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U.S. v. KACZOWSKI

September 22, 1999

THE UNITED STATES OF AMERICA
v.
PAUL KACZOWSKI (COUNTS 1, 2 & 3) BRUCE ZIMINSKI (COUNTS 1, 2 & 3) FRANK MASTERANA (COUNTS 1 — 5)



The opinion of the court was delivered by: Elfvin, District Judge.

      MEMORANDUM and ORDER

Paul Kaczowski, a defendant herein, has objected to the Report and Recommendation of the United States Magistrate Judge Leslie G. Foschio as filed August 24, 1999 in this case.

Mr. Kaczowski, along with two other gentlemen, was indicted April 24, 1998 for having (COUNT ONE) conspired to violate 18 U.S.C. § 1955 by doing certain acts as part of an illegal gambling business — a bookmaking operation which accepted wagers on sporting events — and (COUNT TWO) conducted etc. such bookmaking operation and (COUNTS THREE, FOUR and FIVE) used interstate and international telephone facilities to carry on such bookmaking operation. Fifty-two overt acts are set forth in support of the charges in COUNT ONE. They concern meetings and telephone conversations in which one or more of the three defendants met or conversed by telephone with an unindicted individual — usually one Joseph Zambito — and, usually, provided "line information" to and, at times, accepted wagers from Zambito or another person. COUNT TWO charges that the three defendants and others "conducted, financed, managed, supervised, directed and owned" an unlawful sports bookmaking operation. COUNT THREE charges that the three defendants and others utilized interstate and international telephone facilities in February and March of 1996 to promote and carry on the sports bookmaking operation. COUNTS FOUR and FIVE charge Masterana with such utilization on February 24, 1996 and March 8, 1996, respectively.

Masterana and Kaczowski moved to dismiss the Indictment or to suppress testimony and other evidence garnered from interceptions of telephone conversations. They assert that that which is set forth in the Indictment does not charge a federal offense, in large part because the sports bookmaking operation and actions in essential support thereof were not illegal in that foreign country in which it and they were carried out.

The undersigned has devoted much thought and attention to whether that which is set forth in this Indictment sets forth federal criminology and, more importantly, how the trial jury is going to be able to distinguish between what may merely facially be criminal and what actually is a violation of Federal and State laws. Very possibly, activities here — including the use of interstate and foreign communication facilities — were not actually violative of the Federal laws set forth in the Indictment but facially they were. The jury and the undersigned are going to have be on their respective toes in determining whether and when activities occurring here were in themselves criminal — peering into and through the evidentiary morass to determine whether certain acts, facially criminal in their nature, actually occurred here as opposed to at that offshore facility where and from which the gambling mainly occurred — or occurred in toto. If the main or major gambling operation was at the offshore site — as it well appears to have been — did any significant part or phase thereof occur here and, if it did, was such part or phase violatory of the pertinent laws of New York State and of the United States of America? There can be no answer to such now and the charges against the defendants will stand. On trial there must be a point-by-point — even a minipoint-by-minipoint — analysis of and ruling upon what the prosecutor will be seeking to place before the trial jury for its consideration.

Meanwhile, defendant Kaczowski's Objections to the Report and Recommendation of Magistrate Judge Foschio are overruled and the prosecution shall proceed.

REPORT AND RECOMMENDATION

JURISDICTION

This case was referred to the undersigned on May 1, 1998 by the Hon. John T. Elfvin for Report and Recommendation on all dispositive motions. It is currently before the court on Defendant Masterana's motion to dismiss the indictment, filed January 14, 1999 (Docket Item No. 11), and Defendant Kaczowski's motions to dismiss the indictment and to suppress testimony from witnesses and evidence derived from interception of telephone conversations, filed February 5, 1999 (Docket Item No. 14), and to suppress tape recorded conversations, filed June 17, 1999 (Docket Item No. 21).

BACKGROUND and FACTS

Defendants were indicted, along with Bruce Ziminski,*fn1 in a five count indictment on April 24, 1998 charging violations of 18 U.S.C. § 2(a) and (b), 371, 1084, 1952 and 1955. Specifically, Defendants are charged with aiding and abetting and conspiring to conduct, finance and own an illegal gambling business which used facilities in interstate and foreign commerce to distribute the proceeds of unlawful bookmaking and using interstate and foreign wire communication facilities between this district and the West Indies and Central America to place bets on sporting events. Defendants allegedly had telephone conversations and met with others at local restaurants where they agreed to actions on which the substantive allegations are based and also shared gambling line information and accepted wagers in connection with the sports bookmaking enterprise.

In connection with the Government's investigation of the bookmaking operation, two electronic surveillance intercept orders were obtained on January 27, 1996 and February 28, 1996 for telephone lines maintained at an office located at Suite 111, 1325 Millersport Highway, in Williamsville, New York ("Suite 111"). Based on these orders, the Government intercepted telephone conversations in which gambling line information was provided and wagers were accepted.

