, directly engaged in ad-

ministration or supervision of gaming:

(b) ‘All individuals who may approve or extend ng credit

in any amount, or whose recommendations in regard are

ordinarily sought or followed:

4) ‘All individuals — have the authority to supervise or

rect a shift of any reson ng or security activity, including but

not limited to su on or direction of the 4a. t area, keno or

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

— or any persons having authority — supervise or

persons;

i) All individuals who may approve or extend to casino

patrons complimentary house services other than eateaee

only;

(g) Al individeels who supervise or direct other employees

ord control of gaming assets and revenues and rec-

neluding the recording of cash and evidences of

aa the maintenance, review or control of the

accounts, and reports of a which are re-

pane to be k pursuant to Reg. 6

ty All individuals who individually or as a part of a group

formulate management policy.

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

contained wi the annual employee report which occtrs

ye - the filing of the report and prior to the filing

of the rt for the next calendar year shall be reported to

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

pana 9 quarter during which the change, addition, or deletion

abe Nevada Gaming Commission Regulation 3.110 provides in pertinent

Key employee.

1. Any executive, employee, or eine a. a licensee

having the power to exercise a uence over de-

cisions — any part of r operation of a gaming li-

censee or who pg RF, A in the annual report

rw A 4, 3.100 is a key employee.

Nos. 79-5255, 79-5317-20 United! States v. Goldfarb, et al. 9

Count Three charged appellant Abraham with a substantive

violation of the Travel Act in much the same language as the

charge against Goldfarb. The alleged unlawful activity was

based upon the same Nevada Statutes and Regulations."

Abraham was alleged to have discussed with Goldfarb 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 opera-

tions of the Aladdin with the consent and assistance of Abra-

ham and in violation of the aforementioned statutes and regu-

lations. Abraham was convicted on this count.

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

yom ay that the public interest and the policies set forth

tion upon the licensee. The commission shall not be restricted

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

tions and responsibilities of the person involved in making

its decision as to key employee status. Grounds - requiring

licensing of a key rye be which are serve the

public interest and the cies of the Nevada Sates @ Control

Act include but are not PTimited to the following:

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

gaming establishment, the So F. or , a... level of influence

or responsibility which he

has little or outdated information pRB 3 his character,

background, 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.

10 Nevada Gaming Commission Regulation 8.060 provides:

ty be tion in operations. Except as Ay to the extent

n these regulations to emergency situa ons,

Ys ro written approval of no person who

to acquire an interest in any licensed gaming opera ration,

n a licensee or in a holding com shall in coumention there.

with take any part or be permi to take ony pe part whatever,

as an employee or otherwise, in the conduct of establishment wherein such op-

erations or in the operation of the establishment

gaming operations are conducted Sues Se pentenre,

application for license or to be permitted to acquire ia tt,

‘I The statutes and ulations relied upon

tet Count Three omits Nevada Gaming Regulation 3 100(1) (b) ond

10a

10 United States v. Goldfarb, ct al. Nos. 79-5255, 79-5317-20

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 facili-

ties of interstate commerce to promote, manage, establish,

carry on and facilitate the promotion, management, establish-

ment and carrying on of an unlawful activity, namely; the

ownership, operation, conducting and carrying on of gaming

operations of a Las Vegas, Nevada gaming 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 unlaw-

ful 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 moticn the appel-

lants argued, inter alia, that Nevada Gaming Commission

Regulations are not “law” for the purposes of criminal prosecu-

tions. From the earliest stages of the proceedings, the defen-

dants objected to and expressed concern over the notion that

a violation of a Nevada Gaming Commission regulation could

form the predicate state law violation 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 indicating

the application of the statute to the specific activity de-

scribed 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-

lla

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 11

titled to a charge that in order to find a defendant guilty

of a particular count that it must find a defendant vio-

lated the provisions of the Nevada statute cited and

described therein.

