Petition for Writ of Certiorari — Emprise Corp. v. United States

Supreme Court brief1975

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TABLE OF CONTENTS

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i... pkckst babar eneesnebadeasednsenees 1

TTT PETE ELT ee EET ELT TET REET Ce 2

CONSTITUTIONAL AND Statutory Provistons INvoLveD.. = 2

SEC EOOME POMORNTR sis c ncn csesacncavanesnces 2

EISELE CET ee eee EE Te eT eee eee 3

1. The Prosecution’s Evidence ........ hexane D

i RO THUS TPOOROIINEE coasts enc sccsnceress 7

ye ER ge | eer rer ree errr Tere es i)

Reasons ror GRANTING THE Writ ...... ceeeaeswankee 9

1. The Court of Appeals Expansively Construed

the Travel Act To Embrace Activities Not

a ee” rer rrr ere i)

II. The Court of Appeals, in Direct Conflict with

Other Circuits, Erronecously Held That Con-

spiracy To Violate the Travel Act Does Not

Require Speeifie Intent To Violate State Law 15

Ill. The Court of Appeals, ia Direct Conflict With

the Sixth Cireuit, Erroneously Held One Cor-

poration Criminally Liabie for the Acts of

PL CRiGRKAs KEN 46Cb Os VEG RGhESMDNS Oh OSES S 17

IV. The Court of Appeals Erroneously Refused to

Recognize the Unconstitutionality of Acts

Which, Both Singly and in Sum Total, Denied

Petitioner’s Fifth and = Sixth Amendment

PE Chere acke SAGE NERS SED a ARRERRKOKAR RES 21

a re ee ea a a a ad ee ee

il Table of Contents Continued

TABLE OF AUTHORITIES

CASES: Page

Bachellar v. Marvland, 397 U.S. 564 (1976). ...0...... 28

Berger v. United States, 205 U.S. 78 (1935). ......... 24

—— v. United States, ao 1S. 123 (HOGS). . ie oes 24

Campbell v. United States, 575 U.S. 487 (1965) ...... 25

Chapman v. California, 386 U.S. 18 (1967)........... 23

Clay v. United States, 408 U.S. 698 (1971).......... 27

estes V, TORRE, BOL Uk Gee CREE so ccckadchbeveawas 23

Giglio v. United States, 405 U.S. 150 (1972) .......... 25

Golden State Bottling Co. v. NLRB, 414 U.S. 168

SEED. bn bah ee ce Nob aaeehes eee Cav eKbeaeeR es 18

Lewis v. United States, 146 U.S. 370 (1892).......... 24

Mares v. United States, 385 F.zd 805 (10th Cir. 1967)... 28

Melrose Distillers, Inc. v. U aed States, 359 U.S. 271

ERD cas ck beh ub euseeeerencckavindseuccnied 18, 19

Mooney v. Holohan, 294 U.S. 108 (1955) ............. 25

Rewis v. United States, 401 U.S. S08 (1971)........ passim

Sheppard v. Maxwell, 584 U.S. 335 (1966) 2.0.2.2... 23

State v. Capital City Dairy Co., 62 Ohio 550, 56 NE.

651 (1900), aff’d, 183 U.S. 238 (1902)........... 5)

State v. Delmar Jockey Ciub, 200 Mo. 34, 92 S.W. 185

GREE, cd cec oes bakeul cu cece cence ake che taeecen 5

Stromberg v. California, 285 U.S. 359 (193 __| Serer 28

Turf Center, Inc. v. United States, 325 F.2d 793 (9th

OE Serer errs Try ery Pero err cee 16

United States v. Alsondo, 486 F.2d 1339 (2d Cir. 1973),

cert. granted, sub. nom., United States v. Feola, No.

Tadd, G2 UE Wi Ble ve ccs neva ces sws vanesus 16

United States v. Archer, 486 F. 2d 600 (2d Cir. 1973). .12, 13

United States v. Bass, 404 U.S. 336 (1971).......... 10, 14

United States v. Bergland, 318 F.2d 159 (7th Cir.),

cert. denied, 375 US. Pee CUED 65 bhi0nee nates 9

United States v. Carter, 311 F.2d 954, cert. denied, 373

ee a Se Rates eae 17

United States v. Cigarette Merchandisers Ass’n, 136

Pe: BEG CER SR rey Bees ok kas cee cuekvankus 19

United States v. Enmons, 410 U.S. 396 (1973) 2.2.2... 10

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

SE: 3c boda aa sk SSG AE SS Cee Ae ae nena 14

United States v. Hanon, 428 F.2d 101 (Sth Cir. 1970) 16

United States v. Hawthorne, 356 F.2d 740 (4th Cir.

DE care eeKN cod oka genec sks Che kas eeee ea aanKe 16

Table of Cont: nts Continued ill

Page

United States v. McCoy, 4298 F.2d 739 (D.C. Cir.

DN Woe ee ie ert Cerra ee one ae 24

United States v. Miller, 379 Fizd 489 (7th Cir. 1967)... 16

United States v. Nardello, 293 U.S. 286 (1969) ....... 11

United States v. Palladino, 475 F.2d 65 (1st Cir. 1973) 24

United States v. Roselli, 452 F.2d S79 (9th Cir. 1970),

cert. denied, 401 U.S. 924 (1971)..........ccc00e 10

United States v. Ryan, 455 F.2d 728 (9th Cir. 1972)... 25

United States v. Stagmen, 446 F.2d 489 (6th Cir.

PERE SU ses ivkauaucercsees ks ceeds CoN akkab eae se 15, 16

United States v. Stone, 452 F.2d 42 (Sth Cir, 1971).... °° 19

United States v. Thomas, 463 F.2d 1061 (7th Cir. 1972) 23

United States v. Union Supply Co., 215 U.S. 50 (1909) 4

United States v. Weehsler, 592 F.2d 344 (4th Cir.

oe) NE EE CET eee eee OE re ee 16

Yates v. United States, 354 U.S. 298 (1957).......... 28

CONSTITUTIONAL PROVISIONS AND STATUTES:

Fifth Amendment, United States Constitution. ..... passim

Sixth Amendment, United States Constitution. ..... passim

eS BRE ee cdc KEV ER SGR AEN CORREA SG EERE OeEE 16

et Sia Oe SPEED os ein esas bel ke ca taweekariee 14

Be Res 0 UE ohh nen cee a ceKvel sek caeuceasen en passim

Pe Ae BE CU Rab ake k knees caw coh knee 13, 14

Se ee EN GW choked heehee chee Cee eb 14

De A A pekkeae ew cec Uk eee kas bcaw cre axes 7

Be ee os oie es ile ce eae hen Me eke acs 25

D.C. Code Ann. §§ 25-118, 47-2345 (1973) ............ )

Del. Code Ann. Tit. 4, § 561(b) (1953) ............... Dd

POOUM TEOU, Teh, Oe oa sn nd dn cnaeecdubeewens 11

PCVOte Teev, URt, BORG ee os ccc akacacccccnrcuccas 11

Dewan Bev. tat. § SER BIO coc os sas w vweeecaesaneae 6

N.Y. Aleo. Bev. ¢ ‘ontrol Law $126 (McKinney 1970)... 5

N.Y. Bus. Corp. Act § MO1(a)( 2) (McKinney 1970).. §

N.Y. Bus. Corp. Law *§906(b) (2 RRA, Pee ae mee 9

Tex. Bus. Corp. Act, Arts. 7.01, 8.16 (1956).......... 5

MISCELLANEOUS:

American Bar Association Standards Relating to the

Prosecution Funciion, Approved Draft, See. 3.5,

Re DEES os iss kus v ecu bok weOkeeeescae 24

iv Table of Contents Continued

Page

Miller, The **Traved Act’’: A New Statutory Approach

ty Organized Crime in the United States, 1 Du-

mipedion Gi. Ba TeV. TEL CIDGS): on cece seaccassacs> 12

Legislation Relating to Organized Crime, Hearings

on H. R. 468 ete. before Subeommittee No. 5 of the

House Committee on the Judiciary, 87th Cong., Ist

ED sc Peand Gledkce haben Vas bea abaanehae ie 12

Sayre, Criminal Responsibility for the Acts of Anotier,

So Hhatv. Us. Bev. GBD (1990) once cscccccnscess 20, 21

“Tie Collateral Consequences of a Criminal Con-

viction,’’ 23 Vand. L. Rev. 929 (1970) ........... 4

ee Bitte BON CROUEE oscv sve vacdsdrnehetsueeiess Fs)

ee EE vay wae bua ee ard eke Okeke 4

elt

IN THE

Supreme Court of the United States

OcTrover TERM 1974

EMPRISE CorPoRATION, Petitioner

Untrep Srates or AMenrica, Jes pondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Petitioner Emprise Corporation prays that a writ of

certiorari issue to review the opinion and judgment of

the United States Court of Appeals for the Ninth Cir-

cuit entered in this proceeding on April 30, 1974.

OPINIONS BELOW

The opinion of the Court of Appeals is not yet re-

ported, It is printed as Appendix A in the separately-

filed Appendix to this petition. In denying a petition

for rehearing, the Court of Appeals made a number of

subsiantive changes in its original opinion; those

changes are printed as Appendix B (pp. 94a ct

seq.) in the separately-filed Appendix.

JURISDICTION

The judgment of the Court of Appeals was entered

on April 30, 1974. App. Av p. la. On May 14. 1974,

Petitioner Emprise Corporation filed a timely Petition

for Rehearing and Suggestion of Appropriateness of

Rehearing in Bane. The Court of Appeals denied

said Petition on July 18, 1974 (App. By p. 94a). but

notice of the denial was not sent to the parties until

July 25. Therefore, pursuant to proper motions, the

court revised the date of the denial nune pro tune to

July 25, 1974. App. C, p. 98a. In the meantime, on

August 8 Mr. Justice Douglas, pursuant to motion,

extended petitioner's time in which it could file this

petition from August 17 to September 16, 1974. App.

EK, p. 102a. The jurisdiction of this Court is invoked

pursuant to 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED

The Fifth and Sixth Amendments to the United

States Constitution; the Travel Act, 18 U.S.C. § 1952,

and the relevant portions of the applicable Nevada

statutes are set forth in Appendix F, pp. 108a ¢é seq.

QUESTIONS PRESENTED

The federal Travel Act, 18 U.S.C. § 1952, makes it

a federal crime to travel in interstate commerce with

intent to facilitate the *‘ promotion, management, estab-

lishment or carrying on”’ of a ‘‘business enterprise in-

volving gambling offenses’? in violation of local law.

The questions presented are:

1. Whether it is an unjustifiably ‘‘expansive inter-

pretation’ (Rewis v. United States, 401 U.S. 808, 809

(1971)) of the Travel Act to read the words ‘‘gam-

bling offemses’’ as covering corporate operation of a

licensed gambling casino in Nevada when the sole

alleged violation related not te any aspeet of the sub-

stantive crime of gambling but entirely to the omission

of certain information in the corporation's application

fora license.

2. Whether conspiracy to violate the federal

Travel Act. 18 ULS.C. § 1952. requires proof of specific

intent to violate state law, as held by the Sixth Circuit

and other Courts of Appeals, or whether no such proof

is necessary, as held by the court below.

3. Whether the petition er corporation was prop-

erly held criminally responsible for acts connaitted by

and on behalf of another corporate entity whieh had

been merged into the petitioner one vear before indict-

ment for business reasons having nothing whatever to

do with the alleged vielation.

4. Whether petitioner was denied due process

under the Fifth Amendment and its right to a jury

trial under the Sixth Amendment by the conduct of the

prosecution prior and subsequent to triai and by the

conduct of the prosecutor and the court at trial—con-

duct which included illegal wiretapping, the ciigender-

ing of prejudicial publicity, interrogations of the jury

out of the presence of defendants and their counsel,

and improper remarks by the prosecutor.

STATEMENT

Petitioner is a New York corporation that was

known, until March 1970, as High Park Corporation.

Its business consists primarily of the operation of con-

cessions for food and liquor at football stadiums, base-

ball parks, race tracks, airports and the like through-

out the United States, Canada and England, After an

eleven-week trial by Jury, the petitioner cerporation

and six indiviauai co-defendants were found guilty of

conspiring to violate the federal Travel Act, 18 U.S.C.

§ 1952,’ and the corporation was sentenced to pay a

¥10,000 fine. The essence of the proof against peti-

tioner was that a former subsidiary whose assets peti-

tioner had acquired by merger in March 1970 had, four

years previously, loaned money to three of the thirty

shareholders of a Nevada corporation called Vegas

Frontier, Ince. (*VEI"’), to enable them to purchase

stock and debentures in VFI, with knowledge that VEIL

would be licensed to operate a gambling casino in Las

Vegas, Nevada, and with the further alleged knowl-

edge that two other persons (co-defendants Zeri!li and

Polizzi) wouid have a ‘thidden interest”? in VEIT. *

This conviction, under an improper extension of a

federal criminal statute based upon the acts of a sub-

sidiary which the petitioner corporation neither rati-

fied nor approved in advance, could possibly jeopar-

dize petitioner’s ability to operate in the future.*

1The individual defendants were also convicted on substantive

counts,

2 There was no proof of any financial interest of Zerilli or Polizzi.

The finding of their ‘hidden interest’’ arises from evidence that

they participated in (or ‘‘controlled’’) the management of VFI.

There was no evidence, direct or circumstantial, that either peti-

tioner or its former subsidiary had knowledge that Zerilli or

Polizzi participated in the management of VEE.

3 Petitioner presently holds 107 alcoholic beverage licenses (as

well as other licenses) in 26 states and the District of Columbia.

As a result of the conviction, 14 of these jurisdictions have com-

menced revocation hearings or indicated their intention to do so.

See United States v. Union Supply Co., 215 U.S. 50 (1909);

“The Collateral Consequences of a Criminal Conviction,’

23) Vand. L. Rev. 929, 1010-11) CiyT@); 45 Am. Jur. 2d

1. The Prosecution’s Evidcuce—Two residents of

Las Vegas named Friedman and Richardson became

interested in 1965 in finaneing, constructing and aper-

ating a licensed gambling casing in Las Vegas to be

muned the Frontier Hotel. They formed the eorpora-

tion known as VEIT to own aiid operate the casino and

to secure froni the Nevada State Gaming Commission

the license needed for such activity. Two of the many

people to whom they attempted to sell stock and denen-

tures in VFI were the defendants Zerilli and Polizzi,

who had previously shown an interest in purchasing

part ownership of a gambling casing in Nevada. Zerilli

and Polizzi eame to Las Vegas in Mareh 1966 and,

together with Friedman aud Riehardson, consulted an

attorney in Reno whe, after obtaining background

information from Zerilli and Polizzi, disenssed their

proposed investment informally with members of the

Nevada Gaming Contre) Board. (This is a regular

procedure permitted under Nevada practice.) The

$150. Examples of juriscieticns where mumerdis statutory

provisions allow for the revocation of such licenses, are the

Distriet of Columbia and the states of New York and Delaware.

E.g., D.C. Code Ann, $$ 25-118. 17-2345 C1974): Bel. Code Ann,

tit. 4, $561 (b) (1953); NY. Aleo. Bey. Control Law $ 126 (Me-

Kinney 1970), A

As a matter of fact. the laws of most states allow for the

involuntary dissolution of a domestic corporation or the revocation

of the certificate of authority of a foreign corporation if it engages

in criminal conduct. E.g., Tex. Bus. Corp. Act, arts. 7.01, 8.16

(1956) and N.Y. Bus. Corp Act £1101 (a) (2) (MeNKinney 1970),

See State v. Capital City Dairy Co. 62 Ohio 350, 56 NE. 651

(1900), aff’d, 183 US. 238 (1802). Some states have also initiated

quo Warranto proceedings, enjouiing corporations from exercising

corporate funetions or from engaging tt some particular corporate

activity. See 37 Yale L. J. 237, 244 (1927): State ve Delmar

Jockey Club, 200 Mo. 34. 92 SW. 185 (1905).

While we believe that both law and equity should preclude each

of these sanctions, and that none of them would be warranted in

this case, the dangers remain.

attorney reported that there were ‘problems’? with

Zerilli’s and Polizzi’s ownership of interests in VET.

it is an admitted fact that Zerilli and Polizzi did

not purchase VEIT stock or debentures or otherwise

make any financial investment. The prosecution's

theory was that the actions of the defendants thereafter

were directed toward securing for Zerilli and Polizzi

substantial participation in the control of the manage-

ment of VET from whieh it could be inferred that they

had some kind of an interest in VET, and that Nevada

law was violated by the failure of Zerilli and Polizzi to

obtain separate gambling Heenses in addition te the

VET corporate license. The Court of Appeals rejected

this theory (which was the only basis for conviction

on the instructions submitted to the jury), but found

that Zerilli and Polizzi did have ‘hidden interests”’,

and held that Nevada law was violated by failing to

make disclosure of such interests in the corporate

license application. Under either theory, the opera-

tion of the casino in these circumstances assertedly

constitutes the “gambling offense’? upon which jur-

isdietion ander the federal Pravel Act rests.