As a result of his conviction on an unrelated matter, Defendant Kaczowski entered the McKean Federal Correctional Institute in McKean, Pennsylvania ("McKean Correctional Facility") in March, 1996. On March 23, 1996, the Government intercepted two telephone calls placed by Kaczowski to others outside McKean Correctional Facility from telephones located within the facility's dormitories. Posted next to each such telephone was either a red or black sign stating:

NOTICE

  THE BUREAU OF PRISONS RESERVES THE AUTHORITY TO
  MONITOR CONVERSATIONS ON THIS TELEPHONE.
  YOUR USE OF INSTITUTIONAL TELEPHONES CONSTITUTES
  CONSENT TO THE MONITORING. A PROPERLY PLACED
  TELEPHONE CALL TO AN ATTORNEY IS NOT MONITORED.

Upon entering custody at the McKean Correctional Facility, Kaczowski executed an "Acknowledgment of Inmate" form, Section 3 of which advises inmates of the prison's telephone monitoring program and that use of the telephone's constitutes consent to the surveillance. It is undisputed that several conversations of Defendant Kaczowski held over those telephones were intercepted and tape recorded by the facility.

Defendants have filed omnibus motions seeking, inter alia, dismissal of their respective charges on the grounds of facial insufficiency and double jeopardy, suppression of testimony, to suppress wiretap evidence and to suppress tapes of recorded telephone conversations made by Defendant Kaczowski while incarcerated at McKean Correctional Facility. Along with his challenge to the Title III electronic intercept orders, Defendant Kaczowski also requests a hearing under Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978). The Government responded on March 1, 1999.

Oral argument was conducted on April 22, 1999. A supplemental brief was filed by Defendant Masterana on May 28, 1999. On June 17, 1999, Defendant Kaczowski filed a motion to dismiss the content of tape recorded conversations obtained while Kaczowski was incarcerated in a federal prison and further supplemented his earlier brief in accordance with the oral argument. The Government filed a response to that motion on July 22, 1999.

DISCUSSION

1. Dismissal of the Indictment

Defendants move to dismiss the Indictment as insufficient to charge an offense. Defendants claim that the Indictment fails to fairly apprise them of the conduct giving rise to the charged offenses, as required by Rule 7(c)(1) of the Federal Rules of Criminal Procedure and, as such, the Indictment does not meet constitutional notice requirements under the Sixth Amendment as to the essential facts of the offenses charged.*fn2

Specifically, Defendant Kaczowski maintains that as the Indictment charges Defendants with committing acts outside the United States in a country in which gambling is legal, as such, the Indictment is insufficient to allege a crime. Affidavit of Herbert L. Greenman, Esq., in Support of Defendant Kaczowski's Omnibus Motion filed February 5, 1999 (Docket Item No. 14) ("Greenman Affidavit") at ¶ 22. Defendant Masterana argues that the Government has conceded that the placing of a bet is legal in New York and, thus, such actions provide no basis for the crimes charged. Defendant Masterana's Brief filed May 28, 1999 (Docket Item No. 19) ("Masterana Brief") at 1.

An indictment is facially valid and sufficient if it contains the elements of the offense charged, fairly informs a defendant of the charges against which he must defend, and enables a defendant to plead an acquittal or a conviction in bar of further prosecution for the same offense. Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974); United States v. Stavroulakis, 952 F.2d 686, 693 (2d Cir.), cert. denied, 504 U.S. 926, 112 S.Ct. 1982, 118 L.Ed.2d 580 (1992); United States v. Ferrara, 701 F. Supp. 39 (E.D.N.Y. 1988). An indictment need only track the language of the statute and, if necessary to apprise the defendant of the nature of the accusation against him, state the time and place of the alleged offense in approximate terms. Russell v. United States, 369 U.S. 749, 765, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962); United States v. Covino, 837 F.2d 65, 69 (2d Cir. 1988); United States v. Bagaric, 706 F.2d 42, 61 (2d Cir.), cert. denied, 464 U.S. 840, 104 S.Ct. 133, 78 L.Ed.2d 128 (1983); Ferrara, supra, at 44.

The form of an indictment is governed by Fed.R.Crim.P. 7(c)(1) which provides that "the indictment . . . shall be a plain, concise, and definite written statement of the essential facts constituting the offense charged." United States v. Macklin, 927 F.2d 1272, 1276 (2d Cir.), cert. denied, 502 U.S. 847, 112 S.Ct. 146, 116 L.Ed.2d 112 (1991). To satisfy this rule, "[t]he facts alleged must be adequate to permit a defendant to plead former jeopardy upon prosecution. The indictment must also be sufficiently specific to enable the defendant to prepare a defense." United States v. Carrier, 672 F.2d 300, 303 (2d Cir.), cert. denied, 457 U.S. 1139, 102 S.Ct. 2972, 73 L.Ed.2d 1359 (1982). As such, it is well settled that indictments which track the statutory language defining an offense are, as a general rule, sufficient under Rule 7(c) so long as application to a particular defendant is clear. United States v. Upton, 856 F. Supp. 727, 739 (E.D.N.Y. 1994). Additionally, while a bill of particulars cannot cure a constitutionally defective indictment, particularization is appropriate when the indictment is challenged as insufficient to permit the preparation of an adequate defense. Upton, supra, at 740-41. It is well established that an indictment which complies with Rule 7(c) also satisfies the requirements of the Sixth Amendment. Russell, supra, at 763-64, 82 S.Ct. 1038; Upton, supra, at 738; United States v. Abrams, 539 F. Supp. 378, 384 (S.D.N.Y. 1982).