(Government's Response to Motion to Dismiss, Appendix

p. 138-39. )

Still claiming inability to comprehend and therefore defend

against the charges, the defendant's filed a joint motion 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 comprehen-

sive scheme of regulatory statutes. Under those statutes

a gaming commission and a gaming board are established

and they are commanded to and have enacted regulations

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

unlawful activity.

In Berman v. Riverside Casino Corp., 247 F. Supp. 243, 248

(D. Nev. 1964), affd 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 regulations

are intended to implement the provisions of the statutes re-

quiring disclosure of a corporate licensee’s key personnel.

Also, N. R. S. 463.150(2)(a) provides that the regulations shall

prescribe “the method and form of application which any

applicant for a gaming license . . . shall follow and com-

plete ...:” The court was thus required to include an in-

struction on regulations so that the jury would not completely

disregard them. The court did not instruct the jury at any

12a

12 United States v. Goldfarb, ct al. Nos. 79-5255, 79-5317-20

place that a violation of a regulation, in and of itself, consti-

tuted 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 government of

their departments, but for administering the laws which

did govern. None of these statutes could confer legisla-

tive power. But when Congress had legislated and in-

dicated 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 administrative rules and regula-

tions, 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.

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 Polizzi.

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

1980), we considered violations of the Controlled Substances

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

under which were authorized by Congress. There, as here,

the defendants contended that violations of the regulations

did not constitute an offense. We statetl:

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

a person to dispense or distribute a schedule V drug for a

13a

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 13

medical purpose and to be within the authority of their

registratior as determined by the Attorney General. Sec-

tion 822(a) requires every person who distributes or dis-

penses controlled substances to register with the Attorney

General. Section 821 authorizes the Attorney General to

promulgate rules and regulations relating to the registra-

tion and control of the manufacture, distribution, and

dispensing of controlled substances. Section 871(b) au-

thorizes the Attorney General 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 Grimaud, this Court is satisfied that

the statute does expressly, albeit in a convoluted fashion,

provide that a violation of the promulgated rules consti-

tutes an unlawful act under the Controlled Substances

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

During the presentation of evidence to the jury in response

to the defendants’ and the trial court’s desire to have the legal

theory of the case made clear, the government filed a docu-

ment 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 viola-

tion of the Regulations which is not concomitant with a statu-

tory violation will not support a Travel Act violation.” (Ap-

pendix, p. 283)

Thus the violation of the Nevada statutes and implementing

regulations would constitute unlawful activity under the Travel

Act. The disclosure provisions required by Regulation 3.100

are cumulative to those contained in the Nevada 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 ingredients

of the crime of conspiracy.

l4a

14 United States v. Goldfarb, et al. Nos. 79-5255, 79-5317-20

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 Regulations.

The court first instructed the jury on Count IV of the

indictment, the conspiracy charge. After preliminary matters

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 instructed on the

meaning of the phrase “unlawful activity.” As a general back-

ground, the court instructed as follows:

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

regulatory statutes. Under these statutes a gaming com-

mission and a gaming board are established and they are

commanded to and have enacted regulations which have

the force of law. It is that law which defines 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 authorities

properly perform their functions in excluding from the

industry all who are in the authorities’ opinions, unsuit-

able or undesirable for any number of reasons. (Appen-

dix 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 persons

who require [sic] to become owners or shareholders 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

l5a

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 15

then thereafter exercise any ownership of, operation, con-

duct 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 panes by concealment.

(Appendix, p. 1206-07)

The court then continued:

I now take up another aspect of the Nevada laws on

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

dated by Nevada statute is required, [sic] all holders of

non-restricted licenses to disclose to the Nevada gaming

authorities names of all persons exercising significant con-

trol 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 dis-

closure of all persons who have significant control and

influence as té gaming, and because of the statutory com-

mand 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 pro-

visions.

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 gaming authorities. The essence or gist of the

violation I have just outlined is concealment, for which

failure to disclose, this must be contrasted with the first

instance of violation I described earlier, that violation

having to do with an unlawful or unlawful licensing viola-

l6a

16 United States v. Goldfarb, ct al. Nos. 79-5255, 79-5317-20

tion of the Nevada casino, where the concealment is a

means to achieve the violation but not itself the actual

unlawful activity. (Appendix, p. 1207-08)

This in our opinion correctly stated the Nevada law.

