December 30, 2019

A Cup of Joe | Should Courts Become Collectors For Criminals?

Can A Deal Between Criminals Be Enforced In A Court of Law?

This will be the last installment in 2019 of CUP OF JOE!

And we end the year with a strange case that asks a strange question:

Where people who have decided to do business outside of the law, should they be able to use the courts of law to enforce their agreements?

You might need something stronger than a coffee for this one. And you might have to sit down.  Here we go:


Two bookies walk into a bar. (You know what a bookie is: it is slang for a bookmaker – someone who accepts wagers from gamblers, usually taking a commission [the “vig”] on bets booked.).

First bookie says he finally got paid off a half-a-mil from a degenerate-gambler customer just by “showing him the rings.” Second bookie laughs and says, "You know, I could really use a loan myself to fix up my place!" First bookie says, "Sure, no problem." They have a drink, and then leave the bar. The next day, the first bookie brings a suitcase filled with cash over to the second bookie’s house and hands the bag over to him and says, "$170K at $1600 a month okay?" Second guy takes the suitcase and says, "Yeah, sure." Second guy soon defaults on the loan. First bookie sues the second loan shark to recover principle plus interest on the loan. No threats of violence. Just the service of a summons and complaint, as if it were a normal debt.


Bookie 1: Mark Centi and the Lender: Michael McGillin




Direct Examination of Bookie 1 – MARK, The Money Lender

Q.  How do you know the defendant?

A.  We were friends we were both involved in bookmaking. We used to layoff bets for each

Q.  What does “layoff bets” mean?

A.  Oh, yeah. It’s how you hedge your bets: It’s a bookie's bet with another bookmaker to help even out the excess action he took from his customers. It’s so you can’t lose too bad.

Q.  Did the defendant ever ask you for a loan?

A.  Yeah.  He asked me for a loan to pay for the construction of his new home.

Q.  Did the loan have terms?

A.  Of course. Mikey calculated a number of payments, terms and interest rates on a piece of paper and we both agreed that Mikey would borrow $170,000 at 3.95% interest, to be repaid in 131 installments in the amount of $1,600 every four weeks.

Q.  Did Mike pay you back?

A.  Nope. He welched. It was a legitimate loan. I trusted him.

Cross-Examination of Bookie 1

Q.  You testified that you and Mikey were involved in bookmaking, right?

A.  Yeah.

Q.  In fact, you and Mikey were convicted of promoting gambling and required to pay fines in the amount of $100,000 and $50,000, respectively.

A.  Yeah. Mikey paid that one off in full. Ha ha! Right, Mikey??

Q.  The money that you lent to Mikey was from your gambling business, right?

A.  Yeah. He knew that.

Q.  You didn’t pay taxes on that money you earned from gambling, did you?

A.  I am going to plead the 5th Amendment on that… on the grounds it may be incriminating.

Q.  Okay, but the money that you lent to Mikey was from money earned from gambling?

A.  Yeah, and like I said, Mikey knew all about that.


Q.  Did you take a loan out from Mark?

A.  No, I did not. He asked me to hold onto cash for him and we had a falling out, and then I gave him every penny back.

Q.  Is that your handwriting on the paper with interest rates that Mark just showed the judge?

A.  Yes.

Q.  How do you explain that?

A.  Mark told me to do it to show his accountant. He was my friend, so I did it. I did not think he would use it to try to sued me. Believe me.


Mark’s Closing Statement

Your Honor, this was a legitimate loan. The source of the money makes no difference at all. A deal is a deal. Even if the court is concerned about the origin of the money, the borrower knew about the source and cannot complain now that the deal was illegal. The promise to pay back money, was a legitimate business obligation and Mike should be held accountable.

Mike’s Closing Statement

Your Honor, the court is asking to settle a dispute between criminals about the return of money that was obtained illegally. The sentiment of ‘honor among thieves’ cannot be enforced in courts of justice. And no court should be required to serve as paymaster of the wages of crime, or referee between thieves.

This case should DISMISSED as a matter of public policy. It’s just not right.



Neither the terms of the agreement, nor the loaning of money to a friend was illegal.

Although the loan was funded by the parties' illegal gambling operation, their conduct was not evil in itself.  And the source of funds used for a loan is not typically a factor in determining a loan’s validity.

Mikey argues the agreement should be deemed unenforceable because the courts should not assist Mark in profiting from ill-gotten gains, where both, Mark and Mikey, were involved in the underlying illegality. But neither enforcement nor invalidation of the contract would avoid that result.

In fact, if the the loan is not enforced, Mikey receives a windfall despite his participation in the criminal acquisition of the funds.

Courts will not reward a welcher who seeks to raise illegality as a sword for personal gain rather than a shield for the public good.

Mikey’s gotta pay Mark what he borrowed plus interest.

See you next year!

Here is the case: https://law.justia.com/cases/new-york/court-of-appeals/2019/105.html

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