Specifically, an indictment will satisfy the Sixth Amendment if it "contains the elements of the offense intended to be charged, `and sufficiently apprises the defendant of what he must be prepared to meet.'" Russell, supra, at 763-64, 82 S.Ct. 1038 (quoting Hagner v. United States, 285 U.S. 427, 431, 52 S.Ct. 417, 76 L.Ed. 861 (1932) (citations omitted)) (emphasis added). While pleading "generic" terms only without the "species" will be insufficient, United States v. Cruikshank, 92 U.S. 542, 558, 23 L.Ed. 588 (1875), an indictment need only apprise the defendant of the nature of the accusation against him "with reasonable certainty," and will be sufficient if the language of the statute is charged along with "a statement of the facts and circumstances as will inform the accused of the specific offense . . . with which he is charged." Russell, supra, at 765-66, 82 S.Ct. 1038 (citing cases) (emphasis added).

Under New York law, a person is guilty of promoting gambling when he knowingly advances or profits from unlawful activity, N Y Penal Law § 225.05 (McKinney 1989)*fn3 (promoting gambling in the second degree), engages in bookmaking by receiving or accepting in any one day more than five bets totaling more than five thousand dollars, N.Y. Penal Law § 225.10 (promoting gambling in the first degree), or is in possession of any writing, paper, instrument or article similar to those commonly used in the operation or promotion of a bookmaking scheme or enterprise, N.Y. Penal Law §§ 225.15 and 225.20 (possession of gambling records). A person "`profits from gambling activity' when, other than as a player, he accepts or receives money or other property pursuant to an agreement or understanding with any person whereby he participates or is to participate in the proceeds of gambling activity." N.Y Penal Law § 225.00(5). "Bookmaking" is defined as "advancing gambling activity by unlawfully accepting bets from members of the public as a business, rather than in a casual or personal fashion, upon the outcomes of future contingent events." N.Y. Penal Law § 225.00(9). "Advancing gambling activity" occurs under New York law when, acting other than as a player, a person "engages in conduct which materially aids any form of gambling activity." N Y Penal Law § 225.00(4).

Defendants maintain they were engaged in merely placing bets which they further maintain the Government has conceded is legal in New York. Affidavit of Herbert L. Greenman, Esq., attached to Notice of Motion filed June 17, 1999 (Docket Item No. 21) ("Greenman Affidavit in Support of Motion to Suppress"), ¶¶ 2-5. However, regardless of whether placing bets, simpliciter, is legal in New York, a plain reading of the Indictment indicates Defendants are accused of more than solely placing bets.

In particular, the Indictment sets forth allegations which, if proven, establish Defendants maintained facilities where they regularly engaged in the promotion of gambling by receiving and relaying bets from gamblers, i.e., "players," to an offshore gambling enterprise. For example, the Indictment alleges Defendants and others working for them, used telephones to provide gambling line information, i.e., "odds" or "point spread,"*fn4 and accepted wagers from individual gamblers. See Overt Acts 10, 20-39 and 41-51. Defendant Kaczowski allegedly possessed papers used in collecting from and paying bettors. Overt Act 19 and 52. As stated, under New York law, the crime of Promoting Gambling in the First Degree occurs when a person engages in bookmaking by either receiving or accepting wagers.*fn5 Thus, even if the evidence were to show the bets at issue were not technically accepted until communicated to the off-shore destination, the Indictment nevertheless charges Defendants with unlawful bookmaking. Regardless of whether the evidence shows Defendants received bets or accepted bets to be "laid off" elsewhere, in either case, the conduct would constitute illegal bookmaking. Accordingly, the Indictment sufficiently charges Defendants with actions which, if proven, would constitute promoting gambling through maintenance of an illegal bookmaking operation assisted with the use of telephones, in violation of New York law. As such, the court considers whether the Indictment otherwise sufficiently alleges violations of federal law.

Counts I and II charge Defendants both with conspiring to violate and with violating 18 U.S.C. § 1955, the Wagering Paraphernalia Act, which renders the promotion of gambling, in a state in which it is illegal, a federal crime. Section 1955 defines an "illegal gambling business as a gambling business which

  (i) is a violation of the law of State of political
  subdivision in which it is conducted;
  (ii) involves five or more persons who conduct,
  finance, manage, supervise, direct or own all or part
  of such business; and
  (iii) has been or remains in substantially continuous
  operation for a period in excess of thirty days or
  has a gross ...

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