On July 5, 1867, the license for VET was signed and

issued to be effective July 27, 1967. Tr. 8090-3094, As

of July 1, 1967, Nevada law no longer required investi-

gation by the Gaming Control Board of a corporation's

stockholders or of any other person who might have a

“direct or indirect interest ina corporation holding a

license Nev. Rev. Stat. §463.530. No gambling took

place at the Frontier Casino before the license was

issued, and the jury was instructed (without objection

from the prosecution) that ‘sinee in this ease a license

Was issued to the corporation VET, any gambling con-

ducted by or through VFI would not be illegal and

would not be in violation of the statute.’ Tr. 8798.4

The Proutier Casino opened under VIL management

on July 27, 1967. The entire operation was sold to the

Hughes Tool Company ou November 27, 1967,

2. The Trial Proceedings—Onu February 26, 1971,

an indictment was returned in the Central District of

California charging **Emprise Corporation’? in one

count with conspiracy to violate the federal Travel

Act. The individual defendants were also charged

With the conspiracy, and some of them were in addition

variously charged with substantive Travel Act offenses

in nine additional counts, After the prosecution

advised that the reference in the indictment was to the

mprise Corporation which had been the subsidiary of

High Park Corporation and which no longer existed?

motions to distniss were filed. The indictment was then

dismissed for lack of personal jurisdiction over the

former subsidiary corporation. The prosecution ap-

pealed and then abandoned its appeal, choosing instead

to file an information on October 14, 1971, charging the

former High Park Corporation (now called Emprise)

with the same conspiracy alleged in the indietment.

The opening paragraph of the information squarely

relied ona theory of viearions liability :

The defendant is a corperation originally in-

corporated pursuant to the laws of the State of

' The theory of Nevada law violation asserted in the instrnetions

and in the evidence and argument was that) Zerilli and Polizzi

should have obtained separate gambling licenses. Tr, 2998-23001,

S695-94, ST6S-69, ST74. SS10.

* The court below repeatedly referred to High Park's subsidiary

as * old Emprise™’ and to petitioner as ‘new Emprise.”” We have

deliberately avoided these designations because we believe they an.

fiirly imply a ereater identity between the two companies than

aetually existed.

The District Court had subject matter jurisdiction under

18 U.S.C. $3231.

New York, under the name High Park Corpora-

tion, It is the surviving corporation of a merger

effectuated March 1, 1970 (pursuant to the laws of

the State of New York) whereby a corporation then

existing under the laws of the State of New York

known as Emprmse Corrorarion (hereinafter re-

ferred to throughout this paragraph as ‘original’

IEMPRISE ConroRATION ), a Wholly owned subsidiary

of High Park Corporation, merged into said Tigh

Park Corporation. Thereafter, on or about

Mareh 17, 1970, High Park Corporation duly

changed its name to Emprise Corporation. It was

the original Earriisk Convokation whieh committed

the conspiratorial acts charged below. Pursuant

to the laws of the State of New York, the now

existing EMpnrisk CorporatioX, as the survivor of

the previousls described merger between original

EMpitsk Convorarion and tligh Park Corpora-

tion, 's named as the defendant herein.

Petitioner then moved to dismiss on the ground that

it had, under the information, committed no offense

and that it could not be held vieariously liable merely

because of its merger with the alleged) wrongdeer,

The court denied the motion and required petitioner

to stand trial along with the six individual defendants,

Consistently with the opening paragraph of the in-

formation, the proof at trial showed no acts by High

Park Corporation (uow called Emiuprise), but only by

the subsidiary. The judge charged the jury that the

subsidiary’s guilt was attributable to the petitioner

(Tr. 8757-38) :

You have heard evidence in this case about a

merger whereby the Emprise Corporation which

existed at the time of the alleged offense, merged

into its parent corporation in F970, You need not

concern vourselves with the legal effect of that

merger, Tf, in accordance with the evidence and

these instructions, you find beyond a reasonable

doubt that the Emprise Corporation which existed

at the time of the criminal acts alleged here did

commit the criminal aets as charged then you

should return a verdict of guilty as against the

corporate defendant.

8. The Court of Appeals—On eppeal, the Ninth

Cireuit affirmed the convictions in a tripartite 78-page

opinion, finding at least a dozen errors but holdiug them

all harmless. On the merger issue, the court relied on

New York law, interpreting that State’s statutes to

vermit ‘the maintenance of 2 prosecution against the

surviving corporation for crimes allegedly conuitted

by a constituent corporation.” App. A, p. 88a." The

court also held on the Travel Act question that defend-

aunts had engaged in the statutorily prohibited *un-

lawful activity,” here a ‘business enterprise involving

gambling offenses,’ even though the gambling con-

ducted by VFI was legal. The court refused to consider

the extensive legislative history indicating a contrary

reading of the statute, stating, “The statutory language

is clear.’ App, A, pp. 18a-1d4a.’

REASONS FOR GRANTING THE WRIT

I. The Court of Appeals Expansively Construed the Travel Act

To Emkrace Activities Not Intended by Congress.

The decision below has applied the federal Travel

Act in a manner that confliets with the principles and

policies established by this Court when it construed the

6“ Consiituent corporation’ is a term taken directly from the

New York statute, Business Corporation Law $ 906(b) (3), which

implies no necessary prior relationship between the *‘constituent”’

and the survivor.

7 But sce Rewis vy. United States, supra, 401 U.S. at 811-812;

United States v. Bergland, 318 F.2d 159, 161 (7th Cir), cart. de-

nied, 375 U.S. 861 (1963).

same law in Rewis v. United States, supra, and when

it subsequently construed other federal criminal stat-

utes (in reliance on Rewis) in United States vy. Bass,

404 U.S. 336 (1971), and (in reliance on Bass) in

United States v. Enmons, 410 U.S. 390 (1973). In all

of these very recent cases, this Court emphasized that

federal criminal statutes should not, in the absence of

the clearest indication, be read **to effect a significant

change in the sensitive relation between federal and

state criminal jurisdiction”’ or to ‘‘overextend limited

federal police resources.’? 404 U.S. at 349; see 401

U.S. at 812; 410 U.S. at 411-412. Such an expansive

reading of federal criminal law would, of course, cast

upon the overworked federal courts the burden of

deciding many criminal cases that should properly be

left to local prosecutors and courts. Yet the decision in

this case does exactly what was warned against in

Rewis—it **would transform relatively minor state

offenses into federal felonies’? (401 U.S. at 812) with-

out an explicit Congressional expression of intention to

do so and in the face of Congressional language in other

statutes waich indicates that this was not Congress’

desire.

We note at the outset that there ean be no doubt that

this case does not involve a ‘gambling offense” in any

ordinary sense of the term. The defendants were not

operating a gambling enterprise in a jurisdiction where

gambling is forbidden. Nor—as was true in United

States v. Roselli, 432 F.2d 679 (9th Cir. 1970), cert.

denied, 401 U.S. 924 (1971)—were they engaged in a

fraudulent enterprise of the kind specifically pro-

hibited by a local law directed at deceptive gambling

such as card playing or betting. In every respect relat-

ing to the gambling aspect of their business, the defend-

ants acted in full compliance with loeal regulations.

The local violation they are charged with having

committed, that assertedly converted the operation of

VEIL into a’tgambling offense,’ was that they failed

“to disclose the identities of Zerilli and Polizzi as per-

sons having an interest in VFL’? when the VFT Lvense

applications were filed. App. A, p. 9a. This, we submit,

was simply not a ‘tgembling offense’? within Congress’

intended meaning in the Travel Act, even if it fell short

of the requirement of Ney. Rev. Stat. § 463.200 that ‘‘all

persons directly or indirectly interested” in a cor-

porate licensee be disclosed, and even if the very debat-

able assumption made by the court below—i., that

there was a failure to make the disclosure directed by

the statute—amounted to a ‘violation’? punishable by

Nev. Rey. Stat. § 463.360 (*‘the catchall section’) as a

‘*oross misdemeanor.”

Nondisclosure or false statements in a licensing regu-

lation are separate and distinct acts from the nature of

the business for which a license is sought. Such non-

disclosure or falsity does not become a ‘gambling

offense”? simply because the license is sought for a

gambling business. If, by way of analogy, a Nevada

statute required gambling casinos to have three fire

exits, would it be a ‘‘gambling offcuse’’ to operate a

‘asino with one? Or if Nevada law required that

employees of gambling casinos work not more than

nine hours a day, would it be a ‘‘gambling offense’’—

reachable by the federal Travel Act—to operate a

casino where the employees worked on twelve-hour

shifts ?

Congress’ intention when the law was enacted is

clear from the legislative history examined by this

Court in Rewis and in its earlier decision in United

States v. Nardello, 393 U.S. 286 (1969). Congress

authorized federal prosecution of those who operated

‘unlawful businesses’’; the law was not designed, as the

Assistant Attorney General who testified in support

of it observed, to bring within federal jurisdiction

‘ineidental illegal acts done in the course of lawful

businesses."’ Legislation Relating to Organized Crime,

Hearings on H.R. 468 ete. before Subcommittee No. 5

of the House Committee on the Judiciary, 87th Cong.,

Ist Sess., 336 (1961). At best, the failure to disclose the

interest of Zerilli and Polizzi amounted to *tincidental

ilegal acts’ which did not convert the operation of a

lawful casino in Nevada into ‘tan unlawful business

enterprise." See the testimony of Attorney General

Kennedy, id. at 35.

Besides conflicting with principles established by

decisions of this Court, the ruling of the Court of

Appeals conflicts with the view of the Travel Act re-

cently taken by the Court of Appeals for the Second

Cireuit in United States v. Archer, 486 F.2d G70 (2d

Cir. 1973), where the Solicitor General did not seek

review of a reversal of a major conviction. Judge

S Assistant Attorney General Miller said in the course of the

House hearings (op. ci7. at 342): ‘When we defined business enter-

prise as one involving gambling, liquor violation, and the like,

we were thinking of the business itself as being an illegal business.

Any business enterprise can have an employee or the president or

someone down the line commit some act which is a violation of a

statute and therefore, a crime. * * * Now, that does not make

the business enterprise, itself. an unlawful one. It merely means

that one individual has committed a crime, and it has no relation to

the business enterprise itself.’’ Mr. Miller also expressed the same

view in a law review article he wrote shortly after the enactment

of the law. Miller, The **Travel Act’’: A New Statutory Approach

to Organized Crime in the United States, 1 Duquesne U.L. Rev. 181,

Vegas, Nevada, would not amount to ‘unlawful activity’ ’’).

Friendly, speaking for the Second Circuit, observed in

Archer that “[tloday there is widespread concern

whether the federal criminal law og not outrun rea-

sonable bounds,’ 486 F.2d at 677. Tle quoted an

authoritative statement that **[t ti is practically no

offense within the purview of loeal laws that does not

become a Federal crime if some distinctive Federal

invelvement happens to be present.’ Jd. at 678. On

the basis of these considerations, among others, the

Travel Act was read narrowly in Archer so as not to

apply to the facts of that case.

This ease graphically demonstrates how the limita-

tions inherent in the Travel Act’s objectives—even if

not in its language—may be abused. An alleged non-

disclosure, which is not even a clear ground for civil

revocation of a license under Nevada law and which

amounts, at most, to a ‘‘gross misdemeanor’? under the

most prosecutorial reading of the Nevada statute, is

made the basis of an assertion that the entire licensed

operation of a gambling casino is ‘in violation of the

laws’? of Nevada, so that any assistance to that opera-

tion js punishable as a federal felony with heavy fines,

jail terms of three and four years, and the collateral

consequences of a felony conviction.

There is, moreover, more than the legislative history

of the Travel Act itself that proves Congress’ narrow

focus. Other federal criminal statutes reach “illegal

gambling businesses,’? and in each instance the law

would be extended well beyond Congress’ probable

intention if it were read to cover incidental or per-

ipheral illegality of the kind sought to be proved here.

eet 18 U.S.C. § 1955 covers any gambling business

“which is a violation of the law of a State’’; this would

have a sweeping effect, for example, on any gambling

enterprise in Nevada that could be shown to be in

violation of some local regulation. Yet in United

States vy. Gordon, 464 F.2d 357 (9th Cir. 1972), the

Court of Appeals, relying on United States v. Bass,

supra, held that a violation of the Nevada Gambling

Commission regulations which leads only to civil sane-

tions does not qualify under § 1955. °

The decision below is, therefore, a signai devarture

from established federal-state relations under which

local crimes, with the exception of thoroughly illegal

businesses that are owned and operated from out of

state, are subject to local police control. If the Nevada

authorities were misled enough by the alleged failure

to disclose the names of Zerilli and Polizzi as interest-

holders in VFI, they could have initiated license-

revocation proceedings or sought to prosecute those

responsible for a *‘gross misdemeanor.’? This Court

should not, at a time when the dockets of federal courts

are swollen, approve of a precedent winch will drag

into the federal courts a host of other similar felony

charges based upon minor incidental infractions of

local law.

* Similarly, 18 U.S.C. $$ 1961-63 subjects to certain federal crimi-

nal sanctions *‘any act or threat involving * * * gambling * * *

which is chargeable under State law and punishable by imprison-

ment fer more than one year.”’ If ‘*gambling’’ were read in that

law as sweepingly as it has been read by the court below, incidental

iliegal acts associated with legal gambling enterprises would be

the subject of federal court action. See also 18 U.S.C. § 1511

(6) (1).

II. The Court of Appeals, in Direct Conflict with Other Cir-

cuits, Erroneously Held that Conspiracy To Violate the

Travel Act Does Not Require Specific Intent To Violate

State Law.

The broad reading of the Travel Act adopted below

is particularly unfair when it is applied in a way that

does not require the prosecution to establish specitie

knowledge that local law has been violated. That is

precisely what occurred here,

The Covrt of Appeals itself recognized (App. A at

19a) that its decision in regard to the nature and extent

of specific intent required to prove a violation of the

Travel Act was in conflict with that set forth in United

States v. Stayman, 446 F.2d 489, 492-493 (6th Cir.

1971).

As pointed out by the court below (App. A at 19a

n. 29), the jury in this case was instructed that ‘it is

not necessary that the Government prove that the

defendants knew that they were violating Nevada law.

The specific intent which the Government must show

is the intent to facilitate the carrying on of a business

enterprise involving gambling in violation of Nevada

law.”? The court thought these instructions ‘could

have been more precise’’ (id. at 192) but nevertheless

upheld them because it disagreed with Stagman that

specifie intent to violate state law was a necessary pre-

requisite to conviction (see App. A at 19a modified by

the denial of the Petition for Rehearing, App. B at

95a),

Stagman, on the other hand, cited cases by four

different Courts of Appeals holding or stating that

“knowing and willful intent to violate state laws is an

clement of the crime proscribed by the Travel Act.”

446 F.2d at 491-492.°° The court noted the Govern-

ment’s argument (adopted by the court below in the

instant case) that **the word ‘intent’ is meant to apply

only to the verb ‘to carry on’ and not to its object,

‘unlawful activity’—ic., that the crime does not require

knowledge that the activity is unlawful.’” /d. at 492.

But the Sixth Circuit in Stagman rejected that argu-

meut, saying, ‘* We prefer the more natural reading, in

which ‘intent’ refers to the entire phrase ‘to * * * carry

ou * * * any unlawful activity,’ ”’ citing **the purposes

and structure of the Act” to support its interpretation.

Id.

This conflict must be resolved. It will not go away.

Courts continue to convict under the Travel Act and

to instruct juries, either on the necessity of a specific

intent to viclate state law or on the non-necessity of

such an intent. Unless this Court acts, the coufusion

and conflict will abound. ”

10 United States v. Miller, 379 F.2d 483, 486 (7th Cir. 1967);

Turf Center, Ine. vy. United States, 325 F.2d 793, 797 (9th Cir.

1963) ; United States vy. Hanon, 428 F.2d 101, 108 (8th Cir. 1970)

(en bane) citing Willer with approval).

The court also cited two cases holding to the contrary. United

States v. Hawthorne, 356 F.2d 740, 742 (4th Cir. 1966), and United

States vy. Weehsler, 392 F.2d 344, 347 (4th Cir. 1968).

The Court has granted a petition for writ of certiorari on a

similar issue of specific intent for a federal conspiracy conviction.

In United States v. Alsondo, 486 F.2d 1339 (24 Cir. 1973), cert.

granted, sub nom, United States y. Feola, No. 73-1123, 42 U.S,

L.W. 3584, the Second Circuit held that although proof of a juris-

dictional element was not requisite for conviction of a substantive

offense under 18 U.S.C. § 111, conspiracy to commit that same of-

fense required proof that the defendants knew the official identity

of the federal officer they were charged with assaulting. Simi-

larly, in the present case it is submitted that in order to be con-

victed of conspiracy to violate the Travel Act, the Government

must infer alia prove intent to violate state law whether or not

that intent is requisite to a substantive offense under the Act.

III. The Court of Appeals, In Direct Conflict With the Siaih

Circuit, Erroneously Held One Corporation Criminally

Liable for the Acts of Another.

In Section AVI of its opinion (App. A, pp. T9a et

seq.), the court below applied a startling new principle

of vicarious criminal liability which is not supported

by any decision of this Court and whieh conflicts

squarely with the decision of the Court of Appeals for

the Sixth Circuit in United State. v. Carter, 311 F.2d

934, 941, cert. denied, 373 US. GIF (1963). The court

below has held in this case that a parent corporation,

which was not shown to have had any involvement

whatever with alleged criminal acts when they were

committed, could be held criminally liable for the a-ts

of a subsidiary corporation solely because the sub-

sidiary was, for reasons totatly unrelated to the alleged

crime, merged into the parent four years after the

commission of the offeise.

In Carter, as in this case. the parent (City Produet

Corporation) acquired by merger the assets of its

subsidiary (Pilsener Brewing Company) after the

alleged criminal conduct and prior to the bringing of

federal charges. Both entities were convicted, but the

Sixth Circuit held on appeal that the merger ** would

not make [City Produets] chargeable, as a principal,

for a crime previously committed by Pilsener. * * *”

311 F.2d at 941. Carter is directly contrary to the

Ninth Cireuit’s lelding in this case. In the instant

appeal, both sides extensively briefed the Sixth Circuit

decision, but the court below simply ignored it. The

conflict requires resolution here.

