The opinion of the court was delivered by: CONNER
In this proceeding, the Government seeks forfeiture
pursuant to 26 U.S.C. § 7302
of an automobile (the "Cadillac") belonging to Harold D. Levine ("Levine"), on the ground that the Cadillac was used in furtherance of a gambling operation for which taxes have not been paid nor registration made in violation of 26 U.S.C. §§ 4401, 4411, 4412.
A bench trial was held on March 19, 1979. This opinion and order incorporates the Court's findings of fact and conclusions of law pursuant to Rule 52(a), F.R.Civ.P.
The Cadillac was seized by special agents of the Criminal Investigation Division (the "Division") of the Internal Revenue Service (the "IRS") on September 17, 1978, pursuant to a search warrant
issued by Magistrate Jacobs of this court, and was transported to a garage leased by the Government where the automobile was searched and its contents inventoried. Following this search, the Cadillac was retained by the Government.
On October 13, 1978, Levine's attorney, in a letter to William DePugh ("DePugh") Chief of the Division in Manhattan, demanded that the Government return the automobile to Levine. By letter dated October 16, 1978, a representative of the IRS informed Levine's counsel that his letter of October 13 would be considered by the Department of Justice as a Petition for Remission or Mitigation, see 28 C.F.R. § 9.1 et seq. Hearing nothing further from the Government, on October 28, 1978 Levine instituted suit ("the Levine action") against the United States and DePugh, seeking return of his automobile and damages for the loss of its use. In the Government's answer of December 29, 1978 to Levine's action, it raised as an affirmative defense that Levine's Cadillac was subject to judicial forfeiture pursuant to 26 U.S.C. § 7302, and that the Government intended to commence a forfeiture proceeding "forthwith." At a pretrial conference on January 9, 1979, the Government informed the Court that it would institute a forfeiture proceeding; the Government commenced the forfeiture proceeding on February 2, 1979 and that case was assigned to this Court as related to the Levine action. It was subsequently decided by the parties that they would proceed via the Government's forfeiture action and, by stipulation of the parties, the Levine action was discontinued.
The Government contends that Levine's Cadillac was used in furtherance of an alleged bookmaking operation involving sports betting being conducted by James Pisacano ("Pisacano") with the assistance of Levine. Five special agents of the Division testified with respect to their observations of Pisacano and Levine on eight separate occasions in 1978. Anthony Carpiniello ("Carpiniello"), Group Manager of the IRS Division, who has had extensive experience in criminal investigations of gambling, testified as the Government's expert witness.
1. The Fundamentals of a Gambling Operation
Carpiniello described how a typical sports betting operation is conducted: There is a "wire room" where the bookmaker receives wagers from bettors. The bookmaker usually arrives at the wire room at about 11:30 A.M. He then gets the "lines" (odds) and organizes his papers, and he starts accepting wagers at about 12:00 o'clock. Wagers are accepted from 12:00 P.M. to 2:00 P.M., when sports events normally begin. The bookmaker leaves the wire room after 2:00 P.M., and he returns at about 5:30 P.M. to begin accepting wagers on evening games.
The bookmaker records the wagers on triplicate slips of paper. At the end of the day, the bookmaker transfers these slips of paper to "figure men" who compute the winnings and losses of each bettor. The next morning, prior to returning to the wire room, the bookmaker picks up the slips from the figure men. In addition to taking wagers from bettors, a bookmaker might also meet with bettors after 2:00 P.M. or after the evening games have commenced in order to "settle up" with the bettors, i. e., collect from each bettor the monies owed to the bookmaker or pay the bettor his winnings.
Carpiniello testified that an automobile could be utilized in a gambling operation of this type in several ways: (1) to provide the bookmaker with transportation to and from his meetings with bettors; (2) to pick up the slips from the figure men; and (3) to transport gambling records and paraphernalia.
2. The Fruits of the Surveillance
The special agents monitored Pisacano's and Levine's activities in New York City on eight days. On the basis of these observations, the agents concluded that Pisacano operated a wire room at 165 East 83rd Street in Manhattan. At trial, the agents testified with respect to what they observed as follows:
Special Agent Thomas Loreto testified that on June 13 he was following the Cadillac, which Levine was driving. Levine stopped at 332 East 73rd Street shortly after 2:00 P.M., where he picked up Pisacano. Shortly thereafter, Loreto saw Pisacano throw a crumpled piece of paper out of the window of the Cadillac. Loreto retrieved the paper from the street. Carpiniello testified that the paper was a "pay and collect slip" a record which indicates to a bookmaker how much a particular bettor owes to or is owed by the bookmaker.
Special Agent Patrick Convery testified that on July 28, at around 11:00 A.M., he saw Levine park the Cadillac on the corner of East 86th Street and Second Avenue in Manhattan, walk to a nearby newsstand, and return to the Cadillac carrying a folded newspaper with an envelope placed on top of it.
Special Agent John McTigue testified that at about 11:30 A.M. on August 1, 1978, he observed Levine park the Cadillac on the corner of East 86th Street and Second Avenue. A male passenger in the car went to what was apparently the same newsstand at which Levine had purchased a newspaper on July 28, gave the woman at the newsstand some currency and received in return some coins, a newspaper, an envelope and some folded legal-size yellow foolscap. The man put the envelope and the paper inside the newspaper and got back into the Cadillac. Special Agent Stephen Callan testified that he then saw Levine and a passenger drive up to 165 East 83rd Street, where the agents suspected the wire room was located, and that Levine left the car and entered the building carrying a newspaper.
Carpiniello testified that the papers that were concealed in the newspaper could have contained computations of the ...