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http://www.thedailyspread.com/blitherings/cohen_appeal2_1.html
The text of Jay Cohen's appeal.
Last Stop Before The Supreme Court?
Jay Cohen's attorneys file their final reply to the governments brief.
- - - - - - - - - - - -
March 3rd, 2001
This is Jay Cohen's reply the government's rebuttal of his appeal (found here)
TABLE OF CONTENTS
Table of Contents i
Table of Authorities iii
Introductory Statement 1
Point I
Contrary to the Government=s Response, the Evidence Failed to Establish any Substantive Violations of ' 1084 and the Jury Instructions as to These Counts Were Grievously in Error 4
A. Section 1084(b) Exempts the Transmission of Wagering Information from New York, a Jurisdiction in Which it is Not a Crime to Place a Bet 5
B. The Government=s Newly-Revised Position on Appeal Concerning the Status of Interstate Off-Track Betting Glaringly Reveals How its Contrary Position at Trial Effectively Eviscerated the Defense in the Eyes of the Jury 14
C. The Government=s Contention that Transmission of Wagering Instructions Constitutes Transmission of a Bet or Wager Per Se is Entirely Without Merit 19
D. The Government=s Newly Conceived Argument that a Contract to Bet Entitles Both Parties to AMoney or Credit as a Result of Bets or Wagers@ is Procedurally and Substantively Defective 23
E. The Evidence Failed to Establish that Defendant AKnowingly@ Used a Wire Communication Facility to Transmit Bets or Wagers in Foreign Commerce 27
Point II
The Rule of Lenity Mandates That Defendant=s Convictions be Reversed and the Charges Against Him Dismissed 29
Point III
This Court is Well-Positioned to Adopt the ACorrupt Motive@ Doctrine, Which Continues to Occupy an Unsettled Area of Law in this Circuit and the Supreme Court, Without Injecting Error Into Countless Conspiracy Convictions 32
A. Numerous Federal Courts Have Endorsed the Rationale Underlying the Powell Doctrine, Which Survives Feola 33
B. Neither This Court Nor the Supreme Court Has Definitively Rejected the Powell Doctrine 34
C. The Facts of this Case Uniquely Implicate the
Powell Doctrine 37
D. Embracing the Powell Doctrine Would Not Inject Error into Countless Conspiracy Convictions 40
Point IV
The Government=s Argument that the District Court Properly Declined to Permit the Deposition of Gyneth McAllister Misapprehends Both the Substance and Relevance of McAllister=s Proposed Testimony 45
Point V
The Government=s Response to Defendant=s Challenge to the District Court=s Deficient Instructions on Aiding and Abetting Effectively Advocates an Unconstitutional Constructive Amendment to the Indictment 47
A. The Government=s Theory of Aiding and Abetting Liability Was Predicated Solely Upon 18 U.S.C. ' 2(a) 47
B. Discussion 49
Conclusion 52
Certificate of Compliance 53
TABLE OF AUTHORITIES
FEDERAL CASES
STATE CASES
FEDERAL STATUTES AND RULES
15 U.S.C. ' 3001 17
15 U.S.C. ' 3002(3) 15
16 U.S.C. ' 3371, et seq. 43
FRAP 32(a)(7)(C) 53
STATE STATUTES
N.Y. Exec. Law ' 63(12) 10, 11
N.Y. Gen. Obl. Law ' 5-401 10
N.Y. Gen. Obl. Law ' 5-411 10
N.Y. Gen. Obl. Law ' 5-413 10
N.Y. Gen. Obl. Law ' 5-415 10
N.Y. Gen. Obl. Law ' 5-419 9-10, 21
OTHER AUTHORITIES
Black=s Law Dictionary (6th ed. 1990) 37
H.R. Rep. No. 87-967, 87th Cong., 1st Sess. (1961),
reprinted in 1961 U.S.C.C.A.N. 2631 11-13, 26
Internet Gambling Prohibition Act of 1999, S.692 19, 30
Internet Gambling Prohibition Act of 2000, H.3125 19, 30
LaFave & Scott, Criminal Law 34
Letter From the Department of Justice to Senator Leahy
Regarding S.692 (June 9, 1999) 17-18
New York Attorney General Opinion 84-F1 10
New York State Senate Bill No. S.2044 13
New York State Assembly Bill No. A.4350 13
New York State Assembly, Memorandum in Support
of Legislation, Bill No. A.4350 13-14
Pub. L. No. 106-553, ' 629, 114 Stat. 2762 15
Third Interim Report of the State of New York Temporary
Commission on Revision of the Penal Law and
Criminal Code (1964) (Legislative Document No. 14) 6
Introductory Statement
In response to the extensively-briefed legal issues presented by Defendant-Appellant Jay Cohen (ADefendant@ ), and in defense of what clearly amounts to a selective prosecution,1 the Government finds itself cobbling together marginally relevant authority, abandoning legal positions it maintained before the district court, and, in its effort to portray Defendant as contriving novel interpretations of law in order to evade the provisions of 18 U.S.C. ' 1084, ignoring substantial authority that undermines its position.
This record unequivocally establishes that Defendant had a reasonable, good faith belief that his conduct was not unlawful, based in no small part on the undisputed fact that Defendant modeled World Sports Exchange (AWSE@) after Capital Off-Track Betting (AOTB@), one of numerous off-track betting enterprises that, at all relevant times, enjoyed no special protections from the reach of ' 1084. Under applicable legal principles, Defendant, therefore, could not have conspired to violate this statute. Defendant=s undisputed belief, moreover, that only information assisting in the placement of bets and wagers was transmitted via interstate wires, undermines the mens rea requirements of both the substantive statute and the conspiracy statute. The Government has cited no persuasive authority to the contrary.
Perhaps most unsettling, the Government begins its brief with a 30-page statement of the case in which, while making limited use of citations to the record, it advances numerous misstatements of fact.2 This Court should not be misled. As discussed in Appellant=s Brief and in this Reply Brief, the relevant facts and authorities require reversal of Defendant=s convictions on all counts and dismissal of the charges.
POINT I
CONTRARY TO THE GOVERNMENT=S RESPONSE, THE EVIDENCE FAILED TO ESTABLISH ANY SUBSTANTIVE VIOLATIONS OF ' 1084 AND THE JURY INSTRUCTIONS AS TO THESE COUNTS WERE GRIEVOUSLY IN ERROR
In response to Defendant=s argument that the evidence failed to establish any substantive violation of ' 1084 and that the jury instructions were defective as to the substantive counts, the Government mounts a multi-pronged defense. First, the Government contends that the exemption set forth in ' 1084(b) does not apply to this case because it is not Alegal@ to place a bet in New York, despite the fact that New York prohibits only engaging in the business of gambling.
