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UNITED STATES v. $3

June 27, 1968

United States of America, Libellant
v.
$3,296.00 In Currency


Ryan, District Judge.


The opinion of the court was delivered by: RYAN

RYAN, District Judge:

The United States of America instituted this suit under the provisions of Section 7302, Title 26, U.S.C., *fn1" by the filing on March 26, 1964, of a Libel praying for forfeiture of $3,296.00 in currency. The money was seized on September 26, 1963 by officers of the Internal Revenue Service in premises known as John's Newsroom, at 155 Clinton Street, Schenectady, New York. It is alleged by the Government that the currency was intended for use and was previously used by Evaristo Marcerola (also known as "Joe" and Joseph Marcerola) in his bookmaking operation at the premises without having paid the occupational tax required by Section 4411, Title 26, U.S.C., and without having registered as required by Section 4412, Title 26, U.S.C. Marcerola has filed an answer, claiming the currency as his property, alleging that it was not subject to condemnation and forfeiture by the United States, and praying for its return.

 A trial of the suit upon these pleadings was had to the Court before the late Senior Judge Stephen W. Brennan. The matter was awaiting his decision at the time of his death.

 The suit has come to me by assignment from Chief Judge Foley during my designation to sit in the Northern District of New York. The attorneys and claimant in person have stipulated that this suit may be determined by me on the transcript of the trial before Judge Brennan with the exhibits and briefs already filed. Although the parties have stipulated that further evidence may be received and oral argument had, if I so desire, I have found this unnecessary. This opinion includes my factual findings of fact and conclusions of law.

 At the outset of the trial, the Court granted claimant's motion to amend his answer to plead the affirmative defense "that the statute requiring registration by gamblers is unconstitutional" (Sections 4411 and 4412, Title 26, U.S.C.A.) and that, therefore, the forfeiture provisions of Section 7302, Title 26, U.S.C., may not be applied to violations of Sections 4411 and 4412. I have concluded for the reasons hereinafter stated that judgment must be given in favor of the claimant directing the return of the currency to him. I have nevertheless made factual findings on the evidence, so that in the event I am found to be in error on appeal a further trial will not be necessary.

 The trial transcript consists only of the testimony of Government witnesses. The claimant rested at the close of the Government's case; he called no witnesses and the claimant did not testify.

 I find from the evidence the following facts, as uncontradicted:

 The premises occupied as "John's Newsroom" at 155 Clinton Street, consisted of a front store in which there were a table, a counter with a cash register, a mirror and a shelf, and a rear room, access to which was through the store, which was large enough to accommodate a number of men. It was furnished with card tables, a couple of television sets, a wall blackboard with football scores on it, and a one-way mirror facing into the store, through which one could look out from the rear room into the store.

 The files of the Court, of which judicial notice is taken, establish:

 
1. A search warrant was issued on September 25, 1963 by United States Commissioner Solomon upon affidavit of Special Agent Schirmer in the matter of United States v. Premises known as John's News Room, 155 Clinton Street, Schenectady, New York and a return was duly filed September 26, 1963.
 
2. A warrant of arrest was issued on the same day by Commissioner Solomon upon affidavit of complaint by Agent Schirmer for arrest of the claimant herein for violation of Sections 4411 and 4412, Title 26, U.S.C. It was executed and return filed on September 26, 1963.

 The regularity of the search warrant and warrant of arrest are not challenged, nor is the legal sufficiency of the affidavits upon which they issued questioned.

 I also take judicial notice of the fact that following Marcerola's arrest a criminal Information was filed charging in three counts violations of Sections 4411, 4412(a), 7203 and 7262, Internal Revenue Code of 1954; and that on November 4, 1963, Marcerola pleaded guilty to Counts 1 and 2 and on November 18, 1963, a fine of $500 was imposed on each of these two counts, and Count 3 was dismissed.

 From this record proof, as well as from the oral testimony at trial, I find that during the times material the claimant Marcerola was in a ...


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