United States v. Useni, Fuat

In the

United States Court of Appeals

For the Seventh Circuit

____________

Nos. 06-1978 & 06-2107

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

FUAT USENI and PHILLIP J. COZZO,

Defendants-Appellants.

____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 02 CR 400—James B. Zagel, Judge.

____________

ARGUED SEPTEMBER 19, 2007—DECIDED FEBRUARY 21, 2008

____________

Before BAUER, MANION, and WOOD, Circuit Judges.

MANION, Circuit Judge. Under Illinois law, only charita-

ble 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 gam-

bling 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

2 Nos. 06-1978 & 06-2107

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.

I.

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 whole-

sale 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 accoun-

tant; 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.

Nos. 06-1978 & 06-2107 3

A. Illinois Gambling Laws

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 organiza-

tion 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 charita-

ble 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

1

A pull-tab is a card with a pattern of symbols on the front

and perforated tabs on the back. The tabs, when pulled back,

reveal colored play symbols. If the symbols on the back

match the pattern of symbols on the front of the card, then the

player wins the prize indicated on the card.

4 Nos. 06-1978 & 06-2107

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,

2

Bingo and pull-tab licensees are required to pay 5% of the

gross proceeds of the games to the Illinois Department of

Revenue. 230 ILCS 20/5; 230 ILCS 25/3.

Nos. 06-1978 & 06-2107 5

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.

B. Birth of the Grand Palace

While the network of laws, rules, and regulations were

designed to prevent fraud, a gambling operation never-

theless presented a lucrative attraction to someone

willing to skirt the law. The Grand Palace was the brain-

child 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,

3

Shlifka died after the indictment in this case was handed

down but before trial began.

6 Nos. 06-1978 & 06-2107

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 conces-

sions 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 ap-

plications for bingo and pull-tab licenses for IAWV posts

were also submitted. Donna Dombrowski, Fred Bingham’s

Nos. 06-1978 & 06-2107 7

live-in girlfriend, testified that Bingham, the Grand Pal-

ace’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 ap-

plication 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 charit-

able 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 governing the conduct of such games.” When

the bingo and pull-tab license applications were rejected

because they were not signed by members of the

IAWV, Mariani testified that Shlifka had him obtain the

signatures of veterans on amended license applications.

After they were submitted, the amended applications

were accepted and bingo and pull-tab licenses issued.

No license to conduct raffles was ever obtained.

While the licenses were being pursued, Shlifka held two

planning meetings. Both meetings occurred before the

operation of the games commenced, the first being held

in January 1994 and the second in May 1994. Mariani and

Carmen Trombetta—an IAWV member who, like

Mariani, became deeply involved in the Grand Palace—

8 Nos. 06-1978 & 06-2107

testified that Useni and Cozzo attended both meetings. At

the May meeting, Shlifka instructed the IAWV veterans

working the games to deny that they were getting paid,

if asked.

C. Operation of the Grand Palace

Once the games commenced, each IAWV post was

ostensibly running one of the weekly gambling sessions.

In reality, though, the veterans had little control over

the games; their contribution was limited to selling pull-

tabs, bingo cards, and raffle tickets to the hall’s patrons.

According to the IAWV members who testified at trial,

the veterans did not control which games were played.

They were not allowed to count the money generated

by the games or be in the back room where the money

was kept. They had no idea how much money was gen-

erated by the business. And they did not have any con-

trol over the checking accounts where the proceeds for

the games were deposited.

The real power over the games—and, most importantly,

over the revenue generated from the games—was exer-

cised by those who had access to the Grand Palace’s back

office, all of whom were non-veterans: Shlifka, Bingham,

and Shlifka’s daughter Laura Dostal, as well as Cozzo and

Useni. Shlifka and Cozzo would determine which games

would be played. After a veteran had completed selling

his allotment of pull-tabs, raffle tickets, or bingo cards,

someone from the back office would collect the gaming

proceeds from the veteran and take the money to the

back room. There, the money was collected and taken by

Fred Bingham, the bookkeeper for the Grand Palace and

a non-veteran, to deposit in accounts he controlled. Be-

Nos. 06-1978 & 06-2107 9

sides handling the money, Bingham, along with Dombrow-

ski, filled out the quarterly bingo and pull-tab returns for

the IAWV posts. On those returns, the number of pull-tab

games being played was vastly under-reported, as was

the revenue generated by the pull-tab games.

