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UNITED STATES v. CONLEY

May 31, 1994

UNITED STATES OF AMERICA,
v.
JOHN F. "Duffy" CONLEY, WILLIAM C. CURTIN, SHEILA F. SMITH, JOHN FRANCIS "Jack" CONLEY, THOMAS "Bud" McGRATH, MARK A. ABBOTT, THOMAS ROSSI, WILLIAM STEINHART, ROBERTA FLEAGLE, ROBIN SPRATT, MONICA C. KAIL, WILLIAM J. REED, JOANNE T. SMITH, KENNETH "Ron" GOODWIN, LAWRENCE N. "Neudy" DEMINO, SR., CHRISTOPHER "Chris" KAIL, JOSEPH A. DEVITA, FRANK GAROFALO, THOMAS D. CIOCCO, MICHAEL SUKALY, PHILLIP M. "Mike" FERRELL, ANESTOS "Naz" RODITES, and WILLIAM E. RUSIN, Defendants.



The opinion of the court was delivered by: DONALD J. LEE

 In prior proceedings, the Court ruled that Defendant John F. "Duffy" Conley ("Duffy Conley") had Fourth Amendment interests that were implicated by seizures and searches of video poker machines from "locations"--bars, delicatessens, coffee shops, etc.--in which Duffy Conley had no reasonable expectation of privacy. United States v. Conley, 856 F. Supp. 1010 1994 U.S. Dist. LEXIS 7281 *3, (W.D. Pa. 1994) (Document No. 801). Specifically, the Court held that Duffy Conley's ownership of the video poker machines, which the Court assumed for purposes of its decision, was an interest protected from unreasonable seizures by the Fourth Amendment. Id. at 16, 18, 23. The Court indicated that although the Fourth Amendment does not require a warrant to seize property in an unprotected area, it does require probable cause to seize without a warrant. The Court presumed that the Government would attempt to show probable cause to seize the machines through the warrants that were in fact issued for the eighty-odd locations. Id. at 18 & n.7. Further, the Court held that Duffy Conley had a reasonable expectation of privacy in the inside compartments of the video poker machines, id. at 16, 19-22, 23-24, necessitating a valid warrant or warrant-exception before the compartments properly could be invaded by law enforcement personnel. *fn1"

 Duffy Conley and the Government subsequently stipulated that Duffy Conley, if called, would testify as to his ownership of video poker machines at specific locations and the Government possessed no evidence to contrary. See Document No. 826. The eighty-one challenged raids are listed by date, law enforcement organization primarily involved and location in the Appendices to this Memorandum Opinion.

 Before the Court are the September 23, 1988 seizures and subsequent searches of video poker machines pursuant to the eighty-one warrants authorizing searches of locations. *fn2" Also before the Court is Duffy Conley's challenge to the September 23, 1988 search of 3100 Windgap Avenue.

 As to the search of 3100 Windgap, Duffy Conley contends the affidavit failed to set forth probable cause, the warrants were executed in violation of state law, and the warrants were not issued by a neutral and detached magistrate. None of Duffy Conley's contentions require suppression of the fruits of the Windgap search.

 SEIZURE AND SEARCH OF VIDEO POKER MACHINES

 Factual Background3

 Twenty-six State applications for search warrants were prepared by Trooper William C. Cunningham of the Pennsylvania State Police on September 22, 1988. See Appendix A. Forty-six applications for search warrants were prepared by Detective John Bosetti of the City of Pittsburgh Police on September 22, 1988. See Appendix B. Three search warrants were prepared by Trooper William C. Cunningham of the Pennsylvania State Police on November 9, 1988. See Appendix C. Three search warrants were prepared by Detective John Bosetti of the City of Pittsburgh Police on December 16, 1988. See Appendix D. Finally, three warrants were prepared by Trooper William C. Cunningham of the Pennsylvania State Police on January 27, 1989. See Appendix E. Duffy Conley is stipulated, in essence, to have uncontested ownership of the video poker machines seized and searched pursuant to these warrants. (Document No. 826).

 The State Warrants

 Each of the September 22, 1988 State applications for search warrants contained eight identical pages of "background" information before setting forth the location-specific information in support of probable cause. Specifically, the "background" pages stated:

 
1. William O. Cunningham, being duly sworn according to law deposes and says: I am a law enforcement officer of the Commonwealth of Pennsylvania within the meaning of Section 5702, Title 18 Pa. C.S. and as such, am empowered to make arrest for criminal offenses enumerated in Title 18 Pa. C.S. I have been a Pennsylvania State Policeman since 1968 and I am presently assigned to the Bureau of Criminal Investigation, Western Task Force Crime Unit. In the past two years I have initiated or participated in the seizure of in excess of five hundred electronic gambling devises, including Draw Poker, Hi-Low Joker Poler [sic], Riverboat Poker, Top Draw Poker, Draw 80 Poker, Jackpot Bonus Poker, and Casino Games within the Commonwealth of Pennsylvania. During the seizure of over three hundred poker machines in Northeast Pennsylvania in 1988 this officer was shown various methods used by manufacturers and vendors of these devices to circumvent Pennsylvania law, such as hidden knock off switches and pay out meters and how to ascertain the internal bookeeping [sic] on these devices by Trp. James Girard, a qualified expert in gambling prosecutions in nine different counties in Pennsylvania.
 