In the instruction on the substantive offense oe against

Goldfarb, the court stated that:

[h]eretofore I have discussed with you in considering the

charge of mer apd as to entail the meaning of the

phrase unla activity. Without repeating those in-

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 defendant

Goldfarb engaged in is as follows: . . .

The court then described a statutory theory based on Nevada

Revised Statutes § 463.335 as was done in the conspiracy

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 Gold-

farb 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-

esrhip, operation or conducting or carrying on of gaming

operations of the Aladdin Hotel and Casino without 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

of the Aladdin Hotel and Casino from the

Nevada Gaming Authorities for which he was not li-

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

17a

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 17

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 3.100

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

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 Gam-

ing Authorities the identity of anyone who is directly or

indirectly involved in the casino’s administration; 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 anyone exerting significant

influence and control at the casino. The disclosure is

necessary so that the Nevada Gaming Authorities can

regulate gambling by determining that such a person

should be licensed, if he is to continue the exercise of sig-

nificant control and influence at the casino. Now, the

Aladdin itself is not charged with the violation. How-

ever, 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 gam-

ing laws.

18a

18 United States v. Goldfarb, et al. Nos. 79-5255, 79-5317-20

As to Abraham, the district court in instructing on Count

III of the indictment again carried through its interpretation

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 Defen-

dant Goldfarb, although the telephone call alleged in the

indictment between defendant Goldfarb and defendant

Abraham occurred on March 15, 1977. (Appendix pp.

1226-27 )

e e °

Additionally, in order for you to find defendant Abraham

guilty of the charges contained in Count III of the in-

dictment, the Government must also prove beyond a

reasonable doubt that defendant Abraham aided and

abetted defendant Goldfarb in either willfully engaging

in the ownership, operation, or conducting or carrying 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 defendant Gold-

farb in willfully concealing his ownership, operation or

conducting or carrying on of gaming operations of the

Aladdin Hotel and Casino from the Nevada Gaming Au-

thorities for which he was not licensed; or both of these

elements. (Appendix p. 1229)

Thus the district court instructed the jury on the unlawful

activities; one based on the unlicensed operation of the Alad«

din; 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 instruc-

tions were correct.

Goldfarb contends that there was a variance between the

allegations in the indictment and the evidence which resulted

19a

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 19

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. 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 reason-

ably 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 § Ct. 349 (1978); United States v. Dunn,

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 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 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 keeping with the principle that a court may

not establish standards of conduct upon pain of imprison-

ment; 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). Id. In determin-

ing whether there has been a constructive amendment

20a

20 United States v. Goldfarb, et al. Nos. 79-5255, 79-5317-20

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 testi-

mony being 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 elements.

The only apparent argument 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 inter-

pretation of Nevada gaming law presented Defendants

with no new factual charges that they were required to

meet, to use variance phraseology, nor did it allow either

proof or argument of a new factual basis for any elernent

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.

pin scheme dien nel adage Por sion. Sl wage eset

constructive amendment claim is to draft an t

with generality, United States v. Crocker, supra, at 1059,

so long as it contains the necessary specificity.

2la

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 21

Vil

We find no prejudicial error in the court's denial of Abra-

ham’s motion to declare a mistrial because of improper cross-

examination of a character witness. One of the character

witnesses was General Ralph G. Taylor retired from the United

States Air Force. Attempts were made by Abraham's attor-

ney to introduce into evidence Abraham's gallantry as an

officer and pilot, his two tours in Vietnam and his communica-

tions with the White House. The court excluded such evi-

dence. We agree that it was not admissible except upon con-

viction to be considered in mitigation of the sentence. Error

was assigned as to the cross-examination of the character wit-

ness Lovell, a former city attorney in Las Vegas, who volun-

teered that Abraham enjoyed a good reputation with Nevada's

“law enforcement community.” 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 an-

swered, “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 government produced evidence showing justi-

fication 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 including rebuttal and surrebuttal evidence and

when it appeared to everyone that this was creating a trial

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

United States, 335 U.S. 469 (1948) had been observed and

the prejudice, 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.