Cozzo, along with Shlifka, appeared to be running

the hall. According to the testimony of the veterans

who worked at the Grand Palace, as well as one of the

undercover state revenue agents sent to investigate the

Grand Palace’s operations, Cozzo announced the rules of

bingo prior to the session, sold bingo cards, verified

winning bingo numbers, administered the raffles, sold

pull-tabs, announced the pull-tab numbers, took the pull-

tab proceeds to the back office, brought out new boxes

of pull-tabs to sell, paid the veterans, and controlled the

pull-tab machine on the wall, removing money from it and

fixing it when it malfunctioned. In contrast, Useni

worked primarily in the concession area of the Grand

Palace. However, witnesses testified that he also verified

winning bingo cards, sold pull-tabs and raffle tickets,

provided raffle tickets to the veterans to sell, paid the

veterans, walked around observing the workers and

players, and installed, restocked, and removed the

money from the pull-tab machine.

Both Useni and Cozzo were involved in obtaining the

pull-tabs from Marotta. Marotta testified that Cozzo

often ordered the pull-tabs from Marotta and picked

them up at Marotta’s place of business. Marotta stated

that Useni also picked up the pull-tabs on occasion.

Marotta further testified that he sold a tremendous

volume of pull-tabs to the Grand Palace—massive in

comparison to other bingo operations. Undercover state

revenue agents sent to investigate the Grand Palace

10 Nos. 06-1978 & 06-2107

observed that the number of pull-tab games played at the

Grand Palace exceeded the number allowed by law,

which varied depending on the type of game played and

total payout for the session. Since pull-tabs are required

to be registered with the state, Cozzo, along with Shlifka,

approached Marotta at one point and asked him to supply

them unregistered pull-tabs. Marotta testified that he

agreed to provide them with unregistered pull-tabs but

that, unbeknownst to Cozzo and Shlifka, he continued

to sell them registered pull-tabs.

D. Useni’s Ownership of the Grand Palace

In June 1995, Useni purchased the Grand Palace from

Shlifka. After the purchase, Useni and Cozzo were in

charge of the hall, and they informed the others of the

change in leadership. Marotta testified that Cozzo told

him that “the heat was on” and that Shlifka was stepping

down. Cozzo then told Marotta that he was in charge

and, if there were any problems, to contact him. Ac-

cording to Levitanksy’s testimony, Cozzo and Useni also

met with him and told him that he should direct any

questions about the Grand Palace to them. Additionally,

Mariani testified that Useni talked to him and told him

that he had bought out Shlifka; going forward, Mariani

was to take orders from Useni.

Useni applied for a provider’s license shortly after

purchasing the Grand Palace. On that license, Useni signed

a certification which read: ”I . . . certify that no employee

of mine shall manage or operate the games. I also state

that I have read the applicable bingo or charitable

games rulebook.” Despite that certification, the games

continued to be operated the same as they were under

Nos. 06-1978 & 06-2107 11

Shlifka’s regime. Carole Johnson, Useni’s girlfriend,

testified that, when she asked Useni where the money

from the games was going, Useni told her that it was

going into a “slush fund” and that he was planning on

retiring early.

During his ownership of the Grand Palace, Useni hired

Cesar Valera to work in the kitchen of the concession

area. The kitchen had been Useni’s primary area of respon-

sibility before he purchased the Grand Palace. Valera

testified that Useni paid him, like the veterans, in cash

and he was not given a W-2.

E. Sale of the Grand Palace to Bingo Partners

Useni’s ownership of the Grand Palace did not last long.

Just eleven months after purchasing the hall, Useni sold

it in May 1996 to Bingo Partners, Inc. (“Bingo Partners”),

a group of veterans consisting of Mariani (the organizer),

Trombetta, James Sarno, Rosario DiMarco, Sam Lenoci, and

Michael Riccio. Mariani testified that Useni had said

that he needed to sell “right away.”4 According to John-

son, right before Useni sold the Grand Palace to Bingo

Partners Useni told Johnson not to talk to anyone who

came into the Grand Palace in a suit because Useni

thought that might be an FBI agent. Useni also told John-

son that he thought the hall was bugged. Useni and Cozzo,

4

The record does not disclose whether Useni or Cozzo had

actual knowledge of an FBI investigation of the Grand Palace

in 1996. Coincidentally, however, the FBI obtained an order

authorizing the interception of oral communications in

May 1996, the same month that Useni sold the Grand Palace

to Bingo Partners.

12 Nos. 06-1978 & 06-2107

along with Johnson, began shredding the pull-tabs, both

the winning and losing tickets, placing the remains in

opaque green bags.

The sale to Bingo Partners did not end Useni’s and

Cozzo’s involvement with the Grand Palace. In addition to

a $120,000 payment up front in exchange for the Grand

Palace, Bingo Partners promised Useni and Cozzo fur-

ther payments in a series of installments. Mariani testified

that Cozzo and Useni repeatedly called Bingo Partners

looking for those payments, which were made out of the

money collected from the pull-tab machine. Trombetta

testified that Cozzo and Useni lent Bingo Partners the

money to operate the games to help Bingo Partners get

established. Trombetta also testified that Useni promised

to let Bingo Partners use his provider’s license in ex-

change for $1000 a week. In addition, Mariani testified

that Bingo Partners received help from Bingham, from

whom Mariani sought advice on several occasions as to

how to operate the hall.