This Court recently considered the civil liabilities

of a purchasing corporation which had bought a busi-

ness with knowledge that the preceding owner had

engaged in an unfair labor practice. It concluded, in

Golden State Bottling Co. vy. NLRB, 414 U.S. 168

(1973), that in order to effectuate the remedial pur-

poses of the National Labor Relations Act, a bona tide

suceessor may be liable for reinstatement and back pay

to improperly discharged employees. The Court rea-

soned that ‘‘[s]ince the suecessor must have notice

before liability can be imposed, ‘his potential liability

for remedying the unfair labor practices is a matter

which can be reflected in the price he pays for the busi-

ness, or he may secure an indemnity clause in the sales

contract which will indemnify him for liability arising

from the seller’s unfair labor practice.’ fd. at 185,

In the instant ease, on the other hand, adjustments in

price and indemnification agreements are obviously

inadequate and unavailable to provide for possible

criminal prosecutions. And, on the record of this case,

it is clear that even the issue of knowledge was taken

from the jury by the judge’s instruction (pp. 8-9,

supra), which simply told the jurors that if the original

offender committed a violation, the merged parent was

to be found guilty.

The starting point with regard to the survival of

corporate criminal liability is, as this Court observed

in Meirose Distillers, Inc. v. United States, 359 U.S.

271, 272 (1959), that ‘tin the federal domain prosecu-

tions abate both on the death of an individual defendant

* * * and on the dissolution of a corporate defendant

* * * unless the action is saved by statute.’? Tn the

Melrose Distillers ease this Court concluded that cor-

porations which were dissolved when their businesses

beeame divisions of a parent corporation could still be

prosecuted criminally under the Sherman Act even

after dissolution. Application of the Welrose Distillers

principle would have required that the present action

be taken only against the original Emprise Corpora-

tion.

Indeed, it was clear throughout the proceedings

below that, notwithstanding the transfer of assets and

dissolution by merger, the original corporation was

available for criminal prosecution. The dismissal of

the initial charge—the appeal from which was

abandoned by the government—was based entirely on

the conclusion that the case was in the wrong federal

district. Moreover, in District Judge Weinfeld’s

decision in United States v. Cigarette Merchandisers

Ass’n, 136 F.Supp. 214 (S.D.N.Y. 1955), on which the

court below relied for its understanding of New York

law (App. A, pp. 82a, 83a), the court ruled that the

acquired corporation, which had been dissolved by

merger, could be prosecuted ‘for crimes it may have

connuitted prior to dissolution.’ 136 F.Supp. at 217.

Accord: United States v. Stone » $02 Fi2d 42, 47 (8th

Cir. 1971) (construing the present New York statute).

Here, instead of prosecuting the dissolved corporation

—as required by the federal policy of Welrose Distillers

and the law of New York—the government has attached

criminal liability to the purchaser of its assets solely

because that purchaser is, for civil purposes, responsible

under New York law for the dissolved corporation's

liabilities.

The court below also erred, we submit, in placing

such heavy reliance on local Jaw in the application of

a federal criminal statute. Corporations which

operate in several states should not have their federal

criminal liability turn on the vagaries of Jaws of par-

ticular local jurisdictions. Such a rule is not only

burdensome to federal prosecutors aud courts, which

must administer the law, but unfair to putative defend-

ants, particularly those whoxe business takes them: into

rarious states.

The decision below, if allowed to stand, has serious

implications for American business. It subjects the

surviving corporation in a merger to vicarious criminal

liability for acts performed on behalf of au acquired

corporation on some earlier date. '* Banks and in-

surance companies could be fatally disabled by criminal

convictions for acts they neither committed nor knew

of, but which had been undertaken on behalf of busi-

nesses they purchased. Mergers and consolidations

are commonly used methods of achieving permissible

business objectives, and businessmen anticipate that

when they engage in such transactions the survivor or

new corporation will bear the risk of unknown civil

liabilities. The price and terms of the exchange will

reflect that risk, and familiar techniques of contract

law are available to shift the economic burden where

it equitably belongs. But we conceive of mo way by

which the possibility of viearious criminal liability and

12 The court below placed no reliance whatever on the fact that

the petitioner and the dissolved corporation had a parent-subsidiary

relationship, so that the court’s reasoning applies to corporations

which are total strangers prior to merger. In any event. in the

absence of proof (and a jury finding) that the parent corporation

was itself involved and knew of the illegal activity, the parent can-

not be held criminally liable. With corporations, as with indi-

viduals, a master is not liable for the criminal acts of his servants

unless he authorizes or knows and acqniesces in what the servant

has done. Sayre. Criminal Responsibility for the Aets of Another,

43 Harv. L. Rev. 689. 723 (1930). No proof of authorization,

knowledge, or aequiescenee by Tigh Park was offered in this case

and, under the instruction given the jury (pp. 8-9, supra), no

such issue was relevant.

its collateral consequences can be covered by contract.

The parties can, of course, provide for the costs of

defense of a criminal prosecution against the dissolved

corporation and the payment by the survivor of any

fine that is due. If, however, the survivor may be held

Vieariously liable and be treated itself as a felon, the

potential harm—particularly in licensed industries—

ix so staggering that corporations would be encouraged

to forego both external arid intevnal mergers and ae-

quisitions, If such a result is to be reached, it surely

requires more careful legal and economic cousideration

than was given by the court below.

Viearious criminal liability is *‘repugnant to every

instinet of the criminal jurist,’ Sayre, supra, 45 Harv.

L. Rev. at 702. It is no less so when it attaches to a

corporation rather than an individual. In the con-

text of this case, the question of viearious liability

presents portant issues affecting corporate business

in general and the economy of the nation. The funda-

mental problems of criminal jurisprudence raised by

the decision below should not be obscured by the other

issues discussed in the court’s lengthy opinion or by

the size of the reeord. They deserve isolated and

thorough examination from this Court.

IV. The Court of Appeals Erroneously Refused To Recognize

the Unconstitutionality of Acts Which, Both Singly and in

Sum Total, Denied Petitioner’s Fifth and Sixth Amendment

Rights.

We respectfully submit that petitioner was denied

due process in violation of the Fifth Amendment and a

jury trial in violation of the Sixth Amendment by the

conduct of the prosecution prior and subsequent to

trial and by the conduet of the prosecutor and the court

at trial. Petitioner was so repeated!y prejudiced by

this conduct that it was denied even the semblance of

a fair hearing and a fair decision by the jury.

We recognize, of course. that a long and complex

trial cannot be a perfect trial, that some mistakes are

bound to be made, and that appellate courts have lati-

tude in overlooking minor errors. But there is

another side to that coin: the length and complexity of

atrial should not be used as an excuse for, or as a shield

against, the denial of basic constitutional rights. This

is particularly true here, where there are not one or

two isolated violations of limited magnitude, but rather

an entire range of serious and pervasive violations

going to the very core of constitutional due process,

Tn presenting these, we do not rely upou our own

interpretation of the record, which is far more serious

than that put forth by the Court of Appeals. Rather,

for purposes of this Petition, and in order that the

Court will have no question about what oecurred, we

adopt the Court of Appeals’? own version of events,

with appropriate references to that Court’s opinion in

Appendix <A:

—The government illegally wiretapped three de-

fendants over a three-year period (S4a-85a). There-

after, the prosecutor threatened to use the logs of the

illegal tapes if a defense attorney did not drop a line

of redirect examination, which the attorney did (86a-

88a) sand a reporter read the prosecutor's transcript of

a benchside conference about the logs, and his paper

headlined, ‘Transcript Shows U.S. Bugged Vegas

Defendants’ Mafia Talks’? (88a-89a). %

8 Prior to trial, when requests were made for disclosure of eaves-

dropping by the prosecution, totally inadequate steps were taken

to determine who was overheard, and it is not known to this day,

—The trial court allowed jurors, who were not

sequestered, to read newspapers with the admonition

-that they avoid stories on the trial—which preswnably

meant reading headlines to determine which stories did

and did not involve the trial (27a-28a). The news-

papers carried stories, intcr alia, “linking [two de-

fendants] to James Hoffa’ (29a), ‘‘referring to

(defendants] and cheir Jinks to organized crime”

(30a), and disclosing a sidebar conference at which the

Mafia was diseussed (23a-24a, 30a). '* ‘The motion

picture The Godfather was released during the trial,

and a local television personality discussed during his

program the beck and [two defendants] and their

alleged links to the Mafia” (23a). The ** Mafia’? and

“related terms’? were actually talked about by the

jurors at the beginning of their deliberations (1la-

34a). Defense counsel ‘told the [trial] court of

juror Palmer’s revelation that other jurors had been

reading newspaper stories about the case and that it

had been ‘devastating to the defendants’? (34a-35a).

The trial court refused to investigate, although the

juror was then in the courtroom, ”

with sufficient certainty. whether officers of the petitioner were not

thenuselves targets or victims of illegal eavesdropping.

For a fuller exposition of this eavesdropping. see the Petitions

for Writs of Certiorari filed contemporaneously with this Petition

by the other defendants convicted below.

Mi he Mares vy. United States, 383 F.2d 805, 809 0th Cir. 1967) :

“Tf any juror even saw the headline and connected it with the trial

in progress, the possibility that it wonld not prejudice that juror

is so slight that it merits no consideration.”

™ See Sheppard v. Marwell, 334 U.S. 333 (1966); Estes v. Teras,

381 TUS. 582. 543 (1965): Chapman vy. California, 386 US. 18, 43-

44. (1967).

The failure to make a prompt investigation of such a charge and

to recognize the harmful effect of such jury exposure was held

reversible error in United States v. Thomas, 463 F.2d 1061, 1065

(7th Cir. 1972).

—The prosecutor told the jury that defendants

**have learned it is better to use a corporate resolution

than a pistol,’? and ‘have learned that a corporate

resolution is 1i0ore deadly and more effective than a

pistol * * *°? (43a n. 56). He also stated that de-

fendants* conduct was **the good old fashioned Chicago

type extortion’? (45a n. 603." Even the Court of

Appeals conceded that **In his closing arguments, the

prosecutor did make comments which could have con-

veyed the impression that appellants were violent in-

dividuals’’ (45a).

—The trial court on two separate oceasions prior to

verdict conducted interrogations of jury members

without defendants or their counsel being present (29a,

ala).

—‘On four oceasions, in ruling on questions ad-

dressed to two government witnesses, the trial judge

made comments that appearfed] to vouch for the

eredibility of the [government’s] witnesses’’ (46a),

and he also indicated in front of the jury that one of

the defendants could cure another witness’ testimony

by taking the stand (47a n. 63).

—Three times the prosecutor improperly used a

deposition from another proceeding, without order of

count or notice, to challenge witnesses in this case

(49a-50a).

"See Bruton v. United States, 391 U.S. 123 (1968); Berger v.

United States, 295 US. 78 (1935): American Bar Association

Standards Relating to the Prosecution Function, Approved Draft,

See, 3.5, 5. pp. 87(b). 88 (February 1971).

Soe Lewis vy. United States, 146 U.S. 370, 372 (1892) ; United

Ntates vy. Palladino, ATS F.2d 65. 75 (1st Cir. 1973): United States

Vv. McCoy, 429 F.2d 739, 742 (D.C. Cir. 1970).

-—The prosecutor, despite the Jencks Act, failed to

disclose prior to trial the transcript of a taped cou-

versation between the key government witness and

another person (52a-54a). ™

—The prosecutor disclosed only a promise to the

government's key witness to call his testimony to the

attention of his Parole Board. However, the witness’

former custodian swore that the witness had told him

of a government promise to release him after testifving

—and he was in fact so released (58a-60a),

—After being instructed that certain prior conduct

by defendants was not to be inquired into, the prosecu-

tor nevertheless cross-examined on precisely that

conduct (48a-49a).

—The prosecutor was allowed to elicit from a witness

the testimony that in a taped transcript, the witness

had told him two defendants had certain hidden in-

terests—which in fact the witness had not stated in

the transcript (54a-58a). *°

—The prosecutor argued ‘‘skimming”’ to the jury

even though there was no evidence in the case of such

a practice (22a).

—The trial court refused to give an instruction on the

testimony of a perjurer even though a Government

witness had previously been convicted of perjury

(21a-22a).

™ See Campbell v. Tnited States, 373 U.S. 487 (1963).

19 See Giglio v. United States, 405 U.S. 150 (1972).

“° See Mooncy vy. Holohan, 294 U.S. 103 (1935): United States vy.

Ryan, 455 F.2d 728, 732 (9th Cir. 1972).

The Court of Appeals concedes not ouly that these

oceurrences teok place, but that in many instances

“errors”? occurred.” It attempted, however, to

explain away, play down or overlook the seriousness of

each “error.”’ We submit not only that many of

these “errgys”’ rose to the levei of individual constitu-

21es# * * (7 1t was error to permit the government to begin a line

of questioning with a high possibility of prejudice * * *°" (44a);

‘Even if the giving of the suppression of evidence instruction

were error * * *"* (21a): °° We agree with appellants that it would

have been preferable to ask each juror about the newspaper * * *”’

(29a-30a): °° On four occasions, in ruling on questions addiessed to

two government witnesses, the trial judze made comments that ap-

pear to vouch for the credibility of the witnesses’ (46a); °* Upon

hindsight, there were things said by the prosecution which would

have been better unsaid”’ (51a): ‘although the trial court clearly

had the best of motivations * * *, it did commit error’” (55a);

“The government concedes that the electronic surveillance was

conducted illegally’? (S4a); It is true that many of the Los An-

geles witnesses on the government’s first list disappeared from the

second list * * ®7" (672): °** Whatever prejudice to appellants could

have resulted * * *°° (222); ‘*In this case the problem of publicity

was not insignificant * * *°? (39a); °*In his closing arguments, the

prosecutor did make comments which could have conveyed the im-

pression that appellants were violent individuals’? (45a); ** How-

ever, the probative value of that testimony was not great enough to

justify its admission * * *°? (49a): **The use of the deposition

cannot be justified by j Fed. R. Crim. P.] 15 * * *° (49a); °°* * *

even if undisclosed promises had been made * * *°" (59a); ‘‘al-

though the instructions on specific intent, viewed alone, could have

been more precise * * *°’ (19a); ** Though the court’s rulings were

erroneous * * **" (44a) 2>*'Tf it were error to allow the prosecttion

to ask appellant Rooks about the first Reisman deposition * * #7’

(50a) ;** While it may generally be preferable for the trial court to

allow such an examination of jurors * * *°? (35a-36a); ‘** * * a

question of inconsistency perhaps cid arise * * *7? (53a); ‘The

balance may not have been so clear when Giordano moved for

severance during trial’’ (69a); °*The court thus should not have

admitted any testimony referring to the Lands transcript’? (55a) ;

‘At most the witness may have misunderstood the court * * *”’

(55a) ; ‘* Errors were committed * * **’ (51a).

tional violations, but that in sum they clearly and with-

out question denied petitioner the fair trial to which it

was entitled under the Fifth and Sixth Amendments.

In addition, there was one serious constitutional

violation that is not sufficiently reflected in the Court of

Appeals opinion. The record of the proceedings below

establishes beyond doubt that there was prominently

presented to the jury a theory for petitioner’s violation

of the Travel Act which the Court of Appeals held

invalid. The government charged in the indictment

and in the information and urged in closing argument

(39 R.T. 7902-94, 43 R.T. 8693-95) that the defendants

violated the law beeause holders of alleged hidden

interests in the gambling franchise were not them-

selves licensed. And the trial court struck from pe-

titioner’s requested instructions a statement that in

wnbling conducted by a corporation, only the cor-

poration need be licensed. It allowed to stand a state-

ment that patrons going to the casino to gamble need

not be liceused, strongly suggesting the negative preg-

nant that other interested parties would have been

required to hold a license. The Court of Appeals

clearly and emphatically rejected precisely this re-

quired-licensing theory. As the court’s opinion put

it, speaking of the government’s contention that all

persons with a direct or indirect interest in a gambling

casino must be licensed: ‘We find no such require-

ment in Nevada law.”” App. A, p. 1a.

The decision of the Court of Appeals, invalidating

the theory of Travel Act violation relied upon by the

government and yet affirming convictions undoubtedly

returned on precisely the same theory. has ignored the

clear teaching of a long line of cases in this Court.

E.g., Clay v. United States, 403 U.S. 698, 705 (1971);

Rewis vy. United States, supra; Bachellar v. Maryland,

397 U.S. 564, 570-571 (1970); Yates v. United States,

304 U.S. 298, 312 (1957); Stromberg v. California,

283 U.S. 359, 307-368 (1931).

CONCLUSION

For each and all of these reasons, we respectfully

submit that the Petition for a Writ of Certiorari

should be granted and the judginent below reversed.

Respectfully submitted,

E. Barrett PrRETTYMAN, JR.

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

Hervert J. MInier, JR.

NATHAN LEWIN

1320-19th Street, N.W.

Washington, D.C. 20036

INDEX

Page

Appendix A, Opinion of Court of Appeals, April 30,

Sere rrr ort Teer Tree TT TIT ee era Ty la

Appendix B. Denial of Petition for Rehearing, July

DA MEE GuN MKS ees bedebeencnsessakconshanevine® 94a

Appendix C. Order Correcting Date of Filing of Order

Denying Petitions for Rehearing, August 5, 1974.. 98a

Appendix D. Stay of Mandate, August 12, 1974 ..... 100a

Appendix KE. Order Extending Time To File Petition

for Writ of Certiorari, August 8, 1974 ......... 102a

Appendix F. Constitutional and Statutory Provi-

NE a Uae Re TARA sera Neches ¥eeewauearene es 103a

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 72-2983

Unitep Srates or Amenica, Plaintiff-Appellee,

Miciaen, Santo Pouizzi, Defendant-Appellant.

No. 72-2984

Unitep States or Amenica, Plaintiff- Appellee,

Jack 8. Suapinoe, Defendant-Appellant.

No. 72-2985

Unitep States or America, Plaintiff-Appellee,

Peter James Betwanca, Defendant-Appellant.

No. 72-2986

Unitep States or America, Plaintiff-A ppellee,

Antuony GriArvano, Defendant-A ppellant.