Abraham and Monazym assign error because the trial court

22a

22 United States v. Goldfarb, et al. Nos. 79-5255, 79-5317-20

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 At-

torney. Chief Judge Kennedy who conducted the in camera

proceeding, wrote an opinion ordering the files sealed. The

trial judge ordered that the defendants who had not partici-

pated 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.

vil

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 infer-

ences to be reasonably drawn therefrom must be viewed in

the most favorable light in favor of the government. Glass

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

yt F. 2d 1226 (6th Cir. 1974); United States v. Green, 548

1261 (6th Cir. 1977). So viewed, we are of the opinion

that ro verdict of the jury is supported by abundant evidence.

In our — the indictment charged only a single con-

lige

23a

Nos. 79-5255, 79-5317-20 United States v. Goldfarb, et al. 23

Aladdin contends that the district court erred in denying

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

itself except through the testimony of its alleged agents, who,

as defendants in this joint trial, had countervailing 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. Aladdin 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 priv-

ilege.

This matter was addressed entirely to the sound discretion

of the district court. Aladdin had a heavy burden to over-

come 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.

24a

ORDER OF SIXTH CIRCUIT COURT OF APPEALS

DENYING PETITION FOR REHEARING

(Filed April 1, 1981)

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

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

United States of America

Plaintiff- Appellee

v. ORDER

Charles Goldfarb, James Tamer,

James Abraham, Edward Monazym,

and the Aladdin Hotel Corporation

Defendants- Appellants

Before WEICK, LIVELY and BROWN, Circuit Judges.

Upon consideration of the petitions for rehearing in which all of

the appellants joined and also the separate motion for rehearing filed

by Appellant Aladdin Hotel Corporation, we are of the opinion that

the issues in these appeals were adequately treated in our signed opi-

nion and that said petition for rehearing and motion for rehearing

lack merit.

It is therefore ordered that the petition for rehearing and the

separate motion for rehearing be denied.

ENTERED BY ORDER OF THE COURT

(s) John P. Hehman

Clerk

25a

PROVISIONS OF FEDERAL AND STATE LAW AND

REGULATIONS INVOLVED

The Fifth Amendment to the United States constitution provides:

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or in-

dictment of a Grand Jury, except in cases arising in the

land or naval forces, or in the Militia, when in actual

service in time of War or public danger; nor shall any

person be subject for the same offence to be twice but in

jeopardy of life or limb; nor shall be compelled in any

criminal case to be a witness against himself, nor be de-

prived of life, liberty, or property, without due process of

law; nor shall private property be taken for public use,

without just compensation.

The Sixth Amendment to the United States Constitution pro-

vides:

In all criminal prosecutions, the accused shall enjoy

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

jury of the State and district wherein the crime shall have

been committed, which district shall have been previously

ascertained by law, and to be informed of the nature and

cause of the accusation; to be confronted with the witnes-

ses against him; to have compulsory process for obtaining

witnesses in his favor, and to have the Assistance of

Counsel for his defence.

Title 18, United States Code, Section 371, provides, in pertinent

part:

If two or more persons conspire either to commit any

offense against the United States, or to defraud the Uni-

ted 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.

26a

Title 18, United States Code, Section 1952 provides, in pertinent

part:

(a) Whoever travels in interstate or foreign commerce or

uses any facility in interstate or foreign commerce, including

the mail, with intent to —

(1) distribute the proceeds of any unlawful activity; or

(2) commit any ct ..ne of violence to further any unlawful

activity; or

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

facilitate the promotion, management, establishment, or

carrying on, or 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, liquor on which the

Federal excise tax has not been paid, narcotics or controlled

substances (as defined in section 102(6) of the Controlled

Substances Act), or prostitution offenses in violation of the

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

States, or (2) extortion, bribery, or arson in violation of the

laws of the State in which committed or of the United States.

