U.S. Useni
| Decision Date | 21 February 2008 |
| Docket Number | No. 06-2107.,No. 06-1978.,06-1978.,06-2107. |
| Citation | 516 F.3d 634 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Fuat USENI and Phillip. J. Cozzo, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Shoshana Gillers, Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellee.
Shelly B. Kulwin, Jeffrey R. Kulwin, Kulwin, Masciopinto & Kulwin, Jeffrey B. Steinback, Chicago, IL, for Defendants-Appellants.
Before BAUER, MANION, and WOOD, Circuit Judges.
Under Illinois law, only charitable organizations are allowed to run certain gambling games such as bingo games, pull-tab games, and raffles as fundraisers for their organizations. In this case, the operators of the Grand Palace Bingo Hall (the "Grand Palace") in Northlake, Illinois, used the Italian American War Veterans (the "IAWV"), a charitable organization, as a front to pocket nearly three million dollars in gambling proceeds. Both Fuat "Frank" Useni and Phillip Cozzo worked at the Grand Palace from its inception until it was sold to a group of IAWV members. A jury convicted Useni and Cozzo of conspiring to commit racketeering offenses and operating an illegal gambling business, as well as several counts of mail fraud and tax fraud. Following their convictions, Useni and Cozzo appealed, challenging various aspects of their respective convictions and sentences. On appeal, the principal question in their challenges to their convictions and sentences is the extent of their involvement in the illegal gambling that occurred at the Grand Palace. We affirm.
Because the jury returned a verdict in favor of the government in this case, we summarize the evidence in the light most favorable to the government. The people who comprised the central witnesses at trial were: Polly Kirby, the manager of the Illinois Department of Revenue's office of bingo and charitable games; Patrick Marotta, the former president and CEO of Gore & Kaye, a wholesale distributor of charitable gaming supplies that was the Grand Palace's primary supplier; Carmen Trombetta and Steven Mariani, IAWV members who were involved in the preparation and operation of the Grand Palace; Carole Johnson, Useni's former girlfriend and a worker at the Grand Palace; Lorraine Mazzei, Cozzo's former girlfriend; Aaron Levitanksy, the Grand Palace's accountant; Donna Dombrowski, the live-in girlfriend of Fred Bingham, the Grand Palace's bookkeeper; and Richard Lexby, an agent for the Internal Revenue Service (the "IRS"). We refer to those witnesses, as well as any other of the witnesses at trial, when their testimony is relied upon in our narrative of the evidence in this case.
Illinois has a network of laws and regulations designed to allow charitable organizations to raise money through limited forms of gambling while, at the same time, strictly limiting the use of the money and facilities involved in the gambling in order to prevent fraud and abuse. At trial, Illinois Department of Revenue employees Polly Kirby, Lisa Roberts, and Randi Kaplan testified about Illinois's regulatory scheme for charitable gambling. According to those witnesses, only certain charitable organizations, such as the IAWV, are permitted to run bingo halls. A charitable organization must have a license issued by the state, to conduct bingo or pull-tab games.1 See 230 ILCS 20/2; 230 ILCS 25/1. A license, which must be renewed annually, allows the charitable organization to hold bingo or pull-tab games once a week. Illinois law also requires that a charitable organization have a license to conduct raffles, but the licensing of raffles is left to each individual municipality rather than the state. In addition, Illinois law prohibits conducting raffles and bingo games on the same premises. 230 ILCS 25/2(11).
A company or person that is not affiliated with a charitable organization may obtain a supplier's license, which allows that company to sell gambling supplies to the charitable group running the games; or a provider's license, which allows the company to rent a facility to a charitable group conducting games. See 230 ILCS 20/3.1; 230 ILCS 25/1.4 — .5. The provider's license, like the bingo and pull-tab licenses, has to be renewed yearly by the state of Illinois. Neither the supplier nor the provider may receive any revenue from the games other than a reasonable sum in exchange for providing their services; the net proceeds of the gambling must go to the charitable organization running the games. See 230 ILCS 20/4; 230 ILCS 25/2. Furthermore, only the members of the charitable organization are allowed to participate in operating the games, including selling bingo cards or pull-tabs, calling numbers, confirming and paying winners, and handling or counting the proceeds from the sale of cards and pull-tabs. Most importantly, only members of the charitable organization are allowed to handle the money earned from the games. Significantly, the members of the charitable organization involved in operating the games must be volunteers and are themselves prohibited from being compensated for their work in running the games. See 230 ILCS 20/4(3); 230 ILCS 25/2(3).
