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.


In fact, the only case cited by the Government which addresses the legality of placing a bet in New York in the context of 18 U.S.C. ' 1084, United States v. Monteleon, Decision, 98 CR 812 (BDP) (S.D.N.Y. Apr. 28, 1999), has no precedential value. It fails, moreover, to consider the purposes and history of ' 1084 as well as the historical distinction in New York law between mere betting and engaging in the business of gambling. See SA212-21. Specifically, Monteleon consists of no more than an oral ruling denying defendant=s pretrial motions, which was neither reduced to a written order nor reported in any forum. Counsel=s research indicates, moreover, that the decision has not been cited by any subsequent court. Substantively, the Monteleon ruling considers neither federal court interpretations of the term Alegal@ as used in ' 1084, the legislative history of that provision, nor longstanding New York case law articulating and applying the distinction between betting and profiting from a gambling business. Monteleon, therefore, has no bearing on the questions presented here.

Like the court in Monteleon, the Government cites New York=s longstanding policy against gambling, but entirely ignores the equally deep-rooted distinction in New York law between engaging in the business of gambling and merely betting. See Watts v. Malatesta, 262 N.Y. 80, 81-82, 186 N.E. 210, 210-11 (1933) (Watts II). As the New York Court of Appeals observed as early as 1903:

There has always been observed a distinction between betting or gambling and maintaining a gambling house or a place to which people resorted to gamble. . . . The same distinction has obtained in this state, where ordinary betting has never been made a crime, though in some cases subject to small pecuniary mulcts, while the keeping of a gambling house, selling lottery tickets, and the profession of a common gambler have been subjected to severe punishment.

 

People v. Stedeker, 175 N.Y. 57,62, 67 N.E. 132, 133-34 (1903) (emphasis added).

Not only has it never been made a crime in New York to place a bet, but the New York General Obligations Law, on which the Government so heavily relies, actually permits recovery of wagered property by a mere bettor, but not by one engaged in the business of gambling. N.Y. Gen. Obl. Law ' 5-419; Watts II.


The development and interpretation of the provisions of the General Obligations Law cited by the Government, which were purposely removed from the New York Penal Law,[3] reveal the depth and significance of the distinction between placing a bet and running a gambling business. At common law, the bettor and the person with whom he placed his bet were considered in pari delicto. Meech v. Stoner, 19 N.Y. 26 (1859). This maxim, however, was abrogated by enactment of the statute, now N.Y. Gen. Obl. Law ' 5-419, providing a remedy for the losing party to recover the property wagered. Id. As a result, A[i]t is clear that in the eye of the law the professional gambler and his customer do not stand on the same place. They are not in pari delicto.@  Watts II, 262 N.Y. at 82, 186 N.E. at 211.[4]


The Government=s citations to New York Attorney General Opinion 84-F1 and to New York State Executive Law ' 63(12) likewise ignore the distinction between mere betting and engaging in a gambling business, and thus fail to support the Government=s position. Attorney General Opinion 84-F1 simply opines that the Division of the Lottery could not, consistent with the State Constitution, operate a game involving betting on sporting events. The opinion does not address the legality of betting in New York. Likewise, New York State Executive Law ' 63(12) simply permits the Attorney General to enjoin illegal acts, which the Attorney General has done to halt the operation of a gambling business in New York. See World Interactive Gaming, discussed supra. The Government cites no action by the Attorney General to enjoin the act of placing a bet.

Perhaps cognizant of the true significance of the distinction it ignores, the Government contends, as a fallback argument, that, even if it is legal to place a bet in New York, the process of Abetting@ is not legal in New York because it Arequires one party to place bets and another to offer and accept them, which is criminal.@  Gov. Br. at 57. The Government, however, cites no authority relating this proposition to ' 1084. In fact, this argument runs directly counter to both a plain reading of ' 1084(b) and its legislative history. Consistent with an ordinary reading of the statute, the House Committee Report clearly states that ' 1084(b) Awould exempt the transmission of gambling information from a State where the placing of bets and wagers on a sporting event is legal, to a State where betting on that particular event is legal.@  H.R. Rep. No. 87-967, 87th Cong., 1st Sess. (1961), reprinted in 1961 U.S.C.C.A.N. 2631, 2632 (emphasis added).


Moreover, the Government=s claim that portions of the House Report not cited by Defendant Aleave no doubt that Congress regarded New York as state in which betting is not legal,@ Gov. Br. at 58, shamelessly distorts this legislative history. As the Government well knows, the example provided in the House Report is limited to off-track betting, which, at the time, was legal only in Nevada. Thus, as the Report makes clear, at the time ' 1084 was enacted, it was legal to place a bet at a Nevada racetrack on a race being run in New York State, but it was not legal to place a bet at a New York racetrack on a race being run in Nevada, even though New York State law permitted parimutuel betting. See H.R. Rep. No. 87-967, 1961 U.S.C.C.A.N. at 2632-33. Under these circumstances, transmitting information from Nevada to New York, assisting with the placement of bets in New York on Nevada races, would not fall within the exemption. Id.

Currently, of course, where New York law now permits parimutuel off-track wagering, transmission of wagering information from Nevada to New York is protected by the exemption. Hence Capital OTB in New York, which accepts wagering instructions via telephone and the Internet from around the world, has operated unfettered for decades. The Government=s claim that the House Report concerning  ' 1084 Adefinitively forecloses@ Defendant=s argument and that it Anotes specifically that betting is illegal in New York,@ Gov. Br. at 51, plainly misrepresents this legislative history.


Notwithstanding its contentions to the contrary, it is the Government which fails to address the portions of the House Report relevant to the question of whether Congress intended ' 1084(b) to exempt transmissions of wagering information from jurisdictions which have not made the placement of a bet a criminal offense. Notably, the Government wholly ignores Defendant=s reference to the legislative history of the preemption portion of ' 1084, which establishes beyond question that Congress was concerned with assisting the states in enforcement of its penal laws. See H.R. Rep. No. 87-967, 1961 U.S.C.C.A.N. at 2633.

Likewise, the Government fails to respond to the fact that, in keeping with this concept, the New York State Senate passed a bill in 1999 that would require any foreign corporation providing gambling or wagering services in New York via the Internet to register with the state. See Appellant=s Br. at 43. At the time Appellant=s Brief was filed, this bill, then numbered S.2044, was pending in a committee of the New York State Assembly. The same bill, now numbered A.4350, was introduced in the State Assembly on February 8, 2001, and is currently under review by the Racing and Wagering Committee. According to the sponsor=s memorandum,

[t]here are dozens of companies on the world wide web which offer interactive wagering programs. All of these companies are situated in foreign countries and market their services to New York State residents. This bill would require internet gambling companies to register as foreign corporation doing business in New York so that residents of this State may easily reach such corporations for service of process.

 


New York State Assembly, Memorandum in Support of Legislation, Bill No. A.4350.[5]

The continued viability of this bill, and the fact that the New York State Senate passed it during the 1999 session, unequivocally attests that the lawmakers of New York fully anticipate that individuals in New York will place bets with offshore gambling entities. If such activity were indeed prohibited by New York law, then any such legislation would not have passed the Senate and would not continue to merit consideration year after year. Rather, it would have been squelched immediately upon introduction.

The simple fact is that the State of New York has never declared the mere bettor to be an outlaw. To the contrary, state lawmakers recognize that modern bettors can and will wager with offshore gambling corporations, and are taking steps to protect them. Thus, to hold that ' 1084(b), which strives for parity with state penal laws, does not exempt transmission of wagering information from New York, would contravene New York=s status quo.

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.

