The Jay Cohen Trial - Day Two

Day two saw the opening statements of both Joseph DeMarco, one of the prosecuting attorneys, and Cohen's attorney, Benjamin Brafman, as well as the examination of two witnesses for the government.

No surprises from DeMarco's opening statement. He began by calling Cohen a bookie, but "not an ordinary bookie." He explained that the lifeline of Cohen's business was the phone lines and that Cohen and his associates violated the Interstate Wire Act. He also explained that Cohen's business, World Sports Exchange (WSE), specifically caters to Americans--that they advertise on American radio stations, in American magazines and in American newspapers; that they take wagers on American sports; and that they use an American ad agency and an American PR firm. "It was an American operation from top to bottom," DeMarco told the court.

Brafman, in his opening statement, took immediate exception to the use of the term "bookie," further explaining that bookies don't submit testimony to congress, that bookies don't use top-eight accounting firms and that bookies don't hire PR firms. He pointed out that World Sports Exchange (WSE) is legally licensed and regulated in Antigua and referred to the operators of WSE as "young professionals with impeccable backgrounds." He also established that Cohen was physically in Antigua, that the phones rang in Antigua, that the accounts are accepted in Antigua and that the money is processed in an Antigua bank. He further reminded the jury that the original investigation was conducted by a law firm and initiated by the NFL, the NBA and the NHL because WSE posted the leagues' logos on its website. Additionally, Brafman said, the leagues crafted the entire FBI investigation. "This case was about business from the very beginning," he said. "Jay Cohen got in the way of their business."

Before witnesses were called to the stand, Chief Judge Thomas Griesa informed the jury of the laws regarding undercover investigations, pointing out that:

1. It is lawful and regular procedure in the U.S. to work undercover, that it is lawful for a member of law enforcement to pose as someone else and that it is lawful to gather evidence while investigating in this manner.
2. If there is an illegal transaction in violation of some law and it's with an undercover agent--if the person being investigated commits a crime under this conditions--then a crime has been committed.

Judge Griesa then recited the applicable sections of the Wire Act itself.

The defense immediately asked for a sidebar, but the request was denied.

The first witness called to the stand was former FBI special agent Steven Bondi, a former member of the computer crime squad. Bondi recorded four phone calls between himself and World Sports Exchange phone operators. During the first conversations, Bondi was informed how to set up an account and how the payment system worked. During the second two, he requested withdrawals. The fourth call, made after Cohen was informed that the criminal complaints were filed, was an effort to find out if WSE was still operating. They were.

The defense objected to the use of the tapes as evidence on the grounds that the identities of the alleged WSE phone operators were never supplied. The objection was overruled and the tapes were played.

The State also showed a videotape of a computer screen displaying an agent dialing up, going to the WSE website and conducting a transaction. Here's where it gets interesting. The government had Bondi explain to the jury how the Internet works and Brafman objected on the grounds that Bondi was not an expert and that the State did not inform the court that there would be an expert witness.

The objection was overruled, however, the fact that the State chose not to bring an Internet expert could pose a problem for the government. (I'll explain why in a moment.)

The defense also objected to Bondi's referring to Cohen as a "bookie." The objection was overruled.

After the jury adjourned for lunch, Brafman asked the Judge Griesa to explain to the jury that the crime of conspiracy required at least two parties and that, by law, an investigator cannot be considered a one of those parties. Judge Griesa granted this request.

In his cross examination, Brafman asked Bondi if he reviewed the rules posted on the site before signing up and Bondi answered "no." The government later pointed out that Bondi was allowed to set up an account even though he didn't read the rules.

Brafman then asked Bondi if he knew what route the phone calls took, what roll satellites played and how many jurisdictions did they pass through. Bondi answered no in each instance.

Brafman asked Bondi if he knew that the site was located in Antigua. Bondi disagreed, saying that it was located in New York. In addressing further questions, Bondi was unable explain where the telecommunications took place. If all the state's witnesses are as uninformed in telecommunications, this could be the first break for the defense, since the government does not have an expert witness.

The government's first break possibly came when the defense questioned Bondi about one of the phone operator's comments to the nature that congressmen and senators were debating legislation to prohibit online gambling (in reference to Bondi's questions to the operator regarding the legality of Net betting.) The government objected to this question and the objection was sustained.

Now for the fireworks: Brafman persistently tried to get Judge Griesa to allow this question and Judge Griesa, visibly irritated, persistently denied the request. My guess is that Brafman was trying to question how Internet gambling could already be illegal if Congress was in the process of passing a prohibition bill. Regardless of his intention, the question was not allowed.

The second witness was FBI special agent Linda Walsh. The court adjourned for the day before the government completed its direct examination. I'll hold off on the Walsh details--including more video and audio tapes--until tomorrow's report.