No. 72-2987

Uniten States ov America, Plaintiff-Appellee,

Artuur J. Rooxs, Defendant-Appellant.

No. 72-2988

Unitep States or America, Plaintiff-Appe ‘ce,

Antuony Josern Zens, Defendant-Appellant.

No. 72-2989

Unitep States or America, Plaintiff-Appellee,

Empnise Corporation, a New York Corporation,

Defendant-A ppelant.

Opinion

April 50, 1974

Appeal from the United States District Court

for the Central District of California

Before: Browsixc and Duxiway, Circuit Judges, and

Renxerrew,* District Judge.

Rexrrew, District Judge:

In 1966 and 1967, appellants Zerilli and Polizzi acquired

hidden interests in Vegas Frontier, Ine. (VFI); a Nevada

corporation, which leased and operated the Frontier Hotel

in Las Vegas, Nevada. VEI was also licensed to conduct

gambling at the hotel, which opened in July of 1967.

Neither Zerilli nor Polizzi wos Leensed by the Nevada

gaming authorities, nor was either man’s interest in VFI

disclosed to those authorites. After extensive negotia-

tions, VFI was sold in November, 1967, to Howard Hughes.

Following a very lengthy and complex trial,’ Zerilli,

Polizzi, and the other appellants were convicted of con-

spiracy (18 U.S.C. $371) to violate 18 U.S.C. § 19527

* The Honorable Charles B. Renfrew, United States District

Judge, Northern District of California, sitting by designation.

? There were 48 days of trial reported in 11.022 pages of report-

er’s transeript (ineluding post-trial motions), and $21 exhibits were

received in evidence.

218 U.S.C. $1952 provides in 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 crime of violence to further any unlawful

activity; or

(3) otherw's. promote, manage, establish, carry on, or facill-

tate the promotion, management, establishment, or carrying on.

of any unlawful activity,

and thereafter performs or attempts to perform any of the acts

specified in subparagraphs (1), (2), and (3), shall be fined not

(Interstate and Foreign Travel or Transportation in Aid

of Racketeering Mnterprises) and of substantive violations

of that section, Appellants challenge their convictions on

a number of bases. They contend:

1, That the prosecution failed to show a violation of

§ 1952.

2. That, if a violation were shown, the laws in question

would be unconstitutionally vague.

3. That the court erred in instructing the jury.

4. That the publicity surrounding their trial deprived

them of a fair trial and that there was jury miseonduet

which the court refused to investigate.

». That the label ‘Mafia’? was applied to them in a

public list of Mafia figures made by the Department of

Justice and that the list was submitted in the grand jury

proceedings and in the trial in this case and that these

actions constitute a deprivation of their rights of due

process,

6. That the trial court committed error in the permission

it gave to the proscention to cross-examine certain of the

appellants about their reputations as members of the

Mafia when the appellants had not presented evidence of

character or reputation.

7. That they were deprived of a fair trial by miseonduet

of the prosecutor which the trial court sanctioned.

8. That the testimony of a key proseention witness should

have been stricken in that the prosecution’s untimely

—s

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 * * * offenses in violation of

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

Wites ** F,””

production of his pretrial statements violated the Jencks

Act.

9. That error was committed in the admission of the

testimony of that witness on the grounds that part of the

testimony was conclusively demonstrated to be false, and

admitted to be false by the witness.

10. That promises of leniency made to the witness by the

prosecution were not disclosed.

11. That the acts complained of were a unitary crime

and that it was not proper for them to be con¥ieted of a——

conspiracy and substantive violations based upon the same

conduct.

12. the venue of the trial court was improper.

12. That the v f the trial t proy

13. That the court below erred in refusing to grant appel-

lant Giordano’s motion for severance.

14. That the court below erred in failing to instruct the

jury that evidence admitted after appellant Giordano had

rested at the close of the prosccution’s case could not be

considered against him.

15. That appellant Giordano’s motion for acquittal at the

close of the prosecution’s case should have been granted.

16. That appellant Emprise is not liable for any criminal

acts that its predecessor in interest allegedly committed.

17. That the evidence was insufficient to support their

convictions.

18. That the trial was materially tainted by leads from

unlawful electronic surveillance.

Having carefully considered each of these contentions,

we affirm the convictions below. Although this opinion

is longer than we would have preferred, appellants have

raised and argued so many points in 534 pages of briefs,

exclusive of appendices and exhibits, that we find a lengthy

opinion unavoidable.

I. Violation of § 1952

Appellants’ threshold contention is that their conduct did

not come within the coverage of the federal Travel Act (18

U.S.C. § 1952), raising two issues as to the meaning of the

statute. Section 1952 condemns interstate travel or the

use of interstate facilities in the furtherance of ‘‘any un-

lawful activity,’’ defined as including ‘‘any business enter-

prise involving gambling * * * offenses in violation of the

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

United States * * * .”’ A violation of ¢ 1952 thus must

—he- premised upon—another—distinet violation of state or

federal law.

Although state law becomes the focus of this inquiry,

“the gravamen of a charge under $1952 is the violation

of federal law * * * 2? United States v. Karigiannis, 430

F.2d 148, 150 (7 Cir. 1970) (Clark J.), cert. denied 400 U.S.

904 (1970). ‘‘Reference to state law is necessary only to

identify the type of unlawful activity in which the defend-

ants intended to engage.’? United States of A merica Vv.

Rizzo, 418 F.2d 71, 74 (7 Cir. 1969), cert. denied 397 U.S.

967 (1970).

While the Government’s theory was not succinctly stated,

either in its briefs or at oral argument, it does emerge from

a careful reading of the indictment and information * to-

gether with the court’s instructions to the jury‘ that ap-

3The indictment names the six individual appellants and the

information names appellant Emprise Corperation, the successor in

interest to a merged corporation of the same name which had been

dismissed from the indjctment for lack of personal jurisdiction

prior to trial.

Both the information and indictment contain the following

language charging appellants with traveling ‘‘in interstate com-

merce and [using] facilities in interstate commerce with intent to:

‘1. Distribute the proceeds of unlawful activity, namely: the

ownership, operation of, and receipt of profits from a Las Vegas,

Nevada gaming casino by persons who were not licensed and whose

pellants violated the federal Travel Act by conduct which

was a ‘‘business enterprise’’ that involved *‘ gambling * * *

offenses”’ in violation of Nevada Revised Statutes (N.R.S.

$ 463.160° in that Zerilli and Polizzi’s interests in the

gambling conducted by VFI at the Frontier Hotel were

hidden from the Nevada gaming authorities.

interest in the gaming casino had been concealed from agencies of

the State ov Nevada in violation of Nevada law; and

‘92 Promote, manage, establish, carry on, and facilitate the

promotion, management, establishment and carrying on of unlaw-

ful activity, namely: the ownership, operation of, and receipt of

profits from a Las Vegas, Nevada gaming casino by persons who

were not licensed by and whose interest in the gaming casino had

been concealed from agencies of the State of Nevada in violation of

Nevada law * * *.’’

The court’s instructions to the jury were also couched in terms of

the failure to disclose the interest of Zerilli and Polizzi in VFI.

5 Nevada Revised Statutes (N.RUS.) $ 463.160 lays down the basic

law requiring a license for gambling operations:

“*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

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 or sports pooi; or

&* - * % *

‘*(¢) To receive, directly or indirectly, any compensation

or reward or any percentage or share of the money or property

played, for keeping, running, carrying on or permitting the same

to be carried on, 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

*“* uals

N.R.S. $ 463.170 then indicates what information must be dis-

closed if a license is to be obtained by a corporation:

**2. No corporation * * * shall be eligible to receiveor hold any

license ua? r¢ this chapter unless all persons having any direct or

indirect interest therein of any nature whatsoever, whether finan-

‘

ern ET Ee * ie areas |

Appellants’ first argument is that since VFI had a

gambling license as required by Nevada law, their activity

could not be unlawful within the meaning of the federal

Travel Act. They rely considerably on one instruction, to

which the government did not object, that VFI was licensed

and that the gambling it conducted could not be found

iHegal.® Appellants counsel stated at oral argument that,

even if appellants procured the VFT license fraudulently,

there would be no criminal violation of Nevada law. We

disagree.

This instruction meant only that the trial court did not

believe that the prosecution could rely upon N.RS.

£¢ 463.160(1)(a). The license would not be viewed as void

ab initio, and the appellants could not be prosecuted for

conducting a gambling enterprise without a license. Nor

could the proscentor ‘pierce the corporate veil’’ to reach

appellants.7 The instruction does not, however, legitimize

cial, administrative, policymaking or s ipervisory, are individually

qualified to be licensed under the provisions of this chapter.”’

{Appellants contend that the revised N.RLS. § 463.170(2), effee-

tive July 1, 1967, should have been applied. In footnote 11, iafra,

we point out the error in that contention.}

The statute governing the disclosure to be made in an application

for a lieense provides:

“9 The application shall include:

* * * % *%

““(d) The names of all persons directly or indire tty inter-

ested in the business and the nature of such interest.’? N.ILS.

§ 463.200.

The forms supplied for an application by a corporation indicate

that corporate officers and stockholders are to be listed as those

persons interested in the business.

6“ Sinee in this case a license was issued to the corporation VFI,

any gambling conducted by or through VFI would not be illegal

and would not be in violation of this statute [N.RS. $ 463.160].”’

Reporter’s Transcript, Vol. 43, p. 8798.

7 See footnote 13, infra.

all the acts of appellants in obtaining the license. N.R.S.

§ 463.160(1)(c) covers precisely the charges here against

appellants: receiving compensation from gambling con-

dueted without having procured and maintained licenses

as required by law.’

Appellants argue, however, that N.R.S. $463.160(1) (e)

only requires that the gambling be licensed and does not

reach fraud or other violations in obtaining the license.

Acceptance of this construction of Nevada law would ef-

fectively emaseulate the statutory scheme of requiring the

disclosure of the identities of the persons who would be

involved in the gambling enterprise. This disclosure re-

quirement has as its purpose the prevention of the in-

filtration of criminal elements into gambling in Nevada. ®

Section 463.160(1)(e) requires not only that a license be

* See footnote 5, supra, for the language of the statute.

***It is hereby declared to be the policy of this state that all

establishments where cambling games are conducted or onerated or

where gambling devices are operated in the State of Nevada shall

be licensed and controlled so as to better protect the public health,

safety, morals, good order and general welfare of the inhabitants of

the State of Nevada.’’ N.R.S. § 463.130(1).

The Nevada Supreme Court, in a decision handed down two years

prior to the enactment of the statutes here in question, gave a

strong policy basis for the licensing requirement:

**Nevada gambling, if it is to succeed as a lawful enterprise,

must be free from the criminal and corruptive taint acquired by

gambling beyond our borders. If this is to be accomplished not

only must the operation of gambiing be carefully controlled, but

the character and background of those who would engage in

gambling in this state must be carefully scrutinized.

‘<# * * The risks to which the publie is subjected by the legalizing

of this otherwise unlawful activity are met solely by the manner in

which licensing and control are carried out.’? Nevada Tar Com-

mission Vv. Hicks, 73 Nev. 115, 119-120, 310 P.2d 852, 854 (1957).

See also Berman y. Riverside Casino Corporation, 247 F. Supp. 243,

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

This statement of policy was not qualified but rather reaffirmed

by N.R.S. § 463.130(1). supra.

procured and maintained, but also that it must be procured

and maintained in a manner that satisfies the other pro-

visions of the gambling law. The term ‘‘as required by

statute’? must be viewed in light of the strong state policy

behind the statutes. The interpretation offered by appel-

lants would give free rein to criminal elements in their at-

tempts to infiltrate Nevada gambling. The most they would

risk would be the administraiive revocation of their cor-

poration’s license. They would become criminally liable

only if they operated a gambling enterprise without pro-

curing a license, and the most dangerous elements could

easily avoid such a blatant vioiation of Nevada law.

Given these considerations, the only reasonable construe-

tion of N.R.S. § 463.160(1)(c) is that persons receiving

compensation from the gambling operation must fulfill all

other state requirements surrounding the granting of a

license. *°

Appellants violated those other provisions by failing to

disclose the identities of Zerilli and Polizzi as persons

having an interest in VFI. Under N.R.S. § 463.170(2),

applicants for a corporate license had to disclose ‘‘ persons

having any direct or indirect interest therein of any nature

whatsoever, whether financial, administrative, policy-

making or «upervisory * * *.’’"' The disclosure require-

10 Ser Yuddleston v. United States, U.S, ——, —— (1974) ;

Cf. Rewis v. United States, 401 U.S. 808, 811-812 (1971).

11Appellants have contended in their briefs that the revision of

this section effective July 1, 1967, should be applied. They did not

press this point at oral argument. We find their contention unten-

able. Although VFI’s license was not issued until July 5, 1967, to

be effective July 27, 1967, the Chairman of the Nevada Gaming

Commission during the time in question testified that VFI had

completed all the formal requirements for a license by June 28,

1967, and that it had a right to a license on that date. VFI itself

had requested that the license be effective as of July 27,1967. There

is no indication that appellants made any attempt to comply with

10a

ment must be complete in order to meet the policy of the

Nevada gambling laws. Appellants stress that the cor-

porate-license application form supplied by the state re-

quired onfy the fisting of the names of corporate oificers

and shareholders. Since VEFI’s applicaticn complied with

this requirement, they argue, there was no failure to dis-

close. This argument, if accepted, would turn the detailed

statutes governing the control of licensing into a mere

formality. Disclosure of nominal officers and shareholders

would guarantee legality and shield the very persons as to

whom the disclosure requirements are directed. The At-

torney General of Nevada in 1960 gave his opinion that

N.R.S. § 462.170(2) gave power to state authorities ‘to re-

quire those persons having administrative, polieymaking or

supervisory interest in the operation to qualify for licens-

ing.”’ To utilize that authority effectively, he stressed,

the authorities would necd to obtain information about

those persons. Official Opinions of the Attorney General

of Nevada, 1960-1962, pn. 83-84 (1960). There was no

hint that formalities suffice or should be exalted over sub-

stanee. In this cate, the information and indictment em-

phasized that Zerilli and Polizzi held the reel interests in

VF! and controlled the nominal shareholders. The trial

court, in its instruetions on the definition of ‘‘owner’’ as

used in the Nevada statutes, stressed the reality of owner-

ship rather than formal titles. (Reporter’s Transcript,

Vol. 42, p. 8765). These statutes require disclosure of the

the new, revised s‘atute, which included reporting requirements in

many ways more stringent than those in the old statute. Sce NIRS.

§$ 463.520. Nor is there any indication that the Board sought to

require appellants to comply with the new statute. Thus the Board

necessarily interpreted the statutes to mean that the old statute

rather than the new statute governed applications completed before

the new statute went into effect. Such an administrative interpre-

tation is entitled to great weight. Sce footnote 12, infra. More-

over, appellants apparently acquiesced in this interpretation, In

these circumstances, the trial court applied the correct statute.

lla

names of all persons with actual control or financial in-

terests in the gambling enterprise. *

Mhe ait wf appellant: charred and peaven in this case

therefore were prohibited by state law.” Appellants, how-

ever, raise further objections. They contend that, even if

they did violate Nevada law, their violations were not

criminal and therefore do not come within the ambit of

¢1952. They characterize their conduct as merely ‘‘op-

erating a casino with a state corporate license but without

other required state Tieenses.”’ That theory, however, is

based upon the goverument’s contention that all persons

with a direct or indirect interest ina gambling casino wist

be licensed. We find no such requirement in Nevada law."

12 The record reveals that the Nevada authorities soncht in this

case to go “behind * the nomial offivers and shareholders and con-

ducted a vigorous investigation to ascertain who controled VEL

The Court gives weight to the manner in whieh the Nevada caming

authorities have construed the statutes under which they operate.

13 Two other theories put forward by the government fail. One

involves “ piercing the corporate veil.” The govern sent arcres in

its brief that the Nevada statutes ** provide the gaming artheritios

with the necessary arthority te go behind the corporate license to

determine who in fact is controtting the corneration Which was

granted the gaming license’ (empbais in original). That arru-

ment is foreclosed by the trial court’s instruction, to which the

government did not object. quoted tH footnote 6, syrd. Althorah

that interpretation of N.RUS. $ 162.169°1) (a) was met he only one

possible, it is not an mnreasonable construction. This Court accepts

it as the law of this case,

The other theory is that N.RUS. $463.160(1) requires that any-

one with a direct or indirect interes: in a gambling enterprise must

be licensed. That statute, however, requires only that licenses vinst

be procured as required by the law. NURS, $465.179(2) indicates

that a corporation can receive and hold a license itself and that

those persons with interests in the corporation must only be quali

fied to be licensed, See also Berman ¥, Rive rside Casino Corpora-

tion, 354 F.2d 43 (9 Cir. 1965).

14 See footnote 13, supra.

12a

The violations of Nevada law in question here were not

by VFI, but rather by those in control of VFI who did not

disclose the interests of Zerilli and Polizzi. The trial court

preserved the corporate fiction and the legality of the

gambling operations conducted by the corporation. Hence

appellants’ argument that N.R.S. § 463.310 specifically

establishes only an administrative penalty available to

the authorities in this case—revocation of VFI’s license—

is in error. That provision does set the procedures for

disciplinary action against the licensee, but here the li-

censee has not been prosecuted tor violating Nevada law.

Sinee there is no specific penalty prescribed for a violation

of N.R.S. $ 463.160(1)(e), the ‘‘catch-all’’ section, N.R.S.

$ 463.360(2)" would apply.’® That violation, there charae-

terized as a gross misdemeanor, would be a criminal infrae-

tion.”

Appellants’ second argument is that § 1952 reaches only

wholly unlawful business enterprises and, since gaming is

legal in Nevada, the federal Travel Act does not apply.