 


En route to its argument that the evidence established a violation of the first clause of ' 1084(a), which prohibits transmission of Abets or wagers@ in foreign commerce, the Government states that ACohen does not dispute that each of the Betting Counts was premised on bets that were placed and unconditionally accepted via WSE=s >click and bet= website or toll-free telephone lines.@  Gov. Br. at 61. This is inaccurate. The evidence established that the ABetting Counts@ were premised on wagering instructions that were transmitted via Internet or telephone to WSE=s offices in Antigua. A bet would be placed on the customer=s behalf in Antigua only if the customer=s wagering account contained sufficient funds to cover the bet and if WSE approved it.[6]

As Defendant has previously explained, see Appellant=s Br. at 51-54, the account wagering format implemented by WSE was identical to the longstanding and unfettered practice of interstate offtrack betting in the horseracing industry B a practice which, at the time of Defendant=s conduct, and contrary to the district court=s instructions, A857, enjoyed no special protection from the reach of ' 1084.[7] Defendant=s uncontradicted testimony established that he in fact modeled WSE after Capital OTB in New York.


The Government, presumably recognizing the potential power of such testimony, insisted at trial that OTB was not regulated by ' 1084. While Defendant presented the district court with extensive authority establishing that what Defendant was doing was no different than what OTB had been doing for years, the Government, taking advantage of the district court=s apparent confusion[8] and citing no support whatsoever, informed the court that Athere are specific federal statutes dealing with telephone accounts and wagering in off track betting and harness racing. It=s not the same.@ A538.[9] The Government went on to ask the court Ato instruct the jury that OTB is not regulated under Section 1084.@ A540.

Unfortunately for Defendant, the district court embraced the Government=s view, and gave the requested instruction.[10]


Now, confronted with the force of Defendant=s argument on appeal, the Government has engineered a complete reversal of the position it took at trial, and suggests that OTB may, in fact, be regulated by ' 1084. In a weak attempt to gloss over the crucial reality that Defendant=s conduct was no different than that of OTB, the Government argues:

It similarly provides no help to Cohen that various states have authorized the establishment of Awagering account@ for the purposes of facilitating state-sponsored off-track betting. (See Br. 51-56). The fact that such Awagering account facilities@ exist does not mean that bettors place bets from out-of-state, that they do so by means of interstate wire communications, or that they may do so without infringing federal law. Cohen, of course, does not contend that the Department of Justice or any federal law enforcement agency has ever endorsed a view that interstate transmittal of such bets is lawful.

Gov. Br. at 70.

The disingenuousness of this response is staggering. Now, recognizing the vitality of Defendant=s argument, and bereft of any support to the contrary, the Government has no choice but to concede that OTB indeed is regulated by ' 1084.

This is a fact that the Department of Justice officially recognized long before Defendant=s trial. In comments submitted to the Senate Judiciary Committee on June 9, 1999, Acting Assistant Attorney General Jon P. Jennings expressed the following concern about S. 692, the AInternet Gambling Prohibition Act of 1999":

The Department of Justice notes that S. 692 may incorrectly imply that the Interstate Horse Racing Act of 1978, 15 U.S.C. ' 3001 et seq., allows for the legal transmission and receipt of interstate parimutuel bets or wagers. The Interstate Horse Racing Act does not allow for such gambling, and if a parimutuel wagering business currently transmits or receives interstate bets or wagers (as opposed to intrastate bets and wagers on the outcome of a race occurring in another state), it is violating federal gambling laws.


Letter from the Department of Justice to Senator Leahy Regarding S. 692 (June 9, 1999).[11]

The inescapable fact is that Defendant=s testimony that he modeled WSE after Capital OTB was absolutely relevant to his state of mind with respect to each and every count of the indictment. For if OTB had been operating for decades without any threat of federal prosecution, then Defendant could justifiably conclude that operating his business in an identical manner would not violate federal law. Crucially, Defendant understood that the reason OTB had operated unfettered for so many years was because their account wagering format ensured that only information assisting in the placing of bets or wagers was ever transmitted via interstate or foreign wire communications.


The bottom line is that if the Government would have conceded at trial precisely that which it concedes on appeal B i.e., that OTB and Jay Cohen were in pari delicto, then the jury could never have been instructed that OTB was irrelevant to this case. If the jury had never been so instructed, then it could have been well-positioned to accept Defendant=s use of OTB as a model. As a consequence, the jury could then have appreciated defense counsel=s resulting argument that, if Defendant believed that OTB was not being prosecuted for precisely the same conduct (because, like WSE, OTB was only transmitting information in an account-based wagering system), then Defendant could not have knowingly used a wire communication facility to transmit bets or wagers in foreign commerce. In short, if the jury had been properly instructed, Defendant would have been in a compelling position to have been found not guilty of all charges.

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

 

The Government cannot escape the fact that the longstanding operation of interstate off-track wagering on horse racing, without any interference or threat of prosecution by the Federal Government, was premised upon the very same interpretation of ' 1084(a) that Defendant urges here B namely, that wagering instructions communicated to an account wagering facility constitute no more than information assisting in the placing of bets or wagers.

This same interpretation was incorporated by Congress into various legislative proposals to prohibit Internet Gambling. The Internet Gambling Prohibition Act of 1999, S.692, and the Internet Gambling Prohibition Act of 2000, H.3125, both proposed enactment of a new section to prohibit Internet gambling, 18 U.S.C. ' 1085, in which the term Ainformation assisting in the placing of bets or wagers@ was defined as Ainformation that is intended by the sender or recipient to be used by a person engaged in the business of betting or wagering to place, receive, or to otherwise make a bet or wager.@ S.692, Sec. (a)(5)(A); H.3125, Sec. (a)(5).


The Government suggests that the distinction urged by Defendant Aignores the substance of the transaction@ Gov. Br. at 52, and is not meaningfully different from traditional wagering on credit. Gov. Br. at 64. The Government overlooks fundamental differences in the two practices. First, in the account wagering context, a potential bettor transmits a request to have a bet placed on his behalf with a wagering facility where the bettor has a wagering account. In turn, the bet does not come into existence until the facility verifies that sufficient funds are on deposit, the wager is approved, the account is debited, and the bet is placed within the facility.

In contrast, where an individual calls a bookie and tells the bookie that he wants to bet a certain sum on the outcome of a particular event, on credit, this communication does constitute the entirety of the bet. In the former context, the transmission consists only of instructions to place a wager from a previously funded account, whereas in the latter, the transmission constitutes the wager itself.


Second, by its very nature, account wagering can only take place where the wagering facility is licensed and regulated by the jurisdiction in which it is located. Account wagering is not possible otherwise, because no individual would turn over funds in advance to a bookie running a prohibited gambling operation and then send instructions to wager later. Even the New York General Obligations Law would not protect a bettor against theft of funds transferred in anticipation of wagering, because such funds do not constitute property staked or wagered.[12] Indeed, traditional, unregulated credit wagering is fraught with the potential for loansharking and other criminal activity in connection with debt collection. These problems do not attend the practice of account wagering.

Although the Government claims that Aevery@ case that has Adirectly or indirectly@ addressed Defendant=s argument has rejected it, Gov. Br. at 65, the Government cites only one unreported case, United States v. Ross, No. 98 CR 1174 (KMW), 1999 WL 782749 (S.D.N.Y. Sept. 16, 1999), which even addresses the distinction between Abets or wagers@ per se and Ainformation assisting in the placing of bets or wagers.@  The Government=s reliance on this case is inapposite for a number of reasons.

