United States v. Masino

• Decision Date: 07 September 2017
• Docket Number: Nos. 16-15451,16-15609,s. 16-15451
• Citation: 869 F.3d 1301
• Parties: UNITED STATES of America, Plaintiff-Appellant-Cross Appellee, v. Larry L. MASINO, Defendant-Appellee-Cross Appellant, Dixie L. Masino, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

869 F.3d 1301

UNITED STATES of America, Plaintiff-Appellant-Cross Appellee,

v.Larry L. MASINO, Defendant-Appellee-Cross Appellant,Dixie L. Masino, Defendant-Appellee.

Nos. 16-15451

16-15609

United States Court of Appeals, Eleventh Circuit.

September 7, 2017

Alicia Forbes, Robert G. Davies, Tiffany H. Eggers, Pamela C. Marsh, U.S. Attorney's

Office, Pensacola, FL, for Plaintiff-Appellant-Cross Appellee.

David Lee McGee, Charles Thomas Wiggins, John R. Zoesch, III, Beggs & Lane, RLLP, Pensacola, FL, for Defendant-Appellee-Cross Appellant.

Joseph Lee Hammons, The Hammons Law Firm, Pensacola, FL, for Defendant-Appellee.

Before ED CARNES, Chief Judge, WILLIAM PRYOR, Circuit Judge, and MOORE,^* District Judge.

WILLIAM PRYOR, Circuit Judge:

We must decide whether an indictment that alleges that a business was in violation of the Florida bingo and gambling house statutes, Fla. Stat. §§ 849.01, 849.02, 849.03, 849.0931, sufficiently alleges one of the essential elements needed to obtain a conviction under the federal gambling statute: that the business "is a violation of" state law, 18 U.S.C. § 1955(b)(1)(i). Larry Masino and his ex-wife Dixie Masino own a Florida business called Racetrack Bingo Inc. Although Florida law generally prohibits gambling, it allows bingo to be conducted under stringent regulations. See Fla. Stat. § 849.0931. The government alleges a scheme in which the Masinos, through Racetrack Bingo, operated illegal bingo games on behalf of several charities, defrauded those charities as to the legality of their operation, charged the charities unlawfully excessive fees, and then laundered the profits. Count Two of the indictment charges the Masinos with violating the federal gambling statute, 18 U.S.C. § 1955. To establish a violation of that statute, the government must prove, among other things, that the business is an "illegal gambling business," which in turn requires proof that the business "is a violation" of state law, id. § 1955(b)(1)(i). The district court dismissed part of Count Two on the ground that a violation of the Florida bingo statute could never convert a bingo business into an illegal gambling business. The government appealed, and Larry Masino filed a cross-appeal. Because we decline to exercise pendent appellate jurisdiction over Larry Masino's interlocutory cross-appeal, we dismiss the cross-appeal. And because a gambling business that violates the Florida bingo statute, Fla. Stat. § 849.0931, could be "a gambling business which is a violation of the law of a State," 18 U.S.C. § 1955(b)(1)(i), we reverse the dismissal of the indictment and remand.

I. BACKGROUND

Former spouses Larry and Dixie Masino and their children own Racetrack Bingo Inc., a Florida corporation that conducted bingo games on behalf of several charities in Fort Walton Beach, Florida. Each charity sponsored two bingo sessions a week. The charities collectively formed Ft. Walton Beach Charities LLC to manage and distribute proceeds of the bingo games. At the direction of the Masinos, each charity entered into annual lease agreements with Racetrack Bingo. The leases provided that Beach Charities would pay Racetrack Bingo a fee that ranged from $1,050 to $1,770 a bingo session. The lease fee did not cover electronic bingo equipment rental, paper bingo supplies, bank fees, and set up and cleanup costs.

In February 2016, a federal grand jury returned a 41-count indictment against Larry and Dixie Masino for conspiracy to commit wire fraud, operating an illegal gambling business, conspiracy to commit money laundering, and money laundering.

18 U.S.C. §§ 1343, 1349, 1955, 1956(h), 1957. In June 2016, a federal grand jury returned a superseding indictment that added predicate offenses to Count Two, operating an illegal gambling business. Count Two states as follows:

Between on or about January 1, 2006, and on or about July 31, 2015, in the Northern District of Florida, the defendants,

Larry L. Masino and Dixie L. Masino,

did conduct, manage, supervise, direct, and own all or part of an illegal gambling business, to wit, a gambling business involving bingo games called Racetrack Bingo Inc., which business was in violation of the laws of the State of Florida, to wit, Florida Statutes, Sections 849.01, 849.02, 849.03, and 849.0931, and which involved five or more persons who conducted, managed, supervised, directed, and owned all or part of said illegal gambling business, and which remained in substantially continuous operation for a period in excess of 30 days, and which had a gross revenue of $2,000 in any single day.

