TABLE OF CONTENTS

Table of Contents........................................... i

Table of Authorities...................................... iii

Introductory Statement...................................... 1

Point I

Contrary to the Government=s Response, the Evidence Failed to Establish any Substantive Violations of ' 1084 and the Jury Instructions as to These Counts Were Grievously in Error 4

A. Section 1084(b) Exempts the Transmission of Wagering Information from New York, a Jurisdiction in Which it is Not a Crime to Place a Bet......................... 5

B. The Government=s Newly-Revised Position on Appeal Concerning the Status of Interstate Off-Track Betting Glaringly Reveals How its Contrary Position at Trial Effectively Eviscerated the Defense in the Eyes of the Jury.................................................. 14

C. The Government=s Contention that Transmission of Wagering Instructions Constitutes Transmission of a Bet or Wager Per Se is Entirely Without Merit...................... 19

D. The Government=s Newly Conceived Argument that a Contract to Bet Entitles Both Parties to AMoney or Credit as a Result of Bets or Wagers@ is Procedurally and Substantively Defective......................................... 23

E. The Evidence Failed to Establish that Defendant AKnowingly@ Used a Wire Communication Facility to Transmit Bets or Wagers in Foreign Commerce........................ 27

Point II

The Rule of Lenity Mandates That Defendant=s Convictions be Reversed and the Charges Against Him Dismissed 29

Point III

This Court is Well-Positioned to Adopt the ACorrupt Motive@ Doctrine, Which Continues to Occupy an Unsettled Area of Law in this Circuit and the Supreme Court, Without Injecting Error Into Countless Conspiracy Convictions................................. 32

A. Numerous Federal Courts Have Endorsed the Rationale Underlying the Powell Doctrine, Which Survives Feola 33

B. Neither This Court Nor the Supreme Court Has Definitively Rejected the Powell Doctrine...................... 34

C. The Facts of this Case Uniquely Implicate the

Powell Doctrine................................... 37

D. Embracing the Powell Doctrine Would Not Inject Error into Countless Conspiracy Convictions.................. 40

Point IV

The Government=s Argument that the District Court Properly Declined to Permit the Deposition of Gyneth McAllister Misapprehends Both the Substance and Relevance of McAllister=s Proposed Testimony 45

Point V

The Government=s Response to Defendant=s Challenge to the District Court=s Deficient Instructions on Aiding and Abetting Effectively Advocates an Unconstitutional Constructive Amendment to the Indictment............................................. 47

A. The Government=s Theory of Aiding and Abetting Liability Was Predicated Solely Upon 18 U.S.C. ' 2(a)....... 47

B. Discussion........................................ 49

Conclusion................................................. 52

Certificate of Compliance.................................. 53

TABLE OF AUTHORITIES

FEDERAL CASES

Cruz v. United States, 106 F.2d 828

(10th Cir. 1939)............................... 33, 34, 41

Fall v. United States, 209 F. 547

(8th Cir. 1913).................................... 33, 34

Huddleston v. United States, 415 U.S. 814 (1974)........... 29

Landen v. United States, 299 F. 75

(6th Cir. 1924).................................... 33, 34

Montclair v. Ramsdell, 107 U.S. 147 (1883)................. 25

Sagansky v. United States, 358 F.2d 195

(1st Cir. 1966)........................................ 21

United States v. Barker, 514 F.2d 208

(D.C. Cir. 1975) (en banc)............................. 33

United States v. Best, 219 F.3d 192

(2d Cir. 2000)......................................... 51

United States v. Blair, 54 F.3d 639

(10th Cir. 1995)................................... 38, 42

United States v. Borgese, 235 F. Supp. 286

(S.D.N.Y. 1964)......................................... 6

United States v. Collado, 106 F.3d 1097

(2d Cir. 1997)......................................... 29

United States v. Crimmins, 123 F.2d 271

(2d Cir. 1941)............................. 35, 36, 38, 40

United States v. Danielson, 199 F.3d 666

(2d Cir. 1999)..................................... 49, 50

United States v. Daury, 215 F.3d 257

(2d Cir. 2000)......................................... 25

United States v. Eisenberg, 596 F.2d 522

(2d Cir. 1979)......................................... 42

United States v. Feola, 420 U.S. 671 (1975). ii, 32-38, 40, 42

United States v. Floresca, 38 F.3d 706

(4th Cir. 1994) (en banc).............................. 50

United States v. Freed, 401 U.S. 601 (1971)................ 36

United States v. Helmsley, 941 F.2d 71 (2d Cir. 1991),

cert. denied, 502 U.S. 1091 (1992)................. 25, 50

United States v. Herrera, 584 F.2d 1137

(2d Cir. 1978)......................................... 43

United States v. Keegan, 325 U.S. 478 (1945)........... 39, 44

United States v. Kelley, 254 F. Supp. 9

(S.D.N.Y. 1966)...................................... 5, 6

United States v. Lanier, 117 S. Ct. 1219 (1997)......... 30-31

United States v. Mack, 112 F.2d 290

(2d Cir. 1940)..................................... 35, 40

United States v. Mauro, 501 F.2d 45 (2d Cir.)