Second, the Government contends that Defendant violated the first clause of ' 1084(a), which prohibits transmission of Abets or wagers,@ on the theory that the transmission of wagering instructions constitutes transmission of bets or wagers as a matter of law. In making this argument, the Government adopts a position with respect to the regulation of interstate off-track betting that is directly contrary to its position at trial, and which starkly reveals how Defendant was wrongly deprived of a fair trial.
Third, the Government contends that Defendant violated the third clause of ' 1084(a), which prohibits transmission of Aa wire communication which entitles the recipient to receive money or credit as a result of bets or wagers,@ reasoning that every bet, once formed, entitles each party to the contract to money or credit.
Finally, the Government defends the court=s instruction concerning the element of knowledge by deeming Defendant=s argument a disguised effort to impute a specific intent requirement into ' 1084.
Each of the Government=s contentions is without merit.
A. Section 1084(b) Exempts the Transmission of Wagering Information from New York, a Jurisdiction in Which it is Not a Crime to Place a Bet.
In response to Defendant=s argument that the term Alegal@ in ' 1084(b) refers to whether the act of placing a bet is prohibited by state criminal law, the Government insists that it is not Alegal@ to place a bet in New York because New York has a longstanding policy against gambling in general. The Government, however, wholly ignores the equally deep-rooted distinction in New York law between betting or wagering on the one hand, and operating a gambling business, on the other. See Appellant=s Br. at 42-43. The Government, moreover, fails to cite any meaningful authority to counter the cases and legislative history cited by Defendant, all of which strongly indicate that ' 1084(b) exempts the transmission of wagering information from a jurisdiction in which the act of placing a bet is not a crime.
The cases cited by the Government in support of its claim that courts have Auniformly@ recognized that it is not Alegal@ to place a bet in New York reveal the tenuousness of the Government=s position. United States v. Kelley, 254 F. Supp. 9 (S.D.N.Y. 1966), which actually supports Defendant=s position, simply does not address the question of whether placing a bet is legal in New York. Rather, Kelley concerned a First Amendment challenge to ' 1084 from defendants who were alleged to be engaged in the business of bookmaking. The court, citing United States v. Borgese, 235 F. Supp. 286, 295-96 (S.D.N.Y. 1964), for the proposition that Agambling per se . . . is contrary to the law of the state of New York,@ concluded that ' 1084 did not infringe the guarantee of free speech because the Asubstantive evil@ that ' 1084 sought to curtail was Athe use of a federally controlled means of communication to violate state penal statutes.@ Kelley, 254 F. Supp. at 15 (emphasis added). Accordingly, contrary to the Government=s contention, Kelley, like the many other federal cases cited by Defendant, see Appellant=s Br. at 41-42, actually supports Defendant=s argument that ' 1084 concerns only conduct that violates state penal law.
Notably, Borgese recognizes the fact that New York penal law neither prohibits nor criminalizes the act of betting. The court cited the following summary of the gambling laws of New York:
AThe substance of this entire area of legislation, however, is that, no matter what form of gambling is involved, the mere player, contestant or bettor is not criminally liable, but that anyone who, in some capacity other than that of a player, operates, promotes or advances an gambling enterprises or activity is guilty of a crime.@
Borgese, 235 F. Supp. at 296 (quoting Third Interim Report of the State of New York Temporary Commission on Revision of the Penal Law and Criminal Code [1964] [Legislative Document No. 14], at 25) (emphasis added).
The New York State cases cited by the Government likewise do not support the Government=s contention that it is not Alegal@ to place a bet in New York. New York Racing Ass=n v. Hoblock, 270 A.D.2d 31, 704 N.Y.S.2d 52 (1st Dep=t 2000), does not even begin to address this proposition. Rather, Hoblock involved a challenge to New York=s Off-Track Betting (AOTB@) Corporation=s audio-only broadcasts of out-of-state horse races for telephone wagering purposes. This required the court to construe the statutory definition of Asimulcast.@ In doing so, the court, citing the state constitution and state penal law, simply noted the general policy against gambling in New York and the rule that the simulcasting statute must be strictly construed. 704 N.Y.S.2d at 55.
Nor does People v. World Interactive Gaming Corp., 185 Misc. 2d. 852, 714 N.Y.S.2d 844 (Sup. Ct. N.Y. Co. 1999) stand for the proposition that it is not legal to place a bet in New York. In contrast to the facts of this case, the respondents in World Interactive Gaming included World Interactive Gaming Corporation (AWIGC@), a Delaware corporation that maintained corporate offices in New York, and Golden Chips Casino, Inc. (AGCC@), an Antiguan subsidiary corporation wholly owned by WIGC and licensed to operate a casino in Antigua. The New York Attorney General began investigating WIGC because WIGC was attempting to sell WIGC stock by making cold calls to prospective investors, including individuals located in New York, even though neither the offering nor the cold-callers were properly registered with the State of New York. The State subsequently expanded the investigation to include GCC, which the court found to be completely dominated by WIGC. Respondents argued that the court lacked subject matter jurisdiction because Internet gambling fell outside the scope of New York state gambling prohibitions, since the gambling occurred outside New York. The court rejected this argument because GCC and WIGC actively promoted gambling in New York, in violation of New York Penal Law ' 225.05, by having established the gambling enterprise, advertising, and soliciting investors in New York. Crucially, the court stated that A[t]he violation had occurred long before a New York resident ever staked a bet.@ 185 Misc. 2d at 861 (emphasis added). The case in no way turned upon a determination that it is not legal to place a bet in New York.
In fact, the only case cited by the Government which addresses the legality of placing a bet in New York in the context of 18 U.S.C. ' 1084, United States v. Monteleon, Decision, 98 CR 812 (BDP) (S.D.N.Y. Apr. 28, 1999), has no precedential value. It fails, moreover, to consider the purposes and history of ' 1084 as well as the historical distinction in New York law between mere betting and engaging in the business of gambling. See SA212-21. Specifically, Monteleon consists of no more than an oral ruling denying defendant=s pretrial motions, which was neither reduced to a written order nor reported in any forum. Counsel=s research indicates, moreover, that the decision has not been cited by any subsequent court. Substantively, the Monteleon ruling considers neither federal court interpretations of the term Alegal@ as used in ' 1084, the legislative history of that provision, nor longstanding New York case law articulating and applying the distinction between betting and profiting from a gambling business. Monteleon, therefore, has no bearing on the questions presented here.
