## Facts

- Jay Cohen founded and ran World Sports Exchange (WSE), an offshore sportsbook based in Antigua whose business was taking bets on U.S. sporting events.
- WSE advertised broadly in the United States and accepted wagers from U.S. customers by toll-free phone and the internet.
- WSE used an account-wagering model: customers opened accounts by wiring funds (minimum about $300) to Antigua; WSE then accepted and confirmed specific wagers and debited the account.
- Over a fifteen-month period, WSE received about $5.3 million in wires from U.S. customers and earned a commission on wagers.
- FBI agents in New York opened accounts and placed bets with WSE as part of an investigation.
- Cohen was indicted in the Southern District of New York for conspiracy and substantive violations of 18 U.S.C. § 1084 (Wire Wager Act), convicted by a jury, and sentenced to 21 months’ imprisonment.

## Issues

1. Whether federal conspiracy and § 1084 required proof of a “corrupt motive” beyond intent to engage in the prohibited conduct.
2. Whether § 1084(b)’s safe harbor for transmitting “information assisting in the placing of bets” applied to WSE’s communications between Antigua and New York.
3. Whether the government had to prove Cohen knew his conduct was illegal to satisfy § 1084’s “knowingly” requirement.
4. Whether the rule of lenity required a narrower interpretation of § 1084 as applied to offshore, internet-based wagering.
5. Whether the indictment was constructively amended or the trial court committed reversible procedural error (including denial of an overseas deposition).

## Decision

- The Second Circuit affirmed the convictions and sentence.
- The court held no additional “corrupt motive” element was required beyond the statutory and conspiracy elements under federal law.
- The court held § 1084(b) did not protect WSE’s conduct because WSE transmitted bets or wagers (not merely assisting information) and because the betting was not legal in New York.
- The court held “knowingly” under § 1084 requires knowledge of the acts and circumstances (bookmaking business; use of wire communications in interstate/foreign commerce), not knowledge that the conduct violates the law.
- The court rejected lenity because § 1084, read in context, was not grievously ambiguous as applied.
- The court found no constructive amendment and upheld the denial of the requested deposition as immaterial to the elements at issue.

## Legal Principles

- Federal conspiracy standards govern federal prosecutions; state-law formulations (such as a distinct “corrupt motive” requirement) do not add elements to federal conspiracy or § 1084 offenses.
- 18 U.S.C. § 1084(a) reaches transmissions of both (1) “bets or wagers” and (2) “information assisting in the placing of bets or wagers” in interstate or foreign commerce by persons in the betting business.
- The § 1084(b) safe harbor is limited: it protects only transmissions of “information assisting” (not the wagers themselves) and only when betting is legal in both the sending and receiving jurisdictions.
- “Knowingly” in § 1084 refers to awareness of the conduct and operative facts, not a good-faith belief about legality; mistake of law is not a defense absent a statutory requirement of knowledge of illegality.
- The rule of lenity applies only when, after ordinary interpretive tools, a criminal statute remains grievously ambiguous; it does not apply where the statute’s text and structure resolve the question.
- A constructive amendment occurs only if the trial proof or instructions broaden the bases for conviction beyond the indictment; tracking statutory elements and the charged theory avoids such error.

## Conclusion

The Second Circuit upheld Cohen’s Wire Wager Act convictions for operating an offshore sportsbook serving U.S. bettors, ruling that the statute covers transmissions of wagers to an illegal-betting jurisdiction, that the safe harbor is narrow and inapplicable, and that “knowingly” requires proof of knowing conduct rather than knowledge of illegality.


United States v. Cohen, 260 F.3d 68 (2d Cir. 2001)