cert. denied, 419 U.S. 969 (1974)...................... 36

United States v. McDougal, 25 F.Supp.2d 85

(N.D.N.Y. 1998), aff=d, 216 F.3d 1074

(2d Cir. 2000) (table)................................. 43

United States v. Menasche, 348 U.S. 528 (1955)............. 25

United States v. Mollica, 849 F.2d 723

(2d Cir. 1988)......................................... 50

United States v. Monteleon, Decision, 98 CR 812 (BDP)

(S.D.N.Y. Apr. 28, 1999)............................. 8, 9

United States v. Murray, 928 F.2d 1242

(1st Cir. 1991)........................................ 43

United States v. Podell, 519 F.2d 144

(2d Cir. 1975)......................................... 43

United States v. Previte, 648 F.2d 73

(1st Cir. 1981)................................ 33, 34, 41

United States v. Reminga, 493 F. Supp. 1351

(W.D. Mich. 1980)...................................... 34

United States v. Rochko, 969 F.2d 1

(2d Cir. 1992)......................................... 50

United States v. Ross, No. 98 CR 1174 (KMW),

1999 WL 782749 (S.D.N.Y. Sept. 16, 1999)........... 21, 22

United States v. Salameh, 152 F.3d 88 (2d Cir. 1998),

cert. denied, 525 U.S. 1112 (1999).................. 42-43

United States v. Samaria, 239 F.3d 228, 2001 WL 55383

(2d Cir. 2001)......................................... 51

United States v. Thomas, 887 F.2d 1341

(9th Cir. 1989)........................................ 43

United States v. Todd, 735 F.2d 146

(5th Cir. 1984)........................................ 43

United States v. Tomeo, 459 F.2d 445

(10th Cir. 1972)....................................... 21

United States v. Truesdale, 152 F.3d 443

(5th Cir. 1998).................................... 21, 24

United States v. Vasquez, 116 F.3d 58

(2d Cir. 1997)......................................... 41

United States v. Wallace, 59 F.3d 333

(2d Cir. 1995)......................................... 50

United States v. Weiss, 752 F.2d 777 (2d Cir.),

cert denied, 474 U.S. 944 (1985)....................... 50

United States v. Zingaro, 858 F.2d 9498

(2d Cir. 1988)......................................... 50

Washington v. Schriver, ___ F.3d ___, 2001 WL 125332

(2d Cir. 2001)......................................... 46

STATE CASES

Meech v. Stoner, 19 N.Y. 26 (1859)......................... 10

New York Racing Ass=n v. Hoblock, 270 A.D.2d 31,

704 N.Y.S.2d 52 (1st Dep=t 2000)........................ 7

People v. Powell, 63 N.Y. 88,

2 Cow. Cr. Rep. 283 (1875)...................... ii, 32-44

People v. Stedeker, 175 N.Y. 57, 67 N.E. 132 (1903)......... 9

People v. World Interactive Gaming Corp.,

185 Misc. 2d. 852, 714 N.Y.S.2d 844

(Sup. Ct. N.Y. Co. 1999)......................... 7, 8, 11

Watts v. Malatesta, 261 N.Y.S. 51, 237 A.D. 558

(Sup. Ct. N.Y. Co. 1932)............................... 10

Watts v. Malatesta, 262 N.Y. 80, 186 N.E. 210 (1933).... 9, 10

CONSTITUTIONAL PROVISION

U.S. Const., Amend. V....................................... 4

FEDERAL STATUTES AND RULES

15 U.S.C. ' 3001........................................... 17

15 U.S.C. ' 3002(3)........................................ 15

16 U.S.C. ' 3371, et seq................................... 43

18 U.S.C. ' 1084....................................... passim

18 U.S.C. ' 1084(a).................................... passim

18 U.S.C. ' 1084(b).................................... passim

18 U.S.C. ' 2.............................................. 48

18 U.S.C. ' 2(a).................................... ii, 47-50

18 U.S.C. ' 2(b)........................................ 47-48

18 U.S.C. ' 111............................................ 38

FRAP 32(a)(7)(C)........................................... 53

STATE STATUTES

N.Y. Exec. Law ' 63(12)................................ 10, 11

N.Y. Gen. Obl. Law ' 5-401................................. 10

N.Y. Gen. Obl. Law ' 5-411................................. 10

N.Y. Gen. Obl. Law ' 5-413................................. 10

N.Y. Gen. Obl. Law ' 5-415................................. 10

N.Y. Gen. Obl. Law ' 5-419........................... 9-10, 21

N.Y. Penal Law ' 225.05..................................... 8

N.Y. Penal Law of 1965 ' 500.05............................ 10

OTHER AUTHORITIES

Black=s Law Dictionary (6th ed. 1990)...................... 37

H.R. Rep. No. 87-967, 87th Cong., 1st Sess. (1961),

