WILLIAM H. STEELE, Chief Judge.
This matter is before the Court on the defendant's motion to dismiss for lack of venue or, in the alternative, motion to transfer. (Doc. 11). The parties have filed briefs in support of their respective positions, (Docs.11, 19, 23), and the motion is
Counts One and Two charge the defendant with using a facility in interstate commerce with the intent to promote, manage, establish and carry on a business enterprise involving unlawful gambling, in violation of 18 U.S.C. § 1952(a)(3)(A).
Counts Three and Six charge the defendant with using a wire communication facility for the transmission of information assisting in the placing of bets or wagers or for transmission of a wire communication entitling the recipient to receive money or credit as a result of bets or wagers, in violation of 18 U.S.C. § 1084(a).
Counts Four and Five charge the defendant with accepting, in connection with the participation of another person in unlawful internet gambling, the proceeds of credit extended to or on behalf of such other person, in violation of 31 U.S.C. § 5363 and 18 U.S.C. § 2.
The alleged dates of the offenses range from April 13 to May 3, 2011. Each offense is alleged to have occurred "in the Southern District of Alabama, Southern Division and elsewhere." (Doc. 4).
The defendant has synopsized the government's discovery, (Doc. 11 at 3-6), the government has offered its own synopsis, (Doc. 19 at 1-3), and neither party quarrels with the other's presentation. The parties thus agree for present purposes with the following description of the underlying facts relevant to the propriety of venue.
The defendant has not traveled to this District in connection with the crimes with which he is charged but has been located principally if not exclusively in Louisiana. The defendant began a bookmaking operation through an internet gambling website. After investigation, Homeland Security Investigations ("HSI") developed a confidential informant, who resided in Pennsylvania and bet with the defendant through the website.
The informant owed the defendant a significant sum in gambling debts. The informant called the defendant, told the defendant he was in Gulf Shores, Alabama, and offered to send a $2,000 payment. The defendant provided a Chalmette, Louisiana address to send the payment. The informant actually was in Pennsylvania, but the money was sent via FedEx by HSI agents from Gulf Shores. This conduct underlies Count Four.
The informant then told the defendant of a person working in Gulf Shores who was interested in betting through the defendant's website on an upcoming playoff series. The informant gave the defendant a telephone number for "Rob," who was actually an undercover agent. The area code was 251, which covers southwest Alabama. The defendant twice called Rob, who was physically in Mobile, to set up Rob's account and explain that payments to cover any losses were to be shipped by FedEx. After Rob rang up $500 in losses, he called the defendant from Mobile and asked how to settle up. The defendant returned Rob's call and instructed him to send cash by FedEx to the Chalmette address.
The defendant argues that venue is improper as to Counts Four and Five (the Section 5363 counts). The burden is on the prosecution to prove venue. United States v. Schlei, 122 F.3d 944, 974 (11th Cir.1997).
The government interposes a threshold objection. Relying on United States v. Snipes, 611 F.3d 855 (11th Cir. 2010), it argues that the propriety of venue cannot be resolved except by a jury at trial. (Doc. 19 at 3-4). According to the government, as long as an indictment charges that the offense occurred in the district of prosecution, the defendant must face trial in that district, short of a successful motion to transfer under Rule 21(b). The Court does not read Snipes so broadly.
In Snipes, the defendant was charged in the relevant counts with willful failure to file an income tax return. 611 F.3d at 861, 866. Venue for such a crime is either the district where the defendant resided at the time of the offense or the location of the designated service center. Id. at 864. The indictment alleged that the defendant resided in the Middle District of Florida, but the defendant denied this and demanded a pre-trial evidentiary hearing to resolve, without a jury, the factual issue of where he resided. Id. at 865-66. The question before the Snipes Court was whether "the district court abused its discretion by not conducting a pretrial evidentiary hearing—essentially, a bench trial—on venue." Id. at 865. In this context, the Court wrote the following:
611 F.3d at 866. The Court concluded that "[t]here was no abuse of discretion in
It is clear from the Court's introductory and concluding statements that the limited issue before it was whether the trial court should have conducted a fact-finding hearing prior to trial. 611 F.3d at 865, 867. The Court's discussion likewise focused on the fact-finding aspect of the relief requested by the defendant. Id. at 866 ("pretrial evidentiary hearing," "determination of facts that should have been developed at trial," "preliminary trials on essential facts") (internal quotes omitted). The Snipes Court did not purport to rule that a trial court cannot make a legal evaluation of venue before trial based on an agreed or undisputed statement of facts.