They cite United States v. Roselli, 432 ¥.2d 879 (9 Cir.

<The violation of any of the provisions of this chapter, the

penalty for which is not herein specifically fixed, shall be deemed a

gross misdemeanor, and shall be punished by a fine of not less than

$1,009, or by imprisonment in the county jail for not less than 6

months, or by both fine and imprisonment.’’

The Chairman of the Nevada Gaming Commission during the

time in question testified that ander the law then in effect, “any

violation’? of that law by individuals would mean that those indi-

viduals were guilty of gross misdemeanors where no specific penalty

was provided, Reporter’s Transcript, Vol. 15, pp. 8028-3029.

Indeed, other than conducting a casino without a license, which is

exceedingly unlikely, it is difficult to imagine what N.R.S. § 463.360

(2) would cover if it did not cover conduct such as that proved in

this case.

7 Once a violation of a state criminal statute has been proved it

is irrelevant whether that violation is classified as a felony or mis-

demeanor, United States v. Karigiannis, 430 F.2d 148, 150 (7 Cir.

1970) (Clark, J.), cert. denied, 400 U.S. 904 (1970).

13a

1970), cert. denied, 401 U.S. 924 (1971), rehearing denied,

402 U.S. 924 (1971), in support. Their reliance upon Ro-

sclli is misplaced. There the Court accepted only for the

purposes of argument the premise that the scope of § 1952

was limited to illegal business enterprises and even on that

basis found such an illegal enterprise (432 F.2d 879 at 887-

888). Appellants overlook that earlier in that opinion this

Court observed:

‘Tf section 1952 applied only when all business activity

was absolutely prohibited in the particular field, the

reach of the section would be materially diminished

without apparent reason in terins of the statute’s pur-

pose. There is no evidence that Congress intended this

result.’’? 432 F.2d 8795 at 887.

Nor do appellants’ general references to the legislative

history of § 1952 support this contention.'* The statutory

18 Appellants rely heavily upon the statements of Assistant

Attorney General Herbert J. Miller, Jr., of the Justice Depart-

ment’s Criminal Division that:

‘(The Travel Act] bans unlawful businesses-—not incidental

illegal acts done in the course of lawful businesses.’’ (‘‘ Legis-

lation Relating to Organized Crime,’’ Hearings on IL, R. 468

et al., Before Subcommittee No. 5 of the House Committee on

the Judiciary, 87th Cong., Ist Sess., p. 336 (1961).)

“Under this bill we would have to show a business enterprise

which was unlawful under ihe laws of the State #@ 0°! (‘The

Attorney General's Program to Curb Organized Crime and

Racketeering,’’ Hearings on 5. 1653 et al., Before the Senate

Committee on the Judiciary, 87th Congress, Ist Sess., p- 260

(1961).)

In 2 law review article, the Assistant Attorney General explained

the impact of the statutory intention thusly :

“(T]o turn a gambling * * * scheme into an ‘unlawful

activity’ within the meaning of the ‘Travel Act’ * * * the

‘business enterprise’ must involve illegal conduct. A program

to establish a gambling casino in Las Vegas, Nevada, would

not amount to ‘unlawful activity.’ ’* (Miller, The ‘‘Travel

Act’?: A New Statutory Approach to Organized Crime in

the United States, 1 Duquesne L.Rev. 181, 194 (1963)

(emphasis in original).)

l4a

language is clear. ‘‘Secetion 1952 speaks not of illegal gam-

bling, bui of a more inclusive category: ‘gambling * * *

offenses.’ ’? United States vy. Roselli, 432 F.2d 879, 887

(9 Cir. 1970), cert. denied’, 401 US. 924 (1971), rehearing

denied, 402 U.S. 924 (1971). See also Turf Center, Ine. v.

United States, 325 F.2d 793, 795 (9 Cir. 1963).

This Court’s construction of the scope of § 1952 will not

open the federz! courts to the prosecutorial abuses which

appellants have depicted for the Court: prosecutions of

minor illegal acts incidental to an otherwise legal business.

The legislative history of § 1952 docs demonstrate that its

main purposes are to attack organized crime and to aid lo-

eal authorities in combatting it.” Courts would simply

not allow it to be used to extend federal prosecutions far

from these purposes.” See Erlenbaugh v. United Slates,

409 U.S. 239, 245 (1972).

We conclude that appellants engaged in a business en-

terprise involving gambling offenses in violation of Nevada

law and 18 U.S.C. § 1952.

Il. Vagueness

Appellants challenge the statutes under which they have

been charged and convicted as being unconstitutionally

vague. ‘*No one may be required at peril of life, liberty or

property to speculate as to the meaning of penal statutes.

All are entitled to be informed as to what the State com-

mands or forbids. Lanzetia v. New Jersey, 306 U.S, 451, 453

(1959). Appellants’ attack is directed at the Nevada stat-

utes and not the language of § 1952, which has been upheld

This history is outlined in some detail in United States v.

Roselli, 432 F.2d 879, 854-888 (9 Cir. 1970).

20 Membership in an organized criminal group is not, of course,

an element of an offense under $1952. United States vy. Roselli,

432 F.2d 879, 885 (9 Cir. 1970), cert. denied, 401 U.S. 924 (1971),

rehearing denied, 402 U.S. 924 (1971). It rests with the. courts

to determine the reach of § 1952 in a case-by-case manner.

15a

previously against claims of vagueness, See, e.g., United

States v. Cozzctti, 441 F.2d 344, 348 (9 Cir. 1971); Turf

Center, Inc. v. United States, 325 F.2d 793, 795 (9 Cir.

1963); United Slates vy. Smith, 209 F.Supp. 907, 917-918

(E.D.IL 1962). We have already held that the Nevada

statutes clearly proseribe the conduct charged against ap-

pellants.*". The construction of those statutes urged by

appellants is unreasonable and conflicts with the manifest

purpose of the Nevada gambling legislation requiring pre-

cise and stringent controls relating to the licensing of gam-

bling. Violation of the statutes in the manner charged

against appellants is a criminal offense.” In affirming

these convictions, we are not enlarging the original legis-

lation by interpretation. Cf. Bouie v. City of Columbia,

378 US. 347, 350-352 (1964); Pierce v. United States, 314

U.S. 306, 311 (1941).

Moreover, the trial court instructed the jury that specific

intent was an clement of the offense charged against appel-

lants.* Thus the jury found that appellants knew that Ne-

vada law had been violated in the procurement of VFI’s

license, ‘*A mind intent upon willful evasion is inconsist-

ent with surprised innocence.’’ United States v. Ragen,

814 U.S. 513, 524 (1942). See also United States v. National

Dairy Corp., 372 U.S. 29, 33, 35 (1963) ; Screws v. United

States, 325 U.S. 91, 103 (1945). The record here is clear

that appellants were not the helpless vietims of an uncon-

stitutionally vague statute.”

21 See pages 5-10, supra.

22 See page 11, supra.

23 While appellants contend that the instructions on specific

intent were erroneous, we find no such error. See pages 17-18,

infra.

24The question of vagueness was considered hefore Congress

enacted § 1952. Assistant Attorney General Herbert J. Miller, Jr.,

testified before the House Subcommittce that: ‘‘It can hardly be

contended that the average American citizen does not know if he

l6a

Ill. Jury Instructions

A. Nevada Statutes and Regulations

Appellants contend that the court below erred in several]

respects in its instructions to the jury. Certain of these

claims concern specific instructions relating to the Nevada

statutes. Appellants’ objections are based upon a misun-

derstanding of the government’s legal theory of the case.

Viewed as a whole, the court’s instructions constitute a

reasonable construction of § 1952 and the Nevada statutes

governing the licensing of gambling operations.

Appeliants also argue that it was error to read to the

jury without explanation, N.R.S. § 463.130.% But that

section is a self-explanatory statement of Nevada legisla-

tive policy and is important in understanding the purpose

and meaning of the other sections. These Nevada statutes

form a unified legislative plan; particular sections cannot

be fully understood without relating them to the entire

statutory scheme. Therefore, under these circumstances,

it was not error to read to the jury sections other than

N.R.S. $$ 463.160 and 463.200, the two sections upon which

the indictment and information were based.

N.R.S. § 463.300, dealing with voting trust agreements,

was also read to the jury. Appellants argue that this was

confusing, since the court had earlier instructed the jury

that the evidence presented had failed to establish a viola-

tion of § 463.300. The court refused appellants’ instrue-

tion which would have directed the jury to disregard all

is engaged, for example, in ‘any business enterprise involving

gambling, liquor, narcotics, or prostitution offerses’ * * *. Since

the bill in addition would require proof of the requisite intent

before a violation would be made out, 1 believe that the scope of

H.R. 6572 in no way threatens the activities or rights of any

persons other than the organized criminals at whom it is aimed.’’

‘‘Legislation Relating to Organized Crime,’’ Hearings on H.R.

468 et al., Before Subcommittee No. 5 of the House Committee on

the Judiciary, 87th Cong., Ist Sess., p. 336 (1961).

25 See footnote 9, supra.

17a

evidence concerning the voting trust agreement. In light

of the court’s specific instruction, no further instructions

were necessary to prevent the jury from finding a violation

of § 463.500. It is also highly unlikely that reading that

section in these circumstances confused the jury. Cf.

Uniled States v. Lookretis, 422 F.2d 647, 651 (7 Cir. 1970),

cert. denied, 398 U.S. 904 (1970).

Although conceding that the court properly charged the

jury that violations of the regulations of the Nevada State

Gaming Commission could not constitute criminal offenses,

appellants nevertheless assert that error was committed in

instructing that such a violation could be considered as an

act in furtherance of a conspiracy. This instruction was

proper and necessary in that without it the jury might

have thought that it had to disregard completely a violation

of the regulations.

B. Sending Statutes and Regulations to the Jury Room

Appellants urge that sending the statutes and regulations

into the jury room, especially without limiting instructions,

Was prejuc ‘cial error. This question is within the sound

discretion of the trial judge. United States v. Gross, 451

F.2d) 1255, 1558-1359 (7 Cir. 1971); United States v.

Bearden, 425 F.2d 805, 815 (5 Cir. 1970), cert. denied, 400

U.S. 836 (1970). In this case, the statutes and regulations

were extremely complex, and the trial judge may justifiably

have believed that it would be better to give the jury the

statutes and regulations rather than to have them attempt

a reconstruction from notes or from memory. In his ef-

fort to avoid confusion, the trial judge did not abuse his

discretion.

C. Reading Indictment and Information to Jury and

Sending Copics to Jury Room

Appellants argue that it was reversible error to read the

indictment and information both at the beginning of trial

and during the instructions. Given the extraordinary

18a

length and complexity of the trial, however, the trial court

may properly have judged that a re-reading was required

to avoid confusion.” The decision to read the indictment

to the jury is within the sound discretion of the trial court,

and we find no abuse of that discretion here.”

The court below also sent to the jury room copies of the

indictment and information. That decision is also generally

within the discretion of the trial judge. United States v.

Murray, 492 F.2d 178, 193-194 (9 Cir. 1973); Souza v.

United States, 304 F.2d 274, 280 (9 Cir. 1962). Appellants

contend that they should have been advised before closing

arguments that the court intended to send the information

and indictment. See Dallago v. United States, 427 F.2d

546, 553 (D.C. Cir. 1969). We agree, but the failure to do

so here is not prejudicial error.** Under all the cireura-

stances of this case, especially the court’s cautionary in-

struction on the use of the indictment and information and

the detailed instructions on what could be considered evi-

dence by the jury, we do not find that error prejudicial in

any respect.

26The indictment was first read on February 16, 1972, and

re-read on April 19, 1972, an interval of more than two montis.

77 The court instructed the jury as to the indictment and in-

formation: ‘‘ An Indictment or Information is but a formal method

of accusing a defendant of a crime. It is not evidence of any

kind against the accused.’’ Reporter’s Transcript, Vol. 43, pp.

8736-8737.

*8 In United States v. Steed, 465 F.2d 1310, 1316 (9 Cir. 1972),

cert. denied, 409 U.S. 1078 (1972), the trial court sent the indict-

ment to the jury room upon the request of the jury during its

deliberations. Despite the objections of both counsel, the court

held that decision was within its discretion. Counsel stipulated

that a cautionary instruction could be affixed to the indictment

that was to be sent to the jury. We do not read the ease to require

affixing such an instruction in all cases in which an indictment is

sent to the jury.

19a

D. Specific Intent

In claiming error in the court’s instructions on specific

intent,” appellants urge us to follow United States v. Stag-

man, 446 F.2d 489, 492-493 (6 Cir. 1971), and hoid that

specific intent to violate state law is an clement of the of-

fense under § 1952. This Court, however, has previously

approved an instruction similar to the one given in this

ease. See Turf Center, Inc. v. United States, 325 F.2d 793,

797 and n. 5 (9 Cir. 1963). Moreover, to the extent that

Stagman requires proof that an accused under § 1952 in-

tended to violate state law himself, we find that it conflicts

with the clear meaning of the ianguage used in § 1952. As

the court in Stagman recognized, the intent required in

the statute ‘‘refers to the entire phrase ‘to * * * carry on

* * * any unlawful activity.’ ’’? 446 F.2d at 492. That

phrase does not require specifie intent to facilitate an ac-

tivity which the accused knew to be unlawful under state

law. This interpretation, apart from its inconsistency

with the literal terms of § 1952, also supports the purposes

of that statute in attacking organized crime by furnishing

federal help io local authorities in their attempts to con-

trol such crime. It would not subject innocent persons to

criminal jeopardy in travelling interstate since for a con-

viction, proof would be required at the least ‘‘that the de-

fendant intended with bad purpose”’ ® to facilitate the vio-

lation of state law.

Although the instructions on specific intent, viewed alone,

could have been more precise, taking the instructions as a

whole, they reasonably informed the jury that they had to

29¢TT]t is not necessary that the Government prove that the

defendants knew that they were violating Nevada law. The

specific intent which the Government must show is the intent to

facilitate the carrying on of a business enterprise involving gam-

bling in violation of Nevada law.’’ Reporter’s Transcript, Vol.

43, p. 8802. See also pages 8755-8757.

3° 446 F.2d at 494.

20a

find that appellants knew that what they were facilitating

was an unlawful activity under state law.

E. Advice of Counsel

As an adjunct to their argument on specific intent, ap-

pellants claim that the court should have instructed the

jury that reliance on advice of counsel could show a lack of

specific intent. Given the evidence in this case, the advice

given by counsel was an insignificant factor in the criminal

enterprise found by the jury; thus the court below did not

err in refusing to give an ‘‘advice of counsel’’ instruction.

See United States v. Shewfelt, 455 F.2d 836, 838-839 (9

Cir. 1972), cert. denied, 406 U.S. 944 (1972) ; Bisno vy. United

States, 299 F.2d 711, 719-720 (9 Cir. 1961), cert. denied,

370 U.S. 952 (1962).

F. Kotteakos Instruction

Appellants contend that they were entitled to a ‘‘multi-

ple conspiracy”’ instruction following the principle of Kot-

teakos v. United States, 328 U.S. 750, 767-768 (1946). See

also United States v. Griffin, 464 F.2d 1352, 1355-1357 (9

Cir. 1972), cert. denicd, 409 U.S. 1009 (1972). Having

carefully reviewed the entire reporter’s transcript of trial

and all documents in evidence, we find that there is no vari-

ance between the allegations of the indictment and infor-

matien and the evidence presented at trial and that there-

fore the trial court did not err in not giving a ‘‘multiple

conspiracy’’ ins’. 1ction.

G. Suppression of Evidence

A letter from appellant Bellanca to Emprise Corporation

was not produced by the defense in response to a grand

jury subpoena because of a claim of attorney-client privi-

lege. The court gave a general instruction on suppression

of evidence, apparently in part on the basis that failure

to produce the letter could be evidence of suppression.”

31 See Reporter’s Transcript, Vol. 35, pp. 6944-6948.

21a

Appellants also complain of the court’s refusal to give an

instruction on attorney-client privilege.

Even if the giving of the suppression of evidence in-

struction were error, we find that the weight of other evi-

dence against appellants is such that the error could not

have been prejudicial. The court below, moreover, had

instructed the jury on the attorney-client privilege during

the trial.**

H. Perjurer’s Testimony

Appellants also claim error in the court’s failure to give

a cautionary instruction on the testimony of a perjurer.

Their initial proposed instruction referred to the witness,

Maurice Friedman, as an admitted perjurer when in fact

he had been convicted of perjury and had not pled guilty.

Appellants submitted a revised instruction after the in-

structions conference substituting ‘‘convicted’’ for ‘‘ad-

mitted’’, but it was rejected as untimely. Even if this were

error, which we do not find, any prejudice resulting from it

was cured by the instructions given on prior inconsistent

statements * and on the weight of the testimony of an in-

42 'Phe issue of attorney-client privilege arose during the testi-

mony of Virgil Wedge. The court instructed the jury that:

“There exists what is known as an attorney-client privilege and

it says, in short substance, that when a man goes to a lawyer

and tells him sometimes confidential matters that he would want

to discuss with a professional man, that that lawyer has the duty

of preserving those matters inviolate to publie notice and to keep

them confidential as long as his client wants him to do so.’’ Re-

porter’s Transcript, Vol. 13, p. 2511.

33**'The testimony of a witness may be discredited or impeached

by showing that he previously made statements which are incon-

sistent with his previous testimony.’’ Reporter's Transcript, Vol.

43, p. 8749.

—-

22a

former.* These instructions sufficiently alerted the jury

to the caution necessary in weighing the testimony of a

witness like Friedman. Cf. United States vy. Evanchik,

413 F.2d 950, 954 (2 Cir. 1969); United States v. Ross, 322

F.2d 306, 307 (4 Cir. 1963), cert. denied, 375 U.S. 970

(1964).

