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United States v. Five Thousand Six Hundred Eight Dollars and Thirty Cents

January 7, 1964

UNITED STATES OF AMERICA, LIBELLANT-APPELLEE,
v.
FIVE THOUSAND SIX HUNDRED EIGHT DOLLARS AND THIRTY CENTS ($5,608.30) IN UNITED STATES COIN AND CURRENCY, RESPONDENT, AND RITA LEADER, INTERVENOR-APPELLANT.



Author: Duffy

Before DUFFY, KNOCH and CASTLE, Circuit Judges.

DUFFY, Circuit Judge.

This is a libel action brought by the United States seeking the forfeiture to the United States of $5,608.30 in United States coin and currency.

Libellant alleges that on October 20, 1958, at 3000-3002 West Irving Park Boulevard, Chicago, Illinois, a bookmaking business was being operated without the owners, operators or conductors thereof having paid the special tax or having registered with the District Director of Internal Revenue.*fn1

The libel alleged the monies seized had been used or were intended to be used in violation of the Internal Revenue Laws of the United States.

On June 8, 1959, the Intervenor-Claimant, Rita Leader, intervened with leave of court, filed a claim for respondent monies, and in her answer denied that the respondent monies had been used or were intended to be used as alleged in the libel.

Rita Leader is the proprietress of a liquor store and tavern located at 3000-3002 Irving Park Boulevard in Chicago, and had been such proprietress since 1941. She testified the monies seized were from proceeds from the liquor store and tavern over the preceding weekend, and from the proceeds of a loan from the Markow Currency Exchange made on the previous Friday and intended to be used in-cashing customers' checks during the week.*fn2

The tavern area is located on the eastern portion of the described premises. It is approximately sixty feet in length and forty-five feet in width with an oval bar against the east wall. From the tavern area, there is an open passageway that leads north to the back yard. In the passageway, there are two doors located on the west wall, leading to washrooms. There is one door in the east wall which opens into an office about eleven feet square. There is no other means of ingress or egress from this office. The liquor store is located at 3002 Irving Park Boulevard and is connected with the tavern area by an open archway near the south end of the two addresses.

On October 20, 1958, at about 3 p. m., Chicago Police Officers Roy Drolen and John Hastings entered the liquor store and walked through the archway into the tavern. They sat at the bar. Two seats to the left of Officer Drolen was an elderly lady who was engaged in a conversation with the bartender about "horses running." The woman said, "I have a good one. I am going to play it $4 across the board." The woman then walked from the bar to the rear of the tavern. She opened the door to the office and stepped inside.

Officer Drolen followed the woman at a distance of five or six feet. When she opened the door, Drolen observed two men seated at the desk inside. Each had before him a copy of the Chicago Turf Bulletin referred to in the testimony as "Scratch Sheets."*fn3 In addition to the scratch sheets in the possession of the two men at the desk, there was another similar scratch sheet posted on the south wall of the office.

In plain sight on the desk at which the two men were seated was $46 in currency. In the top center drawer of the desk was $1,329.80 in currency and cash lying loose. Also, five envelopes were found in the desk containing respectively, $750, $2,540, $180, $405 and $357.50. These envelopes had written notations thereon such as "Johnson," "Paul, 2540," "arrow," "Norm 405" and "Norm from J. Mack."

After Officer Hastings and Sgt. Allman had entered the office, David Leader came into the room and identified himself as manager of the liquor store. Allman asked Leader what he was doing with an operation like that where he had so much money invested running a book. Allman testified that Leader replied, "Well, it helps pay the rent." Sgt. Allman also testified that in his opinion a handbook operation on October 20, 1958 was being conducted at 3000 West Irving Park Boulevard.

Before the trial, intervenor Leader moved that the property seized be returned to her on the ground that it was unlawfully seized against her will and without a search warrant. The motion asked that the cash and currency seized be suppressed as evidence "in any proceedings."

The principal argument of intervenor on this appeal is that the District Court erred in holding that a motion to suppress on the ground that evidence had been obtained in violation of the ...


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