First, Ross summarily rejects the distinction made by the defendant therein between his casino=s method of prepaid betting and the activities of bookmakers who extend credit, as one based on Amere method of payment.@ Id. at *7. The court thus wholly failed to consider the well-established practice of account wagering, which many states permit to take place via interstate or foreign wire communication facilities in connection with pari-mutuel betting on horse races. See Appellant=s Brief, at 51-54.


Second, Ross relies in significant part on Sagansky v. United States, 358 F.2d 195 (1st Cir. 1966), and United States v. Tomeo, 459 F.2d 445 (10th Cir. 1972), neither of which is factually consistent with the case before this Court and neither of which considered the specific question before this Court. Unlike the case here, Sagansky and Tomeo both involved the direct placement of bets with bookmakers via interstate telephone calls, without the initial establishment and funding of an account with a licensed and regulated account wagering facility. In each case the defendant argued that the word Atransmission@ in ' 1084(a) encompassed only the sending and not the receiving of bets. Both courts held that the word Atransmission@ encompasses both the sending and receiving of bets. Neither decision, however, addressed the question of whether the transmission of wagering instructions to an account wagering facility is a transmission of a bet or wager per se.

Third, the Government ignores the procedural posture of Ross, which was decided upon the defendant=s motion to dismiss. Accordingly, the question before the court in Ross was whether the indictment properly charged the transmission of Abets or wagers,@ see id. at *2-3, and the court=s holding is limited to the proposition that an indictment properly charges transmission of a bet or wager by alleging the act of accepting an offer to bet. Indeed, in Ross, the Government even argued that the issue of whether the defendant Atransmitted bets@ was a factual rather than a legal issue, and that Athis factual issue [could not] be determined on a motion to dismiss.@ Id. at *3 (emphasis added). The Government cannot have it both ways.


Here, the Government=s contention that, as a matter of law, transmission of instructions to place a wager constitutes transmission of the wager itself must be rejected. The simple fact is that, on this full record, the distinction that Defendant draws between Abets or wagers@ per se and Ainformation assisting in the placing of bets or wagers,@ is supported by centuries-old common law, the ongoing, unfettered practice of interstate off-track wagering in several states, including New York, recent federal legislative action, and common sense.

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.

The Government argues, in the alternative, that the evidence established that Defendant=s conduct violated the third clause of ' 1084, which prohibits the transmission of Aa wire communication which entitles the recipient to receive money or credit as a result of bets or wagers.@  18 U.S.C. ' 1084(a). The Government reasons that once an offer to bet was accepted, the communication confirming acceptance Aentitled@ A>a recipient=@ of the communication, either WSE or one of its customers, to A>money or credit as a result of bets or wagers.=@ Gov. Br. at 71. In essence, the Government contends that every bet, once formed, Aentitles@ both parties to the contract to money or credit. Id. The Government=s argument cannot be sustained, either procedurally or substantively.


Undoubtedly recognizing that the specific theory upon which it proceeded to trial is not supported by the evidence, the Government now attempts to resurrect the third clause of ' 1084(a) with a specious theory never advanced below. When questioned by the district court in a pretrial hearing specifically about the application of the third clause, counsel for the Government stated:

 

     If money is wired, for example, from New York to Antigua to set up an account, it would be sent to B that would be something that would be included in the third provision.

 

A170. Questioned further about who would be the Arecipient@ in this scenario, counsel for the Government, after careful consideration of the language in the indictment, stated: AI believe that the recipient would be the defendant.@ A171. The Government thus charged Defendant and proceeded to trial on the theory that the third clause of ' 1084(a) was violated because customers of WSE wired money to the company in Antigua to establish wagering accounts.[13]


The Government cannot now advance a theory premised on entirely different facts and which alleges that the Arecipient@ was either WSE or its customers. These arguments have been waived, and should not be considered by this Court, as they amount to a post hoc amendment of charges. See United States v. Helmsley, 941 F.2d 71, 89 (2d Cir. 1991), cert. denied, 502 U.S. 1091 (1992) (AAn unconstitutional amendment of the indictment occurs when the charging terms are altered, either literally or constructively.@).

Even were this Court to consider the Government=s newly crafted interpretation of the third clause of ' 1084(a), this interpretation is at odds with the statute=s language, structure, and legislative history, and is not supported by the facts. The Government essentially argues that every confirmation of a bet or wager is also a Acommunication which entitles the recipient to receive money or credit as a result of bets or wagers.@  Under this interpretation, the first clause of ' 1084(a) would be superfluous because it would be wholly encompassed by the third clause. An interpretation that would eviscerate the first clause of ' 1084(a), however, contravenes the fundamental principle of statutory construction that a court should A>give effect, if possible, to every clause and word of a statute.=@ United States v. Menasche, 348 U.S. 528, 538-39 (1955) (quoting Montclair v. Ramsdell, 107 U.S. 147, 152 [1883]). As the Government itself has pointed out, an interpretation of the statute that would negate the first clause of ' 1084(a) would be just the sort of A>absurd=@ result that statutes should be interpreted to avoid. See Gov. Br. at 64-65 (quoting United States v. Daury, 215 F.3d 257, 264 [2d Cir. 2000]).


The Government=s interpretation, moreover, is directly at odds with the legislative history of ' 1084. In emphasizing that the exemption in ' 1084(b) applies only to information assisting in the placing of bets and wagers, the House Report states: ANothing in the exemption, however, will permit the transmission of bets and wagers or money by wire as a result of a bet or wager from or to any State whether betting is legal in that State or not.@  H.R. Rep. No. 87-967, 87th Cong., 1st Sess. (1961), reprinted in 1961 U.S.C.C.A.N. 2631, 2633 (emphasis added). The legislative history thus clarifies that Aa wire communication which entitles the recipient to receive money or credit as a result of bets or wagers@ indeed constitutes a wire transmission of proceeds of a bet or wager, or notice that one is entitled to receive such proceeds,[14] not mere confirmation that a bet has been placed in a remote jurisdiction on a caller=s behalf. As the Government established during its case in chief, this provision could not apply to Defendant, since WSE did not return money to its customers via wire, even upon request, but only via bank draft sent by regular mail or Federal Express. Tr. at 83; see also Tr. at 131-33.


In addition, the Government=s argument is premised upon a misapprehension of the facts. The Government contends that WSE Awas entitled to 10% of the bet no matter what the outcome of the sporting event.@  Gov. Br. at 71. Although the Government makes no citation to the record, this apparently refers to the testimony of one agent who, conceding that she Adidn=t learn too much about the different types of wagers,@ commented in response to a question about the definition of a Astraight wager@ that, where an individual bets A55 to win 50,@ there is a A10 percent fee to place that bet.@  Tr. at 157. In fact, however, as another agent testified, where an individual bets A55 to win 50" and wins, the bettor takes $105, and the gambling business takes nothing. Tr. at 71-72. Accordingly, the bet itself Aentitles@ the business to nothing. Likewise, it Aentitles@ the bettor to nothing.

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

 

The Government attempts to characterize Defendant=s argument that the evidence failed to establish that Defendant knowingly transmitted bets or wagers in foreign commerce as Ajust another way of arguing that ignorance of the law is a defense to the crime.@  Gov. Br. at 75. This claim is meritless.


The Government concedes that the knowledge requirement applies to all factual elements of a violation. Gov. Br. at 74. In this case, as the Government recognizes, the Government must prove Athat the defendant >knowingly= used a wire communication facility in interstate or foreign commerce for a purpose proscribed by the statute.@  Gov. Br. at 75 (emphasis added). Accordingly, the Government must prove that Defendant knew that what was being transmitted was in fact a bet or wager, and not merely information assisting in the placing of a bet or wager. This is no different from a requirement that the Government must prove that a defendant charged with drug distribution knew that the substance in question was a controlled substance and not, for instance, baking soda. This is a question of fact, not law.