Like the court in Monteleon, the Government cites New York=s longstanding policy against gambling, but entirely ignores the equally deep-rooted distinction in New York law between engaging in the business of gambling and merely betting. See Watts v. Malatesta, 262 N.Y. 80, 81-82, 186 N.E. 210, 210-11 (1933) (Watts II). As the New York Court of Appeals observed as early as 1903:
There has always been observed a distinction between betting or gambling and maintaining a gambling house or a place to which people resorted to gamble. . . . The same distinction has obtained in this state, where ordinary betting has never been made a crime, though in some cases subject to small pecuniary mulcts, while the keeping of a gambling house, selling lottery tickets, and the profession of a common gambler have been subjected to severe punishment.
People v. Stedeker, 175 N.Y. 57,62, 67 N.E. 132, 133-34 (1903) (emphasis added).
Not only has it never been made a crime in New York to place a bet, but the New York General Obligations Law, on which the Government so heavily relies, actually permits recovery of wagered property by a mere bettor, but not by one engaged in the business of gambling. N.Y. Gen. Obl. Law ' 5-419; Watts II.
The development and interpretation of the provisions of the General Obligations Law cited by the Government, which were purposely removed from the New York Penal Law, 3 reveal the depth and significance of the distinction between placing a bet and running a gambling business. At common law, the bettor and the person with whom he placed his bet were considered in pari delicto. Meech v. Stoner, 19 N.Y. 26 (1859). This maxim, however, was abrogated by enactment of the statute, now N.Y. Gen. Obl. Law ' 5-419, providing a remedy for the losing party to recover the property wagered. Id. As a result, A[i]t is clear that in the eye of the law the professional gambler and his customer do not stand on the same place. They are not in pari delicto.@ Watts II, 262 N.Y. at 82, 186 N.E. at 211.4
The Government=s citations to New York Attorney General Opinion 84-F1 and to New York State Executive Law ' 63(12) likewise ignore the distinction between mere betting and engaging in a gambling business, and thus fail to support the Government=s position. Attorney General Opinion 84-F1 simply opines that the Division of the Lottery could not, consistent with the State Constitution, operate a game involving betting on sporting events. The opinion does not address the legality of betting in New York. Likewise, New York State Executive Law ' 63(12) simply permits the Attorney General to enjoin illegal acts, which the Attorney General has done to halt the operation of a gambling business in New York. See World Interactive Gaming, discussed supra. The Government cites no action by the Attorney General to enjoin the act of placing a bet.
Perhaps cognizant of the true significance of the distinction it ignores, the Government contends, as a fallback argument, that, even if it is legal to place a bet in New York, the process of Abetting@ is not legal in New York because it Arequires one party to place bets and another to offer and accept them, which is criminal.@ Gov. Br. at 57. The Government, however, cites no authority relating this proposition to ' 1084. In fact, this argument runs directly counter to both a plain reading of ' 1084(b) and its legislative history. Consistent with an ordinary reading of the statute, the House Committee Report clearly states that ' 1084(b) Awould exempt the transmission of gambling information from a State where the placing of bets and wagers on a sporting event is legal, to a State where betting on that particular event is legal.@ H.R. Rep. No. 87-967, 87th Cong., 1st Sess. (1961), reprinted in 1961 U.S.C.C.A.N. 2631, 2632 (emphasis added).
Moreover, the Government=s claim that portions of the House Report not cited by Defendant Aleave no doubt that Congress regarded New York as state in which betting is not legal,@ Gov. Br. at 58, shamelessly distorts this legislative history. As the Government well knows, the example provided in the House Report is limited to off-track betting, which, at the time, was legal only in Nevada. Thus, as the Report makes clear, at the time ' 1084 was enacted, it was legal to place a bet at a Nevada racetrack on a race being run in New York State, but it was not legal to place a bet at a New York racetrack on a race being run in Nevada, even though New York State law permitted parimutuel betting. See H.R. Rep. No. 87-967, 1961 U.S.C.C.A.N. at 2632-33. Under these circumstances, transmitting information from Nevada to New York, assisting with the placement of bets in New York on Nevada races, would not fall within the exemption. Id.
Currently, of course, where New York law now permits parimutuel off-track wagering, transmission of wagering information from Nevada to New York is protected by the exemption. Hence Capital OTB in New York, which accepts wagering instructions via telephone and the Internet from around the world, has operated unfettered for decades. The Government=s claim that the House Report concerning ' 1084 Adefinitively forecloses@ Defendant=s argument and that it Anotes specifically that betting is illegal in New York,@ Gov. Br. at 51, plainly misrepresents this legislative history.
Notwithstanding its contentions to the contrary, it is the Government which fails to address the portions of the House Report relevant to the question of whether Congress intended ' 1084(b) to exempt transmissions of wagering information from jurisdictions which have not made the placement of a bet a criminal offense. Notably, the Government wholly ignores Defendant=s reference to the legislative history of the preemption portion of ' 1084, which establishes beyond question that Congress was concerned with assisting the states in enforcement of its penal laws. See H.R. Rep. No. 87-967, 1961 U.S.C.C.A.N. at 2633.
Likewise, the Government fails to respond to the fact that, in keeping with this concept, the New York State Senate passed a bill in 1999 that would require any foreign corporation providing gambling or wagering services in New York via the Internet to register with the state. See Appellant=s Br. at 43. At the time Appellant=s Brief was filed, this bill, then numbered S.2044, was pending in a committee of the New York State Assembly. The same bill, now numbered A.4350, was introduced in the State Assembly on February 8, 2001, and is currently under review by the Racing and Wagering Committee. According to the sponsor=s memorandum,
[t]here are dozens of companies on the world wide web which offer interactive wagering programs. All of these companies are situated in foreign countries and market their services to New York State residents. This bill would require internet gambling companies to register as foreign corporation doing business in New York so that residents of this State may easily reach such corporations for service of process.
New York State Assembly, Memorandum in Support of Legislation, Bill No. A.4350. 5
The continued viability of this bill, and the fact that the New York State Senate passed it during the 1999 session, unequivocally attests that the lawmakers of New York fully anticipate that individuals in New York will place bets with offshore gambling entities. If such activity were indeed prohibited by New York law, then any such legislation would not have passed the Senate and would not continue to merit consideration year after year. Rather, it would have been squelched immediately upon introduction.