Even the broadest statements in Snipes do not suggest such a ruling. "[A] jury must decide whether the venue was proper," 611 F.3d at 866, but the very case from which Snipes drew this quotation held merely that the prosecution must actually prove venue when the defendant challenges it at trial. Green, 309 F.2d at 853, 856; see also United States v. White, 611 F.2d 531, 536-37 (5th Cir.1980) (construing Green) (the "failure to instruct on venue is reversible error when trial testimony puts venue in issue and the defendant requests the instruction"). This part of Snipes says only that a jury must decide whether venue is proper when there is a disputed factual aspect to the issue.
In the same citation string, the Snipes Court cited Stickle and Muhammad. It cited Stickle for the proposition that "[t]he jury was justified in finding that the government established venue in the Southern District of Florida for count II." 454 F.3d at 1273. This is hardly a pronouncement that the jury must always resolve venue, which in Stickle turned on the factual question of where an offender resided. Id. at 1272. Snipes cited Muhammad for the proposition that "`[v]enue is ordinarily a question of fact for the jury to decide.'" 502 F.3d at 656 (emphasis added) (quoting United States v. Bascope-Zurita, 68 F.3d 1057, 1062 (8th Cir.1995)). This language on its face reflects that venue need not always be submitted to a jury. Moreover, Bascope-Zurita itself clarified, in its next sentence, that "when the relevant facts to determining venue are not disputed, the district court may resolve the issue as a matter of law." 68 F.3d at 1062. This part of Snipes affirmatively supports the proposition that a court may resolve venue before trial when the question is one of law and not of disputed fact.
The Snipes Court cited Rule 12(b) and Torkington to suggest limitations on a court's ability to dismiss an indictment. The quote from Torkington questions only dismissals based on "a determination of facts that should have been developed at trial," 812 F.2d at 1354, not dismissals based on legal determinations in the context of undisputed facts. Moreover, Torkington relied for the quoted proposition on United States v. Korn, 557 F.2d 1089 (5th Cir.1977), which continued in its next sentence that the propriety of a Rule 12(b) dismissal is "by-and-large contingent upon whether the infirmity in the prosecution is essentially one of law or involves determinations of fact." Id. at 1090 (internal quotes omitted). "If a question of law is involved, then consideration of the motion is generally proper." Id. This part of Snipes affirmatively reflects that a court may resolve venue before trial when the question is one of law and not of disputed fact.
The Court notes in passing a seeming tension between the government's position and the constitutional provisions concerning venue. "The Trial of all Crimes . . . shall be held in the State where the said Crimes shall have been committed. . . ." U.S. Const. art. III, § 2, cl. 3. "In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed. . . ." Id. amend. VI. Both these provisions speak of the defendant's right to be tried in a correct venue, not simply the right not to be convicted in an incorrect venue. Whenever a defendant is tried in an incorrect venue despite his timely objection, his constitutional right to be tried in a correct venue is impacted. This may be unavoidable when it is only the jury's determination of the facts that establishes the impropriety of the government's chosen venue, but when as here there are no disputed facts and only legal questions concerning the significance or sufficiency of the undisputed facts, a rule that would preclude judicial resolution of venue before trial seems neither unavoidable nor particularly respectful of these constitutional guarantees.
The Court issues no definitive ruling concerning the scope of permissible pretrial challenges to venue. For present purposes, it is sufficient to state that the government's unadorned invocation of Snipes does not persuade the Court that it lacks discretion to address this defendant's particular challenge to venue.