Nevada Revised Statutes, §463.160.1(a) provides:

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

employee, whether for hire or not, either solely or in conjunction

with others:

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

pose 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 sports pool;

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.

Nevada Revised Statutes, §463.335 provides:

27a

1. As used in this section:

(a) “Gaming empioyce” means any person connected directly

with the operation of a nonrestricted establishment, and includes

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) Security personnel;

(10) Shift or pit bosses;

(11) Shills; and

(12) Supervisors or managers.

“Gaming employee” does not include bartenders, cocktail

waitresses or other persons engaged in preparing or serving food

or beverages.

(b) “Nonrestricted establishment” means any establish-

ment except one in which slot machines only are operated inci-

dentally to some other primary business of the licensee.

is valid only for a period not to exceed 30 days from its date of

issue and is not renewable.

(d) “Work permit” means any card, certificate or permit

issued by the board or by a county or city licensing authority,

whether denominated as a work permit, registration card or

otherwise, authorizing the employment of the holder as a gam-

ing employee. A document issued by any authority for any

employment other than gaming is not a valid work permit for

the purposes of this chapter.

2. The legislature finds that, to protect and promote the

health, safety, morals, good order and general welfare of the in-

habitants of the State of Nevada and to carry out the policy

declared in NRS 463.130, it is necessary that the board;

(a) Ascertain and keep itself informed of the identity, prior

28a

activities and present location of all gaming employees in the

State of Nevada; and

(b) Maintain confidential records of such information.

3. No person may be employed as a gaming employee unless

he is the holder of:

(a) A valid work permit issued in accordance with the applica-

ble ordinances or regulations of the county or city in which his

duties are performed and the provisions of this chapter; or

(b) If no work permit is required by either the county or the

city, a work permit issued by the board.

A work permit issued to a gaming employee must have clearly im-

printed thereon a statement that it is valid for gaming purposes

only.

4. Whenever any person applies for the issuance or renewal of

a work permit, the county or city officer or employee to whom the

application is made shall within 24 hours mail or deliver a copy

thereof to the board, and may at the discretion of the county or

city licensing authority issue a temporary work permit. If within

30 days after receipt by the board of the copy of the application,

the board has not notified the county or city licensing au ority of

any objection, the authority may in its discretion issue, renew or

deny a work permit to the applicant. Any holder of a work permit

must obtain renewal of the permit from the issuing agency within

10 days following any change of place of employment.

5. If the board within the 30-day period notifies the county or

city licensing authority that the board objects to the granting of a

work permit to the applicant, the authority shall deny the work

permit and shall immediately revoke and repossess any tem-

porary work permit which it may have issued.

6. Application for a work permit, valid wherever a work per-

mit is not required by any county or city licensing authority, may

be made to the board, and may be granted or denied for any

cause deemed reasonable by the board.

7. Any person whose application for a work permit has been

denied because of an objection by the board or whose application

has been denied by the board may apply to the board for a hear-

ing. At the hearing, the board or any designated member of the

board or an examiner appointed by the board shall take any

29a

testimony deemed necessary. After the hearing the board shall

review the testimony taken and any other evidence, and shall

within 30 days from the date of the hearing announce its decision

sustaining or reversing the denial of the work permit or the objec-

tion to issuance of a work permit. The board may object to is-

suance of a work permit or may refuse to issue a work permit for

any cause deemed reasonable by the board. The board may ob-

ject or refuse if the applicant has:

(a) Failed to disclose, misstated or otherwise attempted to

mislead the board with respect to any material fact contained in

the application for the issuance or renewal of a work permit;

(b) Knowingly failed to comply with the provisions of chapters

463, 464 or 465 of NRS or the regulations of the Nevada gaming

commission at a place of previous employment;

of moral turpitude, embezzlement or larceny against his

employer or any gaming licensee, or any violation of any law per-

taining to gaming, or any other crime which is inimical to the

declared policy of this state concerning gaming;

(d) Been identified in the published reports of any federal or

state legislative or executive body as being a member or associate

or organized crime, or as being of notorious and unsavory reputa-

tion.