The simple fact is that the State of New York has never declared the mere bettor to be an outlaw. To the contrary, state lawmakers recognize that modern bettors can and will wager with offshore gambling corporations, and are taking steps to protect them. Thus, to hold that ' 1084(b), which strives for parity with state penal laws, does not exempt transmission of wagering information from New York, would contravene New York=s status quo.
B. The Government=s Newly-Revised Position on Appeal Concerning the Status of Interstate Off-Track Betting Glaringly Reveals How its Contrary Position at Trial Effectively Eviscerated the Defense in the Eyes of the Jury.
En route to its argument that the evidence established a violation of the first clause of ' 1084(a), which prohibits transmission of Abets or wagers@ in foreign commerce, the Government states that ACohen does not dispute that each of the Betting Counts was premised on bets that were placed and unconditionally accepted via WSE=s >click and bet= website or toll-free telephone lines.@ Gov. Br. at 61. This is inaccurate. The evidence established that the ABetting Counts@ were premised on wagering instructions that were transmitted via Internet or telephone to WSE=s offices in Antigua. A bet would be placed on the customer=s behalf in Antigua only if the customer= s wagering account contained sufficient funds to cover the bet and if WSE approved it. 6
As Defendant has previously explained, see Appellant=s Br. at 51-54, the account wagering format implemented by WSE was identical to the longstanding and unfettered practice of interstate offtrack betting in the horseracing industry B a practice which, at the time of Defendant=s conduct, and contrary to the district court=s instructions, A857, enjoyed no special protection from the reach of ' 1084. 7 Defendant=s uncontradicted testimony established that he in fact modeled WSE after Capital OTB in New York.
The Government, presumably recognizing the potential power of such testimony, insisted at trial that OTB was not regulated by ' 1084. While Defendant presented the district court with extensive authority establishing that what Defendant was doing was no different than what OTB had been doing for years, the Government, taking advantage of the district court= s apparent confusion 8 and citing no support whatsoever, informed the court that Athere are specific federal statutes dealing with telephone accounts and wagering in off track betting and harness racing. It=s not the same.@ A538.9 The Government went on to ask the court Ato instruct the jury that OTB is not regulated under Section 1084.@ A540.
Unfortunately for Defendant, the district court embraced the Government= s view, and gave the requested instruction. 10
Now, confronted with the force of Defendant=s argument on appeal, the Government has engineered a complete reversal of the position it took at trial, and suggests that OTB may, in fact, be regulated by ' 1084. In a weak attempt to gloss over the crucial reality that Defendant=s conduct was no different than that of OTB, the Government argues:
It similarly provides no help to Cohen that various states have authorized the establishment of Awagering account@ for the purposes of facilitating state-sponsored off-track betting. (See Br. 51-56). The fact that such Awagering account facilities@ exist does not mean that bettors place bets from out-of-state, that they do so by means of interstate wire communications, or that they may do so without infringing federal law. Cohen, of course, does not contend that the Department of Justice or any federal law enforcement agency has ever endorsed a view that interstate transmittal of such bets is lawful.
Gov. Br. at 70.
The disingenuousness of this response is staggering. Now, recognizing the vitality of Defendant=s argument, and bereft of any support to the contrary, the Government has no choice but to concede that OTB indeed is regulated by ' 1084.
This is a fact that the Department of Justice officially recognized long before Defendant=s trial. In comments submitted to the Senate Judiciary Committee on June 9, 1999, Acting Assistant Attorney General Jon P. Jennings expressed the following concern about S. 692, the AInternet Gambling Prohibition Act of 1999":
The Department of Justice notes that S. 692 may incorrectly imply that the Interstate Horse Racing Act of 1978, 15 U.S.C. ' 3001 et seq., allows for the legal transmission and receipt of interstate parimutuel bets or wagers. The Interstate Horse Racing Act does not allow for such gambling, and if a parimutuel wagering business currently transmits or receives interstate bets or wagers (as opposed to intrastate bets and wagers on the outcome of a race occurring in another state), it is violating federal gambling laws.
Letter from the Department of Justice to Senator Leahy Regarding S. 692 (June 9, 1999). 11
The inescapable fact is that Defendant=s testimony that he modeled WSE after Capital OTB was absolutely relevant to his state of mind with respect to each and every count of the indictment. For if OTB had been operating for decades without any threat of federal prosecution, then Defendant could justifiably conclude that operating his business in an identical manner would not violate federal law. Crucially, Defendant understood that the reason OTB had operated unfettered for so many years was because their account wagering format ensured that only information assisting in the placing of bets or wagers was ever transmitted via interstate or foreign wire communications.
The bottom line is that if the Government would have conceded at trial precisely that which it concedes on appeal B i.e., that OTB and Jay Cohen were in pari delicto, then the jury could never have been instructed that OTB was irrelevant to this case. If the jury had never been so instructed, then it could have been well-positioned to accept Defendant=s use of OTB as a model. As a consequence, the jury could then have appreciated defense counsel=s resulting argument that, if Defendant believed that OTB was not being prosecuted for precisely the same conduct (because, like WSE, OTB was only transmitting information in an account-based wagering system), then Defendant could not have knowingly used a wire communication facility to transmit bets or wagers in foreign commerce. In short, if the jury had been properly instructed, Defendant would have been in a compelling position to have been found not guilty of all charges.
C. The Government=s Contention that Transmission of Wagering Instructions Constitutes Transmission of a Bet or Wager Per Se is Entirely Without Merit.
The Government cannot escape the fact that the longstanding operation of interstate off-track wagering on horse racing, without any interference or threat of prosecution by the Federal Government, was premised upon the very same interpretation of ' 1084(a) that Defendant urges here B namely, that wagering instructions communicated to an account wagering facility constitute no more than information assisting in the placing of bets or wagers.
This same interpretation was incorporated by Congress into various legislative proposals to prohibit Internet Gambling. The Internet Gambling Prohibition Act of 1999, S.692, and the Internet Gambling Prohibition Act of 2000, H.3125, both proposed enactment of a new section to prohibit Internet gambling, 18 U.S.C. ' 1085, in which the term Ainformation assisting in the placing of bets or wagers@ was defined as Ainformation that is intended by the sender or recipient to be used by a person engaged in the business of betting or wagering to place, receive, or to otherwise make a bet or wager.@ S.692, Sec. (a)(5)(A); H.3125, Sec. (a)(5).
http://www.thedailyspread.com/blitherings/cohen_appeal2_1.html
The text of Jay Cohen's appeal.