Consistent with the Constitution, the Rules of Criminal Procedure provide that, "[u]nless a statute or these rules permit otherwise, the government must prosecute an offense in a district where the offense was committed." Fed. R.Crim.P. 18. For purposes of determining where the offense was committed, "the locus delicti [of the charged offense] must be determined from the nature of the crime alleged and the location of the act or acts constituting it." United States v. Rodriguez-Moreno, 526 U.S. 275, 279, 119 S.Ct. 1239,
Counts Four and Five charge the defendant with "knowingly accept[ing] . . . the proceeds of credit extended to or on behalf of" another person in connection with the other's participation in unlawful internet gambling, in violation of 31 U.S.C. § 5363. The only verb in Section 5363 reflecting an essential conduct element is "accept," and the government does not argue that other statutory language suggests additional essential conduct elements.
Instead, the government argues that acceptance is a "fluid principle" connoting more than mere receipt, which the government concedes occurred only in Louisiana. (Doc. 19 at 9). In particular, the government asserts that acceptance is a "process" that "encompasses the agreement, approval or satisfaction between the parties regarding the conditions, purpose and effect of the thing received." Using this somewhat tortured phraseology, the government reasons that the defendant's acceptance as to Count Five began when he called Rob in Alabama and told him to settle his $500 gambling debt by sending cash via FedEx. (Doc. Id. at 9-10).
Section 5363 was enacted only five years ago and has not been heavily litigated. The parties have cited, and the Court has located, no case or legislative history addressing the precise meaning of the undefined term "accept" within the statute. The parties instead rely on differing portions of a definition from an (outdated) legal dictionary. The defendant notes those portions defining "accept" in terms of receipt. See Black's Law Dictionary 12 (5th ed. 1979) ("[t]o receive with approval or satisfaction"; "to receive with intent to retain"; "receive with approval"; "Means something more than to receive, meaning. . . to keep and retain."). The government cites those portions arguably more expansive. See id. ("[a]gree to; accede to or consent to"; "Means something more than to receive, meaning to adopt, to agree to carry out provisions. . . .").
The government's snippets might be relevant were the defendant charged with accepting a philosophical proposition or an offer to contract, or perhaps if he were charged with agreeing to accept the proceeds of credit, but he is not. Instead, he is charged with actually accepting the proceeds of credit, a specific property. The most and indeed only natural reading of the statute under the parties' proposed
The Eleventh Circuit, in construing a criminal statute, has recently noted that "[t]he ordinary meaning of `receive' is `to knowingly accept'" (or to take possession or delivery of or to take in through the mind or senses). United States v. Pruitt, 638 F.3d 763, 766 (11th Cir.2011). If to "receive" means to "knowingly accept," then to "knowingly accept" must mean to "receive." This bolsters the case for the defendant's proposed definition.
A textual review of the statute likewise makes it doubtful that acceptance can occur prior to the actual delivery of the credit proceeds or other property to the defendant. A defendant may not knowingly accept credit or its proceeds "extended to or on behalf of certain persons and may not knowingly accept an electronic funds transfer or funds "transmitted by or though a money transmitting service" from or on behalf of certain persons. 31 U.S.C. § 5363(1), (2). The use of the highlighted past tense indicates that the defendant's acceptance can occur only after the credit has been extended and only after the funds have been transmitted. While the past tense is not used in subsections (3) and (4), their wording is not such as to undermine the conclusion that acceptance occurs only after transmission to the defendant.
