U.S. v. Morgano

• Decision Date: 20 December 1994
• Docket Number: 92-2144 and 92-2224,92-1829,Nos. 92-1828,92-2069,s. 92-1828
• Citation: 39 F.3d 1358
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Bernard J. MORGANO, Dominick Palermo, Nicholas Guzzino, Peter Petros, Sam Nuzzo, Jr. and Samuel Glorioso, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1358

39 F.3d 1358

UNITED STATES of America, Plaintiff-Appellee, v. Bernard J. MORGANO, Dominick Palermo, Nicholas Guzzino, Peter Petros, Sam Nuzzo, Jr. and Samuel Glorioso,

Defendants-Appellants.

Nos. 92-1828, 92-1829, 92-2069, 92-2144 and 92-2224.

United States Court of Appeals, Seventh Circuit.

Argued April 8, 1994.

Decided Oct. 13, 1994.

Rehearing Denied Dec. 20, 1994.

Andrew B. Baker, Jr., (argued), Philip P. Simon, and Michael A. Thill, Asst. U.S. Attys., Office of the U.S. Atty., Dyer, IN, for plaintiff-appellee.

Richard F. James, James, James & Manning, Dyer, IN, Kevin E. Milner; Ronald D. Menaker, Arnstein & Lehr, Chicago, IL, F. Allen Tew, Jr. (argued), Indianapolis, IN, Scott L. King (argued), King & Meyer, Gary, IN, Michael J. Troumouliaris, Merrillville, IN, and Daniel R. Goeglein (argued), Lyons

& Truitt, Valparaiso, IN, for defendants-appellants.

Before CUMMINGS and RIPPLE, Circuit Judges, and TINDER, District Judge. ¹

TINDER, District Judge.

Six defendants were convicted by a jury of operating a racketeering enterprise, 18 U.S.C. Sec. 1962(c) (RICO), conspiring to operate a racketeering enterprise, 18 U.S.C. Sec. 1962(d), interstate travel in aid of racketeering, 18 U.S.C. Sec. 1952, illegal gambling, 18 U.S.C. Sec. 1955, and extortion, 18 U.S.C. Sec. 1951, in the United States District Court for the Northern District of Indiana. Each was subsequently sentenced to a lengthy prison term. All Defendants appeal their convictions and several challenge their sentences. Because their appeals were consolidated, numerous issues must be addressed in this opinion. Issues raised by all Defendants jointly include whether consecutive sentences for the RICO conviction and separate substantive offenses constitute double jeopardy, the applicability of the United States Sentencing Guidelines to the RICO conspiracy conviction and whether the nexus between their criminal activity and interstate commerce (as required by 18 U.S.C. Sec. 1951) was proven. Other issues, raised by individual Defendants, include Guzzino's contention that the district court improperly fined him; Petros' challenge of the district court's ruling on his claim of mental incompetency, the lack of evidence of his participatory link to the conspiracy, and the competency of his legal counsel; Glorioso's contention that the district court improperly denied him a sentence reduction for acceptance of responsibility; and Nuzzo's challenges to the computation of the offense level for his sentence.

I. Background

The facts of this case, though somewhat tedious and spanning a period of four years, deserve attention before proceeding to the legal issues raised by Appellants. Defendant Bernard Morgano owned and operated a restaurant in Gary, Indiana, which was used as a "count house" for an illegal lottery operated by Al Watkins and Anthony Leone. ² In addition to charging Watkins and Leone a fee for the use of his restaurant, Morgano collected from them, on behalf of the Chicago "syndicate," a "street tax" of fifteen percent of the lottery's gross receipts for protection and the right to operate the gambling enterprise. As will shortly be seen, the evidence adduced at trial indicated Morgano (or "Snooky" as he was called) became a central figure in establishing the syndicate's presence in northwestern Indiana. Defendant Peter Petros also worked for the syndicate collecting street tax from gambling operations in northwest Indiana, including the operators of tavern-based gambling machines. Some of Petros' unsavory activities included forcibly collecting $1000 a month from a restaurant owner who ran an illegal gambling business by threatening to harm the owner and his family; collecting $2500 per month from an operator of video poker machines after implying his business might be destroyed if he refused; attempting to collect protection money from two other video poker machine operators; and attempting to extort protection money from the operator of a betting house in Gary, Indiana. Overseeing Petros and Morgano's activities was a gentleman named Frank Zizzo, the coordinator of gambling operations in this region of Indiana for the Chicago syndicate.