Last Stop Before The Supreme Court?
Jay Cohen's attorneys file their final reply to the governments brief.
- - - - - - - - - - - -
March 3rd, 2001
This is Jay Cohen's reply the government's rebuttal of his appeal (found here)
TABLE OF CONTENTS
Table of Contents i
Table of Authorities iii
Introductory Statement 1
Point I
Contrary to the Government=s Response, the Evidence Failed to Establish any Substantive Violations of ' 1084 and the Jury Instructions as to These Counts Were Grievously in Error 4
A. Section 1084(b) Exempts the Transmission of Wagering Information from New York, a Jurisdiction in Which it is Not a Crime to Place a Bet 5
B. The Government=s Newly-Revised Position on Appeal Concerning the Status of Interstate Off-Track Betting Glaringly Reveals How its Contrary Position at Trial Effectively Eviscerated the Defense in the Eyes of the Jury 14
C. The Government=s Contention that Transmission of Wagering Instructions Constitutes Transmission of a Bet or Wager Per Se is Entirely Without Merit 19
D. The Government=s Newly Conceived Argument that a Contract to Bet Entitles Both Parties to AMoney or Credit as a Result of Bets or Wagers@ is Procedurally and Substantively Defective 23
E. The Evidence Failed to Establish that Defendant AKnowingly@ Used a Wire Communication Facility to Transmit Bets or Wagers in Foreign Commerce 27
Point II
The Rule of Lenity Mandates That Defendant=s Convictions be Reversed and the Charges Against Him Dismissed 29
Point III
This Court is Well-Positioned to Adopt the ACorrupt Motive@ Doctrine, Which Continues to Occupy an Unsettled Area of Law in this Circuit and the Supreme Court, Without Injecting Error Into Countless Conspiracy Convictions 32
A. Numerous Federal Courts Have Endorsed the Rationale Underlying the Powell Doctrine, Which Survives Feola 33
B. Neither This Court Nor the Supreme Court Has Definitively Rejected the Powell Doctrine 34
C. The Facts of this Case Uniquely Implicate the
Powell Doctrine 37
D. Embracing the Powell Doctrine Would Not Inject Error into Countless Conspiracy Convictions 40
Point IV
The Government=s Argument that the District Court Properly Declined to Permit the Deposition of Gyneth McAllister Misapprehends Both the Substance and Relevance of McAllister=s Proposed Testimony 45
Point V
The Government=s Response to Defendant=s Challenge to the District Court=s Deficient Instructions on Aiding and Abetting Effectively Advocates an Unconstitutional Constructive Amendment to the Indictment 47
A. The Government=s Theory of Aiding and Abetting Liability Was Predicated Solely Upon 18 U.S.C. ' 2(a) 47
B. Discussion 49
Conclusion 52
Certificate of Compliance 53
TABLE OF AUTHORITIES
FEDERAL CASES
STATE CASES
FEDERAL STATUTES AND RULES
15 U.S.C. ' 3001 17
15 U.S.C. ' 3002(3) 15
16 U.S.C. ' 3371, et seq. 43
FRAP 32(a)(7)(C) 53
STATE STATUTES
N.Y. Exec. Law ' 63(12) 10, 11
N.Y. Gen. Obl. Law ' 5-401 10
N.Y. Gen. Obl. Law ' 5-411 10
N.Y. Gen. Obl. Law ' 5-413 10
N.Y. Gen. Obl. Law ' 5-415 10
N.Y. Gen. Obl. Law ' 5-419 9-10, 21
OTHER AUTHORITIES
Black=s Law Dictionary (6th ed. 1990) 37
H.R. Rep. No. 87-967, 87th Cong., 1st Sess. (1961),
reprinted in 1961 U.S.C.C.A.N. 2631 11-13, 26
Internet Gambling Prohibition Act of 1999, S.692 19, 30
Internet Gambling Prohibition Act of 2000, H.3125 19, 30
LaFave & Scott, Criminal Law 34
Letter From the Department of Justice to Senator Leahy
Regarding S.692 (June 9, 1999) 17-18
New York Attorney General Opinion 84-F1 10
New York State Senate Bill No. S.2044 13
New York State Assembly Bill No. A.4350 13
New York State Assembly, Memorandum in Support
of Legislation, Bill No. A.4350 13-14
Pub. L. No. 106-553, ' 629, 114 Stat. 2762 15
Third Interim Report of the State of New York Temporary
Commission on Revision of the Penal Law and
Criminal Code (1964) (Legislative Document No. 14) 6
Introductory Statement
In response to the extensively-briefed legal issues presented by Defendant-Appellant Jay Cohen (ADefendant@ ), and in defense of what clearly amounts to a selective prosecution,1 the Government finds itself cobbling together marginally relevant authority, abandoning legal positions it maintained before the district court, and, in its effort to portray Defendant as contriving novel interpretations of law in order to evade the provisions of 18 U.S.C. ' 1084, ignoring substantial authority that undermines its position.
This record unequivocally establishes that Defendant had a reasonable, good faith belief that his conduct was not unlawful, based in no small part on the undisputed fact that Defendant modeled World Sports Exchange (AWSE@) after Capital Off-Track Betting (AOTB@), one of numerous off-track betting enterprises that, at all relevant times, enjoyed no special protections from the reach of ' 1084. Under applicable legal principles, Defendant, therefore, could not have conspired to violate this statute. Defendant=s undisputed belief, moreover, that only information assisting in the placement of bets and wagers was transmitted via interstate wires, undermines the mens rea requirements of both the substantive statute and the conspiracy statute. The Government has cited no persuasive authority to the contrary.
Perhaps most unsettling, the Government begins its brief with a 30-page statement of the case in which, while making limited use of citations to the record, it advances numerous misstatements of fact.2 This Court should not be misled. As discussed in Appellant=s Brief and in this Reply Brief, the relevant facts and authorities require reversal of Defendant=s convictions on all counts and dismissal of the charges.
POINT I
CONTRARY TO THE GOVERNMENT=S RESPONSE, THE EVIDENCE FAILED TO ESTABLISH ANY SUBSTANTIVE VIOLATIONS OF ' 1084 AND THE JURY INSTRUCTIONS AS TO THESE COUNTS WERE GRIEVOUSLY IN ERROR
In response to Defendant=s argument that the evidence failed to establish any substantive violation of ' 1084 and that the jury instructions were defective as to the substantive counts, the Government mounts a multi-pronged defense. First, the Government contends that the exemption set forth in ' 1084(b) does not apply to this case because it is not Alegal@ to place a bet in New York, despite the fact that New York prohibits only engaging in the business of gambling.
