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March 25, 2003


The opinion of the court was delivered by: Harold Baer, Jr., United States District Judge


John Fitzsimmons and George Conforti (collectively "Defendants") were convicted after a trial of involvement in an illegal gambling business, in violation of 18 U.S.C. § 1955. They timely moved for acquittal, pursuant Fed.R.Crim.P. 29, claiming that the prosecution failed to prove that the gambling was part of a business, or alternatively for a new trial, pursuant to Fed. R. Crim. P. 33, claiming that 1) the Court improperly prevented Defendants' attempted establishment of an advice-of-counsel defense, and 2) the jury instruction improperly permitted to affix culpability based on Defendants' failure to prevent another from violating the law. For the foregoing reasons, Defendants' motions are denied.


A. Standard of review

On a motion for acquittal, pursuant to Fed.R.Crim.P. 29, the Court must view the evidence in the light most favorable to the prosecution, see United States v. Zagari, 111 F.3d 307, 327 (2d Cir. 1997), and must resolve all reasonable inference in favor of the government, see United States v. Rodriguez, 702 F.2d 38, 41 (2d Cir. 1983) (citing United States v. Artuso, 702 F.2d 38, 41 (2d Cir. 1980)). Further, "[t]he verdict will be sustained unless no `rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.'" See Zagari, 111 F.3d at 327 (quoting Jackson v. Virginia, 443 U.S. 307 (1979)).

The Court can grant a new trial "if required in the interest of justice." See Fed.R. Crim. P. 33; United States v. Locascio, 6 F.3d 924, 949 (2d Cir. 1993) (quoting Fed.R.Crim.P. 33). However, a new trial is generally disfavored and should be granted only in extraordinary circumstances. See United States v. Costello, 255 F.2d 876, 879 (2d Cir. 1958); see also, e.g., Locascio, 6 F.3d at 949.

B. Proof of Vigorish

The Defendants urge the Court to reverse their convictions on the basis that the failed to provide evidence that the Defendants charged the bettors vigorish,*fn1 which according to Defendants is an essential characteristic of an illegal gambling operation and the feature that distinguishes illegal bookmaking from personal gambling, which is legal. Specifically, Defendants contend that the Government failed to meet its burden under either the state or federal gambling statutes because it failed to prove that the organization profited from the gambling business — e.g., proof of the vigorish charged.*fn2 The Government's position is that it need not prove that the operation profited or that it charged vigorish, and that there was ample evidence that Defendants profited from the enterprise. I agree.

Section 1955 of Title 18 of the United States Code the makes it illegal to "conduct[], finance[], manage[], supervise[], direct[], or own[] all or part" of a gambling business which 1) violates the law of a state, 2) involves five or more people, and 3) has been in substantially continuous operation for more than 30 days or has gross revenue of more than $2,000 in any single day.*fn3 The underlying state statute upon which the Defendants were prosecuted and convicted is New York Penal Law §§ 225.05 and 225.10. A person who "knowingly advances or profits from unlawful gambling activity" is guilty of promoting gambling in the second degree. See N.Y. Penal Law § 225.05 (McKinney's 2000). A person who "knowingly advances or profits from unlawful gambling activity" by engaging in bookmaking*fn4 by receiving more than five bets totaling more than $5,000 in any one day is guilty of promoting gambling in the first degree. See id. § 225.10. The statute defines "advances gambling activity" as follows: "A person "advances gambling activity" when, acting other than as a player, he engages in conduct which materially aids any form of gambling activity." See id. § 225.00[4] (emphasis added).*fn5

As indicated above, Defendants contend that without evidence of vigorish, there is no basis for finding that the Defendants were "acting other than as [] player[s]." This contention misstates the law. Neither 18 U.S.C. § 1955 nor New York Penal Law §§ 225.05 or 225.10 requires the Government to prove the Defendants charged vigorish. Indeed, one of the cases that Defendants cite suggests the contrary. The cases that Defendants cite discuss vigorish and note that even a bookmaker engaged in illegal gambling can place a bet with another bookmaker legally, if this bettor was not placing a "lay-off" bet. See, e.g., United States v. Greco, 619 F.2d 635, 639 (7th Cir. 1980). However, none of them say that proof of vigorish is an essential element of the prosecution.

Defendants rely primarily on United States v. Greco, 619 F.2d 635 (7th Cir. 1980), which they assert stands for the proposition that a conviction under § 1955 requires proof that bets were "lay off" bets rather than personal wagers. I read this case differently. The two defendants in Greco admitted all the elements of 1955 except that there were five or more people involved in the gambling operation. See id. at 636-37. A dozen witnesses testified that they placed bets with the defendants, and thus the narrow issue before the court was whether these people were placing "lay-off bets" with the defendants, in which case they would be involved in the gambling operation, or were involved merely as bettors. See id. at 638 (noting that "§ 1955 proscribes any degree of participation in an illegal gambling business, except participation as a mere bettor" (quoting Sanabria v. United States, 437 U.S. 54, 70 n. 26 (1978)). The Seventh Circuit did not hold, as Defendants here suggest, that proof of lay-off betting is a sine qua non of all prosecutions under 1955. Rather, it held that the expert's definition of "lay-off betting" was inadequate to assist the jury in determining whether other individuals who testified that they placed bets with defendants were participating merely as bettors. See id. at 639.

With regard to the facts introduced at trial, the Government's key witness was a former runner for the gambling enterprise, Jack Lazzaro. Mr. Lazzaro testified that for several years prior to being hired by Mr. Fitzsimmons and Mr. Conforti, he placed bets with them. See Tr. 97-99, 145. As a runner, he developed new customers, usually friends or friends of friends, and served as an intermediary between his customers and Mr. Fitzsimmons and Mr. Conforti — for example, giving the customers a special telephone number to call and paying out their winnings and collecting their loses. See Tr. 99, 105-07, 115-16, 145. Significantly, he testified that his payment was determined as a percentage of certain of his bettors' losses.*fn6 If Mr. Lazzaro did not take a cut of the money himself, either Mr. Conforti or Fitzsimmons would pay him. The Government also introduced audiotapes of conversations in which Mr. Fitzsimmons discussed collection of gambling debts from a delinquent bettor, as well as the plea allocution of a third participant in the enterprise. In sum, although the Government offered no evidence that Defendants charged vigorish, there was ample evidence that they were operating a profit-oriented gambling business and that they indeed profited from it.

C. Advice-of-Counsel Defense

Defendants argue that a new trial is required because the Court decided to allow the aiding-and-abetting charge after the defense, having ceased to pursue an advice-of-counsel defense on the belief that the Court had decided to disallow an aiding-and-abetting charge, had rested. The Government counters that the Court invited the Defendants to establish the prerequisites for the defense — that there existed an attorney-client relationship, that the Defendants fully disclosed all pertinent facts to the attorney, and that they relied in good faith on the ...

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