In short, while Defendant maintains that knowledge of the wrongfulness of his actions is required to support his conviction for conspiracy, see Point III, infra, he makes no such argument with respect to the substantive counts. Defendant does contend, however, as explained in Point I.B, supra, that, in view of the exemption set forth in ' 1084(b), the undisputed evidence failed to establish that he knowingly transmitted bets or wagers in violation of ' 1084. This failure of proof requires reversal of convictions on all counts. At the very least, because the district court=s instructions precluded the jury from making the appropriate factual determinations,[15] this case should be remanded for a new trial.


                           POINT II

THE RULE OF LENITY MANDATES THAT DEFENDANT=S CONVICTIONS BE REVERSED AND THE CHARGES AGAINST HIM DISMISSED

 

The Government=s claim that ' 1084 provided Defendant with fair notice that his conduct was proscribed is preposterous in view of the decades-old practice of interstate off-track wagering, recent federal legislative efforts to clarify the Wire Act, and recent efforts in New York to protect consumers who wager with offshore Internet enterprises. The ambiguities in ' 1084 indeed are Agrievous@ as applied to Defendant. See Gov. Br. at 78 (citing Huddleston v. United States, 415 U.S. 814, 831 [1974], United States v. Collado, 106 F.3d 1097, 1107 [2d Cir. 1997]). Aside from noting the Government=s about-face on the applicability of ' 1084 to OTB (see Point I.B, supra), perhaps in this regard Defendant need go no further than referring to recently proposed federal legislation which would have directly and specifically prohibited Internet gambling.


The Government suggests that Defendant=s Rule of Lenity argument is based solely on the absence of special statutory definitions of the terms Abets or wagers@ and Alegal.@  Gov. Br. at 78. As explained previously, see Appellant=s Br. at 63-66, Defendant=s argument that the Rule of Lenity requires reversal of his convictions is based on much more. Not only does the statute fail to provide definitions for these terms, which are susceptible to multiple interpretations, but the National Association of Attorneys General has concluded that the statute is Aambiguous,@ and, as noted, Congress has attempted to clarify these ambiguities in several pieces of proposed legislation. As discussed, see Point I.C, supra, the Internet Gambling Prohibition Act of 1999, S.692, and the Internet Gambling Prohibition Act of 2000, H.3125, each provide for definitions of Ainformation assisting in the placing of bets and wagers@ that accord with Defendant=s interpretation of that phrase. Each bill also contains a definition of Abets and wagers.@

Moreover, the Government=s contention that the district court=s interpretation of the terms Abets and wagers@ and Alegal@ in ' 1084 were Aforecasted by many sources@ is entirely without support. As shown in Point I.A, supra, the fact that many cases have held that Ataking bets@ B in other words, operating a gambling business B is prohibited in New York does not implicate either the legal status of placing a bet in New York nor the meaning of the term Alegal@ as it is used in ' 1084(b). Likewise, for reasons discussed in Appellant=s Brief, the cases that the Government cites as upholding the convictions of others for Avirtually@ the same conduct at issue in this case, see Gov. Br. at 79, do no such thing. Indeed, the very fact that we are even debating Alegal@ versus not criminal on this appeal, alone establishes unconstitutional ambiguity.


The Rule of Lenity, as a component of Due Process, prohibits a conviction predicated on a statute that does not fairly warn of what it proscribes. United States v. Lanier, 117 S.Ct. 1219, 1225 (1997). As applied in this case, ' 1084 did not fairly warn Defendant that establishing an offshore gambling business in a jurisdiction where such business is licensed and regulated, and modeling its operating procedures after gambling enterprises in the United States subject to the same legal restrictions, violated its provisions. Accordingly, Defendant=s convictions should be reversed and this case dismissed.


                           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

 

In response to Defendant=s argument that this Court should finally embrace the principle set forth in People v. Powell, 63 N.Y. 88, 2 Cow. Cr. Rep. 283 (1875), that a conviction for conspiracy to engage in acts that are not inherently wrongful requires proof of a corrupt or evil motive, the Government attempts to establish that the Powell doctrine was never widely accepted in the federal courts, that the doctrine has been Aunequivocally@ rejected by this Court and the Supreme Court, and that adopting it now would open the floodgates to claims of error in countless conspiracy convictions. Not only is the Government wrong, but it conveniently ignores many still-viable federal precedents as well as express language limiting the reach of United States v. Feola, 420 U.S. 671 (1975), on which it so heavily relies. The Government=s fallback floodgates argument, moreover, exaggerates both the reach of Powell and the potential for viable post-conviction petitions for relief.

In the final analysis, contrary to what it ascribes to Defendant, it is actually the Government which asks this Court to ignore or "overrule precedents stretching back to the beginning of the last century." Gov. Br. at 47.


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

 

The Government=s efforts to diminish the Powell doctrine  are misleading and unavailing. In its attempt to portray the Powell doctrine as antiquated and without meaningful support in the federal courts, the Government suggests that it has not been cited with approval beyond a handful of decisions issued during or prior to the 1930s, and that it has never been endorsed by the Second Circuit. See Gov. Br. at 36. In fact, the doctrine has enjoyed considerably more support than the Government is willing to acknowledge.

As discussed in Appellant=s Brief, The First, Sixth, Eighth, Tenth, and D.C. Circuits have, at various times, cited the Powell doctrine with favor. Appellant=s Br. at 22-24, citing United States v. Previte, 648 F.2d 73, 81-82 (1st Cir. 1981); Landen v. United States, 299 F. 75, 78 (6th Cir. 1924) Fall v. United States, 209 F. 547, 553 (8th Cir. 1913); Cruz v. United States, 106 F.2d 828, 830 (10th Cir. 1939); United States v. Barker, 514 F.2d 208, 233 (D.C. Cir. 1975) (en banc) (Bazelon, C.J., concurring).


 Notably, in Previte, which was decided after Feola, the First Circuit recognized the Powell doctrine as a viable doctrine Alimited to cases in which an alleged objective may be completely innocent and unobjectionable.@  648 F.2d at 81. The Previte court did not apply the doctrine, however, because it concluded, citing  Feola, that the gratuity offenses alleged to be the objects of the conspiracy in that case required guilty knowledge. Id. at 82. Previte thus makes clear that, as discussed in more detail in Part I.B, infra, the Powell doctrine indeed survives Feola.

Likewise, in United States v. Reminga, 493 F. Supp. 1351, 1361 (W.D. Mich. 1980), a post-Feola case wholly ignored by the Government, the court, based on the Acorrupt motive@ doctrine and citing both Powell and Landen, granted the defendant=s motion for acquittal as to the count of conspiracy to engage in the business of dealing in firearms. Landen thus remains viable precedent in the Sixth Circuit, as do Previte, Fall, and Cruz, in their respective circuits.

The Reminga court, moreover, observed that the Acorrupt motive@ doctrine is grounded in sound reasoning. 493 F. Supp. at 1361. First, the danger arising from the act of agreeing to undertake certain acts is less when the actors are not motivated by criminal intent. Second, the likelihood of ongoing criminal activity is virtually nonexistent where the actors agree to undertake acts that are not inherently wrongful and not known by them to be illegal, because they are not likely to undertake similar acts upon learning of their illegality. Id. (citing LaFave & Scott, Criminal Law, at 469-70). These principles remain of undiminished validity.