Second, the Government contends that Defendant violated the first clause of ' 1084(a), which prohibits transmission of Abets or wagers,@ on the theory that the transmission of wagering instructions constitutes transmission of bets or wagers as a matter of law. In making this argument, the Government adopts a position with respect to the regulation of interstate off-track betting that is directly contrary to its position at trial, and which starkly reveals how Defendant was wrongly deprived of a fair trial.
Third, the Government contends that Defendant violated the third clause of ' 1084(a), which prohibits transmission of Aa wire communication which entitles the recipient to receive money or credit as a result of bets or wagers,@ reasoning that every bet, once formed, entitles each party to the contract to money or credit.
Finally, the Government defends the court=s instruction concerning the element of knowledge by deeming Defendant=s argument a disguised effort to impute a specific intent requirement into ' 1084.
Each of the Government=s contentions is without merit.
A. Section 1084(b) Exempts the Transmission of Wagering Information from New York, a Jurisdiction in Which it is Not a Crime to Place a Bet.
In response to Defendant=s argument that the term Alegal@ in ' 1084(b) refers to whether the act of placing a bet is prohibited by state criminal law, the Government insists that it is not Alegal@ to place a bet in New York because New York has a longstanding policy against gambling in general. The Government, however, wholly ignores the equally deep-rooted distinction in New York law between betting or wagering on the one hand, and operating a gambling business, on the other. See Appellant=s Br. at 42-43. The Government, moreover, fails to cite any meaningful authority to counter the cases and legislative history cited by Defendant, all of which strongly indicate that ' 1084(b) exempts the transmission of wagering information from a jurisdiction in which the act of placing a bet is not a crime.
The cases cited by the Government in support of its claim that courts have Auniformly@ recognized that it is not Alegal@ to place a bet in New York reveal the tenuousness of the Government=s position. United States v. Kelley, 254 F. Supp. 9 (S.D.N.Y. 1966), which actually supports Defendant=s position, simply does not address the question of whether placing a bet is legal in New York. Rather, Kelley concerned a First Amendment challenge to ' 1084 from defendants who were alleged to be engaged in the business of bookmaking. The court, citing United States v. Borgese, 235 F. Supp. 286, 295-96 (S.D.N.Y. 1964), for the proposition that Agambling per se . . . is contrary to the law of the state of New York,@ concluded that ' 1084 did not infringe the guarantee of free speech because the Asubstantive evil@ that ' 1084 sought to curtail was Athe use of a federally controlled means of communication to violate state penal statutes.@ Kelley, 254 F. Supp. at 15 (emphasis added). Accordingly, contrary to the Government=s contention, Kelley, like the many other federal cases cited by Defendant, see Appellant=s Br. at 41-42, actually supports Defendant=s argument that ' 1084 concerns only conduct that violates state penal law.
Notably, Borgese recognizes the fact that New York penal law neither prohibits nor criminalizes the act of betting. The court cited the following summary of the gambling laws of New York:
AThe substance of this entire area of legislation, however, is that, no matter what form of gambling is involved, the mere player, contestant or bettor is not criminally liable, but that anyone who, in some capacity other than that of a player, operates, promotes or advances an gambling enterprises or activity is guilty of a crime.@
Borgese, 235 F. Supp. at 296 (quoting Third Interim Report of the State of New York Temporary Commission on Revision of the Penal Law and Criminal Code [1964] [Legislative Document No. 14], at 25) (emphasis added).
The New York State cases cited by the Government likewise do not support the Government=s contention that it is not Alegal@ to place a bet in New York. New York Racing Ass=n v. Hoblock, 270 A.D.2d 31, 704 N.Y.S.2d 52 (1st Dep=t 2000), does not even begin to address this proposition. Rather, Hoblock involved a challenge to New York=s Off-Track Betting (AOTB@) Corporation=s audio-only broadcasts of out-of-state horse races for telephone wagering purposes. This required the court to construe the statutory definition of Asimulcast.@ In doing so, the court, citing the state constitution and state penal law, simply noted the general policy against gambling in New York and the rule that the simulcasting statute must be strictly construed. 704 N.Y.S.2d at 55.
Nor does People v. World Interactive Gaming Corp., 185 Misc. 2d. 852, 714 N.Y.S.2d 844 (Sup. Ct. N.Y. Co. 1999) stand for the proposition that it is not legal to place a bet in New York. In contrast to the facts of this case, the respondents in World Interactive Gaming included World Interactive Gaming Corporation (AWIGC@), a Delaware corporation that maintained corporate offices in New York, and Golden Chips Casino, Inc. (AGCC@), an Antiguan subsidiary corporation wholly owned by WIGC and licensed to operate a casino in Antigua. The New York Attorney General began investigating WIGC because WIGC was attempting to sell WIGC stock by making cold calls to prospective investors, including individuals located in New York, even though neither the offering nor the cold-callers were properly registered with the State of New York. The State subsequently expanded the investigation to include GCC, which the court found to be completely dominated by WIGC. Respondents argued that the court lacked subject matter jurisdiction because Internet gambling fell outside the scope of New York state gambling prohibitions, since the gambling occurred outside New York. The court rejected this argument because GCC and WIGC actively promoted gambling in New York, in violation of New York Penal Law ' 225.05, by having established the gambling enterprise, advertising, and soliciting investors in New York. Crucially, the court stated that A[t]he violation had occurred long before a New York resident ever staked a bet.@ 185 Misc. 2d at 861 (emphasis added). The case in no way turned upon a determination that it is not legal to place a bet in New York.
In fact, the only case cited by the Government which addresses the legality of placing a bet in New York in the context of 18 U.S.C. ' 1084, United States v. Monteleon, Decision, 98 CR 812 (BDP) (S.D.N.Y. Apr. 28, 1999), has no precedential value. It fails, moreover, to consider the purposes and history of ' 1084 as well as the historical distinction in New York law between mere betting and engaging in the business of gambling. See SA212-21. Specifically, Monteleon consists of no more than an oral ruling denying defendant=s pretrial motions, which was neither reduced to a written order nor reported in any forum. Counsel=s research indicates, moreover, that the decision has not been cited by any subsequent court. Substantively, the Monteleon ruling considers neither federal court interpretations of the term Alegal@ as used in ' 1084, the legislative history of that provision, nor longstanding New York case law articulating and applying the distinction between betting and profiting from a gambling business. Monteleon, therefore, has no bearing on the questions presented here.
