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United States v. Atiyeh

March 24, 2005


On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Nos. 01-cr-00750-1, 01-cr-00750) District Judge: Honorable Bruce W. Kauffman

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


Argued October 5, 2004

Before: SLOVITER, BECKER, and STAPLETON, Circuit Judges.


This case involves an off-shore betting operation. Appellant George Atiyeh was convicted by a jury in the United States District Court for the Eastern District of Pennsylvania of conspiracy to operate a gambling business, conspiracy to utilize wire communications to transmit information concerning bets, money laundering, and substantive gambling offenses. In his direct appeal, Atiyeh contends that the District Court erred by denying his pretrial motion to dismiss certain counts of the indictment as barred by the statute of limitations. He further argues that a new trial is required because the remaining counts were tainted by the dismissed counts.

The Government cross appeals from the District Court's grant of Atiyeh's post-conviction motion for acquittal on the counts that were predicated on a violation of 18 U.S.C. § 1955 (prohibiting illegal gambling businesses). It also appeals from the District Court's grant of a two-level downward adjustment in Atiyeh's sentence for acceptance of responsibility pursuant to U.S.S.G. § 3E1.1.

Atiyeh's direct criminal appeal was consolidated with the two Government appeals. The District Court had subject matter jurisdiction under 18 U.S.C. § 3231. We have jurisdiction to hear Atiyeh's direct criminal appeal under 28 U.S.C. § 1291.

We have jurisdiction over the Government's cross appeal of the judgment of acquittal under 18 U.S.C. § 3731 and of the sentence imposed under 18 U.S.C. § 3742.

I. Factual and Procedural Background

At trial, the Government presented evidence that from November 1995 through January 1997, George Atiyeh operated an unlicensed sports-gambling business known as International Casino ("IC"). Although IC purported to be an "off shore" business operating solely in Antigua, substantial portions of its operations were also located in Quebec, Canada and Allentown, Pennsylvania.

IC was an account bookmaking operation. Customers who wished to open a sports-wagering account to place bets on the outcome of a wide variety of sports matches, such as the Super Bowl, professional basketball games, and similar events, would wire an initial deposit to a bank account in Antigua controlled by Atiyeh. Atiyeh would then transfer those funds to a bank account in Allentown, Pennsylvania, which he also controlled. The accumulated funds were used to pay IC's business expenses and to pay the successful bettors. To make these payouts, Atiyeh or another IC employee would cash checks drawn on the Allentown bank account and purchase money orders from banks and post offices in the Allentown area which they would then mail to the successful bettors. Often, the envelopes used to mail payouts bore an Antiguan return address but a Pennsylvania postmark.

IC used several telephone lines to accept bets and provide betting information to callers from various United States locations. Typically, IC's customers placed their wagers over toll-free lines that were then forwarded to IC employees in Quebec, Canada. On some occasions when employees in Quebec were unavailable, calls were forwarded to and answered by IC employees in Allentown.

In 1996, the Federal Bureau of Investigation ("FBI") began an undercover investigation of IC. Between September 12, 1996 and December 12, 1996, Special Agent Raymond R. Manna, assuming the role of a bettor, opened an account with IC, placed bets, and requested payouts. On December 17, 1996, the Government obtained a search warrant to search the building at 727 North Meadow Street, Allentown, Pennsylvania, where IC operated. This search resulted in the seizure of a number of IC documents, including banking and telephone records of the betting operation.

A grand jury sitting in the Eastern District of Pennsylvania returned a fifteen count sealed indictment against Atiyeh on December 12, 2001. Count One charged that between November 1995 and January 1997, Atiyeh conspired with unnamed individuals, in violation of 18 U.S.C. § 371, *fn1 to violate 18 U.S.C. § 1084 *fn2 by using wire communication facilities in foreign commerce to transmit information concerning bets and wagers on sporting events, and to violate 18 U.S.C. § 1955 by conducting a gambling business. Count Two charged that Atiyeh violated 18 U.S.C. § 1955 by conducting a gambling business during the same period.