2. Video Display and Electronic Gambling Devices Defined
 
We know electronic video display gambling devices are distinctive by nature and bare [sic] several identifying characteristics which preclude them from being classified as amusement devices. These electronic devices are an extension of the mechanical slot machine, using computer-randomizing technology to create electronic "reels:" [sic] which introduce the element of chance previously provided by mechanical reels or drums in the earlier devices. Similarly video display gambling devices contain EPROMs (computer chips) which program printed circuit boards to display games of chance including, but not limited to, draw poler [sic] and black jack card games. The cards displayed on the video screen are dealt randomly and electronically by the device, eliminating any skill factor on the part of the player.
 
We have found through inspecting electronic and video display gambling devices and during our experiences in the Pennsylvania Courts of Common Pleas, that the following characteristics are synonymous with gambling devices.
 
A. KNOCK-OFF FEATURE - These are used only on gambling devices and are used to remove accumulated credits for the following reasons. When players are reimbursed for unused credits, it is essential that the unused credits be removed to prevent subsequent players from being reimbursed for those accumulated credits. The knock-off feature is also an element of an accounting function which provides the operator with a method for recording the unused credits for which the player is reimbursed. These knock-off features are often disguised or hidden with [sic] these devices to avoid detection by law enforcement. Video display gambling devices are equipped at the manufacturer with a built-in knock down device on the electronic circuit board.
 
Distributors or vendors may try to hide the knock down features through various disguises such as magnetic switches, remote control devices, or hidden buttons; but, our experience inspecting the machine has shown the knockdown feature connot [sic] be removed from the electronic circuit board.
 
B. METERS - Manual meters are often found inside these gambling devices to record the number of coins inserted into the device. A second meter is often found to record the number of credits "knocked off" or removed from display numbers on the video screen. The newer model gambling devices display these numbers on the video screen (accounting display or bookkeeping). This coded feature maintains the confidentiality of the knock-off data. These meters usually contain at least six (6) figures which show that [sic] these devises have the ability to accumulate an inordinate number of credits.
 
C. POWER INTERRUPT CIRCUIT - Most video display gambling devices and electronic gambling devices have a circuit which is activated when a power failure occurs. Without this power interrupt circuit, all accumulated credits recorded on the credit display meter would be removed when a power failure occurs and the power is then restored. Since a credit and a coin (usually .25 cents [sic]) are of the same value, loss of credit would represent a large financial loss to the player.
 
D. MULTIPLE COIN FEATURE - Often these devices have multiple coin feature which allows the player to deposit several coins before play begins or which allows the player to add coins during play to increase his or her odds of winning additional credits. These coins are transmitted into credits and are recorded on a credit meter. The credits are then used to increase the wager on a feature or to increase the chances of winning additional credits on a special feature.
 
E. DIP SWITCHES - Dip switches are also an integral part of these gambling devices and are used to vary the number of coins per credit, the points awardable, the odds, the maximum wager per hand, or the type of game.
 
F. VARIABLE ODDS - This is another characteristic of these devices that allows the possessor or vendor to change player odds or set the device at a disadvantage to the player.
 
G. ACCUMULATE AN INORDINATE NUMBER OF CREDITS - These devices all have the ability to accumulate an inordinate number of credits, usually 9,999 and have the ability to carry over credits won on a previous game to wager on at a later game.
 
I. NON-SKILL - These devices are of a non-skill nature and are based wholly or predominantly on chance, which would preclude the ability of a player from significantly affecting the outcome of play. Draw poker and black-jack are examples of the types of games which may be played on video display gambling devices for consideration of twenty-five cents. Althought [sic] knowledge of how the game of poker or black-jack maybe [sic] used to hold over certain cards the ultimate "reeling" of the electronic circuitry within the device to produce any winning or non-winning combination of cards is strictly up to the device. There is no interaction on the part of the player with the device relative to game strategy, deception, card mathematics, psychology, or courage in betting or raising as in a poker game with individuals.

 VIDEO DISPLAY AND ELECTRONIC GAMBLING DEVICE DISTRIBUTORS DEFINED

 
We have further learned through previous investigation, seizure of gambling devices, and interviews with those in control of the device, that machine vendors and distributors solicit various locations such as taprooms, social clubs, and other business [sic] for the purpose of gambling device placement as well as legitimate vending machine placements. During the solicitation of placement by the distributor with the business location, such matters as device servicing, money collection, and "credits paid off" on the devices by the club or bar (usually $ 10.00 on 40 credits or over) a 50-50 split is then made of the accumulated quarters played on the device. [sic] Half for the distributor and half for the business location. Accounting meters within the devices, which record the number of credits "knocked off" the device, then come into importance. This is used as a check on how many credits were won on the device and a corresponding check on the bartenders [sic] record. Usually the machine distributor has the only access to the coin box or the area of the recording meters within the device.
 
