Grand Jury indictments in the US Federal and - Tech IP DKS

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      Gaming Team

      by David Schollenberger,
      Partner and Head of Gaming Team

      Much attention has been given recently to the
      indictments of William Scott and Jessica Davis of
      Worldwide Telesports, David Carruthers and Gary
      Kaplan of Betonsports and most recently to Peter
      Dicks of Sportingbet. Many may not understand how
      the criminal charge process works in the U. S. and what
      is meant by the terms "indictment" or a "grand jury
      indictment". In this article, the federal and state
      indictment process will be explored.

      Federal and state court systems

      The court system in the U. S. includes two different
      systems, a federal one and a state one. Federal courts
      hear cases involving federal legislation and international
      treaties and constitutional matters. Federal courts are
      courts of limited jurisdiction and only have subject
      matter jurisdiction specifically granted by the                 characterised as misdemeanors or less serious crimes
      Constitution.                                                   can proceed by the issuance of the complaint. Felonies
                                                                      are more serious crimes that are punishable by one
      State criminal courts hear cases related to violations of       year imprisonment or more.
      the criminal laws in their state. Federal courts at trial
      level are called Federal District Courts and are                Indictment
      generally held to be more sophisticated and formal
      than their state counterparts. Judges are appointed to          An "indictment" is where a formal written charge is
      the federal bench for life. In states, the appointment          issued against a person who is being investigated that
      process varies but in many they are elected for a               states that there is enough evidence to satisfy the
      specific term and can be more political.                        belief that there is "probable cause" that the person
                                                                      committed the crime. The indictment lists the crimes
      A criminal proceeding in both federal and state courts          that the defendant is allegedly guilty of and will
      in the US is started by a prosecutor who issues a               describe the facts that support the allegations. Each
      formal list of criminal charges which is called a               individual crime listed on the indictment is known as a
      complaint or information.         Crimes that are               "count."

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      The Fifth Amendment to the US Constitution requires             criminal process. In a majority of cases an indictment is
      that                                                            returned by the grand jury.
                                                                      A returned indictment may then be "sealed". A "sealed
      "No person shall be held to answer for a capital, or            indictment" is where an indictment remains secret and
      otherwise infamous crime, unless on a presentment or            non-public. It may be used where a prosecutor does
      indictment of a Grand Jury . . . nor shall be compelled         not want the prospective defendant to know that the
      in any criminal case to be a witness against himself, nor       charges are being investigated, such as where further
      be deprived of life, liberty or property, without due           evidence is being gathered and/or to prevent the
      process of law . . ."                                           defendant from trying to escape. It may be unsealed
                                                                      when the person named in the indictment is arrested.
      The Fifth Amendment has been interpreted by the
      Supreme Court to mean that a grand jury indictment               Grand juries in state courts
      is required for all federal felonies, unless the defendant
      waives his right to be indicted by a grand jury. The            Since the Constitution does not require states to use
      Fifth Amendment right to a grand jury indictment has            grand juries, a large number of states have abolished
      further been held not to apply to state courts.                 them. Louisiana, the state that charged Peter Dicks,
                                                                      and all the other states that have laws prohibiting
      Grand jury                                                      remote gaming, still use grand juries for some
      A grand jury is a panel of randomly selected ordinary
      citizens selected to secretly investigate criminal activity     Size of the grand jury panels vary widely from states
      and determine if there is sufficient evidence to charge         like Connecticut where the number of jurors is 1-3 to
      the defendant and make them respond to the charges.             Vermont where the panel is 18-23. In the nine states
      A grand jury is traditionally larger and different than a       that have legislation prohibiting remote gaming the
      petit jury which sits at trials. Federal grand juries will      panel sizes are Louisiana (12), Nevada (17), Michigan
      usually consist of 16-23 US citizens. Grand juries are          (13-17), Illinois (16), South Dakota (6-10), Oregon (7),
      selected in the same way as petit juries but whilst a           Indiana (6), Wisconsin (17) and Washington (12).
      petit jury will only sit for one case, a grand jury will sit
      for a period of time, usually between 6-18 months and           Different States use grand juries for different purposes
      will address many cases.                                        and procedures for grand juries vary from state to
                                                                      state. Twenty-five states make the use of indictments
      The prosecutor presents the case to the selected                optional. In these States, most of these let prosecutors
      grand jury panel along with the summoned witnesses.             either use an indictment or an information to charge
      No judge, defendant or defence lawyers are present              any offence. All of the states where there remote
      but the grand jury members may ask questions to the             gaming legislation exists are on this list except
      witnesses.                                                      Louisiana.