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

 


In its zeal to claim that this Court and the Supreme Court have Aunequivocally@ rejected the Powell doctrine, see Gov. Br. at 34, the Government single-mindedly focuses on broad-based language in Feola and conveniently ignores both the precise issue in that case as well as the Supreme Court=s express language declining to rule on the Powell doctrine. The Government's result-oriented analysis, moreover, simply overlooks those authorities that do not support its ultimate premise.

The Government asserts, for instance, that "[t]his Court again rejected the Powell doctrine in United States v. Mack, 112 F.2d 290 (2d Cir. 1940)," Gov. Br. at 38, just before jumping to its analysis of the Supreme Court's 1974 ruling in Feola. The Government wholly fails to mention, however, this Court=s post-Mack decision in United States v. Crimmins, 123 F. 2d 271 (2d Cir. 1941), in which Judge Learned Hand, the author of Mack, effectively did an about-face and sanctioned application of the Powell rule under appropriate facts.

The Government further ignores the Supreme Court's discussion of Crimmins in Feola. Far from overruling Crimmins, which remains a precedent of this Court, the Supreme Court in Feola merely delimited its application to appropriate circumstances. Specifically, the Feola court discussed at some length the famous "traffic light" analogy articulated by Judge Hand in Crimmins, an analogy which, the Court noted, comes close to stating the Powell doctrine. See Feola, 420 U.S. at 691. Rather than rejecting the analogy outright, the Supreme Court merely noted its limited applicability:


[t]he traffic light analogy poses the question whether it is fair to punish parties to an agreement to engage intentionally in apparently innocent conduct where the unintended result of engaging in that conduct is the violation of a criminal statute.

420 U.S. at 691. However, the Court went on to expressly state that Athis case does not call upon us to answer this question, and we decline to do so, just as we have once before. United States v. Freed, 401 U.S. [601], at 609 n.14 [1971]."  Feola, 420 U.S. at 691.

Far from rejecting the reasoning of Crimmins, therefore, Feola only found Crimmins to be inapplicable to the particular facts of that case, in which the underlying conduct, assault, was clearly wrongful and not apparently innocent. See Feola, 420 U.S. at 692. As the Court stated, A[i]f the [traffic light] analogy has any vitality at all, it is to conduct of the latter variety; that, however, is a question we save for another day."  Id.

It is thus clear that the Crimmins case, which, contrary to Mack, appears to embrace the Powell doctrine, and its progeny, see United States v. Mauro, 501 F.2d 45, 50, n.2 (2d. Cir) (collecting cases), cert. denied, 419 U.S. 969 (1974), have never been overruled. All the Feola Court found was that Crimmins itself was an inappropriate vehicle in which to explicate upon the Powell doctrine:


In Crimmins, the substantive offense, namely, the receipt of stolen securities that had been in interstate commerce, proscribed clearly wrongful conduct. Such conduct could not be engaged in without an intent to accomplish the forbidden result. So, too, it is with assault, the conduct forbidden by the substantive statute, '111, presently before us. One may run a traffic light 'of whose existence one is ignorant,' but assaulting another 'of whose existence one is ignorant,' probably would require unearthly intervention. Thus, the traffic light analogy, even if it were a correct statement of the law, is inapt, for the conduct proscribed by the substantive offense, here assault, is not of the type outlawed without regard to the intent of the actor to accomplish the result that is made criminal.

 

420 U.S. at 691-2.

By its own admission, the Supreme Court's precise ruling in Feola was rather narrow:

We hold here only that where a substantive offense embodies only a requirement of mens rea as to each of its elements, the general federal conspiracy statute requires no more.

 

Id. at 692.[16] Neither this Court, nor the Supreme Court has revisited the issue ever since.

Moreover, even if "Feola has been universally recognized as announcing a principle of general application to conspiracy charges," Gov. Br. at 41, the Government fails to mention the indisputable fact that no court which has referenced Feola has had occasion to revisit the narrowly circumscribed Powell issue. The Government also ignores the fact that none of the cases in sister circuits which support the doctrine have ever been overruled. Consequently, this Court is free to consider whether the so delimited corrupt motive doctrine should now be held to apply to the circumstances underlying the conspiracy charged in this case.


C.   The Facts of this Case Uniquely Implicate the Powell Doctrine.     This appears to be the first post-Feola case in which the Powell doctrine has been raised as a distinguishing factor.[17] The undisputed facts of this case, in contrast to those in Crimmins and Feola, uniquely implicate the Powell doctrine, for they establish that Defendant engaged in conduct that was not clearly wrongful and which, indeed, could be engaged in Awithout an intent to accomplish the forbidden result." Feola, 420 U.S. at 691.[18]

As the Government has frequently stated, unlike the statute involved in Feola, 18 U.S.C. ' 111, the statute in this case, 18 U.S.C. ' 1084, contains no requirement of criminal intent or inherent awareness of wrongfulness. See Gov. Br. at 75 ("Rather, unless the 'text of the statute dictates a different result, the term "knowingly" merely requires proof of knowledge of the facts that constitute the offense.'@ [citation omitted]); cf. Feola, 420 U.S. at 686 ("[' 111] does require a criminal intent . . . . We hold, therefore, that in order to incur criminal liability under ' 111 an actor must entertain the criminal intent to do the acts therein specified.").[19]


The Government cannot have it both ways. As noted in Appellant=s Brief, in an instance which parallels Defendant=s situation, the Supreme Court has ruled that a conspiracy conviction cannot lie. Specifically, in United States v. Keegan, 325 U.S. 478 (1945), the majority found that a conspiracy to commit a statute which was "innocent[ly]" and "honestly" believed to be unconstitutional was not sufficiently established. As therein stated:

One with innocent motives, who honestly believes a law is unconstitutional and, therefore, not obligatory, may well counsel that the law shall not be obeyed; that its command shall be resisted until a court shall have held it valid, but this is not knowingly counselling, stealthily and by guile, to evade its command.

 

325 U.S. at 493-94 (emphasis added).[20]

 

Here, the record establishes beyond dispute that Defendant took objectively reasonable and affirmative measures to ensure that his conduct was not prohibited by law. Indeed, Defendant took affirmative measures to ensure that his actions were specifically sanctioned, and regulated, under the laws of the jurisdiction in which he ultimately located his business. He also modeled his interstate activities after New York=s Capital OTB, which had been engaging in interstate betting activity for decades without any Government interference. See Point I.B, infra.


Under such circumstances, contrary to the facts in those  cases cited by the Government, there simply was no mens rea, no criminal intent, motivating Defendant's conduct. Indeed, as the Government has urged throughout, none was even required by 18 U.S.C. ' 1084. Accordingly, unlike the ' 111 violation involved in Feola, unlike the receipt of stolen securities complained of in Crimmins, and unlike the harboring of illegal aliens in Mack, the conduct proscribed by the statute in this case is certainly "of the type outlawed without regard to the intent of the actor to accomplish the result that is made criminal." Feola, 420 U.S. at 692. As a result, as expressly reserved by the Feola Court, this Court is free to consider the applicability of the Powell doctrine to Defendant's indisputably innocent state of mind.

In sum, the Powell doctrine remains ripe for consideration. We respectfully submit that (a) where, as here, Defendant firmly believed that he was acting in compliance with law; (b) where Defendant took every reasonable measure to legitimize such belief; (c) where local Antiguan law unequivocally sanctioned his conduct, and (d) where such conduct, therefore, was not inherently wrongful, the Powell rule should prevent the imposition of conspiratorial liability.