reprinted in 1961 U.S.C.C.A.N. 2631............. 11-13, 26

Internet Gambling Prohibition Act of 1999, S.692....... 19, 30

Internet Gambling Prohibition Act of 2000, H.3125...... 19, 30

LaFave & Scott, Criminal Law............................... 34

Letter From the Department of Justice to Senator Leahy

Regarding S.692 (June 9, 1999)...................... 17-18

New York Attorney General Opinion 84-F1.................... 10

New York State Senate Bill No. S.2044...................... 13

New York State Assembly Bill No. A.4350.................... 13

New York State Assembly, Memorandum in Support

of Legislation, Bill No. A.4350..................... 13-14

Pub. L. No. 106-553, ' 629, 114 Stat. 2762................. 15

Third Interim Report of the State of New York Temporary

Commission on Revision of the Penal Law and

Criminal Code (1964) (Legislative Document No. 14)...... 6

Introductory Statement

In response to the extensively-briefed legal issues presented by Defendant-Appellant Jay Cohen (ADefendant@), and in defense of what clearly amounts to a selective prosecution,^[1] the Government finds itself cobbling together marginally relevant authority, abandoning legal positions it maintained before the district court, and, in its effort to portray Defendant as contriving novel interpretations of law in order to evade the provisions of 18 U.S.C. ' 1084, ignoring substantial authority that undermines its position.

This record unequivocally establishes that Defendant had a reasonable, good faith belief that his conduct was not unlawful, based in no small part on the undisputed fact that Defendant modeled World Sports Exchange (AWSE@) after Capital Off-Track Betting (AOTB@), one of numerous off-track betting enterprises that, at all relevant times, enjoyed no special protections from the reach of ' 1084. Under applicable legal principles, Defendant, therefore, could not have conspired to violate this statute. Defendant=s undisputed belief, moreover, that only information assisting in the placement of bets and wagers was transmitted via interstate wires, undermines the mens rea requirements of both the substantive statute and the conspiracy statute. The Government has cited no persuasive authority to the contrary.

Perhaps most unsettling, the Government begins its brief with a 30-page statement of the case in which, while making limited use of citations to the record, it advances numerous misstatements of fact.^[2] This Court should not be misled. As discussed in Appellant=s Brief and in this Reply Brief, the relevant facts and authorities require reversal of Defendant=s convictions on all counts and dismissal of the charges.

POINT I

CONTRARY TO THE GOVERNMENT=S RESPONSE, THE EVIDENCE FAILED TO ESTABLISH ANY SUBSTANTIVE VIOLATIONS OF ' 1084 AND THE JURY INSTRUCTIONS AS TO THESE COUNTS WERE GRIEVOUSLY IN ERROR

In response to Defendant=s argument that the evidence failed to establish any substantive violation of ' 1084 and that the jury instructions were defective as to the substantive counts, the Government mounts a multi-pronged defense. First, the Government contends that the exemption set forth in ' 1084(b) does not apply to this case because it is not Alegal@ to place a bet in New York, despite the fact that New York prohibits only engaging in the business of gambling.

Second, the Government contends that Defendant violated the first clause of ' 1084(a), which prohibits transmission of Abets or wagers,@ on the theory that the transmission of wagering instructions constitutes transmission of bets or wagers as a matter of law. In making this argument, the Government adopts a position with respect to the regulation of interstate off-track betting that is directly contrary to its position at trial, and which starkly reveals how Defendant was wrongly deprived of a fair trial.

Third, the Government contends that Defendant violated the third clause of ' 1084(a), which prohibits transmission of Aa wire communication which entitles the recipient to receive money or credit as a result of bets or wagers,@ reasoning that every bet, once formed, entitles each party to the contract to money or credit.

Finally, the Government defends the court=s instruction concerning the element of knowledge by deeming Defendant=s argument a disguised effort to impute a specific intent requirement into ' 1084.

Each of the Government=s contentions is without merit.