      A simple majority vote of the grand jury panel is all           Grand juries in some states are used only for
      that is required for a federal grand jury indictment.The        indictment but in some states also are used to
      standard of proof here "probable cause" is relatively           investigate criminal activity and the conduct of public
      low and the grand jury does not need to consider                affairs, public welfare or safety. Some states give their
      whether the person under investigation is guilty of the         grand juries various specific tasks. Alabama grand juries
      crime beyond a reasonable doubt, nor consider                   must investigate the country pension list to determine
      punishment after conviction. After considering all the          if anyone is receiving a pension who is not entitled to
      evidence and witness testimonies, if a majority of jurors       it. Tennessee grand juries are charged with any failure
      vote to indict the defendant, the defendant must face           to comply with the state rules that require rabies
      further criminal charges. The results of the vote are           vaccinations for cats and dogs. Pennsylvania grand
      prepared by the grand jury foreman and delivered to             juries must approve proposals to put up statues
      the federal judge. After a grand jury indictment, a             honouring military personnel.
      warrant is subsequently issued which starts the federal

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History and Indictments by Grand Juries in other parts          available to the prosecutor at trial without the
of the world                                                    opportunity for the accused to defend him or herself.
                                                                Moreover, the grand jury almost always agrees with the
According to the State of Florida Grand Jury                    prosecution and indicts the accused. A former Chief
Handbook, the first grand jury was held in England in           Judge of New York State was apparently quoted in
1166. It was recognized in the Magna Carta granted by           1985 as saying, "prosecutors have so much sway over
King John of England upon the demand of the people              grand juries they could get them to indict a ham
in 1215 A.D and its present form evolved in the period          sandwich."
1327 to 1377.
Grand juries were abolished in the UK in the 1930s ,
New Zealand in 1961 and Canada in the 1970s. They               In summary, the grand jury indictment process used by
are not used in any other country now other than in             US federal and state courts is an arcane procedure
the US.                                                         that does not add much additional protection to the
                                                                rights of persons suspected of criminal activity. If
Criticisms of Grand Juries                                      anything, it provides more benefit to the prosecution. It
                                                                is therefore unlikely to add any safeguards or slow the
The Sixth Amendment to the Constitution which                   tide of investigations and charges being brought against
applies to both State and federal criminal prosecutions         remote gaming companies and their executives.
provides that:

"In all criminal prosecutions, the accused shall enjoy the
right to a speedy and public trial, by an impartial jury                         Further Information
of the State and district wherein the crime shall have
                                                                For more information and any other gaming related issues
been committed . . . , and to be informed of the nature
and cause of the accusation; to be confronted with the
witnesses against him; to have compulsory process for                            David Schollenberger
obtaining witnesses in his favour and to have Assistance
of Counsel for his defence."                                                Partner and Head of Gaming Team
                                                                                      Manches LLP
The Sixth Amendment protections of right to be                
notified of the nature and cause of the accusation and                          +44 (0) 207 404 4433
to confront witnesses and be defended with a lawyer
do not apply to grand juries. The Fifth Amendment
right against self-incrimination, ie not to be compelled        This briefing note is intended merely to provide a
to testify against oneself is applied differently in grand      summary of the law in this area and is not a
jury proceedings. Unlike at trials, the defendant may be        comprehensive guide. It is not intended to provide legal
compelled to appear and must assert any Fifth                   advice for specific cases. Note:The law and practice in this
Amendment rights on a question by question basis. In            note is stated as at October 2006.
addition, certain procedural safeguards of defendants
such as the rule against hearsay evidence, are also not                                                    Manches LLP
available at a grand jury hearing.                                                                         October 2006

Some argue that the grand jury system is unjust in not
providing these Constitutional rights available in a trial.
Whilst the Grand Jury system was intended to be a
protection for defendant rights against prosecutors, it
can be a means for the prosecutor to strengthen its
case by obtaining testimony and use evidence not

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