L. Skimming *

Appellants argue that the trial court committed error in

not admonishing the jury during instructions that the

prosecution’s argument about ‘‘skimming’’ should be dis-

regarded as unsupported by evidence and as not appearing

in the indictment or information. Whatever prejudice to

appellants could have resulted from the proseeutor’s ar-

gument was cured by the trial court’s painstaking instruc-

tions on the elements of the offenses charged. The trial

judge read the language of the information and indictment

to the jury and sent copies of them to the jury room. The

jury was fully apprised of the charges against appellants;

‘*skimming’’ was not one of them.

IV. Prejudicial Publicity

Appellants claim that they were prejudiced by the pub

licity given their case both before and during trial and that

the trial judge failed to take adequate measnres to detect

and prevent that prejudice. The pretrial publicity con-

%4**The testimony of an informer who provides evidence against

a defendant for pay, or for immunity from punishment, or for

personal advantage or vindication, must be examined and weighed

by the jury with greater care than the testimony of an ordinary

witness. The jury must determine whether the informer’s testi-

mony has been affected by interest or by prejudice against any

of the defendants.’’ Reporter’s Transcript, Vol. 4%, p. 8751.

35 **Skimming’’ appears to mean misappropriation of casino

funds through falsification of accounts by underreporting the

funds flowing into the cashier’s office and by unrecorded payments

from the cashier’s office.

23a

sisted mainly of newspaper articles on the case. These

articles commented, for instance, upon the alleged ties of

appellants to the Mafia and upon the ‘‘skimming”’ allega-

tions of the prosecution.

Appellants also point to several incidents during trial

which in their view also led to prejudicial publicity. News-

paper articles referred, for example, to evidence which had

not been admitted linking appellants Zerilli and Polizzi to

James Hoffa, the former Teamster official, in a prior at-

tempt to invest in a Las Vegas casino. On another occa-

sion a witness mentioned in the absence of the jury that

during a previous recorded and transeribed conversation,

he ‘thad in mind’? Zerilli and Polizzi when he used the

terms ‘*Mafla’’? and ‘‘Cosa Nostra.’’? References to this

comment appeared in the newspapers. Later a newspaper

diselosed the court’s ruling at a sidebar conference sus-

taining the prosecutor’s objection to a question asking Po-

lizzi to explain his testimony on cross-examination that

he had been falsely aceused by the Department of Justice

of being in the Mafia.*7 The prosecutor had mentioned at

that sidebar conference surveillance logs of Zerilli and

Polizzi disclosing ‘*the whole Mafia organization in De-

troit,’? and the newspaper article referred to that com-

ment. The motion picture The Godfather was released

during the trial, and a local television personality dis-

cussed during his pregram the hook and Zerilli and Polizzi

and their alleged links to the Mafia. Finally, after the

jury had reached its verdicts, one juror allegediy told de-

fense counsel that other jurors had read newspaper articles

% Appellants also cite the book The Godfather, as a factor. since

its storyline includes the infiltration of Las Vegas gambling by

Mafia figures.

37 The newspaper apparently learned of the ruling when a

reporter, without the yuvernment’s authorization or knowledge,

read its copy of the reporter’s daily transcript in which the con-

ference vuiside the presence of the jury was reported. Thereafter

the government took action to prevent recurrence of such an event.

24a

on the case during trial and that this had been ‘‘devastat-

ing to the defendants.’’ Although this juror had been in

the courtroom during a hearing on a motion for a new trial,

the court refused appellants’ request to have him testify

but permitted defense counsel to file affidavits. The juror

was subsequently unwilling to submit an affidavit, but de-

fense counsel did file an affidavit purporting to state what

the juror had said.

An accused has an unquestioned right to have jurors

decide his guilt or innocence who are not biased by what

has appeared in the media. In some instances prejudicial

publicity before and during trial may be so obvious and

overwhelming that an appellate court must overturn a

conviction without delving into a detailed analysis of the

possibility of prejudice and the judicial action taken to

curb it. See Sheppard v. Maxwell, 384 U.S. 333, 349-352

(1966) ; Estes v. Tevas, 381 U.S. 532, 542, 544 (1965); Ri-

deau v. Louisiana, 373 U.S. 723, 726 (1963) ; Irvin v. Dowd,

366 U.S. 717, 725 (1961). After a review of appellants’

evidence and arguments on this question, we do not find

that the situation here reached that extreme, and therefore

we do not find ‘‘bias or preformed opinion’’ which would

require reversal as a matter of law. Beck v. Washington,

369 U.S. 541, 557 (1962); United States v. Silverthorne,

430 F.2d 675, 678 (9 Cir. 1970), cert. denied, 400 U.S. 1022

(1971). We must now determine the probability of preju-

dice in this case and whether the court responded ade-

quately to curtail the chance of an unfair trial. Marzhall v.

United States, 360 U.S. 310, 312 (1959).

A. Pretrial Publicity

‘‘(T he trial judge has a large discretion in ruling on

the issue of prejudice resulting from the reading by jurors

of news articles concerning the trial. * * * [W]hen pre-

trial publicity is great, the trial judge must exercise cor-

respondingly great care in all aspects of the case relating

to publicity which might tend to defeat or impair the rights

of an accused. The judge must insure that the voir dire

examination of the jurors affords a fair determination that

no prejudice has beea fostered.”’ Silrerthorne vy. United

States, 400 F.2d 627, 637-628 (9 Cir. 1968). In a case of

substantial pretrial publicity, the voir dire must not simply

call for the jurors’ subjective assessment of their own im-

partiality, and it must not be so general that it does not

adequately probe the possibility of prejudice. 400 F.2d

at 638.

If this case were to be considered closely similar to Si-

rerthorne, supra, in the seriousness of the question of pre-

judice from pretrial publicity, there is little doubt that the

‘nitial voir dire was not sufficiently probing to meet the

Silverthorne standards. The trial judge’s questions on

pretrial publicity were limited to two questions addressed

to the first prospective panel of jurors and later ques-

tions addressed to an individual prospective juror.” The

answers gave no indication of possible prejudice.

We find, however, that the pretrial publicity in this case

was not substantial enough to have required the trial judge

to interrogate the prospective jurors at length about it.

38<The Court: Have any of you heard anything about the facts

of this case except what you have heard in this courtroom today?

‘Prospective Jurors: No.

“se Court: 1 take it when you say you haven’t heard of it

that mears you haven't read anything about it either. Is that

correct?

‘Prospective Jurors: That’s right.”’ Reporter’s Transcript of

Proceedings of February 15, 1972, p. J-87.

39«*'The Court: Have you heard anything about this case in

the newspaper or radio?

‘*Prospective Juror Schadick: No.

“The Court: If you are a juror and you do hear something

about it will you put aside whatever news that should attract your

attention as quickly as you could without consuming it?

‘*Prospective Juror Schadick: Yes.”’ Reporter’s Transcript of

Proceedings of February 15, 1972, pp. J-126-J-127.

26a

The judge was aware of the publicity, and clearly it was

his judgment that the pretrial publicity was not a signifi-

‘ant danger to a fair trial.’ His concern seemed greater

about the possible effects of publicity during trial. The

pretrial publicity in this case does not resemble the situa-

tion in S’lverthorne v. United States, 400 F.2d 627, 639

(1968). Unless a trial judge clearly has erred in his esti-

mation of the action needed to uncover and prevent preju-

dice from pretrial publicity, an appellate court should not

intervene and impose its estimate. ‘The court closest to

the situation can best evaluate the proper way to walk the

difficult line between a vigorous voir dire to determine any

possible bias and avoidance of creating bias by specific

questions which add ‘‘fuel to the flames’’ in suggesting the

presence of controversial issues. Beck v. Washington, 369

U.S. 541, 548 (1962). The court below did not abuse its

diseretion by the way it handled the question of pretrial

publicity.

B. Publicity During Trial

When the possibility of prejudice from publicity arises

during trial, the trial court has ‘‘the affirmative duty * * *

to take positive action to ascertain the existence of im-

proper influences on the jurors’ deliberative qualifications

and to take whatever steps are necessary to diminish or

4° A trial judge in a noteworthy and controversial case cannot

be expected to impanel jurors who have not heard about the case.

“In these days of swift, widespread and diverse methods of com-

munication, an important case can be expected to arouse the in-

terest. of the public in the vicinity, and searcely any of those best

qualified to serve as jurors will not have formed some impression

or opinion as to the merits of the ease. * * * To hold that the mere

existence of any preconceived notion as to the guilt or innocence of

an accused, without more, is sufficient to rebut the presumption

of a prospective juror’s impartiality would be to establish an im-

possible standard. It is sufficient if the juror can lay aside his

impression or opinion and render e verdict based on the evidence

presented in court.’’ Irvin v. Dowd, 366 U.S. 717, 722-723 (1961).

27a

eradicate such improprieties.’? Silverthorne v. United

States, 400 F.2d 627, 643 (9 Cir. 1968). See also Gordon

vy. United States, 438 F.2d 858, 872-873 (5 Cir. 1971), cert.

denied, 404 U.S. 828 (1971), rehearing denied, 404 U.S. 960

(1971). The better practice, if there is a clear chance of

prejudice, is for the court to interrogate each juror in

camera about the possibly prejudicial publicity. Silver-

thorne v. United States, 400 F.2d 627, 644 (9 Cir. 1968);

Coppedge v. United States, 272 F.2d 504, 508 (D.C. Cir.

1959). The trial judge carries a difficult burden. He is

called upon to question the jurors, but repeated questioning

could itself be prejudicial in inciting in the jurors “joint

or individual curiosity and encourage attempts to read the

very newspaper articles sought to be kept from their knowl-

edge.’’ Silverthorne v. United States, 400 F.2d 627, 643

(9 Cir. 1968). Tlis very questions may disclose or accen-

tuate controversial issues. Unless he has clearly abused

his discretion, we shall uphold the trial judge’s delicate

estimation of the needs of the case of which he has first-

hand experience.

During his initial voir dire of prospective jurors, the

judge indicated that the jurors would not be sequestered

but that they would be expected to avoid hearing or seeing

anything about the case." One prospective juror was ques-

tioned about adherence to that admonition; she indicated

41°°The Court: I am not so sure that this will happen, but it

may. There may be some newspaper attention given this case, or

there may be some talk about it on the radio or television. If you

are selected as a juror in this case I am going to admonish you

that when you leave here and go to your home and pick up the

paper, if you should pick it up and see something about this case

I am going to admonish you to put the paper down right away

and to read no more of that article, because I don’t want anything

coming to your attention other than that which is directed to you

through the rules of evidence that we have and that will come from

this courtroom.

‘*] will also tell you to blind yourself te the subject on TV and

to deafen yourself to the subject on radio if it should happen.

‘‘Are there any of you who if you were a member of the jury

28a

that she would find it difficult to follow and was excused.

Appellants argue that allowing the jurors to read news-

papers with the admonition to avoid stories on the trial

after glancing at headlines itself raised enough possibility

of prejudice to require reversal. We disagree. The rele-

vant questions are the nature of the headlines and the ac-

tions taken by the court to cure any possibility of preju-

dice.”

Early in the trial on February 24, 1972, the court again

admonished the jury to avoid any publicity about the case.”

in this case would feel that you shouldn’t have to obey such admoni-

tion at all, and ‘I am going to read what I please and listen to what

I want to’—would any of you be inclined to do that?

‘*Prospective Jurors: No.

‘The Court: Would you understand that there is a compelling

reason for this Court to ask you to insulate yourselves from other

information that may come to you through newspapers or through

other media about this case, you understand that there is a reason

for my doing so?

‘*Prospective Jurors: Yes.’’ Reporter’s Transcript of Pro-

ceedings of February 15, 1972, pp. J-87-J-88.

42 Cases cited by appellants are readily distinguishable from this

ease. In United States v. Rattenni, 480 F.2d 195, 196 (2 Cir.

1973) (Clark, J.), a juror admitted ‘‘her prejudice against

Rattenni on the remaining open charges against him as well as in

all of the charges against his co-defendants’’. In United States v.

Thomas, 463 F.2d 1061, 1062-1063 (7 Cir. 1972), a juror disclosed

that certain jurors had ‘‘argued from’’ a newspaper article which

they displayed during their deliberations and that several votes

were required before all jurors decided to vote for conviction. In

Mares vy. United States, 383 F.2d 805, 809 (10 Cir. 1967), ecrt.

denied, 394 U.S. 963 (1969), an article reported a withdrawn guilty

plea and an excluded confession, probably the most conclusively

prejudicial publicity possible, and the court took no steps to deter-

mine the jury’s exposure to it.

43°*May I remind the jury once again about the earlier admoni-

tion about reading any publicity that may be in the newspapers

about this case, or watching any news concerning this case on TV

or radio. Please be mindful of the importance of the admonition

that I have told you about concerning that.’’ Reporter’s Tran-

script, Vol. 6, p. 1319.

The very next day, after newspaper stories linking Zerilli

and Polizzi to James Hoffa, the court undertook an in

camera interrogation of each juror separately, in the ab-

sence of all defendants, counsel and other jurors. The

judge asked whether they had read the articles and whether

they had seen or heard anything about the case in the

newspapers, on television, or on the radio. Ile also gave

them another general admonition. Nothing said by any

of the jurors during this interrogation revealed a possi-

bility of prejudice from the publicity. We agree with

44 The court gave a fair and complete report of the interrogation

to the parties and counsel:

“One juror indicated that several days ago he heard on the

Long Beach radio station that a jury had been selected in this

case, but that he had heard nothing else on radio. All the other

jurors indicated that they had heard nothing on radio or on TV

about the case.

“Mr. Dewey said that he saw the Los Angeles Times in the jury

room this morning, but as soon as he saw it he pushed it aside and

did not read the paper at all. es

“Mr. Ford stated that he had not read either of the articles, but

that four or five days ago he saw an article in the paper saying

that a jury had been selected in the case.

‘“‘Mr. Foss said that he saw the headline in last night’s Herald

Examiner, but that he did not read the article, and that he did not

read the article in the Times.

‘*Bach of the other jurors indicated that he or she had not read

either of the articles and had heard nothing on radio or TV. This

inquiry includes the alternates.

‘‘l admonished each against reading any future articles and

received the promise of each that he would net read any newspaper

articles about this case or listen to any account of it on radio or

TV.

‘*Each person was asked if anything had happened to this point

to prejudice him or her against any defendant, and each indicated

that nothing had.

**T see no reason at this point to declare a mistrial, but if any

counsel desires to be orally heard on such a motion I will hear it

at a later time in the day.’’ Reporter's Transcript, Vol. 7, pp.

1348-1349

30a

appellants that it would have been preferable to ask cach

juror about the newspaper carrying the lieffa story which

apparently was in the jury room, but each juror’s other

answers would have to be willful falsehoods if each had in

fact read the article in the jury room. If the jurors had

read the story, ‘*{e|ven the most biased argument would

be hard put to suggest that all twelve jurors, sworn to try

the indictments fairly would deliberately break their oaths

by remaining in the box, having read the items, instead of

bowing out under the wise protection of the court and sav-

ing not only their dignity but their honor.’’? United States

v. Carlucci, 288 F.2d 691, 696 (3 Cir. 1961), cert. denied,

366 U.S. 961 (1961).

On March 9, 1972, after newspaper articles were pub-

lished referring to appellants and their links to organized

crime as discovered by United States Senate investigators,

the court declined to question the jurors again, in the belief

that new questioning could itself undermine the jury’s

belief in its own integrity.” On March 21, 1972, after the

leak of the ruling at the sidebar conference, the court,

having the opportunity to observe on a daily basis the de-

meanor of the jurors and after expressing his confidence in

their ability to obey his admonitions, again declined to

interrogate the jurors anew.

**Now wouldn't vou think that if you were on this jury and

every second day I came to you and said, now you are not reading

any newspapers, are you, wouldn't you think that I had little

enongh trust in the integrity of these jurors?’’ Reporter’s Tran-

seript, Vol. 16, p. 3152.

4° I M|y concern is with this jury and my concern is that your

clients and the Government will get a fair trial in this case, and

I have gone to the efforts that you have just described to admonish

the jury time and again and to talk with them individually about

their responsibility not to read the newspapers or any accounts of

this trial from the newspapers, and I have reason to believe that

they are going to obey that admonition because | have impressed

upon them the importance of doing so.’’ Reporter’s Transcript,

Vol. 24, p. 4711.

31a

On April 3, 1972, the trial court on its own motion con-

ducted an in camera questioning of each juror.7 Again

defendants, counsel, and the other jurors were not present.

Ile asked them gencrally whether they had read, seen, or

heard anything in the media about the ease. The jurors in-

dicated that they had not. Appellants argue that Juror

Foss, whose family was keeping a serapbook of articles

concerning the trial, must have been exposed to publicity

surrounding the case. Here is the record:

“The Court: Mr. Foss, you will recal'! that some

time ago I called the jurors in one at a time to ask

them if they had read any newspaper articles about

this case and because of the length of the trial I

thought if wise to emphasize it again and to call them

in to ask if they had read any newspaper articles about

the case. Have you read any?

‘Juror Foss: No. My people eut the articles out of

the paper before they give me the paper. Before they

bring the paper to me in the morning they cut every-

thing out. They have got it in a scrapbook somewhere.

‘The Court: And you will wait until the case is

over before you read it?

“Juror Foss: I won’t read anything about the

case.

“The Court: That is fine.

“Juror Foss: I will decide it on the facets in the

courtroom.’’ Reporter’s Transcript, Vol. 31, pp.

6010-6011.

The argument is frivolous,

After the verdicts were reached, the trial judge ques-

tioned each juror separately in his chambers. He stressed

on this occasion whether the term ‘‘ Mafia’’ or related terms

—

* Reporter's Transcript, Vol. 31, pp. 6008-6024.