Like the court in Monteleon, the Government cites New York=s longstanding policy against gambling, but entirely ignores the equally deep-rooted distinction in New York law between engaging in the business of gambling and merely betting. See Watts v. Malatesta, 262 N.Y. 80, 81-82, 186 N.E. 210, 210-11 (1933) (Watts II). As the New York Court of Appeals observed as early as 1903:
There has always been observed a distinction between betting or gambling and maintaining a gambling house or a place to which people resorted to gamble. . . . The same distinction has obtained in this state, where ordinary betting has never been made a crime, though in some cases subject to small pecuniary mulcts, while the keeping of a gambling house, selling lottery tickets, and the profession of a common gambler have been subjected to severe punishment.
People v. Stedeker, 175 N.Y. 57,62, 67 N.E. 132, 133-34 (1903) (emphasis added).
Not only has it never been made a crime in New York to place a bet, but the New York General Obligations Law, on which the Government so heavily relies, actually permits recovery of wagered property by a mere bettor, but not by one engaged in the business of gambling. N.Y. Gen. Obl. Law ' 5-419; Watts II.
The development and interpretation of the provisions of the General Obligations Law cited by the Government, which were purposely removed from the New York Penal Law, 3 reveal the depth and significance of the distinction between placing a bet and running a gambling business. At common law, the bettor and the person with whom he placed his bet were considered in pari delicto. Meech v. Stoner, 19 N.Y. 26 (1859). This maxim, however, was abrogated by enactment of the statute, now N.Y. Gen. Obl. Law ' 5-419, providing a remedy for the losing party to recover the property wagered. Id. As a result, A[i]t is clear that in the eye of the law the professional gambler and his customer do not stand on the same place. They are not in pari delicto.@ Watts II, 262 N.Y. at 82, 186 N.E. at 211.4
The Government=s citations to New York Attorney General Opinion 84-F1 and to New York State Executive Law ' 63(12) likewise ignore the distinction between mere betting and engaging in a gambling business, and thus fail to support the Government=s position. Attorney General Opinion 84-F1 simply opines that the Division of the Lottery could not, consistent with the State Constitution, operate a game involving betting on sporting events. The opinion does not address the legality of betting in New York. Likewise, New York State Executive Law ' 63(12) simply permits the Attorney General to enjoin illegal acts, which the Attorney General has done to halt the operation of a gambling business in New York. See World Interactive Gaming, discussed supra. The Government cites no action by the Attorney General to enjoin the act of placing a bet.
Perhaps cognizant of the true significance of the distinction it ignores, the Government contends, as a fallback argument, that, even if it is legal to place a bet in New York, the process of Abetting@ is not legal in New York because it Arequires one party to place bets and another to offer and accept them, which is criminal.@ Gov. Br. at 57. The Government, however, cites no authority relating this proposition to ' 1084. In fact, this argument runs directly counter to both a plain reading of ' 1084(b) and its legislative history. Consistent with an ordinary reading of the statute, the House Committee Report clearly states that ' 1084(b) Awould exempt the transmission of gambling information from a State where the placing of bets and wagers on a sporting event is legal, to a State where betting on that particular event is legal.@ H.R. Rep. No. 87-967, 87th Cong., 1st Sess. (1961), reprinted in 1961 U.S.C.C.A.N. 2631, 2632 (emphasis added).
Moreover, the Government=s claim that portions of the House Report not cited by Defendant Aleave no doubt that Congress regarded New York as state in which betting is not legal,@ Gov. Br. at 58, shamelessly distorts this legislative history. As the Government well knows, the example provided in the House Report is limited to off-track betting, which, at the time, was legal only in Nevada. Thus, as the Report makes clear, at the time ' 1084 was enacted, it was legal to place a bet at a Nevada racetrack on a race being run in New York State, but it was not legal to place a bet at a New York racetrack on a race being run in Nevada, even though New York State law permitted parimutuel betting. See H.R. Rep. No. 87-967, 1961 U.S.C.C.A.N. at 2632-33. Under these circumstances, transmitting information from Nevada to New York, assisting with the placement of bets in New York on Nevada races, would not fall within the exemption. Id.
Currently, of course, where New York law now permits parimutuel off-track wagering, transmission of wagering information from Nevada to New York is protected by the exemption. Hence Capital OTB in New York, which accepts wagering instructions via telephone and the Internet from around the world, has operated unfettered for decades. The Government=s claim that the House Report concerning ' 1084 Adefinitively forecloses@ Defendant=s argument and that it Anotes specifically that betting is illegal in New York,@ Gov. Br. at 51, plainly misrepresents this legislative history.
Notwithstanding its contentions to the contrary, it is the Government which fails to address the portions of the House Report relevant to the question of whether Congress intended ' 1084(b) to exempt transmissions of wagering information from jurisdictions which have not made the placement of a bet a criminal offense. Notably, the Government wholly ignores Defendant=s reference to the legislative history of the preemption portion of ' 1084, which establishes beyond question that Congress was concerned with assisting the states in enforcement of its penal laws. See H.R. Rep. No. 87-967, 1961 U.S.C.C.A.N. at 2633.
Likewise, the Government fails to respond to the fact that, in keeping with this concept, the New York State Senate passed a bill in 1999 that would require any foreign corporation providing gambling or wagering services in New York via the Internet to register with the state. See Appellant=s Br. at 43. At the time Appellant=s Brief was filed, this bill, then numbered S.2044, was pending in a committee of the New York State Assembly. The same bill, now numbered A.4350, was introduced in the State Assembly on February 8, 2001, and is currently under review by the Racing and Wagering Committee. According to the sponsor=s memorandum,
[t]here are dozens of companies on the world wide web which offer interactive wagering programs. All of these companies are situated in foreign countries and market their services to New York State residents. This bill would require internet gambling companies to register as foreign corporation doing business in New York so that residents of this State may easily reach such corporations for service of process.
New York State Assembly, Memorandum in Support of Legislation, Bill No. A.4350. 5
The continued viability of this bill, and the fact that the New York State Senate passed it during the 1999 session, unequivocally attests that the lawmakers of New York fully anticipate that individuals in New York will place bets with offshore gambling entities. If such activity were indeed prohibited by New York law, then any such legislation would not have passed the Senate and would not continue to merit consideration year after year. Rather, it would have been squelched immediately upon introduction.