In violation of Title 18, United States Code, Sections 1955 and 2.

The prosecution proceeded under the theory that the Masinos "defrauded the charities by falsely representing that they were operating [Racetrack Bingo] in compliance with Florida law. Instead, [they] falsely inflated the amount charged for rent and expenses so [they] could unlawfully retain bingo proceeds that were otherwise supposed to go to the charities." The Masinos then "conspired to launder and did launder the proceeds of their fraud and illegal gambling operation." The government suggested that "the amount ordered in restitution, forfeiture, and any money judgment [could] exceed approximately $5.8 million."

Larry and Dixie Masino moved to dismiss Count Two of the indictment, Fed. R. Crim. P. 12(b)(3)(B). The district court initially granted the motion to dismiss Count Two in its entirety because it determined that "bingo offenses are not a form of illegal gambling under Florida law, and therefore, a violation of the Florida Bingo statute may not serve as a predicate offense for purposes of the Federal Gambling statute." But the district court later vacated that order and instead granted in part and denied in part the Masinos' motion to dismiss Count Two. The district court explained, "Given that the Florida Legislature plainly expressed its intent by including offenses chargeable under the Bingo Statute as forms of ‘racketeering activity’ under the 2013 amendment to Florida's [Racketeering Act], it necessarily follows that a violation of the Bingo Statute now constitutes an ‘illegal gambling business' in violation of Florida law for purposes of the [federal gambling statute]." The district court dismissed Count Two to the extent it charged a violation based on bingo activities that occurred before the amendment to Florida's Racketeering Act, which occurred on April 10, 2013. The district court concluded that the indictment failed to charge the essential element that Racetrack Bingo was an "illegal gambling business" because no violation of the Florida bingo statute could convert a bingo company into an illegal gambling business.

The government appealed the partial dismissal of Count Two, 18 U.S.C. § 3731. Larry Masino cross-appealed on the ground that the district court should have dismissed Count Two in its entirety. Dixie Masino did not file a cross-appeal. After we asked the parties to address the basis for our jurisdiction over the cross-appeal, the government argued that we lack jurisdiction over a cross-appeal of a denial of a motion to dismiss an indictment. We construed this response as a motion to dismiss the cross-appeal and carried that motion with the case.

II. STANDARD OF REVIEW

We review the legal sufficiency of the allegations in an indictment de novo. United States v. York , 428 F.3d 1325, 1331 n.8 (11th Cir. 2005).

III. DISCUSSION

We divide our discussion in two parts. First, we explain that even if we have the authority to exercise pendent appellate jurisdiction when the government appeals from the dismissal of an indictment, 18 U.S.C. § 3731, we decline to exercise that jurisdiction over the cross-appeal. Second, we explain that Count Two of the indictment is legally sufficient because there are at least some violations of the Florida bingo statute, Fla. Stat. § 849.0931, that could make Racetrack Bingo an "illegal gambling business" under federal law, 18 U.S.C. § 1955.

A. We Decline to Exercise Pendant Jurisdiction over Larry Masino's Cross-Appeal.

Ordinarily, we cannot review a criminal case "until conviction and imposition of sentence." Flanagan v. United States , 465 U.S. 259, 263, 104 S.Ct. 1051, 79 L.Ed.2d 288 (1984) ; see 28 U.S.C. § 1291. But there is a statutory exception for "an appeal by the United States ... from a[n] ... order of a district court dismissing an indictment." 18 U.S.C. § 3731. And the doctrine of pendent appellate jurisdiction allows a federal court to "address nonappealable orders if they are ‘inextricably intertwined’ with an appealable decision or if ‘review of the former decision [is] necessary to ensure meaningful review of the latter.’ " Summit Med. Assocs., P.C. v. Pryor , 180 F.3d 1326, 1335 (11th Cir. 1999) (alteration in original) (quoting Swint v. Chambers Cty. Comm'n , 514 U.S. 35, 51, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995) ).

Larry Masino argues that his cross-appeal is inextricably intertwined with the order the government appeals, but even if we have jurisdiction over that cross-appeal, we decline to exercise it. See, e.g. , Hartley v. Parnell , 193 F.3d 1263, 1272 (11th Cir. 1999) ("To the extent we have discretionary pendent appellate jurisdiction ..., we decline to exercise that jurisdiction." (citation omitted)). We will instead address only the appeal filed by the government.

B. Count Two of the Indictment Is Legally Sufficient To State an Offense.

Congress passed the Organized Crime Control Act of 1970, Pub. L. No. 91-452, 84 Stat. 922, to address a major source of money and power for organized crime—gambling. See United States v. Harris , 460 F.2d 1041, 1045 (5th Cir. 1972). The Act prohibits substantial and continuous illegal gambling businesses:

(a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined under this title or imprisoned not more than five years, or both.

(b) As used in this section—

(1) "illegal gambling

...