(e) Been placed and remains in the constructive custody of

any federal, state or municipal law enforcement authority; or

(f) Had a work permit revoked or committed any act which is

a ground for the revocation of a work permit or would have been

a ground for revoking his work permit if he had then held a work

permit.

8. Any applicant aggrieved by the decision of the board may,

within 15 days after the announcement of the decision, apply in

writing to the commission for review of the decision. Review shall

be limited to the record of the proceedings before the board. The

commission may sustain or reverse the board's decision. The

decision of the commission shall be subject to judicial review pur-

suant to NRS 463.315.

9. All records acquired or compiled by the board or commis-

sion relating to any application made pursuant to this section and

30a

all lists of persons to whom work permits have been issued or

denied and all records of the names or identity of persons engag-

ed in the gaming industry in this state are confidential and shall

not be disclosed except in the proper administration of this

chapter or to an authorized law enforcement agency.

10. A work permit expires unless renewed within 10 days after

a change of place of employment or if the holder thereof is not

employed as a gaming employee within the jurisdiction of the is-

suing authority for a period of more than 90 days.

Nevada Gaming Commission Regulation 3.100 provides:

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

licensee, as defined in Reg. 4.030. 1(b), shall submit an employee

report to the board on a form to be furnished by the board. The

report shall identify every individual who is directly 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 employees are presumed

to be actively and directly engaged in the administration or

supervision of gaming:

(a) All individuals who are compensated in any manner in ex-

cess of $40,000 per annum;

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

in any amount, or whose recommendations in this regard are or-

dinarily sought or followed;

casino personnel;

(d) All individuals who have the authority to supervise or

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 opera-

tions, or any persons having authority to supervise or direct such

persons;

(e) All individuals who regularly participate in the count more

frequently than 1 day in each week or who actually participate in

the count more than 10 days in any 30-day period;

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

patrons complimentary house services other than beverages only;

3la

(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 in-

debtedness, and the maintenance, review or control of the

records, accounts, and reports of transactions which are required

to be kept pursuant to Reg. 6;

(h) Any individual who has been specifically represented to

the board or commission by a licensee or any officer or director

thereof as being important or necessary to the operation of the

gaming establishment;

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

mulate management policy.

2. The annual employee report shall also include a decription

of the gaming duties, casino responsibilities, and casino authority

delegated to each individual identified in the report.

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

contained within the annual employee report which occurs

subsequent 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 not less than 10 days after the end of the calendar quarter

during which the change, addition, or deletion occurred.

4. The annual employee report and subsequent reports of

changes, additions, or deletions shall be confidential and may

not be disclosed except upon order of the commission or pursuant

to the terms of NRS 463.130.

Nevada Gaming Commission Regulation 3.110 provides:

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

having the power to exercise a significant influence over decisions

concerning any part of the operation of a gaming licensze or who

is listed or should be listed in the annual employee 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 Con-

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

licensed, the commission shall serve notice of such determination

upon the licensee. The commission shall not be restricted by the

32a

title of the job performed but shall consider the functions 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 public 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, to 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, background,

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.

3. The licensee shall, within 30 days following receipt of the

notice of the commission's determination, present the applica-

tion for licensing of the key employee to the board or provide

documentary evidence that such key employee is no longer em-

ployed by the licensee. Failure of the licensee to respond as re-

quired by this section shall constitute grounds for disciplinary

action.

4. Any individual whose application for licensing as a key

employee is required pursuant to this regulation may request the

commission in writing to review its determination of that in-

dividual’s status within the gaming organization any time within

10 days following the filing of a completed application as re-

quired by this regulation. In the event the commission deter-

mines that the applicant is not a key employee or that the public

interest and policies of the Nevada Gaming Control Act do not

require the licensing of the key employee at this time, then the

key employee applicant shall be allowed to withdraw his applica-

tion and he may continue in his employment. In no event shall

the request of the key employee applicant for review stay the

obligation of the licensee to present the key employee's applica-

tion within the 30-day period herein proscribed.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.