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


Seemingly unmindful that, in the contrasting situation where an offense is mala in se or notoriously prohibited, an intent to commit the underlying crime effectively establishes, per se, the existence of a "corrupt motive" for purposes of conspiratorial liability,[21] the Government contends that endorsement of the Powell doctrine would require courts to venture into standardless decisionmaking about the distinction between conduct that is mala in se and that which is malum prohibitum. The Government further claims that this would inject error into countless conspiracy cases. Gov. Br., at 35. These dire predictions are unavailing.

Were this Court to apply the Powell doctrine in the unique factual context presented by this appeal, its precedential effect would reach only that narrow class of cases in which the underlying conduct is not inherently or notoriously wrongful and where, based on objectively cognizable factors, it is clear that the actor firmly believed that the law sanctioned such conduct. See, e.g., Previte, 648 F.2d 73 at (noting that "the Powell doctrine is limited to cases in which an alleged objective may be completely innocent and unobjectionable"). Moreover, far from placing the courts in the position of having to reconsider and vacate countless conspiracy convictions, the Acorrupt motive@ doctrine could only apply where, as here, the defendant had made a timely protest to any contrary instructions. See United States v. Vasquez, 116 F.3d 58, 60 (2d Cir. 1997).


Practically, as gauged by the lack of any judicial intrusion into this area over the last several decades, the doctrine  certainly has not been asserted in recent times. Again, that is undoubtedly due to the fact that it is the rare case, indeed, in which the evidence unequivocally demonstrates not only that a defendant lacked any corrupt motive, but, to the contrary, that he undertook specific and objectively appropriate measures to reassure himself of the lawfulness of the actions taken.

Under such circumstances, it is decidedly hyperbolic, if not grossly untenable, for the Government to argue that "Cohen asks the Court not only to overrule precedents stretching back to the beginning of the last century but, in the process, to inject error in countless conspiracy prosecutions." Gov. Br. at 47. Defendant simply asks the Court to examine the availability of conspiratorial liability, in a unique case such as this, where an accused's alleged conspiratorial conduct indisputably was motivated by the belief that it fully complied with applicable law. After all, how often does such a rare case get prosecuted, let alone result in a conviction?


The fact remains that every one of the post-Feola cases cited by the Government, Gov. Br. at 41-43, involved either inherently or notoriously wrongful conduct which the actor knew, or should have known, was proscribed at the time of its commission.[22] See United States v. Eisenberg, 596 F.2d 522 (2d Cir. 1979) (interstate transportation of counterfeit checks); United States v. Salameh, 152 F.3d 88 (2d Cir. 1998), cert. denied, 525 U.S. 1112 (1999)(bombing populated buildings and structures); United States v. Herrera, 584 F.2d 1137 (2d Cir. 1978) (harboring illegal aliens and using facilities in interstate commerce to operate an illegal enterprise); United States v. Podell, 519 F.2d 144 (2d Cir. 1975) (bribery, perjury and defrauding the United States); United States v. Murray, 928 F.2d 1242 (1st Cir. 1991) (operating an illegal gambling business in violation of state law, under 18 U.S.C. '1955); United States v. Thomas, 887 F.2d 1341 (9th Cir. 1989) (violation of Lacey Act under 16 U.S.C. '' 3371 et seq., involving interstate transportation or acquisition of wildlife protected by state, tribal and federal laws); United States v. McDougal, 25 F.Supp.2d 85 (N.D.N.Y. 1998), aff'd, 216 F.3d 1074 (2d Cir. 2000) (table) (same).[23]


The sort of inherently wrongful conduct involved in the above-cited cases simply is not what is before the Court in this appeal. Rather, the record here shows that Defendant undertook legitimate and objectively reasonable measures to satisfy himself that he was acting lawfully. Defendant is not aware of any cases  presenting this unique factual scenario in this circuit or the Supreme Court since Keegan. Under these circumstances, the still-viable Powell doctrine should be embraced by this Court, which should thereby reverse Defendant=s conviction for conspiring to violate the law.


                           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

 

In arguing that the district court properly refused to permit the deposition of Gyneth McAllister, the Government ignores significant portions of McAllister=s proffered testimony and mischaracterizes the propositions for which such testimony would have been probative.

The Government contends that McAllister concluded that the United States tacitly accepted offshore Internet gambling targeted at U.S. customers based on the Amere fact@ that U.S. officials Awere willing to meet with her and did not specifically inform her@ that such activity would violate ' 1084. Gov. Br. at 91. The Government ignores the fact that McAllister would have testified that the U.S. officials with whom she met expressed interest in helping to strengthen Antiguan gaming regulations and in protecting U.S. customers who gambled with Antiguan companies. More importantly, the Government ignores the fact that McAllister would have testified that she communicated these facts to Defendant.


These facts, along with the other facts to which McAllister would have testified, see Appellant=s Br. at 73-76, were probative of two key issues: (1) with respect to the conspiracy count, whether Defendant had a corrupt motive to violate the law; and (2) with respect to the substantive counts, whether Defendant knew that bets or wagers per se, and not merely information assisting in the placing of bets or wagers, were transmitted in foreign commerce. Defendant did not, as the Government suggests, proffer this testimony based on the premise that Defendant had to know that he was violating the law in order to be convicted of the substantive counts.

The proffered testimony indeed tended to show that Defendant believed that only information assisting in the placing of bets or wagers was transmitted in foreign commerce. The exclusion of this crucial proof was an abuse of discretion, let alone a constitutional deprivation, see Washington v. Schriver, ___ F.3d ___, 2001 WL 125332 *8 (2d Cir. 2001), which mandates a new trial.


                            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

 

Throughout this prosecution, as dramatically reflected in its requests to charge, the Government=s express theory of aiding and abetting liability on Defendant's part was based solely upon 18 U.S.C. ' 2(a). Yet, now, in response to Defendant's meritorious complaint that the District Court's duly protested instructions under that specific theory of criminal liability were egregiously deficient, the Government B implicitly conceding the viability of Defendant's challenge B now asks this Court to uphold these convictions under ' 2(b). The Government's position simply cannot be sustained, for it effectively advocates that this Court now lend its imprimatur to what would surely amount to an unconstitutional constructive amendment to the indictment.

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

 


Curiously ignored in the Government's brief is the daunting B  and rather inconsistent B reality that, during trial, the Government submitted its proposed jury instruction regarding aiding and abetting liability under 18 U.S.C. ' 2(a). Specifically, despite the Government=s now revised claim that its theory of liability was based on the second paragraph of the aiding and abetting statute, namely 18 U.S.C. ' 2(b), the Government=s own proposed instruction solely contemplated the actual participation in the commission of a criminal act (18 U.S.C. ' 2[a]), as opposed to the causation of an act, which, if committed, would only then amount to an offense, as provided in 18 U.S.C. ' 2(b).

The Government's proposal, in its entirety, provided:

Counts Two through Eight of the Indictment also charge the defendant with aiding and abetting the crime of being engaged in an illegal gambling operation.

 

The aiding and abetting statute is set forth in Title 18, United States Code, Section 2. That statute provides, in pertinent part:

 

Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.

 

Under the aiding and abetting statute, it is not necessary for the Government to show that a defendant himself physically committed the crime with which he is charged B here, the gambling transmissions charged in Counts Two through Eight B in order for your to find that the defendant guilty of that offense. Thus, if you do not find beyond a reasonable doubt that the defendant himself committed the crime charged, you may, under certain circumstances, still find the defendant guilty as someone who aided and abetted another person in the commission of the offense.

 

A person who aids or abets another to commit an offense is just as guilty of that offense as if he committed it himself. Accordingly, you may find that defendant guilty if you find beyond a reasonable doubt that the Government has proved that someone else committed the crime, and that the defendant aided and abetted that person in the commission of the offense.