A. Section 1084(b) Exempts the Transmission of Wagering Information from New York, a Jurisdiction in Which it is Not a Crime to Place a Bet.

In response to Defendant=s argument that the term Alegal@ in ' 1084(b) refers to whether the act of placing a bet is prohibited by state criminal law, the Government insists that it is not Alegal@ to place a bet in New York because New York has a longstanding policy against gambling in general. The Government, however, wholly ignores the equally deep-rooted distinction in New York law between betting or wagering on the one hand, and operating a gambling business, on the other. See Appellant=s Br. at 42-43. The Government, moreover, fails to cite any meaningful authority to counter the cases and legislative history cited by Defendant, all of which strongly indicate that ' 1084(b) exempts the transmission of wagering information from a jurisdiction in which the act of placing a bet is not a crime.

The cases cited by the Government in support of its claim that courts have Auniformly@ recognized that it is not Alegal@ to place a bet in New York reveal the tenuousness of the Government=s position. United States v. Kelley, 254 F. Supp. 9 (S.D.N.Y. 1966), which actually supports Defendant=s position, simply does not address the question of whether placing a bet is legal in New York. Rather, Kelley concerned a First Amendment challenge to ' 1084 from defendants who were alleged to be engaged in the business of bookmaking. The court, citing United States v. Borgese, 235 F. Supp. 286, 295-96 (S.D.N.Y. 1964), for the proposition that Agambling per se . . . is contrary to the law of the state of New York,@ concluded that ' 1084 did not infringe the guarantee of free speech because the Asubstantive evil@ that ' 1084 sought to curtail was Athe use of a federally controlled means of communication to violate state penal statutes.@ Kelley, 254 F. Supp. at 15 (emphasis added). Accordingly, contrary to the Government=s contention, Kelley, like the many other federal cases cited by Defendant, see Appellant=s Br. at 41-42, actually supports Defendant=s argument that ' 1084 concerns only conduct that violates state penal law.

Notably, Borgese recognizes the fact that New York penal law neither prohibits nor criminalizes the act of betting. The court cited the following summary of the gambling laws of New York:

AThe substance of this entire area of legislation, however, is that, no matter what form of gambling is involved, the mere player, contestant or bettor is not criminally liable, but that anyone who, in some capacity other than that of a player, operates, promotes or advances an gambling enterprises or activity is guilty of a crime.@

Borgese, 235 F. Supp. at 296 (quoting Third Interim Report of the State of New York Temporary Commission on Revision of the Penal Law and Criminal Code [1964] [Legislative Document No. 14], at 25) (emphasis added).

The New York State cases cited by the Government likewise do not support the Government=s contention that it is not Alegal@ to place a bet in New York. New York Racing Ass=n v. Hoblock, 270 A.D.2d 31, 704 N.Y.S.2d 52 (1st Dep=t 2000), does not even begin to address this proposition. Rather, Hoblock involved a challenge to New York=s Off-Track Betting (AOTB@) Corporation=s audio-only broadcasts of out-of-state horse races for telephone wagering purposes. This required the court to construe the statutory definition of Asimulcast.@ In doing so, the court, citing the state constitution and state penal law, simply noted the general policy against gambling in New York and the rule that the simulcasting statute must be strictly construed. 704 N.Y.S.2d at 55.

Nor does People v. World Interactive Gaming Corp., 185 Misc. 2d. 852, 714 N.Y.S.2d 844 (Sup. Ct. N.Y. Co. 1999) stand for the proposition that it is not legal to place a bet in New York. In contrast to the facts of this case, the respondents in World Interactive Gaming included World Interactive Gaming Corporation (AWIGC@), a Delaware corporation that maintained corporate offices in New York, and Golden Chips Casino, Inc. (AGCC@), an Antiguan subsidiary corporation wholly owned by WIGC and licensed to operate a casino in Antigua. The New York Attorney General began investigating WIGC because WIGC was attempting to sell WIGC stock by making cold calls to prospective investors, including individuals located in New York, even though neither the offering nor the cold-callers were properly registered with the State of New York. The State subsequently expanded the investigation to include GCC, which the court found to be completely dominated by WIGC. Respondents argued that the court lacked subject matter jurisdiction because Internet gambling fell outside the scope of New York state gambling prohibitions, since the gambling occurred outside New York. The court rejected this argument because GCC and WIGC actively promoted gambling in New York, in violation of New York Penal Law ' 225.05, by having established the gambling enterprise, advertising, and soliciting investors in New York. Crucially, the court stated that A[t]he violation had occurred long before a New York resident ever staked a bet.@ 185 Misc. 2d at 861 (emphasis added). The case in no way turned upon a determination that it is not legal to place a bet in New York.