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United States v. LaCost

July 12, 2010

UNITED STATES OF AMERICA, PLAINTIFF,
v.
JIMMY A. LACOST, MICHAEL W. LACOST, AND LACOST AMUSEMENTS, INC., A CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

OPINION

This case is before the court for ruling on various motions filed by Defendants, Jimmy A. LaCost, Michael W. LaCost, and LaCost Amusements, Inc. (LaCost Amusements). This court has carefully considered the arguments presented by the parties and rules as follows: (1) Defendants' Motion to Dismiss Count 55 of the Indictment (#30) is DENIED; (2) Defendants' Motion to Compel the Government to Provide Notice of Intent to Offer Rule 404(b) Evidence Sixty Days Before Trial (#34) is DENIED; (3) Defendants' Motion to Require the Government to Give Reasonable Notice of Intent to Use Expert Testimony (#35) is DENIED; (4) Defendants' Motion for Preservation of Rough Notes and Logs (#36) is DENIED; (5) Defendants' Motion for Production of Favorable Evidence (#37) is DENIED; (6) Defendants' Motion for Early Return of Trial Subpoenas (#38) is DENIED; and (7) Defendants' Motion to Dismiss Counts 56-109 of the Indictment (#32) is taken under advisement pending supplemental briefing.

BACKGROUND

On January 6, 2010, the grand jury returned a 12-page, 109 count indictment (#1) against Defendants. In Counts 1 through 54, Defendants Jimmy LaCost and LaCost Amusements were charged with committing specified structured transactions over a period from January 25, 2005, to June 22, 2009, for the purpose of evading the reporting requirements of 31 U.S.C. § 5313(a), and regulations prescribed thereunder, while violating another law of the United States as set forth in Count 55 of the indictment, and as part of a pattern of illegal activity involving more than $100,000 in a 12-month period commencing on January 1, 2008, in violation of 31 U.S.C. § 5324(a)(3) and (d)(2), 18 U.S.C. § 2 and 31 C.F.R. § 103.11. In Count 55, all three Defendants were charged with conducting, financing, managing, supervising, directing, and owning part of an illegal gambling business, namely, a gambling business providing and maintaining video gambling machines and devices, in violation of 18 U.S.C. §§ 2 and 1955(a). In Counts 56 through 109, Defendants Jimmy LaCost and LaCost Amusements were charged with separate specified incidents of money laundering, from January 25, 2005, to June 22, 2009, in violation of 18 U.S.C. §§ 2 and 1956(a)(1)(B)(ii). The indictment also alleged that the property involved in transactions or attempted transactions in violation of 18 U.S.C. § 1956 is subject to forfeiture.

Defendants are represented by retained counsel and have pleaded not guilty to the charges.

PENDING MOTIONS

I. MOTIONS TO DISMISS

A. MOTION TO DISMISS COUNT 55

On March 31, 2010, Defendants filed a Motion to Dismiss Count 55 of the Indictment (#30) and a Memorandum in Support (#31). Defendants argued that Count 55 of the Indictment is invalid because it provides no factual particulars to apprise the defendants of what they must meet at trial. Defendants argued that "Count 55 provides absolutely no factual details apprising the defendants of what the government contends they did that violates the charged statutes." Defendants pointed out that the Illinois statutes referred to in the indictment specifically excluded from the definition of "gambling device" a "coin-in-the-slot operated mechanical device played for amusement which rewards the player with the right to replay such mechanical device, which device is so constructed or devised as to make such result of the operation thereof depend in part upon the skill of the player and which returns to the player thereof no money, property or right to receive money or property." 720 Ill. Comp Stat. 5/28-2(a)(1) (West 2008). Defendants contended that the "video poker and other games that LaCost Amusements leased to bars, restaurants and stores from January 6, 2005 through July 8, 2009 facially fall within" this exclusion. Defendants therefore argued that the leasing of those devices was not per se illegal. Defendants also noted that, effective July 13, 2009, the Video Gaming Act became effective and explicitly made gambling on certain video machines, including video poker machines, legal in Illinois. See 230 Ill. Comp. Stat. 40/1 et seq. (West 2010).

On April 14, 2010, the Government filed its Response (#40). The Government argued that the allegations in Count 55 are "more than sufficient for purposes of allowing the defendants to prepare a defense and plead the judgment as a bar to any future prosecutions." The Government also argued that, in their motion to dismiss, Defendant demonstrated an awareness of the specific nature of the grand jury's charge, namely, that they provided and maintained illegal gambling devices. The Government contended that, while Defendants allege that the leasing of the devices was not per se illegal, this is a defense to be presented at trial, not grounds to dismiss the indictment. The Government pointed out that Defendants, in including this argument in their Motion to Dismiss, have already asserted a defense and have demonstrated that the indictment is sufficient for purposes of allowing them to prepare a defense. The Government stated that the "finder of fact will determine if the video poker and other machines were for amusement only, or if, as alleged in the Indictment, they indeed were gambling machines and devices in violation of Illinois law." The Government argued that, for purposes of Defendants' Motion to Dismiss, "the allegations of Count 55 of the Indictment are assumed to be true and sufficiently state the offense of conducting an illegal gambling business in violation of 18 U.S.C. § 1955."

On April 21, 2010, Defendants filed a Reply (#43). Defendants argued that "Count 55 alleges a 41/2 year time period (1,644 days) during which defendants allegedly conducted an illegal gambling business by providing video poker machines to multiple bars, restaurants, and retail stores in Kankakee County and other contiguous counties" and "alleges not one specific fact that allows the Defendants to pin down when during those 1,644 days something happened, where it happened, who did it, what happened, or how the Defendants allegedly aided and abetted whatever occurred."

Count 55 of the Indictment states that, from on or about January 6, 2005, and continuously thereafter, up to and including July 8, 2009, in Kankakee County and elsewhere, Defendants: did conduct, finance, manage, supervise, direct, and own part of an illegal gambling business, namely, a gambling business involving providing and maintaining video gambling machines and devices, which gambling business was a violation of the laws of the State of Illinois, specifically 720 ILCS 5/28-1(a)(3) and (a)(1), and which involved five or more persons who conducted, financed, managed, supervised, directed, and owned part of such gambling business, and which remained in substantially continuous operation for a period in excess of thirty days and had a gross revenue in excess of $2,000 in any single day.

All in violation of Title 18, United States Code, Sections 2 and 1955(a).

Under Rule 7(c)(1) of the Federal Rules of Criminal Procedure, an indictment "must be a plain, concise, and definite written statement of the essential facts constituting the offense charged . . . ." Fed. R. Crim. P. 7(c)(1). For an indictment to be legally sufficient, it must accomplish three functions: (1) it must state each of the elements of the crime charged; (2) it must provide adequate notice of the nature of the charges so that the defendant may prepare a defense; and (3) it must allow the defendant to raise the judgment as a bar to future prosecutions for the same offense. United States v. Fassnacht, 332 F.3d 440, 444-45 (7th Cir. 2003). In considering a challenge to the sufficiency of an indictment, this court must be "mindful that dismissing an indictment is an extraordinary measure." United States v. Patrick, 683 F. Supp. 2d 808, 809 (N.D. Ind. 2010), citing United States v. Morrison, 449 U.S. 361, 365 (1981). Accordingly, the Seventh Circuit has "cautioned that the sufficiency of an indictment is to be reviewed practically, with a view to the indictment in its entirety, rather than in any 'hypertechnical manner.'" Fassnacht, 332 F.3d at 445, quoting United States v. Smith, 230 F.3d ...


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