The act of which Section 5363 is a part defines a "restricted transaction" as "any transaction or transmittal involving any credit, funds, instrument, or proceeds described in any paragraph of section 5363 which the recipient is prohibited from accepting under section 5363." 31 U.S.C. § 5362(7). This provision underscores that it is only the actual credit, funds, instruments and proceeds which the defendant is barred from accepting. The act then tasks the Secretary and others with devising regulations requiring "designated payment systems" and their participants to take steps "to identify and block or otherwise prevent or prohibit the acceptance of restricted transactions." Id. § 5364(a). This provision makes sense only in the context of blocking or otherwise preventing actual transfers of property, as the regulated "financial transaction providers" could scarcely be expected to prevent persons from (as the government alleges here) reaching telephone agreements to transfer property. Because Section 5364 contemplates that acceptance can be prevented by blocking the transfer, it further supports the conclusion that acceptance occurs only by receipt at the conclusion of the transfer.
As with its decision concerning pretrial challenges to venue, the Court issues no definitive ruling on the scope of Section 5363. For present purposes, it is sufficient to state that the government's argument does not persuade the Court that the defendant could have accepted the proceeds of credit before they arrived in Louisiana. Consequently, venue over Counts Four and Five is not proper under the first paragraph of Section 3237(a).
"Any offense involving the use of the mails [or] transportation in interstate or foreign commerce . . . is a continuing offense and, except as otherwise expressly provided by enactment of Congress, may be inquired of and prosecuted in any district from, through, or into which such commerce [or] mail matter . . . moves." 18 U.S.C. § 3237(a). Without so much as a single citation to authority, the government argues that this second paragraph of Section 3237(a) secures venue in this District. (Doc. 19 at 8-9). The defendant, citing a D.C. Circuit case, responds that
"[A] faithful reading of the precise words of the statute in the order in which they are written suggests that an `offense involve[s]' transportation in interstate commerce only when such transportation is an element of the offense." United States v. Morgan, 393 F.3d 192, 199 (D.C.Cir.2004). The Eleventh Circuit has employed the second paragraph of Section 3237(a) when such transportation, or use of the mails, is an element of the offense charged. See United States v. Kapordelis, 569 F.3d 1291, 1308 (11th Cir.2009); United States v. Bagnell, 679 F.2d 826, 830-31 (11th Cir.1982); United States v. Martino, 648 F.2d 367, 400 (5th Cir.1981). Neither use of the mails nor transportation in interstate commerce is an element of the offense with which the defendant is charged, and the government does not argue otherwise.
The question becomes whether, and to what extent, the second paragraph of Section 3237(a) may be utilized by the prosecution when use of the mails or transportation in interstate commerce occurred but is not an element of the offense charged. The government, as noted, has cited no cases at all but merely insists without explanation that the defendant's direction to Rob to send cash by FedEx to Louisiana satisfies the statute. The Court's own review has disclosed but two Eleventh Circuit cases relying on the second paragraph of Section 3237(a) when use of the mails or transportation in interstate commerce occurred but was not an element of the offense charged, and they are easily distinguishable from the present situation.
In United States v. McCulley, 673 F.2d 346 (11th Cir.1982), two defendants were convicted of aiding and abetting the breaking of seals and the loosening of straps on mail pouches with the intent to steal mail, conduct that occurred on a flight from Los Angeles to Atlanta. Id. at 348. The Court characterized the second paragraph of Section 3237(a) as "a catchall provision designed to prevent a crime which has been committed in transit from escaping punishment for lack of venue." Id. at 350. It thus applies to a crime "which occurs on some form of transportation in interstate or foreign commerce." Id. at 349. Similarly, in United States v. Breitweiser, 357 F.3d 1249 (11th Cir.2004), the defendant was charged with abusive sexual contact with a minor and with simple assault, conduct that occurred on a flight from Houston to Atlanta, and the Court applied McCulley. Id. at 1251-53. As discussed in Part I.B, the defendant did not accept the proceeds of credit while it was in transit. Nor is this a case where no venue exists outside of Section 3237(a). McCulley and Breitweiser therefore do not apply.
In Morgan, the defendant was charged in the District of Columbia with receipt of stolen federal property (a computer), which property he received in Maryland after it was physically transported from the District. 393 F.3d at 194. Similar to this case, there was evidence the defendant knew the shipment was coming and that he even asked a conspirator when he would be receiving his computer. Id. at 197. After a thorough review, the Morgan Court concluded that no court has ever construed the second paragraph of Section 3237(a) so expansively as to support venue in the originating district under such circumstances, and it rejected the government's position as "entirely untenable."