32a

had been factors in the jury’s deliberations.** It seems that

the terms were discussed briefly at the beginning of the

jury’s deliberations and once during a lunchtime, but the

jurors agreed that those terms and issues had not been

factors in their decisions. The judge also asked them about

** The court’s questions and each juror’s response relating to the

“‘Mafia’’ issue were as follows:

‘‘The Court: Now has anything, any mention of the word

‘Mafia’ or ‘Cosa Nostra’ or anything like that that may have

happened during this trial brought about anything in your

tainking that in your opinion led to these verdicts?

*‘Juror Dewey: No. We threw that out the first day we

were in because, we brought it up in our minds whether any-

body thought about it, I don’t think they are on trial here

for that, that is not the question of what we heard, the fact

that somebody mentioned the name in there or something like

that, there was no evidence to substantiate anything like that

anyway, and that isn’t what we looked at in there.’’

‘‘The Court: All right. You said that on the first day you

were in deliberation, as I understood you to say, that the jurors

asked each other, did they?

‘‘Juror Dewey: No, I think it was just an informal thing,

that we just said, we are going to go by the evidence and forget

the statements that were made that didn’t have any bearing

on the case.

‘The Court: And that would have included any reference

to Mafia or Cosa Nostra?

‘‘Juror Dewey: I don’t think we got down and said the

words just to the effect that we will stick to the evidence and

that was all.’’

- * 7 * oa

**The Court: Do you know that any mention during the

trial of the words ‘Mafia’ or any related term had any effect

upon the verdicts that were reached?

‘Juror Ford: No, I don’t think that that influenced any-

body. I think a lot of times these people just think it is really

fictional to a great degree, they think it is a bogeyman word

and that it is not anything real, that it is exaggerated.

“*The Court: Mr. Dewey tells me that at the outset during

the deliberations there was some informal talk about whether

30a

their exposure to the book and the motion picture The

Godfather. Two jurors had read the book, but said that it

had not influenced their decisions. He asked all but four

jurors general questions about their exposure to news-

paper, television, and radio publicity, again without any

revelations of possible prejudice.

any of these terms have influenced anybody or brought any

trouble to this trial, and he seems to say that there was some

general discussion about it so that you could kind of clear

the decks on that right away, is that true?

‘Juror Ford: Yes. They had, you know, some of them

didn’t even know what the term meant, what it was all about,

some werent familiar with it, some had heard of it but only

in something that they had seen or heard.”’

“The Court: I am told that there was some discussion at

the outset in the jury room by the jurors about these terms

*Mafia’ and related terms and that you decided you were just

going to have a discussion about it and get it out of the way.

“Juror Foss: I don’t think that that had anything to do

with the verdicts.

“The Court: There was the question I was going to ask,

whether you think that any of these terms inflamed the jury

members in any way. Do you think so?

** Juror Fuss: No, I am sure they did not.’’

a” * * * *

{For the entire transcript of the interrogation of Juror

Palmer, see footnote 50, infra. |

* * * * *

“The Court: Do you think any mention of the words

‘Mafia’ or related terms had ax influence at all on any of -

these jurors?

Juror Beth: No, I don’t think anybody even thought any-

thing about it. I know I didn’t. It didn’t bother me a bit.’’

~ * * * *

“The Court: * * * Now there was some discussion during

the trial of the word * Matia’ and related terms.

“Juror Daniels: Sure.

34a

Finally, on June 12, 1972, at a hearing on a motion for

a new trial, defense counsel told the court of juror Palmer’s

revelation that other jurors had been reading newspaper

stories about the case and that it had been ‘‘devastating to

“The Court: Do you think that any discussion of that word

adversely affected any of these defendants?

‘‘Juror Daniels: No, your Honor, because we didn’t even

during the time of our deliberations, we never did, even the

word ‘Mafia’ was not even entertained or brought forth.’’

‘‘Juror Mirick: * * * {[Wle threw out when we first went

in there any talk of Mafia * * *.

“‘The Court: * * * Now do you think that the use of these

words ‘Mafia’ and related words at all influenced any of these

jurors? -

‘‘Juror Mirick: No, Il am sure not.’’

“The Court: The word ‘Mafia’ and related terms were

bandied about a little bit during the time of the trial. Do

you think that that inflamed the jury in any way?

** Juror Hoeffler: No.

**The Court: Do you think that it had any adverse effect at

all on any of these defendants?

“Juror Hoeffler: Would you say that saiet

‘*The Court: Do you think that the use of that term

‘Mafia’ and so forth had any adverse effect on these defend-

ants? Did any of you use it, we will say, against any of these

defendants or use it in reaching your verdicts?

**Juror Hoeffler: No, sir.’’

“The Court: Now what about during the deliberations,

during the course of the trial the word ‘Mafia’ came up and

related terms to that also. Do you think that any mention

of that had any adverse effect upon any of these defendants?

“Juror Stroops: No, sir. I don’t think we—I know we

didn’t pay any attention. I think it was just in one thing, it

was in Mr. Friedman's just one time, I think in his testimony

it was just one time we seen it in the testimony. * * *”’

eT hae ED

35a

the defendants.’’ The court refused defense counsel’s re-

quest for an immediate examination of jurors Palmer and

Dewey who were in the courtroom, but stated that counsel

could file affidavits on the matter. Palmer subsequently

refused to submit an affidavit, although defense counse) did

submit two affidavits.” While it may generally be pref-

“The Court: There was during the trial the mention of

the word ‘Mafia’ and some related terms. Do you think that

that adversely affected any of these defendants?

‘Juror Montejano: No, your Honor. I think if anything

it might have helped us to even try to be really applying our-

selves and just go by the facts.

“The Court: Now some have said that at the outset of your

deliberations that there was some discussion of the effect of

these terms, ‘Mafia}’ and so forth in the jury room, and you

decided to clear the decks concerning it in that manner.

‘‘Juror Montejano: Thai is right.”’

oS 28 C¢ @ &

‘The Court: Do you think that the mention during the

trial of the word ‘Mafia’ or any related such term did it have

any adverse influence upon any member of this jury to your

knowledge against any of these defendants?

‘‘Juror McDonald: No, sir, absolutely not.”’

o * * *

“The Court: There was a mention during the trial of the

word ‘Mafia’ and some related terms. Do you think that

anybody on this jury related any of these terms to any of

these defendants?

‘‘Juror Plant: No, sir.

‘‘The Court: Did it in your opinion have any effect at all

in the verdicts that were reached?

‘‘Juror Plant: No, sir.’’

Reporter’s Transcript, Vol. 46, pp. 8997-8998, 9000-9001,

9003, 9009, 9011, 9013, . 5, 9018, 9020, 9023, 9026.

4” Counsel for appellant Zerilli subm tted the following affidavit,

dated June 16, 1972:

“William J. Weinstein, being first duly sworn, deposes and

Says:

* * * . ~

“On June 12, 1972, prior to the commencement of the court

proceedings in the morning on the motions for new trial, I saw

36a

erable for the trial court to allow such an examination cf

jurors in order to dispel any doubts as to the integrity of

the jury’s deliberations, such action was not required here,

The trial judge, after having questioned juror Palmer on

three separate occasions duving and immediately after

trial in the privacy of his chambers, could understandably

Alfred Palmer, one of the jurors at the trial of the above case,

i> the hallway outside the courtroom. We said ‘hello’ to each

other, ana I then talked to Agnar Wahlberg, one of the court

reporters.

“A few minutes later [I went into the courtroom, Mr.

Palmer was then sitting in the courtroom, I said ‘hello’ to

him again, and I remarked that the five days of deliberation

of the jury indicated the dedicated work of the jury.

“*T was about to walk to the counsel table, but before I could

do so Mr. Palmer made substantially the following statement:

***We tried to be conscientious. But the newspaper pub-

licity of the trial was devastating to the defendants. You

can't keep those jurors from reading the newspapers.’

**I then stopped vend inquired about this, and I asked Mr,

Palmer if he was referring to the Hoffa story.

**His reply was suostantially as follows:

***More than that. The jury was reading about the case

every day.’

‘Mr. Palmer further stated that he himself had not read the

newspaper articles concerning the case during the trial, but

that he had read them after the trial, and that he could now

understand how many of the other jurors felt during the trial.

He said he felt that the Los Angeles Herald-Examiner was

more damaging than the Los Angeles Times.

“Mr. Palmer also stated that the people in his office work

hard and then go to Las Vegas and lose their money, and that

he thought this was wrong. I then asked him how he felt

about horse racing, and he said he thought that horse racing

was the same.’’

37a

have been skeptical of such a belated attack on the jury’s

yerdicts. The record is not barren on this point,’ and the

50 In his first interrogation of the jurors, the trial judge asked

Palmer about his own exposure to the media, Palmer answered

that he had not read, seen, or heard anything about the case,

Reporier’s Transeript, Vol. 7, pp. 1330-1332, During the second

voir dire, Palmer again failed to mention any problem with the

publicity. Reporter's Transcript, Vol. 31, pp. 6011-6012. The

post-trial interrogation of juror Palmer is set out in full below:

“The Court: Come in, Mr. Palmer.

*‘Juror Palmer: Thank you, sir.

‘“‘T owe you an apology for being the black sheep, the only

one that said yes when | should have said no.

“The Court: No apology needed at all.

‘juror Palmer: The count was seven to five and 1 still

feel that if we had had another session we could have come

out on it. [This reference is to the jury's failure to reach

a verdict as to defendant Polizzi on Count 3 of the indict-

ment. See p. 8987.]

‘The Court: My purpose here now is to ask you some

questions about the case. Do you think that anything hap-

pened outside of this courtroom during the trial of this case

that in any way influenced the verdict in the case?

‘‘Juror Palmer: Well, I will put it this way, not that I

know of. As far as myself is concerned, no, but as to others

I am not too sure.

“The Court: Yes. Now is there anything about that, that

leads you to suspect that anything happened?

“Juror P.lmer: Well, 1 would rather hesitatingly say no.

‘The Court: Read that answer to me.

** (Record read.)

‘Juror Palmer: I think you well know in your experience

that when folks get together outside, going to lunch or some-

thing like that, you can’t very well stop them from talking

about it among themselves, you know what I mean, just among

ourselves, and I think some of that was done but I don’t want

to accuse anybody of it.

“The Court: Yes. All right. Now do you think that any-

body reached any decisions about the ease before the case was

turned over to the jury?

‘Juror Palmer: I don’t think so. None were expressed to

me, no, sir,

“The Court: Mr. Palmer, there is a picture called The

Godfather, Have you seen that picture?

eed

38a

court could reasonably have found juror Palmer’s disclo-

sure as reported by defense counsel unworthy of belief.

‘Juror Palmer: No, sir, T have not.

“The Court: Have you read the book by he samme wane’

‘Juror Palmer: No, sir. In facet, I never heard of it until

you mentioned it.

“The Court: Was there any discussion of either the picture

or the book in that jury room?

‘Juror Palmer: No, sir, not that [ know of; not that I heard,

“The Court: Do you think that the mention during this

trial of any of the terms such as ‘Mafia’ or related terms had

any unfavorable influence on the verdicts that were reached?

‘Juror Palmer; Well, to be frank and honest with you, |

hope I won't get into trouble by doing so, | think some of

that was mentioned during the lunch hour between some of

the members of the jury.

‘The Court: In what respect?

‘Juror Palmer: Well, it was just the faet that ii eame up

during the trial, the Chief of Police of Detroit accused some

of our defendants of being members of it, they threatened him

with suit and the suit was never filed because they thought they

couldn’t win it, the defendants I mean. Do [ make myself

clear?

“The Court: Yes, I think so. What you are saying is that

during a lunch hour that there was some discussion of the

evidence, is that correct?

‘‘Juror Palmer: I was told somewhere that that come out

in the local papers during the trial, and I think that was dis-

cussed during the lunch hour between some of the members.

I don’t want to hold up my right hand and swear to that,

your Honor.

“The Court: Did you hear it yourself?

‘Juror Palmer: Indirectly, yes.

“The Court: What do you mean by ‘indirectly’?

‘Juror Palmer: Well, they were some distance away from

me, that is what I think they were talking about, but T couldn't

convict them of it, I heard the word * Mafia’ mentioned and

that kind of thing, and that was all, but 1 den't think there

was any prejudice to it as far as that is concerned because

it was admitted it was not to be considered in the trial. It

was, shall I say, outlawed.

“The Court: Do you think that anybody did consider that

in the deliberations in this case!

‘Juror Palmer: I don't believe so, no, sir.

“The Court: Any comment or any discussion about it in

the deliberations?

39a

Palmer’s unwillingness iv submit an affidavit strongly sup-

ports that judgment.”

In this ease the probiem of publicity was not insignificant,

nt Tt was a prodhens ‘had wwres Raedled, bas proper isdicial

supervision, ‘The right to publish a prejudicial article

docs not carry with it the right of an aecused to an uuto-

nuatie mistrial. Such an outcome would give to the press a

power over judicial proceedings which may not he coun-

tenaneed.””) Mares v. United States, 283 F.2d 805, 808 (10

Cir. 1967), cert. denied, 394 U.S, 968 (1969), After our

detailed review, we cannot say that there is a Serious poxsi-

Wility that the jury was influenecd by considerations apart

from evidence properly admitted at trial. The trial judge

admonished the jury on at least four oecasions to avoid

publicity about the case, He interrogated the jurors in-

dividually three times. The fact that the jurors discussed

the term ‘Mafia’? and related issues does not in itself re-

ouire reversal, Cf, United States v. Lasarus, 425 F.2d 638,

640-641 (9 Cir. 1970), cort. denicd, 400 US, 869 (1970),

rehearing denied, 400 U.S. 94 (1970). For sppellants’

“Juror Palmer: No, sir, nothing. 1 never heard the word

mentioned during the deliberation time, no, sir.

“The Court: All right. I think those are the questions

that I wanted to ask you. And thank you again.

“Juror Palmer: Let me say it has been a pleasure to work

with you. I hops I get a chanee to do it again.

“The Court: It has been a pleasure working with you.

“Juror Palmer: Thank you."’

Reporter's Transcript, Vol. 46, pp. 1005-9008.

“A vase cited by appellants in support of their contention that

juror Palmer's revelations indicate jury bias is easily distinguished

from this case, United States v. Thomas, 4635 F.2d 1061, 1062 (7

Cir. 172), involved the dis dosure by ” juror the morning after

the jury lie! deliberated. and reached a verdict that jurors ** who

vhoxe to vote for conviction argued from [a newspaper] article

which they displayed and to whieh they repeatedly referred.”

Here Palmer's disclosure as reported by appellants” counsel came

approximately six weeks after the verdict hed been reached, and

there were good reasons for disbelieving that disclosure,

40a

arguments of prejudice and juror Palmer’s disclosure to be

true, the other jurors would in effect have committed per-

jury on several occasions and have entered into a conspir-

acy of silence. The trial judge found that incredible. We

agree. ‘‘Appellate courts should be slow to impute to

juries a disregard of their duties, and to trial courts a want

of diligence or perspicacity in appraising the jury’s con-

duct.’? Fairmount Glass Works v. Cub Fork Coal Co., 287

U.S. 474, 485 (1933) (Brandeis, J.). ‘‘If the mere oppor-

tunity for prejudice or corruption is to raise a presumption

that they exist, it will be hard to maintain jury trial under

the conditions of the present day.’’ Jolt v. United States,

218 U.S. 245, 251 (1910) (Holmes, J.). No reversible error

was committed in the trial court’s handling of the question

of prejudicial publicity; we do not find ‘‘that the prob-

ability of prejudice arose and was not eliminated.”’ Silver-

thorne v. United States, 400 F.2d 627, 644 (9 Cir. 1968).

V. Department of Justice ‘‘Mafia’’ List

The United States Department of Justice in 1969 included

appellants Zerilli and Polizzi on a list of known Mafia

figures. See 115 Cong. Ree., Part 17, pp. 23440-23441 (An-

gust 12, 1969). Appellants contend that the presence of

those names on that list was the motivating factor in the

prosecution of this case and also that the prosecution made

several prejudicial comments, based upon appellants’

alleged Mafia connections, to the grand and petit juries.

Their first point, that their inclusion on the ‘‘ Mafia list’’

was the prime motivation for the prosecution, is not sup-

ported by anything in the record and is strongly contra-

dicted by the testimony of three government officials prom-

inent in this prosecution.

*2 The Honorable W. Matthew Byrne, Jr., United States District

Judge, and who was United States Attorney in Los Angeles during

the initial stages of ihis case, testified that interviews with Maurice

Friedman were ‘‘the basis for the commencement of the investiga-

4la

The next contention, that the prosecution ‘¢noisoned’’ the

grand jury proceedings by comments referring to the

Mafia, is unsupported by the record or by the authorities

appellants cite. The portions of the transcript of the pro-

ceedings before the grand jury which appellants quote in

their opening brief are not evidence of grand jury bias.

‘‘Mafia’’ is mentioned by the prosecutor in one question.

The possible use of foree is the basis of four questions re-

ferring to appellant Shapiro. One witness is asked

whether he is fearful or apprehensive as a result of his

testimony. Appellants allege that the grand jury was ‘‘re-

peatedly told’? of a prior arrest of appellant Zerilli; and

the prosecutor commented on the alleged association of

Zerilli and Polizzi with ‘‘tough guys, Italians, from New

York.’’

Appellants have a difficult burden to satisfy in their

challenge to the indictment. ‘*An indictment returned by

a legally constituted and unbiased grand jury, like an in-

formation drawn by the prosecutor, if valid on its face, is

enough to eall for trial of the charge on the merits. The

Fifth Amendment requires nothing more.” Costello v.

