We conclude, therefore, that the evidence secured from the Iannelli interceptions should not be suppressed.
The attack upon the constitutionality of 18 U.S.C. § 1955 is answered by the decision of the court for the Eastern District of Michigan in United States v. Aquina, supra. In sustaining the legislation, the court pointed out that the argument that Congress had overreached its authority under the commerce clause of the Constitution, Article I, § 8, Clause 3, had been rebuffed by the Supreme Court in Perez v. United States, 402 U.S. 146, 91 S. Ct. 1357, 28 L. Ed. 2d 686 (1971). The Perez case was concerned with intrastate loan sharking activities which actually appear less likely to affect interstate commerce than the gambling activity involved in the case at bar.
Congress has determined that an illegal gambling business involving five or more persons and with gross revenue of $2,000 a day or more or which has been in operation for a period of more than thirty days represents activity by organized crime which should be subject to prohibition by the national government. While the Supreme Court has yet to pass upon this exercise of legislative power, its holding in the Perez case leads us to believe that the same reasoning must apply to the gambling statute as was applied to the loan sharking situation. We therefore hold that 18 U.S.C. § 1955 is constitutional.
The motions to suppress evidence received as a result of the searches of homes of several of the defendants are based upon two main contentions; first, that no probable cause was shown and, second, that the documents received were testimonial in nature and that even if the requirements of the Fourth Amendment have been met, the Fifth Amendment has been violated.
Both the Government and the defendants concede that if the evidence received from the Iannelli wiretap complies with appropriate standards, then the affidavits for the search warrants would be adequate. Since we have already found that the wiretap did comply with statutory and constitutional requirements, probable cause did, in fact, exist for the issuance of search warrants.
In support of their motion to suppress on the theory that the material was testimonial in nature, the defendants cite Hill v. Philpott, 445 F.2d 144 (7th Cir. 1971), and United States v. Blank, 330 F. Supp. 783 (N.D. Ohio 1971). In the Philpott case, the Court of Appeals, with one judge dissenting, held that the Fifth Amendment was violated in a search of a physician's office which resulted in a seizure of several truckloads of ledgers, appointment books, receipt books, etc. in connection with a criminal prosecution for income tax evasion. In the Blank case, the search was for the records of a defendant involved in gambling. The Court suppressed the evidence citing the Philpott case as authority.
The Supreme Court in Warden v. Hayden, 387 U.S. 294, 87 S. Ct. 1642, 18 L. Ed. 2d 782 (1967) made clear that it no longer would prohibit a search for that which previously had been considered as "mere evidence." In that case, however, it did footnote an observation that there might be some things which by their very nature could not be seized. Just what might fall in that category has caused some uncertainty and concern in the lower courts. Nevertheless, it appears that the net effect of the Hayden case was to broaden the scope of the type of material which could be the subject of a search rather than to narrow it.
The seizure of gambling paraphernalia, including such things as numbers slips, diaries, lists of names, receipts, etc. has been sustained in a number of cases. See United States v. Hanon, 428 F.2d 101 (8th Cir. 1970), cert. denied 402 U.S. 952, 91 S. Ct. 1608, 29 L. Ed. 2d 122, and while the Fifth Amendment contention was not precisely raised in United States v. Sigal, 341 F.2d 837 (3rd Cir. 1965), cert. denied, 382 U.S. 811, 86 S. Ct. 23, 15 L. Ed. 2d 60, the Court of Appeals of this Circuit did allow seizure of records similar to those involved in the case at bar.
We conclude that the Hayden case would not invalidate searches for materials which had been previously approved by various courts. See also, United States v. Bennett, 409 F.2d 888 (2d Cir. 1969) cert. denied sub nom.; Jessup v. United States, 396 U.S. 852, 90 S. Ct. 117, 24 L. Ed. 2d 101; Cf. United States v. Scharfman, 448 F.2d 1352 (2d Cir. 1971). See also, United States v. Main, 312 F. Supp. 736 (D.C. Del. 1970).
The rationale of the Blank case is that the records speak against the defendant just as clearly as if he were on the witness stand testifying. However, it is quite clear that there is a distinction between the situation where a person is forced to testify and incriminate himself and the circumstance where records which the defendant prepared at an earlier time under no duress or coercion are used as evidence against him. The Supreme Court in the cases of United States v. White, 401 U.S. 745, 91 S. Ct. 1122, 28 L. Ed. 2d 453 (1971) and Lopez v. United States, 373 U.S. 427, 83 S. Ct. 1381, 10 L. Ed. 2d 462 (1963), permitted the introduction into evidence of recordings of statements made to a third party by a defendant under the belief that his confidence would not be violated. In both instances it developed that the third party was a Government agent or informer.
It is not difficult to appreciate the similarity between voluntarily maintaining records in the operation of an illegal business or criminal activity in the expectation that they would not be divulged and making incriminating statements to a third party under the same mistaken impression. In neither case is the element of compulsion present and both represent what has been termed as being within an assumption of risk.
This type of documentary evidence is not of a purely personal and private nature.
The motions to suppress as to the material seized at the defendants' homes are denied.
Count 1 of the indictment charges the defendants with conspiracy to mail paraphernalia to be used in bookmaking in violation of 18 U.S.C. § 1302, to carry on unlawful gambling activity in violation of the laws of Pennsylvania, a violation of § 1952, and to conduct, finance, and own an illegal gambling business in violation of § 1955. The second count charges the defendants with ". . . did knowingly and wilfully conduct, finance, manage, supervise, direct, and own an illegal gambling business, such business having a gross revenue of $2,000 or more on one or more single days, involving five or more persons in its conduct, financing, management, supervision, direction and ownership . ."
Defendants contend that there is duplicity between the conspiracy count and Count 2 and cite the case of United States v. Greenberg, 334 F. Supp. 1092 (N.D. Ohio 1971), where it was held that a conspiracy to violate § 1955 was duplicitous of a count of an infraction of § 1955.
It is basic that the commission of a substantive offense and a conspiracy to commit such offense are separate and distinct. But here the defendants invoke Wharton's rule
which simply stated provides that when the actions of two or more people are necessary to the commission of a certain crime, then that offense may not be indicted as a conspiracy. This exception applies only when the wrongdoing actually is committed and the general principle of separate offenses would be applicable if the underlying crime were not perpetrated.
There are some points of distinction between this case and the Greenberg litigation. Here, the conspiracy charge takes into account not only § 1955 but also § 1952. And it would serve little purpose, therefore, to dismiss only part of the count at this stage of the proceeding when we are not certain what facts might be proved at trial with respect to § 1955. Under these circumstances, it would appear that no ruling should be made at this particular time on the objection raised by defendants but that the matter should be reserved for determination at the conclusion of the prosecution's case. This contention, therefore, of the defendants is denied without prejudice to renew it during the trial.
Extensive motions have been filed by all defendants for bills of particulars. The following requests will be granted:
1. The Government shall indicate the day or days on which the illegal gambling business had a gross revenue of $2,000 or more which it intends to prove at the time of trial.
2. The Government shall indicate as to each of the named defendants, the capacity or capacities in which he is alleged to have participated in the illegal gambling business which is a violation of § 1955, that is, whether he conducted, managed, financed, supervised, directed or owned a portion of the business.