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UNITED STATES v. CONLEY

July 11, 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

MEMORANDUM OPINION

 Before the Court is Defendant Sheila F. Smith's Motion to Suppress [Warrant No. 91-263M]. The motion of Defendant Sheila F. Smith ("Sheila Smith") relates to the September 20, 1991 search of her residence.

 A. Findings of Fact

 1. On September 19, 1991, FBI Agent Andrea Dammann presented to United States Magistrate Judge Ila Jeanne Sensenich an application and affidavit of probable cause for a search warrant for the premises located at 1352 Pesavento Drive, Bridgeville, Pennsylvania (the "Pesavento Drive affidavit") (Document No. 914). *fn1" The premises to be searched were Sheila Smith's residence.

 2. The search warrant described the structure to be searched and authorized the seizure of the following items:

 
(b) Any and all gambling paraphernalia and records including but not limited to: names and addresses of the owners, users, routemen, collectors, movers, solicitors, salespersons, servicemen, distributors, and manufacturers relating to the video poker machines; contracts setting forth agreements between vendors and the establishment for video poker machines; documents, ledgers, books regarding the machine usage, number of plays, amounts deposited in the machines, amounts of payoffs to winners, percentage and income earned by vendor and establishment from video poker machines.
 
(c) Any and all business records reflecting banking transactions, canceled checks, purchase and sales orders, invoices, shipping and receiving receipts; and invoices relating to Sheila Smith, Sheila Kelly, Duffy Conley, Duffy's Vending, Three Rivers Coin, Matrix, Premier Enterprises, T. D. Amusements, Chartiers Vending and S & M Vending from 1986 to the present.
 
(d) Any and all documents relating to loans and/or other financial transactions between vendor and establishment.
 
(e) Electronic data processing and storage devices, computers and computer systems including central processing units; internal and peripheral storage devices such as fixed disks, external hard disks, floppy disk drives and diskettes, tape drives and tapes, optical storage devices or other memory storage devices; peripheral input/output devices such as keyboards, printers, video display monitors, optical readers, and related communications devices such as modems; together with system documentation, operating logs and documentation, software and instruction manuals.
 
All of the above records, whether stored on paper, on magnetic media such as tape, cassette, disk, diskette or on memory storage devices such as optical disks, programmable instruments such as telephones, "electronic address books", calculators, or any other storage media, together with indicia of use, ownership, possession, control of such records.
 
All of which constitute fruits, instrumentalities and evidence of the offense of operating an illegal gambling business, in violation of Title 18, United States Code, Sections 2 and 1955.

 Warrant, at 1-2.

 3. In the affidavit of probable cause, Agent Dammann states the following regarding her sources of information:

 
2. I am knowledgeable of the facts set forth herein as a result of my involvement in the Duffy Conley investigation, including my interviews of witnesses; discussions with other special agents of the FBI and IRS; review of statements given by witnesses to other law enforcement officers in this investigation; review of grand jury transcripts and memoranda of interviews of several witnesses; review of documents gathered during the course of this investigation; and my own observations and surveillance during the course of this investigation.

 4. The Pesavento Drive affidavit quotes 18 U.S.C. ยง 1955, the prohibition of illegal gambling businesses.

 5. Stating that it was a description of an illegal per se video poker machine under Pennsylvania law, the Pesavento Drive affidavit included the following quote from United States v. 294 Various Gambling Devices, C.A. No. 85-297 (W. D. Pa. July 20, 1989) (Weber, J.):

 
The machine displays the time honored ranking of poker hands and the number of points the machine will award for the listed hands. The ranking of hands is grounded in laws of statistical probability, and the video poker machine awards points based on this scale, although it does not award true odds. The higher rank of the hand, the higher the amount of points awarded.
 
Upon insertion of a quarter, the machine displays five cards on a video screen. These five cards are randomly selected by the machine from an ordinary deck of 52 cards in four suits. In an effort to improve the hand dealt to him, the player may then "discard" any of the five original cards by pressing the appropriate buttons on the machine. The machine then displays new cards to replace the ones discarded. The machine automatically evaluates this final array of five cards, ranks it as a poker hand, and awards points as indicated above.
 
This in all its simplicity is the sum total of the game of video poker.
 
Up to now we have employed the term "points" to describe the units awarded to the player by the machine for winning poker hands. No matter whether an individual machine labels it "score," credits, or "games," each point entitles the player to one free play of the machine. Each play of the game has one object: the accumulation of additional free games, and these free games may be accumulated from game to game so that, with a run of luck, a player may accumulate a significant number of free games.
 
When a machine is used as a gambling device, these free games are converted to cash by a bartender or owner of the establishment that houses the machine. A successful player in such an establishment is paid a quarter for each "credit" accumulated on the machine. The bartender or owner, having verified the number of credits and paid the player, then removes or "knocks off" the player's accumulated credits, returning the machine to zero credits to await the next player's coins.

 Pesavento Drive affidavit, at 3-4, P6.

 6. The Pesavento Drive affidavit indicates that a Cooperating Witness ("C. W.") was granted immunity on April 24, 1991, has provided information to law enforcement officers and prosecutors approximately five times since April 9, 1991 and has testified before the federal grand jury in this case. The Pesavento Drive affidavit indicates that C. W. was represented by counsel at each of his meetings with government representatives.

 7. The Pesavento Drive affidavit states that C. W. has known Duffy Conley and worked for his business from November, 1986 until the (then) present time, C. W. has no criminal record and the information provided by C. W. in this case has proven to be truthful and accurate in every instance where the FBI and IRS attempted to verify it.

 8. Paragraph 4(a)-(p) of the Pesavento Drive affidavit details the information C. W. furnished to law enforcement officials and prosecutors. Paragraphs 9 through 16 of this Opinion correspond to paragraph 4(a)-(p) of the Pesavento Drive affidavit.

 9. C. W. was hired in November, 1986 by Duffy Conley and Duffy's Vending, also known as Three Rivers Coin, which at that time was located at Third Avenue and Third Street, Carnegie, Pennsylvania and at Conley Motor Freight, 930 Saw Mill Run Boulevard, Pittsburgh, Pennsylvania.

 10. After his first month of employment, C. W. began repairing video poker machines owned by Duffy's Vending, which were in place at various business establishments and private clubs in the Western District of Pennsylvania. These machines were operationally equivalent to the illegal machines described in 294 Various Gambling Devices. Although there were "on paper" changes to the structure of Duffy Conley's illegal gambling business, C. W. continues to work for Duffy in substantially the same capacity at the present time.

 11. From November 1986 to January 1990 Duffy Conley's video poker machine business operated as follows:

 
Duffy Conley was the owner and operator of Duffy's Vending. Duffy's Vending owned both legitimate vending machines and games as well as video poker machines throughout the Western District of Pennsylvania. During that time period, C. W. observed Duffy Conley acting as collector, emptying money from the video poker machines at certain locations. C. W. also observed Duffy Conley splitting money with the owners of several of the locations where the video poker machines were located. Duffy Conley's role in this organization was also made clear to C. W. when C. W. attended and participated in several business meetings of the employees of Duffy's Vending in 1988. In fact, at one of these meetings, an organization chart was provided to the employees in attendance. In addition to Duffy Conley, the management of Duffy's Vending from November of 1986 to January of 1990 ...

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