Counts Three through Seven charged Atiyeh with violating 18 U.S.C. § 1084 based on five telephone calls made by FBI Agent Manna to IC. Those calls were made on September 12, October 9 and 16, November 29, and December 12, 1996. Count Eight charged a conspiracy, also continuing from November 1995 until January 1997, in violation of 18 U.S.C. § 1956(h), *fn3 between Atiyeh and unnamed individuals, to conduct financial transactions with the proceeds of the gambling business, in violation of 18 U.S.C. § 1956(a)(1), *fn4 and to transfer funds with the intent of promoting the gambling business, in violation of 18 U.S.C. § 1956(a)(2).*fn5

Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity

(A) (i) with the intent to promote the carrying on of specified unlawful activity; or

(ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or

(B) knowing that the transaction is designed in whole or in part–

(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or (ii) to avoid a transaction reporting requirement under State or Federal law, shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.

Counts Nine through Fifteen charged substantive crimes of money laundering in violation of 18 U.S.C. § 1956(a)(2) based on the transmission of funds from a bank in Antigua to an account in Allentown, Pennsylvania, on various dates from October 25, 1996 through November 29, 1996. Finally the indictment contained a notice of money laundering forfeiture pursuant to 18 U.S.C. § 982.

Atiyeh was arrested on the indictment on December 19, 2001, and released on bail. Thereafter, he filed a pretrial motion to dismiss Counts Three through Six and Counts Nine through Fifteen, as barred by the five-year statute of limitations set forth in 18 U.S.C. § 3282. Each count charged conduct that had occurred more than five years prior to the return of the indictment. The District Court judge denied the motion in an order dated May 30, 2002. The trial was held from September 9 to September 19, 2002, and Atiyeh was convicted by the jury on all fifteen counts. Thereafter, the District Court granted Atiyeh's motion for judgment of acquittal under Federal Rule of Criminal Procedure 29(c) as to Counts Two (operating an illegal gambling business), Eight through Fifteen (money laundering), and Count One, to the extent that it charged a conspiracy to conduct a gambling business.

At the sentencing hearing on the remaining counts (the remainder of Count One and Counts Three through Seven), the District Court awarded Atiyeh a two-level downward adjustment for acceptance of responsibility. Atiyeh was sentenced to fifteen months imprisonment, supervised release for two years, a $4,000 fine, and $600 in special assessments. This timely appeal followed.

II. Statute of Limitations

It is evident that the indictment, returned by the grand jury on December 12, 2001, charged conduct in Counts Three through Six and Nine through Fifteen *fn6 that occurred outside the five-year statute of limitations period prescribed by 18 U.S.C. § 3282. *fn7 Atiyeh filed a motion asking the District Court to dismiss these counts as time-barred. In its response to the motion, the Government revealed that on October 5, 2001, it had filed an ex parte application under 18 U.S.C. § 3292 with the Grand Jury Supervising Judge,*fn8 who entered the requested order ex parte on the same day. That order suspended the statute of limitations for several periods of time on the ground that evidence was sought from foreign countries.

In pertinent part the statute pursuant to which the judge entered the order provides that:

(a)(1) Upon application of the United States, filed before return of an indictment, indicating that evidence of an offense is in a foreign country, the district court before which a grand jury is impaneled to investigate the offense shall suspend the running of the statute of limitations for the offense if the court finds by a preponderance of the evidence that an official request has been made for such evidence and that it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in such foreign country.

(2) The court shall rule upon such application not later than thirty days after the filing of the application.

(b) Except as provided in subsection (c) of this section, a period of suspension under this section shall begin on the date on which the official request is made and end on the date on which the foreign court or authority takes final action on the request.

(c) The total of all periods of suspension under this section with respect to an offense

(1) shall not exceed three years; and

(2) shall not extend a period within which a criminal case must be initiated for more than six months if all foreign authorities take final action before such period would expire without regard to this section.

18 U.S.C. § 3292 (emphasis added).

In its application for suspension of the statute of limitations, the Government also revealed that it had received all the requested foreign evidence from Canadian and Antiguan authorities at least two months prior to its application, and in some ...

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