Although Bingo Partners was now in charge, the opera-

tion of the Grand Palace did not differ significantly from

when Useni owned the hall. Bingo Partners continued to

pay the workers in cash and run the same games as the

previous regime. A big change, however, was that the

FBI began electronically monitoring the back room of the

Grand Palace. As a result, the FBI was able to uncover

evidence that the veterans comprising Bingo Partners

were diverting a substantial portion of the proceeds

from the gambling into their own pockets. At the height

of operation, Trombetta testified that each member of

Bingo Partners took $800 to $1000 per week from the

proceeds of the gambling. In order to prevent discovery

of the skimmed proceeds by the state, the number of

patrons attending the bingo sessions was significantly

Nos. 06-1978 & 06-2107 13

under-reported. As a consequence, the amount of pro-

ceeds from the bingo games went substantially under-

reported. Bingo Partners also did not report to the state

the proceeds from the pull-tab machines or the raffles;

instead, the members of Bingo Partners pocketed those

funds.

F. Indicted

More than a year after Cozzo and Useni relinquished

control of the Grand Palace to Bingo Partners, Cozzo

became aware of an FBI investigation and took steps to

head off prosecution. Cozzo attempted to ensure that

Marotta kept quiet. (Recall that Marotta had been the

Grand Palace’s biggest supplier and therefore knew the

extent of the Grand Palace’s operation.) In October 1997,

Cozzo met with Marotta at Finkel’s Deli. Cozzo told

Marotta that the heat was on and that they were being

investigated by the FBI. Cozzo warned Marotta to keep

his mouth shut and to say nothing or else he would be a

“dead man.” Cozzo later repeated his threat to Marotta,

this time over the phone after Marotta had met with the

FBI, again telling Marotta that he was a “dead man.”

Cozzo’s efforts to stave off a federal prosecution were

unsuccessful, though he was not formally charged until

April 2002, when the government indicted him, Useni,

Shlifka, Mariani, Trombetta, Sarno, DiMarco, Lenoci,

Riccio, and James Prebis, who had replaced Bingham as

the Grand Palace’s bookkeeper during the tenure of

Bingo Partners.5 In count one of the indictment, Cozzo

and Useni were charged with conspiring to conduct an

5

Bingham died before the grand jury handed down the

indictment.

14 Nos. 06-1978 & 06-2107

enterprise’s affairs through a pattern of racketeering

activity in violation of 18 U.S.C. § 1962(d). The government

alleged that Useni and Cozzo agreed to conduct and

participate in the conducting of the affairs of an

association-in-fact enterprise consisting of the Grand

Palace, Cozzo, Useni, Shlifka, Mariani, Bingo Partners,

and the members of Bingo Partners, through a pattern

of racketeering activity that included operating an

illegal gambling business and mail fraud. Count two of

the indictment alleged that Cozzo and Useni conducted

an illegal gambling business in violation of 18 U.S.C.

§ 1955. Counts three through nine alleged that Cozzo and

Useni committed mail fraud in violation of 18 U.S.C.

§§ 1341 and 2 because the bingo and pull-tab license

applications Bingo Partners had submitted to the state on

behalf of the IAWV posts in 1997 were part of a scheme to

defraud. Count twenty-five alleged that Cozzo and

Useni had conspired to commit tax fraud in violation of

18 U.S.C. § 371 by concealing income from the gambling

at the Grand Palace. Counts twenty-six and twenty-

seven alleged that Useni wilfully understated the Grand

Palace’s corporate income on the two corporate tax re-

turns he signed as the Grand Palace’s owner in violation

of 26 U.S.C. § 7206(1).

G. Trial

Shlifka died after the indictment was handed down.

Mariani, Trombetta, and DiMarco all pleaded guilty and

agreed to testify against Useni and Cozzo.6 In return, the

6

Sarno, Lenoci, and Prebis all entered guilty pleas but did not

testify at Cozzo’s and Useni’s trial. As for Riccio, the record

(continued...)

Nos. 06-1978 & 06-2107 15

government agreed to recommend that Trombetta receive

a one-third reduction in his sentence and that DiMarco

receive a two-thirds reduction. In Mariani’s case, the

government agreed that Mariani could ask the district

court for a sentencing departure based on his cooperation.

