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UNITED STATES v. JACOBS

August 29, 1990

UNITED STATES OF AMERICA, Plaintiff,
v.
NORMAN JACOBS and REX RASMUSSEN, Defendants


James H. Alesia, United States District Judge.


The opinion of the court was delivered by: ALESIA

JAMES H. ALESIA, UNITED STATES DISTRICT JUDGE

 Each of the two defendants in this case, Norman Jacobs ("Jacobs") and Rex Rasmussen ("Rasmussen"), has filed a motion to dismiss the indictment against him on grounds of outrageous government misconduct and pre-indictment delay. For the reasons set forth below, at this time, the Court denies the motions of both defendants without an evidentiary hearing.

 I. Facts

 In an eight-count indictment, the Government has charged Jacobs and Rasmussen with violations of certain federal narcotics laws. These charges arose from a lengthy undercover operation conducted by the Federal Bureau of Investigation (FBI) with the cooperation of an informant named Todd Darling ("Darling").

 Because Darling could not afford to pay this gambling debt, on or about March of 1983, he contacted Jacobs for assistance in arranging a $ 10,000.00 "juice" loan. Jacobs and Darling became acquainted during the course of Jacobs' heavy gambling days during the 1970s and early 1980s. During this same period, Jacobs, through his gambling activities, also became acquainted with Rasmussen and other gamblers who traded information about sporting events and the various odds being offered by illegal bookmakers.

 After being contacted by Darling, Jacobs introduced Darling to a loan shark named "Ben." *fn1" Ben indicated that he would provide a $ 10,000.00 "juice" loan to Darling at an interest rate of five percent per week, *fn2" but only if Jacobs agreed to guarantee the loan. Jacobs agreed to do so, and on April 1, 1983, Jacobs gave Darling a $ 5,000.00 installment at Jacobs' dental office. On the following day, Darling received the balance of the loan from Jacobs. Although Darling made the first couple of weekly interest payments to Jacobs, he thereafter defaulted.

 In May of 1983, Darling approached the Government and offered to cooperate with federal agents concerning the "juice" loan arranged by Jacobs and unrelated bookmaking activities. Pursuant to this investigation, on or about May 9, 1983, Darling, under the supervision of federal agents, began to covertly record numerous conversations with Jacobs and Ben related to the loan transaction. For approximately the following year, the focus of the Government's investigation and the topic of the recorded conversations were the usurious "juice" loan.

 Meanwhile, because Darling had ceased making the weekly interest payments on the "juice" loan to Jacobs, Ben looked to Jacobs for repayment. Fearing the consequences that might result from his failure to make good on his guaranty to Ben and his underworld sources, Jacobs continued to make the weekly interest payments on the "juice" loan to Ben.

 In May of 1984, the focus of the Government's investigation shifted from the usurious "juice" loan arranged by Jacobs and bookmaking to narcotics. The parties disagree as to who introduced the subject of narcotics.

 A. The Government's Version

 According to the Government, in May of 1984, Jacobs telephoned Darling regarding the loan. When Jacobs placed this call, Darling had ceased his undercover contact with Jacobs, so Darling advised the FBI of the call. At the direction of the FBI, Darling subsequently attempted to arrange a meeting with "Buck," another of Jacobs' underworld loan sources, on the pretext of making payments on the loan to Buck directly. To that end, on May 16, 1984, Darling placed a telephone call to Jacobs at his office. This call was placed by Darling from the FBI's office and, therefore, was recorded. During this conversation, Jacobs put Buck on the telephone and Buck told Darling that he now owed $ 31,000.00 in principal and interest on the "juice" loan. In addition, Buck instructed Darling to set up a meeting with Jacobs when Darling had the money to repay the loan.

 After receiving this telephone call at home from Jacobs, Darling immediately advised the FBI. According to the Government, this unexpected development in the investigation caused it to shift its focus from the usurious "juice" loan and bookmaking activities to narcotics. Consequently, the Government instructed Darling to advise Jacobs that Darling could obtain narcotics in order to determine whether Jacobs could or would produce a buyer for them, as suggested during the previous, unrecorded telephone conversation.

 On May 23, 1984, Darling met with Jacobs for breakfast and recorded their meeting. During this meeting, Darling told Jacobs that Darling had 20 ounces of cocaine. Jacobs indicated that he had a possible purchaser for the cocaine and that he would call him that day. Jacobs did, in fact, attempt to reach this as yet unnamed possible purchaser during the meeting. Over the next several days, Jacobs and Darling had several telephone conversations pertaining to this potential purchase.

 On May 30, 1984, Darling received a telephone call from Rasmussen. During this conversation, which was the first recorded conversation between Darling and Rasmussen, Rasmussen introduced himself to Darling as a friend of Jacobs. Rasmussen then mentioned that Jacobs said Darling "had something." Darling and Rasmussen also discussed price and purity. On the following day, Jacobs telephoned Darling and confirmed that he had asked Rasmussen to contact Darling and that Jacobs had discussed the issue of price with Rasmussen prior to Rasmussen's call to Darling.

 Over the course of the next several weeks, Darling recorded numerous conversations involving himself, Jacobs, and Rasmussen. During these conversations, Darling, Jacobs, and Rasmussen negotiated the sales price of the cocaine, the quantity available for sale, the availability of a sample for testing, and the manner in which Darling and his cocaine source, undercover agent Raymond Spoon from the FBI, ...


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