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United States v. Neal

January 10, 2008

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
JOHN NEAL, DEFENDANT-APPELLANT.



Appeals from the United States District Court for the Southern District of Indiana, Indianapolis Division. Nos. 99 CR 15 & 00 CR 62-John Daniel Tinder, Judge.

The opinion of the court was delivered by: Ripple, Circuit Judge.

ARGUED OCTOBER 29, 2007

Before BAUER, RIPPLE and WILLIAMS, Circuit Judges.

In 2000, John Neal pleaded guilty to six federal charges for which he was sentenced to 42 months' imprisonment and thirty-six months' supervised release. In September 2006, the Government petitioned the court to revoke Mr. Neal's supervised release. The district court granted the Government's petition and sentenced Mr. Neal to an additional 24 months' imprisonment. Mr. Neal now appeals his sentence. For the reasons set forth in this opinion, we affirm the judgment of the district court.

I. BACKGROUND

A. Mr. Neal's Convictions

In March 2000, Mr. Neal was charged in a thirteen-count indictment with conspiracy to defraud the United States Government, operating an illegal gambling business, money laundering and tax evasion.*fn1 Shortly thereafter, in April 2000, the Government, by information, charged Mr. Neal with an additional four counts of money laundering. Mr. Neal then entered a plea agreement with the Government on Counts 1 and 2 of the superseding indictment and on all four counts contained in the information. With respect to the counts charged in the indictment, the court entered its judgment on December 15, 2000, sentencing Mr. Neal to 42 months' imprisonment and 36 months' supervised release.*fn2 The court entered judgment on the counts charged in the information on the same day; that judgment also sentenced Mr. Neal to 42 months' imprisonment and 36 months' supervised release. Each judgment indicated that the sentences imposed were to run concurrently with the other.

B. Mr. Neal's Supervised Release

Mr. Neal served his sentence and began his term of supervised release on April 19, 2004. The terms of Mr. Neal's release included the following conditions: (1) "[t]he defendant shall not commit another federal, state, or local crime"; (2) "the defendant shall . . . submit [to his probation officer] a truthful and complete written report within the first five days of each month"; (3) "the defendant shall work regularly at a lawful occupation"; (4) "the defendant shall not incur new credit charges or open additional lines of credit without the approval of the probation officer"; and (5) "[t]he defendant shall refrain from purchasing, delivering, repairing, or collecting monies from any video gambling machines similar to those of the instant Federal offense" and "is further prohibited from employing any individual to perform the job duties of delivering, repairing, or collecting monies from any video gambling machines similar to those of the instant Federal offense." R.94 at 3-4.

During the term of his supervised release, Mr. Neal became the target of a gambling investigation conducted by state excise police. On September 18, 2004, pursuant to warrant, state police conducted searches of Mr. Neal's home and business properties; the search uncovered large amounts of unreported cash as well as gambling machines and other gambling equipment.

Two days after execution of the warrant, the Government petitioned for revocation of Mr. Neal's supervised release. According to the Government, Mr. Neal had violated each of the conditions of his release set forth above. After the Government filed its petition, the State of Indiana charged Mr. Neal with seventy-one violations of state law involving illegal gambling, money laundering and operating a corrupt business.

C. Revocation Proceedings

On January 26, 2007,*fn3 the district court held a hearing on the alleged violations. Mr. Neal admitted that he had failed to submit truthful monthly financial statements to his probation officer and that he had opened a new line of credit. He requested, however, that the court continue the revocation hearing on the other alleged violations pending trial on the state offenses.*fn4 The district court refused and heard evidence on the violations.

At the hearing, Mr. Neal's probation officer, Troy Adamson, testified that, although Mr. Neal had filled out monthly reports, the information contained in the reports was inaccurate. Mr. Neal's monthly reports listed only a pension income of $5,988.42 per month, totaling $72,000 per year. However, Mr. Neal's federal tax returns listed income in excess of $200,000 per year for 2004 and 2005. Additionally, Mr. Neal's monthly report failed to identify bank accounts with balances in excess of $1 million and failed to reveal a large amount of cash-$1.6 million- found hidden in Mr. Neal's home.

Also at the hearing, Officer Monty McMahan of the Indiana State Excise Police testified that, in the spring of 2004, he had begun an investigation of possible gambling violations at two bars in Anderson, Indiana. As the investigation progressed, Mr. Neal became one of its targets. Officer McMahan testified that he personally witnessed eleven vehicles, owned or registered to Mr. Neal or to Video Services (a company owned by Mr. Neal), transporting gambling machines and making collections. Officer McMahan also testified to the actions of a man named David Snow. According to Officer McMahan, Snow would go into various establishments owned by Mr. Neal and would leave carrying a bag of money. In September 2005, as part of the investigation, an undercover officer, April Tackett, had a conversation with Snow. During this conversation, Snow related that he worked for Mr. Neal and that he had collected money from gaming machines at different establishments. Officer McMahan testified that Officer Tackett had observed Snow open the video machines at Dolenski's Bar on June 9, 2006, read the machine's meter and obtain $2,295 in payment from the bar manager. Officer McMahan stated that, when excise police pulled trash from Mr. Neal's residence on June 15, 2006, they discovered "what appeared to be a split sheet that contained meter readings from video gaming machines, and the split amount on that sheet was $2,295." Tr. (1/26/07) at 35.

Officer McMahan further testified as to his personal observations of events at Big Baby's Bar. Big Baby's liquor license had been suspended temporarily due to the presence in the bar of illegal gambling devices, which had been removed during the suspension. The day after the suspension ended, Officer McMahan observed nine video gambling machines being delivered to the establishment.

According to Officer McMahan, Mr. Neal was one of the incorporators of Big Baby's; the tax records for the business were sent to Mr. Neal's address, and the utility bills also were in his name.

Finally, Officer McMahan testified that, on September 18, 2006, state excise officers executed a search warrant at Video Services. Gambling equipment, slot machines, pull tabs and other ...


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