3. As a member of the Pennsylvania State Police, I am empowered by law to conduct investigations of and make arrests for offenses involving violations of the Pennsylvania Gambling Laws. I have personally participated in the Investigation described herein. The Probable cause set forth in this affidavit is based on my personal investigation described herein, information received from Trooper L. Parker, Tpr. R. Conrad, Tpr. L. Graber, Trp. R. Kutch, Tpr. M. Rogers, and Cpl. J. Poydence he/she [sic], Bureau of Criminal Investigation, Organized Crime Unit West.

 E.g, DEF'T 1-O-2 at pp.1-8. The State warrants of November 9, 1988 and January 27, 1989 also rely on "background" substantially similar to the "background" quoted above.

 Following the "background" portion of the affidavit, each affidavit sets forth location-specific information. That is, each warrant included the facts gathered in the course of the investigation relating to the location for which the warrant was sought, in addition to the "background" information.

 Each State affidavit sets forth at least one instance of a trooper receiving or witnessing a pay-off on a video poker machine, and the use of a knock-off device to remove the credits accumulated on the video poker machine. *fn4" Each state warrant contained additional information regarding the circumstances of the pay-off as well. The types of additional information included observation of location employees keeping written records of pay-offs in addition to the electronic records generated by the machines, observation of the source of the payoffs, i.e., from the money in the machines, a cash register, a segregated source of funds, the machine's attendant or funds from an unknown source, and incriminating statements made by location employees. Few, if any, of the warrants contained all types of information.

 Further, each of the location-specific portions of the affidavits state that an officer entered the location several days before the application for search warrant was made and observed video poker machines in operation. *fn5"

 Following the location-specific information, each of the State applications for search warrant contained a boilerplate conclusion, which stated:

 
To conclude, on each visit troopers played the video poker machines at random at the above establishment. As a result, troopers played random machines on different occasions. Troopers were never directed to any particular video poker machine, which says that one machine pays-off [sic] and other machines are for amusement only and do not pay-off [sic]. Troopers never heard in the above establishment another patron/player directed to any particular video poker machine for the same purpose. On each visit where troopers either accumulated a sufficient amount of credits on the video poker machine, or they witnessed a patron/player accumulate a sufficient number of credits for a pay-off. [sic] Neither the trooper nor the patron/player were never [sic] refused or denied a cash pay-off. Based on the above information, this affiant concludes that all of the video poker machinesat [sic] the establishment are being used as gambling devices and should be seized as contraband.

 E.g., DEF'T 1-O-2 at p.10.

 The City of Pittsburgh Affidavits

 The affidavits accompanying the City applications for search warrants also contained a "background" section that was repeated in each application. The City affidavits substitute the qualifications of Detective Bosetti for those of Trooper Cunningham. Otherwise, with the exception of style and grammar, the State and City "background" sections of the affidavits are the same in all material respects.

 Each City affidavit states officers received and/or witnessed two or more pay-offs on different visits to the location, and the use of a knock-off device to remove the accumulated credits subject to the pay-offs. The City affidavits contain additional information akin to that included in the State affidavits.

 Further, each of the location-specific portions of the affidavits states that an officer entered the location several days before the application for search warrant was made and observed video poker machines in operation. *fn6" In addition, twenty-four of the City affidavits relate at least one pay-off and knock-off between September 9, 1988 and September 20, 1988. *fn7"

 Discussion

 Request for Franks Hearing

 In Franks v. Delaware, 438 U.S. 154, 57 L. Ed. 2d 667, 98 S. Ct. 2674 (1978), the Supreme Court provided a limited opportunity for a defendant to challenge the truthfulness of an affiant's statements in an affidavit of probable case. The Court held:

 Id. at 155-56. The Court emphasized that "the rule announced . . . has a limited scope, both in regard to when exclusion of the seized evidence is mandated, and when a hearing on allegations of misstatements must be accorded." Id. at 167. At the conclusion of the Opinion, the Supreme Court again emphasized the limitations on the rule, stating:

 
There is, of course, a presumption of validity with respect to the affidavit supporting the search warrant. To mandate an evidentiary hearing, the challenger's attack must be more than conclusory and must be supported by more than a mere desire to cross-examine. There must be allegations of deliberate falsehood or of reckless disregard for the truth, and those allegations must be accompanied by an offer of proof. They should point out specifically the portion of the warrant affidavit that is claimed to be false; and they should be accompanied by a statement of supporting reasons. Affidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained. Allegations of negligence or innocent mistake are insufficient. The deliberate falsity or reckless disregard whose impeachment is permitted today is only that of the affiant, not of any nongovernmental informant. Finally, if these requirements are met, and if, when material that is the subject of the alleged falsity or reckless disregard is set to one side, ...

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