The simple fact is that the State of New York has never declared the mere bettor to be an outlaw. To the contrary, state lawmakers recognize that modern bettors can and will wager with offshore gambling corporations, and are taking steps to protect them. Thus, to hold that ' 1084(b), which strives for parity with state penal laws, does not exempt transmission of wagering information from New York, would contravene New York=s status quo.
B. The Government=s Newly-Revised Position on Appeal Concerning the Status of Interstate Off-Track Betting Glaringly Reveals How its Contrary Position at Trial Effectively Eviscerated the Defense in the Eyes of the Jury.
En route to its argument that the evidence established a violation of the first clause of ' 1084(a), which prohibits transmission of Abets or wagers@ in foreign commerce, the Government states that ACohen does not dispute that each of the Betting Counts was premised on bets that were placed and unconditionally accepted via WSE=s >click and bet= website or toll-free telephone lines.@ Gov. Br. at 61. This is inaccurate. The evidence established that the ABetting Counts@ were premised on wagering instructions that were transmitted via Internet or telephone to WSE=s offices in Antigua. A bet would be placed on the customer=s behalf in Antigua only if the customer= s wagering account contained sufficient funds to cover the bet and if WSE approved it. 6
As Defendant has previously explained, see Appellant=s Br. at 51-54, the account wagering format implemented by WSE was identical to the longstanding and unfettered practice of interstate offtrack betting in the horseracing industry B a practice which, at the time of Defendant=s conduct, and contrary to the district court=s instructions, A857, enjoyed no special protection from the reach of ' 1084. 7 Defendant=s uncontradicted testimony established that he in fact modeled WSE after Capital OTB in New York.
The Government, presumably recognizing the potential power of such testimony, insisted at trial that OTB was not regulated by ' 1084. While Defendant presented the district court with extensive authority establishing that what Defendant was doing was no different than what OTB had been doing for years, the Government, taking advantage of the district court= s apparent confusion 8 and citing no support whatsoever, informed the court that Athere are specific federal statutes dealing with telephone accounts and wagering in off track betting and harness racing. It=s not the same.@ A538.9 The Government went on to ask the court Ato instruct the jury that OTB is not regulated under Section 1084.@ A540.
Unfortunately for Defendant, the district court embraced the Government= s view, and gave the requested instruction. 10
Now, confronted with the force of Defendant=s argument on appeal, the Government has engineered a complete reversal of the position it took at trial, and suggests that OTB may, in fact, be regulated by ' 1084. In a weak attempt to gloss over the crucial reality that Defendant=s conduct was no different than that of OTB, the Government argues:
It similarly provides no help to Cohen that various states have authorized the establishment of Awagering account@ for the purposes of facilitating state-sponsored off-track betting. (See Br. 51-56). The fact that such Awagering account facilities@ exist does not mean that bettors place bets from out-of-state, that they do so by means of interstate wire communications, or that they may do so without infringing federal law. Cohen, of course, does not contend that the Department of Justice or any federal law enforcement agency has ever endorsed a view that interstate transmittal of such bets is lawful.
Gov. Br. at 70.
The disingenuousness of this response is staggering. Now, recognizing the vitality of Defendant=s argument, and bereft of any support to the contrary, the Government has no choice but to concede that OTB indeed is regulated by ' 1084.
This is a fact that the Department of Justice officially recognized long before Defendant=s trial. In comments submitted to the Senate Judiciary Committee on June 9, 1999, Acting Assistant Attorney General Jon P. Jennings expressed the following concern about S. 692, the AInternet Gambling Prohibition Act of 1999":
The Department of Justice notes that S. 692 may incorrectly imply that the Interstate Horse Racing Act of 1978, 15 U.S.C. ' 3001 et seq., allows for the legal transmission and receipt of interstate parimutuel bets or wagers. The Interstate Horse Racing Act does not allow for such gambling, and if a parimutuel wagering business currently transmits or receives interstate bets or wagers (as opposed to intrastate bets and wagers on the outcome of a race occurring in another state), it is violating federal gambling laws.
Letter from the Department of Justice to Senator Leahy Regarding S. 692 (June 9, 1999). 11
The inescapable fact is that Defendant=s testimony that he modeled WSE after Capital OTB was absolutely relevant to his state of mind with respect to each and every count of the indictment. For if OTB had been operating for decades without any threat of federal prosecution, then Defendant could justifiably conclude that operating his business in an identical manner would not violate federal law. Crucially, Defendant understood that the reason OTB had operated unfettered for so many years was because their account wagering format ensured that only information assisting in the placing of bets or wagers was ever transmitted via interstate or foreign wire communications.
The bottom line is that if the Government would have conceded at trial precisely that which it concedes on appeal B i.e., that OTB and Jay Cohen were in pari delicto, then the jury could never have been instructed that OTB was irrelevant to this case. If the jury had never been so instructed, then it could have been well-positioned to accept Defendant=s use of OTB as a model. As a consequence, the jury could then have appreciated defense counsel=s resulting argument that, if Defendant believed that OTB was not being prosecuted for precisely the same conduct (because, like WSE, OTB was only transmitting information in an account-based wagering system), then Defendant could not have knowingly used a wire communication facility to transmit bets or wagers in foreign commerce. In short, if the jury had been properly instructed, Defendant would have been in a compelling position to have been found not guilty of all charges.
C. The Government=s Contention that Transmission of Wagering Instructions Constitutes Transmission of a Bet or Wager Per Se is Entirely Without Merit.
The Government cannot escape the fact that the longstanding operation of interstate off-track wagering on horse racing, without any interference or threat of prosecution by the Federal Government, was premised upon the very same interpretation of ' 1084(a) that Defendant urges here B namely, that wagering instructions communicated to an account wagering facility constitute no more than information assisting in the placing of bets or wagers.
This same interpretation was incorporated by Congress into various legislative proposals to prohibit Internet Gambling. The Internet Gambling Prohibition Act of 1999, S.692, and the Internet Gambling Prohibition Act of 2000, H.3125, both proposed enactment of a new section to prohibit Internet gambling, 18 U.S.C. ' 1085, in which the term Ainformation assisting in the placing of bets or wagers@ was defined as Ainformation that is intended by the sender or recipient to be used by a person engaged in the business of betting or wagering to place, receive, or to otherwise make a bet or wager.@ S.692, Sec. (a)(5)(A); H.3125, Sec. (a)(5).