A Supreme Case for Cohen?

27 February 2002

Jay Cohen, the only person in America to go to trial over criminal charges relating to Internet gambling, has petitioned to bring his case to the Supreme Court.

Cohen, who filed a petition Feb. 22 for a writ of certiorari with the Supreme Court, is seeking to overturn a judgment rendered July 31 by the U.S. Court of Appeals for the Second Circuit. The appeals court upheld Cohen's March 28, 2000, conviction in a New York federal court for one count of conspiracy and seven counts of violating the Interstate Wire Act of 1961.

"I think the principle effect (of a Supreme Court reversal) would be to restore what Congress had intended in the first place, by making (it) clear that account wagering is legal."
- Ian Gershengorn
Jenner and Block

Cohen was sentenced to 21 months in prison, two years of supervised release, a special assessment of $800 and a fine of $5,000. He is presently free on bond pending certiorari.

Ian Gershengorn, a lawyer for the Washington, D.C. law firm Jenner and Block, said the U.S. government has 30 days to file a response to the petition. After that, Cohen's side, which consists of Gershengorn and Donald B. Verrilli of Jenner and Block as well as Benjamin Brafman, Mark M. Baker and Melinda Sarafa of the New York law firm Brafman and Ross, has ten days to reply government's filing.

Four of the nine Supreme Court justices will need to vote in favor of certiorari for the case to be heard. If the case is granted consideration, it will take a vote of five justices to overturn Cohen's conviction. Gershengorn said it's hard to predict whether a case will be taken up by the court.

"The Supreme Court is always a long shot, but we think there are compelling issues in this case that have tremendous impact on the gambling industry and obviously on Jay personally, and we think it would be a good case for the court to take," he said.

Sarafa said that, although it's always difficult to persuade the Supreme Court to take case, the issues brought up in the appeal would be of interest to the court and should be decided once and for all by the court.

"One of the issues goes to the heart of conspiracy law, and that's whether someone has to have a corrupt motive that is innocent by itself but corrupt by statute," she said.

There are four reasons the Supreme Court should grant certiorari, Gershengorn said. First is the lower court's interpretation of the Wire Act. The court "rewrote the statute to cover a range of conduct that Congress didn't want to cover," Gershengorn said.

"It eliminated the distinction between bets and information relating to bets, which was a critical distinction in the statute--one that the off-track betting industry, for example, relies on extensively," the attorney said.

Second, Gershengorn said, the Second Circuit's interpretation of the Wire Act is insensitive to the interests of state of foreign governments. The interpretation, he said, criminalizes the passage of information about a bet between jurisdictions where betting is legal.

"Even if both those places didn't want to criminalize the conduct, you still have violated a federal criminal statute, which is a fairly surprising holding," he said.

Third, the Second Circuit court said it was irrelevant that Cohen, who launched an online wagering company called World Sports Exchange in 1997 in Antigua, tried to pattern his business after legal operations. The court should have taken note of Cohen's desire to run a legal business in a jurisdiction that permits it, Gershengorn said. The final reason asserted in the petition, he said, is that Cohen's conviction affects the offshore gambling and off-track betting industries, both of which rely on account wagering.

Should the case be reviewed by the Supreme Court, the justices' ruling could potentially have an explosive impact on the legislative environment surrounding Internet gambling. In Congress, three bills seeking to make online gaming illegal in the United States are awaiting consideration. Sarafa said it's too soon to tell exactly how much of an impact the petition will have. "It could potentially have an enormous effect, but it depends on which issues the court chooses to hear and how the court decides them," she said. Gershengorn said that, while a Supreme Court decision overturning Jay Cohen's conviction could drastically alter gaming legislation, the prime effect of such a decision would be to clarify the Wire Act.

"I think the principle effect would be to restore what Congress had intended in the first place, by making (it) clear that account wagering is legal," he said. "But there's no doubt that a Supreme Court reversal of the conviction would have important ramifications for the industry, and that Congress would likely take notice."

Click here to read Jay Cohen's petition for a writ of certiorari.

Anne Lindner can be reached at anne@rivercitygroup.com.