Supplier, pull-tab, and bingo licensees have reporting obligations to the state. Suppliers must file quarterly reports listing such information as the manufacturer's serial number for each pull-tab box sold, the date of the sale, the type of tickets sold, serial numbers for the tickets, and what the ideal gross proceeds would be for each box of pull-tabs. Pull-tab and bingo licensees are required to report quarterly to pay their taxes.2 On a bingo report, a licensee must list the date, the amount of prizes awarded, and the number of players participating for each bingo session held, as well as the gross proceeds from the games that quarter and the amount of tax owed to the state. In contrast, a pull-tab return must report, among other things, each pull-tab game played, the date the particular pull-tab game was played, the manufacturer's serial number for that game, the gross proceeds from the game, the gross proceeds for the sale of pull-tabs that quarter, and the amount of tax owed.
While the network of laws, rules, and regulations were designed to prevent fraud, a gambling operation nevertheless presented a lucrative attraction to someone willing to skirt the law. The Grand Palace was the brainchild of William Shlifka,3 a man who had no affiliation with the IAWV. Shlifka planned to have several IAWV posts each apply for separate bingo and pull-tab licenses, which would allow Shlifka to run several sessions of gaming a week. In turn, Shlifka would have the Grand Palace apply for provider's and supplier's licenses so that it could supply the gambling equipment and host the sessions. Shlifka would pay each veteran who worked a nightly gaming session $50 per session and would pay each IAWV post $100 for every gaming session they hosted.
From the beginning, Shlifka involved Cozzo, who was also not a member of the IAWV, in the planning of the Grand Palace. Prior to the opening of the Grand Palace, Shlifka, together with Cozzo, met with several people who would be key to the Grand Palace's success: Steven Mariani, a high-ranking IAWV member who would recruit IAWV posts and members; Patrick Marotta, the president of bingo-supply distributor Gore & Kay who would be the main supplier of gambling equipment to the Grand Palace; and Aaron Levitansky, who would do the accounting work for the Grand Palace. According to Mariani's testimony, Shlifka and Cozzo approached Mariani and asked him to recruit IAWV posts to sponsor the games and offered Mariani $100 for each gaming session hosted by an IAWV post recruited by Mariani. Shlifka also introduced Mariani to "Frank" Useni, another non-IAWV member, as someone who would help run the kitchen and do the janitorial work for the bingo hall. Shlifka and Cozzo next met with Marotta about providing gaming supplies. Marotta testified that Shlifka and Cozzo sought Marotta's advice as to the type of games to run and pull-tabs to use. At that meeting with Marotta, Shlifka referred to Cozzo as his "partner." Shlifka and Cozzo then met with Levitansky about the hall. Levitanksy testified that Shlifka told him that the Grand Palace would make money by renting the hall and selling bingo cards to the IAWV posts, as well as by selling concessions to hall patrons. At that meeting no mention was made of the Grand Palace ever profiting off of the revenue from the games.
After securing the aid of Mariani, Marotta, and Levitansky, Shlifka applied for a provider's license in February 1994, using the names of his wife and daughter as purported officers of the Grand Palace. Several applications for bingo and pull-tab licenses for IAWV posts were also submitted. Donna Dombrowski, Fred Bingham's live-in girlfriend, testified that. Bingham, the Grand Palace's bookkeeper and a non-IAWV member, completed the applications for the posts. Each application listed the address of the Grand Palace as the address of the IAWV post submitting the application, though no IAWV post had its place of business at the Grand Palace. Mariani testified that Shlifka, gave the money for the license application fees to him, who in turn had money orders made out to be submitted with the applications.
According to the testimony of Lorraine Mazzei, Cozzo's former girlfriend, Cozzo had one of the bingo license applications signed by Mazzei and his sisters. The bingo application required. Mazzei and Cozzo's sisters to make several certifications, including that they were bona fide members of the charitable organization and that they had a copy of the rulebook for conducting charitable games and would "be responsible for the conduct of the games in accordance with the provisions of the laws of the State and the rules and regulations of the department...
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