"Venue should not be made to depend on the chance use of the mails, when Congress has so carefully indicated the locus of the crime." Travis v. United States, 364 U.S. 631, 636, 81 S.Ct. 358, 5 L.Ed.2d 340 (1961).
Again, the Court issues no definitive ruling on the scope of Section 3237(a). For present purposes, it is sufficient to state that the government has not shown that the offense with which the defendant is charged involves use of the mails or transportation in interstate commerce. Consequently, venue over Counts Four and Five is not proper under the second paragraph of Section 3237(a).
Because venue as to Counts Four and Five is improperly laid in this District, these counts are subject to dismissal. E.g., United States v. Muench, 153 F.3d 1298, 1300 (11 th Cir.1998). The defendant does not challenge venue as to the other four counts of the indictment, but he insists that, because venue is improper as to two counts, "venue is improper as to the entirety of the indictment," such that the entire indictment must be dismissed. (Doc. 11 at 9-10).
For this proposition, the defendant relies on United States v. Stewart, 256 F.3d 231 (4th Cir.2001), which states only that, "[w]hen multiple counts are alleged in an indictment, venue must be proper on each count." Id. at 242. It is certainly correct that improper venue as to one count cannot be rescued by proper venue as to another, but nothing in Stewart supports the facially illogical position that proper venue as to one count is destroyed by improper venue as to another. On the contrary, Stewart relied on United States v. Bowens, 224 F.3d 302 (4th Cir.2000), a case in which the Court threw out convictions on two counts for improper venue while affirming conviction on a third count. Id. at 304.
The defendant has not justified its request for dismissal of the entire indictment. The scope of potential dismissal is therefore limited to Counts Four and Five.
"Upon the defendant's motion, the court may transfer the proceeding, or one or more counts, against that defendant to another district for the convenience of the parties and witnesses and in the interest of
The parties apply the factors listed in Platt v. Minnesota Mining & Manufacturing Co., 376 U.S. 240, 243-44, 84 S.Ct. 769, 11 L.Ed.2d 674 (1964), and on balance they favor transfer to the Eastern District of Louisiana. The defendant is of course located there, as are any witnesses he may call. The government as well intends to call witnesses from Louisiana, and the only Alabama witness it identifies is Rob. Since the government insists that the defendant can easily travel between New Orleans and Mobile, the same is equally true of Rob. The government says the case involves calls between Louisiana and Alabama, but it also involves the defendant's gambling business run out of Louisiana. This is not a document-intensive case, and many of those the government will use are in Mississippi. The only documents in Alabama are the recorded phone calls between the defendant and Rob and Rob's recorded sessions on the gambling website, and even these the government concedes can be sent with ease to Louisiana. (Doc. 19 at 16). The defendant has identified additional expense to him of trying the case in Mobile, while the government has identified no additional expense to it of trying the case in New Orleans. The defendant's original counsel is in New Orleans, though he has been replaced by local counsel. Accessibility, docket condition and disruption of business are neutral.
The defendant proposes "forum shopping" as a special consideration favoring transfer. The Court pretermits discussion of that possibility because a different consideration does so. As addressed in Part I, the government cannot try the defendant in this District on charges under Section 5363, but the defendant concedes that venue as to these counts is proper in the Eastern District of Louisiana. (Doc. 11 at 9). That district is thus the only one in which the defendant can be tried on all charges, and it would be efficient and in the interest of justice for all charges to remain consolidated for prosecution.
The defendant seeks either dismissal of the indictment in its entirety or transfer of the action in its entirety. As noted in Part I.D., he is not entitled to dismissal of the entire indictment. Therefore, the entire action, including Counts Four and Five, will be transferred to the Eastern District of Louisiana.
For the reasons set forth above, the defendant's motion to dismiss for lack of venue is