 

As you can see, the first requirement is that another person has agreed with the defendant to commit the crime charged. Obviously no one can be convicted of aiding and abetting the criminal acts of another if no crime was committed by the other person in the first place. But if you do find that a crime was committed, then you must consider whether the defendant you are considering aided or abetted the commission of the crime.

 


In order to aid or abet another to commit a crime, it is necessary that the person knowingly agreed to associate himself in some way with the crime, and that he agreed o knowingly seek by some act to help make the crime succeed.

 

A820-21(emphasis added).

 

Thereafter, the District Court held a charging conference in which it reviewed and ruled upon the parties= proposed instructions. During the conference, the Government referred to its submitted charge, noting Ait=s the standard aiding and abetting charge.@ Tr. 1064. The Government then cited to specific language in ' 2(a), contained within its charge request, stating A[t]he >counsels, commands, produces or procures its commission= language I think is sufficient.@  Tr. 1064.

The District Court agreed and ruled that it would instruct the jury in accordance with the Government=s proposed instruction regarding aiding and abetting liability. Tr. 1064-1065. Despite the foregoing, as argued in Defendant's principal brief, at pp. 67-71, the District Court failed to charge the jury with respect to 18 U.S.C. ' 2(a).

B.   Discussion.

The Government's current position, which tacitly acknowledges the correctness of Defendant's challenge by not even attempting to salvage the District Court's instructions under 18 U.S.C. ' 2(a), effectively asks this Court to amend the indictment. That is because, in so arguing, the Government seeks to have this Court sustain this conviction upon an amended theory of criminal liability, wholly distinct from that upon which Defendant stood trial, and upon which he fashioned his defense. Respectfully, the Court must decline this invitation.


A constructive amendment of an indictment is per se violative of the grand jury clause of the Fifth Amendment. United States v. Danielson, 199 F.3d 666, 669 (2d Cir. 1999); United States v. Zingaro, 858 F.2d 9498 (2d Cir. 1988); see also, United States v. Rochko, 969 F.2d 1, 5 (2d Cir. 1992); United States v. Mollica, 849 F.2d 723 (2d Cir. 1988); United States v. Weiss, 752 F.2d 777, 786-787 (2d Cir. ), cert denied, 474 U.S. 944 (1985); United States v. Floresca, 38 F.3d 706 (4th Cir. 1994) (en banc) (upon reversing conviction, court held that a constructive amendment claim is reviewable, absent preservation, as plain error).

Generally, A[a]n unconstitutional amendment of the indictment occurs when the charging terms are altered, either literally or constructively[,]@ United States v. Helmsley, 941 F.2d 71, 89 (2d Cir. 1991), cert. denied, 502 U.S. 1091 (1992). Thus, a constructive amendment arises when the terms of the indictment are in effect altered by the presentation of evidence and jury instructions which so modify essential elements of the offense charged that there is a substantial likelihood that the defendant may have been convicted of an offense other than that charged in the indictment. United States v. Wallace, 59 F.3d 333, 337 (2d Cir. 1995) (quoting United States v. Mollica, 849 F.2d 723, 729 (2d Cir. 1988).


If upheld, the Government's revised view of this case would accomplish, on appeal, just such a result in altering, post hoc, the charging terms upon which Defendant stood trial. As demonstrated by the Government=s own proposed request to charge and remarks at trial, it was always professed to be the Government=s theory of aiding and abetting upon the provisions of 18 U.S.C. ' 2(a) alone. Therefore, that was the theory upon which the defense was constructed, in specifically seeking to convince the jury that no crime was actually committed by virtue of the operation having been solely conducted in Antigua. Accordingly, it is respectfully submitted that the case must rise or fall on the legitimacy of the District Court=s charge under 18 U.S.C. ' 2(a), at pains of a broadening of the prosecutorial theory in violation of these constructive amendment principles.

As contended in Defendant's principal brief (Appellant=s Br. at 67-71), and as attested to by the failure of the Government even to attempt to justify the Court's charge, it is clear that the District Court's instructions with respect to ' 2(a) were egregiously deficient. They simply did not advise the jury that,

"To convict a defendant on a theory of aiding and abetting, the government must prove that the underlying crime was committed by a person other than the defendant and that the defendant acted . . . with the specific purpose of bringing about the underlying crime." United States v. Best, 219 F.3d 192, 199 (2d Cir.2000).

 

United States v. Samaria, 239 F.3d 228, 2001 WL 55383, *4 (2d Cir. 2001). Consequently, this record presents clear and well-preserved error which mandates a reversal of Defendant's convictions.


                          CONCLUSION

FOR THE REASONS STATED HEREIN AND IN APPELLANT=S BRIEF, THE JUDGMENT OF CONVICTION SHOULD BE REVERSED AND ALL COUNTS SHOULD BE DISMISSED; ALTERNATIVELY, FOR SUCH REASONS, A NEW TRIAL SHOULD BE ORDERED.

 

Dated:    New York, New York

March 2, 2001

 

 

 

Respectfully submitted,

 

BRAFMAN & ROSS, P.C.

Attorneys for Defendant-                                     Appellant Jay Cohen

767 Third Avenue, 26th Floor

New York, New York 10017

212 750-7800

 

 

By:                     

MARK M. BAKER

 

 

 

 

BENJAMIN BRAFMAN

MARK M. BAKER

JENNIFER LIANG

MELINDA SARAFA

 

Of counsel


                   Certificate of Compliance

 

                      (FRAP 32[a][7][C])

 

 

I, Mark M. Baker, an attorney at law duly admitted to practice in the United States Court of Appeals for the Second Circuit, hereby certifies that, although the within Reply Brief on behalf of Defendant-Appellant does not comply with the word  limitation contained in Fed. R. App. P. 32 (a)(7)(B)(ii), in that, according to the word count in the word-processing system used to prepare such brief, there are 12,848 words, Defendant-Appellant was previously granted leave to file a principal brief containing 19,964 words, Appellee has been granted leave to file a principal brief containing 24,721 words, and Defendant-Appellant has moved, in conjunction with this filing, pursuant to Local Rule 27(g), for permission to file such oversized Reply Brief.

Dated:    New York, New York

March 2, 2001

 

 

 

                          

MARK M. BAKER



[1]  As discussed in Appellant=s Brief at 51-54 and in Point I.B, infra, off-track betting facilities in several states have engaged for many years in interstate account wagering in the same manner as Defendant, with no special exemption from the provisions of ' 1084. Counsel is aware of no prosecution for such activity. In addition, hundreds of offshore Internet and telephone gambling businesses are currently in operation, yet counsel is aware of no prosecutions for such activity since Defendant and several others were charged in the Southern District of New York in March 1998.

[2]  First, the Government claims that, A[l]ike most bookies, Cohen and his conspirators derived profits not from winning on a particular bet or group of bets, but from commissions, commonly known as >vig= or >juice,= on each bet. At Cohen=s book , the >vig= typically was 10% of the amount of the bet.@ Gov. Br. at 5. There is no support in the record for this proposition. As discussed in Point I.D, infra, WSE did not charge commissions on bets. Rather, as indicated by the testimony of the Government=s own agent, WSE=s revenues depended upon the balance of bets placed and whether each individual bet was won or lost by the bettor, not on any commission or fee. See Tr. at 71-72.

 

Second, the Government states, without any citation to the record, that ACohen continued through much of the trial to serve as president of WSE and to oversee its book-making activities in the United States.@ Gov. Br. at 5. In fact, as Cohen testified, after he voluntarily surrendered, he became the inactive President of WSE and did not deal with its daily operations. A654-55. Furthermore, there was no evidence that any Abook-making activities@ took place in the United States.

