and that to conduct 'tip sheet' play, as the defendants did, was a wagering activity or lottery as defined by 26 U.S.C. § 4421. Hence it follows that they were liable to pay the special tax, hence under a duty to register. The jury's verdict of guilty against each defendant under the second count must therefore stand.
The jury acquitted defendant Panichella (the bartender) under the first count, but found the proprietor (di Primio) guilty. Unless the jury confused the names of the defendants (as the Court, we must confess, did at one point in drafting this opinion), we must assume that the jury did not give credence to the plain testimony of the enforcement agent who testified that he played a number with the bartender Panichella. Against the proprietor (di Primio) there was no evidence of participation in 'numbers'. Therefore the Court would be inclined to disregard the numbers charge in considering the case of defendant di Primio, since the jury disregarded it with respect to the defendant actually implicated.
Therefore we must ask whether the proprietor di Primio should be punished for 'wilful' failure to pay the special tax due by reason of the 'tip sheet' play.
This defendant's testimony shows that he was familiar with the law regarding registration and gambling taxes; and that he did not wish to engage in any activity which would render his establishment liable for taxes requiring registration.
Whether 'tip sheets' were such an activity we regard as a debatable question, in the light of the vigorous contentions of counsel. The fact that we do not find those contentions convincing does not alter the fact that an appellate court might take a different view. The issue is apparently res integra. No court decisions have been cited where the point arose. Hence we feel that this defendant's belief that no tax was due was not arbitrary or unreasonable or held in bad faith. Accordingly we think that he should be punished in accordance with the scale of punishment established by 26 U.S.C. § 7262 (fine of $ 1000 to $ 5000) rather than that established by 26 U.S.C. § 7203 (fine of not more than $ 10,000, or imprisonment not more than one year, or both).
The penalty for a wrong guess ought to be more than $ 50. 26 U.S.C. § 7262 automatically attaches a substantial fine, which this defendant should pay if the Court's view of the law is correct.
However, the count under 26 U.S.C. § 7262 was withdrawn from the case because of a defect in pleading.
But as a practical matter the greater includes the less, and if counsel for defendant become convinced that this Court is correct with respect to the issue of liability for 'tip sheet' activities, and will stipulate that the defendant di Primio may be sentenced under the verdict of guilty under the first count to such sentence as might have been imposed under the third count if it were applicable, it would eliminate the necessity of a reindictment of said defendant for the offense attempted to be charged in the defective third count.
We therefore shall deny all defendants' motions and defer sentence under the first count, and direct both defendants to appear for sentence under the second count; after which counsel may consider whether to take an appeal from such sentence, or to stipulate as suggested with regard to the first count, or to take such other steps as they may deem available and appropriate.
AND NOW, this 1st day of October, 1962, after argument, IT IS ORDERED that defendants' motion for judgment of acquittal, for arrest of judgment, and for new trial be and the same hereby are overruled and refused; and that sentence of the defendant di Primio under the first count of the indictment shall be deferred until further order of court, and that defendants Panichella and di Primio shall appear for sentence under the second count thereof.