Morgano, unable to carry on all the illicit activities by himself, eventually hired Anthony Leone to help collect the street tax and paid him $1000 a month for his services. Confiding in Leone, Morgano explained the money they collected was eventually turned over to the syndicate in Chicago. Some of their "taxpayers" included Steve Sfouris, who paid $1500 each week out of the receipts of an illegal dice game (known as "barbooth") operated in his restaurant; Tony Penzato, another gambling operator in the area who paid $500 a month; and Sam Nuzzo, Jr., also a Defendant in this action who paid $500 per month to protect his illegal sports and horse betting operation. To coordinate their efforts, Morgano, sometimes with Leone, travelled from northern Indiana to Illinois frequently (some twelve times in a three month period) to meet with Defendants Dominick Palermo, Nicholas Guzzino and Zizzo at a restaurant known as "The Taste of Italy" in Calumet City, Illinois. Though these meetings were conducted surreptitiously by the Defendants, they did not escape the Government's electronic surveillance and several conversations occurring at The Taste of Italy were recorded and ultimately used as evidence to convict the Defendants. After Zizzo died sometime in March, 1986, he was replaced by Morgano to coordinate gambling for the syndicate in the region. Palermo, with whom Morgano met on a number of occasions at The Taste of Italy, was Morgano's boss and the person to whom Morgano delivered the street tax he collected. To protect this operation from law enforcement interference, Morgano bribed a local sheriff and two other police officers for an extended period of time. Guzzino assisted Morgano's efforts to collect street tax, in effect serving as Morgano's second-in-command. Once in April, 1986, when Morgano was hospitalized due to a heart attack, Guzzino directed Morgano's cohort Leone to handle collections while Morgano was out of commission, going so far as to inform those who paid money to Morgano that Leone would be collecting in Morgano's place for a short time. Any money collected by Leone was delivered to Morgano's home.

Sam Glorioso was another lieutenant in this operation who, among other things, collected money from the owner of a Greek coffee house (John Mantis) in Hammond, Indiana, who used his business to operate an illegal poker game. Unable to get along with Glorioso, at some point John asked Morgano for someone else to collect his protection money. Morgano sent Leone with Glorioso to inform John that Leone would take over collections from that time forward. Following this meeting John paid Leone at least once, if not on several occasions. Meanwhile, Morgano, who started his own poker game with Defendant Sam Nuzzo, Jr., arranged to have a "dirty" Gary police officer (who, in actuality, was an undercover Federal Bureau of Investigation (FBI) agent posing as a cop on the take) protect their game and raid competing gambling establishments. Morgano planned to have Glorioso visit the establishments following each raid to arrange protection payments--offering to prevent police interference in exchange for money. One owner who was raided but steadfastly refused to pay, Franklin Burton, found the windows in the front door of his business shot out by Morgano and Leone in an attempt to coerce him into paying the street tax. Immediately following this incident Burton received telephone calls threatening his family with injury unless he paid the protection money. Instead of succumbing to the pressure, Burton approached the FBI and agreed to record his conversations with the Defendants. During one of these dialogues, Glorioso related to Burton that the syndicate had, on a past occasion, broken somebody's legs for failing to pay a $300 debt--implying, of course, that the same fate would befall him if he refused to pay. After confirming with Nuzzo Glorioso's connection to the syndicate, Burton eventually agreed to pay Glorioso about $500 per month.

Several "bookies" in St. Joseph County were also the victims of the syndicate's extortion. Morgano had Leone and Petros collect protection money from several operators of illegal football betting games in that area. These bookies, Edward Strawmier, Donald Pytel, and Jeffrey Dunk, were extorted by the syndicate from the fall of 1986 until sometime in November, 1987, making payments amounting to some $1100 during each month of both the 1986 and 1987 football season. Leone and Petros were delegated other duties by Morgano, such as extorting money from Louis Gerodemos, the operator of gambling parties at his restaurant in Lake of the Four Seasons, Indiana. Morgano, accompanied usually by Leone, met with Gerodemos on a number of occasions in an attempt to convince him to pay street tax. These meetings were largely unsuccessful until Morgano was accompanied by his boss, Guzzino, whom Gerodemos feared because he knew Guzzino was allied with the syndicate and failure to pay might result in harm to him or his family. During one of these meetings, Guzzino explained to Gerodemos that Morgano was the coordinator of all gambling activity in Indiana. After this, Gerodemos eventually arranged to pay $1000 per month for protection.

Not only did Nuzzo assist in the extortion activities, he and his family also operated a betting operation. Bets were placed with Nuzzo's sisters, Sandra Mynes and Jennifer Kaufman, and bettors would settle their accounts with Ned Pujo (who owned the Beer Barrel Tavern), Nuzzo, Sam Nuzzo, Sr. (Nuzzo's father), or Arthur Nuzzo (Nuzzo's brother). The Nuzzo family also distributed football "parlay" cards for betting. The operation suffered a slight set-back in November, 1987, when the FBI raided this and other gambling establishments, seizing...