 

Third, the Government states that the National Football League Ahad accused Cohen of violating the Wager Act and other laws in an unsuccessful effort to halt his use of certain trademarks.@ Gov. Br. at 5-6. As Cohen=s uncontradicted testimony established, WSE settled the matter without litigation by agreeing to cease their use of team names and to take down links to official websites of the major sports leagues. A515-16.

 

Fourth, the Government states that its undercover agents were never Atold that their bets were conditional or subject to rejection.@ Gov. Br. at 12. This is misleading. The evidence established that, prior to wagering, a potential bettor had to send money to WSE in Antigua to fund a wagering account.  See Tr. at 53-54. Further, the WSE Rules and Regulations state that WSE reserves the right to refuse any wager prior to its acceptance. A348.                                     (cont=d)

 

Finally, the Government claims that Cohen never sought counsel from any lawyer after receiving the letter from the law firm representing several major sports leagues. Gov. Br. at 15. The cited testimony, however, entirely fails to support this proposition. See A947-49. Moreover, as the Government is well aware, Defendant did consult counsel after receiving such correspondence, as included in the Government=s response to Defendant=s pretrial motions is correspondence from the law firm in question to Defendant=s legal counsel. See Gov.=s Mem. of Law in Response to Def.=s Pretrial Motions, Ex. D.

[3]  Sections 5-401, 5-411, 5-413, 5-415, and 5-419 of the New York General Obligations Law were formerly Sections 991, 992, 993, 1385, and 994 of the New York Penal Law, respectively. Each of these Penal Law sections was repealed by ' 500.05 of the Penal Law of 1965, effective September 1, 1967. The current sections of the General Obligations Law became effective on the same date. The removal of these sections from the Penal Law and insertion into the purely civil General Obligations Law underscores their remedial, not penal, role.

[4]  See also Watts v. Malatesta, 261 N.Y.S. 51, 54, 237 A.D. 558, 561 (Sup. Ct. N.Y. Co. 1932) (Watts I) (APlaintiff, on the other hand, has committed no crime in making the wager and in delivering to defendant, in payment of his losses, the checks in evidence. The statute clearly intended that he should recover the amounts paid by him.@).

[5]  The bill text, status, and sponsor=s memorandum are available at http://leginfo.state.ny.us:82/NYSLEG/bstfrmef.cgi.

[6]  In fact, the WSE Rules and Regulations provided that WSE Areserves the right to refuse any wager prior to its acceptance.@ A348.

[7]  See Appellant=s Br. at 52-53 & n.17.  Although the definition of Ainterstate off-track wager@ in the Interstate Horseracing Act of 1978 was expanded on December 21, 2000, to include wagers placed by an individual in one state via telephone or other electronic media and accepted by an off-track betting system in the same or another state, Pub. L. No. 106-553, ' 629, 114 Stat. 2762 (amending 15 U.S.C. ' 3002[3]), ' 1084 has not been amended since Defendant=s trial.  The amendment to the Interstate Horseracing Act arguably would preclude prosecution of OTB at this juncture.

[8]  The trial judge, conceding that he had not thoroughly reviewed the matter, had previously opined that Athere=s, at least, an indication that an analogy to off-track betting is not on point@ because of the existence of the Interstate Horseracing Act of 1978.@ A525.

[9]  Not surprisingly, the Government cites not one such authority in its brief.

[10]  The district court instructed the jury that Aanything that you have heard about New York state law, or off track betting, is really not relevant to our case because the case doesn=t arise under the off track betting regulations of New York State or any state law at all.  It is under the federal statute.@ A857.  This was reversible error.  See Appellant=s Br. at 61.

[11]  This letter is available at the Department of Justice=s website at http://www.usdog.gov/criminal/cybercrime/s692ltr.htm.

[12]  See N.Y. Gen. Obl. Law ' 5-419; Cf. United States v. Truesdale, 152 F.3d 443, 449 n.5 (5th Cir. 1998) (concluding that, under Texas law, receiving money to facilitate the placing of a wager at a later time does not constitute a bet).

[13]  As the Government apparently has come to realize, this theory fails because such wire transfers did not Aentitle@ WSE to anything.  The evidence established that a potential bettor would wire money to Antigua solely to establish a wagering account.  The establishment and funding of wagering account did not constitute the placement of a wager or instructions to wager. Rather, it facilitated subsequent wagering from the offshore wagering account upon instruction by a WSE customer. An individual could wire money, never place a bet, and then request that the money be returned, which WSE would do by sending a bank draft via regular mail or Federal Express. Accordingly, wire transfers to establish wagering accounts Aentitled@ WSE to nothing. Cf. Truesdale, 152 F.3d at 449 n.5 (concluding that, under Texas law, receiving money to facilitate the placing of a wager at a later time does not constitute a bet).

[14]  In fact, consistent with its apparently inability to sustain a single theory of prosecution, the Government indicated in its response to Defendant=s pretrial motions that the third clause refers to Agambling winnings information.@  Gov.=s Mem. of Law in Opposition to Def.=s Pretrial Motions, at 15, n. 13.

[15]  See Appellant=s Br. at 59-61; see also Defendant=s Requests to Charge, Nos. 5 & 7, at A775, A777.

[16]  AMens rea,@ as an element of criminal responsibility, is  defined as "a guilty mind; a guilty or wrongful purpose; a criminal intent." Black's Law Dictionary 985 (6th ed.1990).

[17]  As noted previously, the defendant in United States v. Blair, 54 F.3d 639 (10th Cir. 1995), a case heavily relied upon by the Government, made no effort, via Powell or otherwise, to distinguish Feola from the facts of his case, which also involved 18 U.S.C ' 1084. See Appellant=s Br., at 36, n.9.

[18]  The Government does not challenge this factual premise in its responsive brief.

[19] It was, therefore, only where such a mens rea was required that the Supreme Court quickly, and understandably, noted that "[o]ur decisions establish that in order to sustain a judgment of conviction on a charge of conspiracy to violate a federal statute, the Government must prove at least the degree of criminal intent necessary for the substantive offense itself." 420 U.S. at 686.

[20] The Government's effort to undermine the force of the Keegan majority decision, Gov. Br. at 44-46, is unavailing. Whatever else was discussed therein, the indisputable fact remains that the Keegan majority, implicitly disagreeing with the dissent (which rejected the Powell doctrine), based its decision on what it viewed to be decidedly innocent conduct.

[21] As Defendant has previously conceded, "it is not necessary to establish knowledge on the part of the defendants of the existence of the law defining the offense, even if it is merely mala prohibita[]," since "[w]here a corrupt motive is established such knowledge is imputed." Cruz, 106 F.2d at 830; see also Appellant=s Br., at 24, n.4.

[22] With regard to the Government's reliance on United States v. Blair, 54 F.3d 639 (10th Cir. 1995), Gov. Br. at 33, 42, see note 17, supra, and Appellant=s Br. at 36 n.9.

[23] Interestingly, the McDougal Court, citing, inter alia, United States v. Todd, 735 F.2d 146, 151 (5th Cir. 1984), observed that "it is sufficient to allege that the defendant knew that his conduct was unlawful." 25 F.Supp.2d at 96. In Todd, the Fifth Circuit stated that for purposes of a Lacey Act violation, "[t]he Government need not prove that the appellants knew of the existence of the Lacey Act itself, only that they knew of the illegal nature of the game." 735 F.2d at 151 (emphasis added).