United States, 350 U.S. 359, 363 (1956). A valid indict-

ment does not require support by ‘‘adequate or competent

tion and the commencement of grand jury investigation regarding

the Frontier ease.”’ Reporter’s Transcript, Vol. 48, p. 9224. He

did not recall having ever seen the ‘*Mafia list.’’ Reporter’s

Transcript, Vol. 51, pp. 9824-9825. David Nissen, chief of special

prosecutions in the organized crime and racketeering section of

‘he United States Attorney’s office in Los Angeles at the time, also

testified that Friedman's information was the basis for the decision

to convene a grand jury. Reporter’s Transcript, Vol. 51, p. 10,031.

He denied that the ‘‘Mafia list’’played any role in developing his

interest in beginning the prosecution. Reporter’s Transcript, Vol.

52, p. 10,220. Wayne W. Hill, a special agent with the F.B.I., also

testified that the Friedman interviews provided the basis for

initiating the prosecution. Reporter's Transcript, Vol. 49, pp.

9412-9418. He too denied ever having seen the ‘‘ Mafia list.”’ Re-

porter’s Transcript, Vol. 50, p. 9714.

42a

evidence.”? 350 U.S. at 364%’ See also United States v.

Calandra, -— U.S. — (i974). Appellants have not demon-

strated a reasonable inference of bias on the part of the

grand jury resulting from the comments of the prosecutor.

Sce Beck v. Washington, 369 U.S, 541, 545-549 (1962). **The

quantum of evidence necessary to indict is not as great

as that necessary to convict. If a grand jury is prejudiced

by outside sources when in fact there is insufficient evidence

to indict, the greatest safeguard to the liberty of the

accused is the petit jury and the rules governing its deter-

mination of a defendant’s guilt or innocence. And, if im-

partiality among the petit jurors is wanting, the cure is

reversal by the appellate courts.’’ Silverthorne vy. United

States, 490 F.2d 627, 634 (9 Cir. 1968).%

Appellants also argue that the ‘‘ Mafia list’? played an

impermissible role in the trial. They refer, however, only

to the comments of the prosecutor in closing argument that

appellants ‘substituted the corporate resolution for the

%3The recent decision cited by appellants, United States v.

Estcpa, 471 F.2d 1132, 1137 (2 Cir. 1972), condemns the needless

use of hearsay testimony before the grand jury and is irrelevant

to appellants’ claims.

“4 References to ‘‘Mafia’’ end ‘‘Italians’’ are certainly not per se

prejudicial. Cf. United States vy. Lazarus, 425 F.2d 638, 640-641

(9 Cir. 1970), cert. denied, 400 US. 869 (1970), rehearing denied,

400 U.S. 954 (1970).

* Those cases upon which appellants rely concerned prosecutor

misconduct in arguments to the petit jury. Berger v. United

States, 295 U.S. 78 (1935) United States v. Cumminas, 468 F 2d

274, 277-278 (9 Cir. 1972); Hall v. United States, 419 F.2d 582

(5 Cir, 1969). This distinction does not justify, of course, prose-

cutor misconduct before the grand jury. See A.B.A. Standards

Relating to the Prosecution Function, Approved Draft, 1971,

§$3.5(b). It does mean that it takes very substantial evidence of

grand jury bias for an appellate court to reverse a conviction

beeause of an indictment returned by an allegedly biased grand

jury.

43a

pistol.” Although it is unclear that these comments

were related to the ‘‘Mafia list’? in any event appellants

have failed to demonstrate that the comments contributed

to an unfair trial. The trial judge specifically inquired of

each juror in camera in a post-verdict voir dire as to the

influence on the jurors of terms such as ‘* Mafia,”’ with no

indication that they had influenced the verdicts.”

_VL. Cross-Examination on Reputation

Appellants argue that the trial court committed reversible

error in allowing the prosecution to cross-examine Polizzi

and Zerilli on their reputations. The government contends

that the cross-examination was permissible as to Polizzi

because he had opened the subject of his reputation on

direct examination and as to Zerilli in order to impeach his

testimony about why he could not be licensed.

‘The price a defendant must pay for attempting to prove

his good name is to throw open the entire subject which the

law has kept closed for his benefit and to make himself

vulnerable where the law otherwise shields him.’’ Michel-

son v. United States, 235 U.S. 469, 479 (1948). Throughout

the presentation of its ease, the prosecution avoided raising

the issue of the Mafia links of Zerilli and Polizzi in dem-

onstrating that they could not themselves obtain licenses

from the Nevada authorities. On direct examination

Polizzi testified that the reason why he could not be licensed

was that he had a ‘‘problem.’? He never described the

1 think I told you at the outset that this is nothing more

“than sophisticated robbery, sophisticated theft. And these busi-

nessinen have learned it is better to use a corporate resolution

than » pistol.’” Reporter’s Transcript, Vol. 43, p. 8683.

‘In short * * * the principals have learned that a corporate

resolution is more deadly and more effective than a pistol, and the

changes of apprehension and proof are considerably more difficult.”’

Reporter's Transcript, Vol. 39, p. 7995.

"7 See pages 29-32, supra.

od re

44a

specifics of this problem. These statements did not open

the question of Polizzi’s reputation for cross-examination.

Appellants could reasonably have understood that refer-

ences to Mafia links and reputation were to be avoided. The

important point fer the prosecution was that Polizzi had

serious problems preventing him from obtaining a license

and thus motivating ium to acquire a hidden interest; what

the specifie problems were was not directly relevant. The

danger of prejudice certainly outweighed whatever slight

probative value a more specific line of questioning may

have had.

The government attempts to justify its cross-examination

of Zerilli in terms of impeaching his testimony on the

reasons why he could not be licensed. His testimony. how-

ever, really concerned what his attorney had told him were

the reasons. <Thus the government’s impeachment was more

directed at the attoruey than Zerilli, unless it could have

been shown that Zerilli was misrepresenting what the attor-

ney had told him. With the probative value of the govern-

ment’s questioning on Zerilli’s reputation at best specula-

tive, it was error to perm:t the government to begin a line

of questioning with a high possibility of prejudice.

Though the court’s rulings were erroneous, appellants

were not prejudiced by them. The court questioned the

jurors individually in camera after they had reached their

verdicts on the influence of the Mafia issue and was satisfied

that it had not been a factor in their decisions. We have

found that he did not commit error in making that deter-

mination,®* and it precludes reversal on this issue.

VIL. Misconduct of the Prosecutor and Trial Judge

Appellants cite many episodes of what they assert to be

misconduct by the prosecutor, sanctioned by the trial judge,

which deprived them of a fair trial. After having carefully

58 See pages 29-32, supra.

a ae

reviewed each of these assertions, we do not find that they

amount to a deprivation of appellants’ right to a fair trial.

No good would be served by a discussion of each of the

points raised, but we shall discuss several representative

claims.”

In his closing arguments, the prosecutor did make com-

ments which could have conveyed the impression that ap-

pellants were violent individuals.” This question, how-

ever, is tied closely to the issue of the influence of the

Mafia references on the jury. We have found that the court

below carefully handled that issue,” and we find that these

comments were not so prejudicial to appellants so as to

require reversal of the jury’s verdicts.

39 Those points not discussed are appellants’ contentions that the

prosecutor misstated facts and evidence throughout the trial; that

the court delayed too long in giving appellants’ counsel oppor-

tunities to argue their objections to the proseeutor’s conduct ; that

the prosecutor was allowed to argue law, and misrepresent the

law, in his arguments to the jury; that the prosecutor improperly

asked witnesses to “‘square’’ their testimony with that of other

witnesses; that the prosecutor intentionally misrepresented to the

court what he expected the testimony of a witness would be; that

the exhibits were mishandled and that the jury may have had in

the jury room exhibits not admitted into evidence; that side-bar

conferenees were audible to the jury mainly through the fault

of the prosecutor ; and that the trial judge changed certain ‘‘ ground

rules’’ to the prejudice of appellants. We have, however, care-

fully considered each of these points and, based upon our review

of the entire record, find them to be without merit.

6<<That is the good old fashioned Chicago type extortion.’

Reporter’s Transcript, Vol. 39, p. 7983. This particular reference

was to testimony in the record which indicated perhaps some poten-

tial for violence during the events in question in this case. See

witness Friedman’s testimony of his mysterious and rather fright-

ening trip to Toledo, Ohio. Reporter’s Transcript, Vol. 5, pp.

1084-1098. The comment was not proper, however. See also the

comments quoted in footnote 56, supra.

®1 See pages 29-32, supra.

Pia

46a

Aprellants argue that the prosecutor gave his personal

opinion of appellants’ guilt to the jury and referred to the

indictment in this case as supporting him. The prosecutor

did mention the grand jury indictment, but he used it to

rebut appellants’ argument to the jury that the prosecutor

Was pursung in effect a personal vendetta against appel

lants.* The reference to the indictment in these cireum-

stances docs not constitute improper argument. Cf. United

States v. Cummings, 468 F.2d 274, 277-278 (9 Cir. 1972);

Hall v. United States, 419 F.2d 582, 587 (5 Cir. 1969).

Moreover, the jury was instriected that the indictment and

information were not evidence and were merely methods

of accusing a defendant of a crime. Reporter’s Transcript,

Vol. 43, pp. 8736-8737.

On four occasions, in ruling on questions addres-ed to

two government witnesses, the trial judge made comments

that appear to vouch for the credibility of the witnesses.

Ilowever, we cannot accept the appellants’ assertions of

prejudice. They did not object to any of the judge’s state-

ments, and they certainly knew how to object when they

thought it important to do so. The error, if any, could

62 Defense counsel had argued: ‘‘The thing that impressed me

and rather frightened me was the display of overwhelnsing power

of the Federal Government if one of their prosecutors gets a theory

and takes after you.”’ Reporter's Transcript, Vol 42, p. 8391.

The prosecutor then argued: ‘** * * But Mr. Ball has made a

statement that I must make one remark to. He says he is worried

because a prosecutor gets you on a theory and a statute and he goes

after you.

‘“‘Not true. Never has been true in the legal system in this

country or the body of criminal law that has only been around for

550 years. Never has been true and it is not true during this

trial.

“A grand jury passed on this indictment. Not Kotoske. When

it is read to you, the judge will read, ‘The Grand Jury charges’.

Not Tom Kotoske.’’ Reporter's Transcript, Vol. 43, p. 8692.

Earlier in his argument, the prosecutor had also referred to the

indictment in trying to show that the government had been con-

sistent in asserting a legal theory under $1952. See Reporter's

Transcript, Vol. 43, p. 8680.

47a

easily have been corrected, had there been objection. For

example, in one instance, at the end of the colloquy, the

court said “** * * in any instance the jury is to draw no

inference from the questions as bringing any truthfulness

to us.’? Reporter’s Transcript, Vol. 2, p. 244. The court,

moreover, instructed the jury not to assume from his

comments during trial that he held particular opinions

about the issues in question and that they were the sole

judges of the credibility of witnesses and of the weight of

evidence. Sce United States v. Jackson, 482 F.2d 1167,

1175-1176 (10 Cir. 1973) ; United States v. Cunningham, 423

F.2d 1269, 1276 (4 Cir. 1970).

Appellants contend that the trial court first received

evidence, in the presence of the jury, on the question of the

applicable Nevada law, rendering the matter one for the

jury’s decision, but then at the end of the trial took the

issue away from the jury by instructing it as to the state

law. The determination of the applicable state law in a

case such as this is a question for the court. Cf. United

States v. D’Amato, 436 F.2d 52, 54 (3 Cir. 1970); United

States v. Lyon, 397 F.2d 505, 513 (7 Cir. 1968), cert. denied,

203 U.S. 846 (1968). To receive testimony on the question

of state law in the presence of the jury is unnecessary, but

not prejudicial error unless the combination of tne testi-

mony and the court's instructions clearly leave the jury

in confusion or in doubt as to the applicable state law. We

do not find prejudicial error here.

Also cited as error is the trial court’s comment that a

certain question could be decided if one of the appellants

took the stand. This was not an infringment of appellant

63°*The Court: I understand what you are trying to show, but

I don’t know how you can show it by establishing—you are not

able to establish the foundation for this document by this witness,

as I see it. You may be able to establish it by some other wit-

ness, or if your brother takes the stand and testifies you can estab-

lish his whereabouts by his testimony.

“Mr. James Bellanca: Then I will withdraw it ané save it until

then, your Honor.’’ Reporter’s Transcript, Vol. 9, p. 1678.

48a

Bellanca’s right against self-incrimination. ‘‘[T] he test is

whether the language used was manifestly intended or was

of such character that the jury would naturally and neces-

sarily take it to be a comment on the failure of the accused

to testify.”’ Anowles v. United States, 224 F.2d 168, 170

(10 Cir. 1955). No such finding could be reached here, It

was an offhand comment which could have had nv influence

on the jury. This point is an example of a practice appel-

lants have followed many times on this appeal: quoting out

of context remarks of the prosecutor and especially the trial

judge and supplying an ‘‘argument’’ for reversal by dra-

matie and hyperbolic language. Appellants argue that

after this incident ‘‘appellant Bellanea had to take the

stand or suffer the possibility of an untoward inference by

the jurors.’’ The episode in fact was a pedestrian exchange

which, if anything, probably left the jury with the impres-

sion that appellants would be able to establish the point

through other witnesses, including appellant Bellanca if he

testified.

Appellants’ next point is that the prosecution evaded a

prior ruling by the court that it could not offer evidence

of prior similar acts by appellants. The court, after hear-

ing the proffered evidence in the absence of the jury,

instructed the jury that there was no evidence of prior

similar acts and that any comments of the prosecutor on

the issue were to be disregarded. In addition, each juror

was asked whether the comments had prejudiced them, and

each juror said that he had not been prejudiced. The

prosecution nevertheless subsequently inquired on ,cross-

examination about prior attempts to invest in Las Vegas.

4 See also United States v. Biondo, 483 F.2d 635, 644645 (8

Cir. 1973); United States vy. Mahanna. 461 F.2d 1110, 1113--1115

(8 Cir. 1972) ; United States v. Porter, 441 F.2d 1204, 1216 (8 Cir.

1971), cert. denied, 404 U.S. 911 (1971); Davis v. United States,

357 F.2d 438, 440-441 (5 Cir. 1966), cert. denied, 385 U.S. 927

(1966).

49a

This line of inquiry was permitted by the court for the

limited purpose of showing Zerilli and Polizzi’s earlier

interest in investing in a Las Vegas casino. However, the

probative value of that testimony was not great enough to

justify its admission in light of the possibility of confus-

ing the jury which in effect was asked to consider the evi-

dence on one issue but not on another, although the issues

of motive and prior similar acts, if not identical, were

closely related. We do not find, however, that prejudice to

appellants actually resulted in light of other and sub-

stantial evidence supporting the verdicts.

The government attempted to use a deposition of Ben-

jamin Reisman, an attorney employed by appellant

Emprise, on its redirect examination of Maurice Friedman.

The deposition was taken in 1970, before appellants were

indicted, during the course of other legal proceedings.

Appellant Rooks was later asked on eross-examination by

the prosecution whether he had heard the reading of the

deposition and whether he knew of the events described in

the deposition. On ecross-examination of appellant Zerilli,

the prosecutor used the deposition again in an attempt to

refresh Zerilli’s recoliection.

The use of the deposition cannot he justified by Rule— .

of the Federal Rules of Criminal Procedure since it was

not taken at the motion of a defendant, it was taken before

the indictment and information here were filed, no order

of the court had been obtained, and no notice had been

viven to the parties. The prosecution argues that it offered

the evidence only as to the corporate defendant Emprise.

The deposition was taken in connection with legal proceed-

ings against Jeremy Jacobs, the President of Emprise. The

court admitted it not on the authority of Rule 15, but

rather on the ground that it was a prior statement of a wit-

ness in a case where the parties and issues were substan-

tially the same as in the present ease. We need not decide

50a

whether there was error.” Another deposiiion of Reisman

was taken and read into the reeord without objection,

thereby curing any defect arising from the admission of

the first deposition. Appellants’ counsel had the oppor-

tunity to ask Reisman about his prior statements, thus

fulfilling appeilants’ right to confront adverse witnesses.

If it were error to allow the prosecution to ask appellant

Rooks about the first Reisman deposition, there was no

possible prejudice.“ The same is true of the use of the

deposition as pessibly refreshing Zerilli’s memory; the in-

cident was insignificant.”

The prosecution, as the representative of the government,

is expected to follow high standards in conducting its ease.

“The United States Attorney is the representative not of

objection to admitting the deposition was withdrawn when it was

agreed that another deposition of Reisman would be taken. The

court had made its ruling, and defense counsel then asked about

the possibility of taking another deposition.

***Q Did you hear the reading of the Ben Reisman deposition

that that happened in the spring?

““A No, I don’t recall hearing that.’’ Reporter’s Transcript,

Vol. 24, p. 4602.

***Q Mr. Zerilli, does that refresh your recollection whether

or not you went up to Emprise or Sportservice to speak with either

Mr. Lou Jacobs or Ben Reisman about the Rooks and Kachinko

loan, prior to April 4, 19667

**A It does not refresh my recollection. I did not go to Buffalo

and talk to them about the Alex Kachinko and Art Rooks loan.

**Q Do you reeall the testimony, Mr. Zerilli, of Mr. Friedman

during this trial indicating that you were there ou that occasion?

‘A I recall the testimony, yes.

*Q Are you saying that it was inaccurate and not true?

“‘A Yes, sir, much of it.

“*Q How about this point, was it not true?

“‘A This point was not true, no, sir.’’ Reporter’s Transcript,

Vol. 26, p. 5211.

5la

an ordinary party to a controversy, but of a sovereignty

whose obligation to govern impartially is as compelling as

its obligation to govern at all; and whose interest, there-

fore, in a criminal prosecution is not that it shall win a case,

but that justice shall be done.’’ Berger v. United States,

295 U.S. 78, 88 (1935). But during an extensive and fiercely

contested trial, we cannot realistically expect pertection.

Cf. Lutwak vy. United States, 344 U.S. 604, 619 (1953).

Upon

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