Useni and Cozzo proceeded to trial. The witnesses at

the six-day trial included Mariani, Trombetta, and

DiMarco, as well as Marotta, the Grand Palace’s supplier

who testified under a grant of immunity; Johnson, Useni’s

girlfriend who had previously testified before the grand

jury under a grant of immunity7; and Agent Richard

Lexby of the IRS, who testified as the government’s sum-

mary witness. Lexby noted that during the period Useni

owned the Grand Palace, pull-tab returns submitted to the

state showed that 654 pull-tab games were played during

the 259 sessions at the Grand Palace. However, Illinois

revenue agents conducting surveillance at the Grand Palace

observed 742 pull-tab games played over the 54 sessions

the agents attended in the same time period. From that

information, as well as testimony from the IAWV members

who worked at the Grand Palace and the bingo and pull-

tab returns filed with the state, Lexby estimated the total

amount of money that had been diverted from the IAWV

6

(...continued)

does not indicate whether he ever pleaded guilty or went to trial

after his counsel filed an unopposed motion to sever his trial

from the other defendants on account of his deteriorating

medical condition.

7

At trial, Johnson testified that she has been married for over

thirty years and that she was married at the time she was hav-

ing a relationship with Useni.

16 Nos. 06-1978 & 06-2107

from 1994 to 1997 at $ 2,986,365.8 According to Lexby, that

figure was a conservative estimate because he did not

attempt to include any calculation of the diverted proceeds

from the pull-tab machines or the raffles held during the

time period before the sale of the Grand Palace to Bingo

Partners.

8

Lexby arrived at that figure by adding up his estimate of the

unreported pull-tab profits and bingo proceeds. Lexby based the

figure for the bingo proceeds on the taped back-room conver-

sations obtained while Bingo Partners operated the Grand

Palace. On the other hand, Lexby based the figure for the

unreported pull-tab profits on what went unreported during

Cozzo’s and Useni’s tenure at the Grand Palace, since the last

time there was a discrepancy between the actual number of pull-

tab boxes sold and the number of pull-tab boxes reported was

the first quarter of 1996, the last quarter Useni and Cozzo were

actively involved in the operation of the Grand Palace before

its sale to Bingo Partners. To calculate the unreported pull-

tab profits from 1994 to 1996, Lexby multiplied $5745 times

the number of sessions to get a figure representing total pull-

tab revenue. Lexby used the $5745 amount because that repre-

sented 10 boxes of pull-tabs sold, which, based on the evid-

ence, was the average number of boxes that were sold each

session. Lexby then subtracted the pull-tab proceeds reported

to the state from his calculation of the total pull-tab revenue

to arrive at the total amount of unreported proceeds. From

there, Lexby multiplied the unreported proceeds by .30, a

profit multiplier that Lexby had calculated by dividing the

reported pull-tab proceeds by the reported pull-tab profits,

and obtained $959,426, a number representing the estimated

unreported pull-tab profits; in other words, the amount that

the operators of the Grand Palace kept and did not give to

the IAWV posts from the sale of pull-tabs between 1994 and

1996.

Nos. 06-1978 & 06-2107 17

A jury found Useni and Cozzo guilty on all counts in

which they were charged: the racketeering conspiracy

count, the § 1955 illegal gambling business count, the mail

fraud counts, and the tax counts. The district court sen-

tenced Cozzo to ninety-six months of imprisonment and

Useni to sixty months. Both Useni and Cozzo appeal.

II.

A. Sufficiency of the Evidence

We begin with the appellants’ challenges to the suffi-

ciency of the evidence supporting their convictions. In

challenging their convictions this way, both Useni and

Cozzo bear “a heavy burden,” since we must examine

“[t]he evidence and all reasonable inferences that can be

drawn from it . . . in the light most favorable to the gov-

ernment.” United States v. Gardner, 238 F.3d 878, 879

(7th Cir. 2001); see also United States v. England, 507 F.3d

581, 588 (7th Cir. 2007) (“[A]n appeal does not deputize

this Court as the ultimate trier of fact.”). We will find

the evidence insufficient “only if no rational trier of fact

could have found guilt beyond a reasonable doubt.” United

States v. Hendrix, 482 F.3d 962, 966 (7th Cir. 2007) (quoting

United States v. Leahy, 464 F.3d 773, 794 (7th Cir. 2006)).

1. RICO Conspiracy

Both Useni and Cozzo challenge the sufficiency of the

evidence supporting their conviction under 18 U.S.C.

§ 1962(d). They argue that the evidence, even taken in

the light most favorable to the government, does not

show that they knew of the illegal gambling operation

18 Nos. 06-1978 & 06-2107

being conducted at the Grand Palace, nor that they

agreed to join in the conspiracy.9

To be convicted of conspiracy under § 1962(d), one

must knowingly agree to facilitate the activities of those

who are operating an enterprise. United States v. Swan, 250

F.3d 495, 499 (7th Cir. 2001); see also Brouwer v.

Raffensperger, Hughes & Co., 199 F.3d 961, 967 (7th Cir.

2000). While the government must show that there was

an agreement between the members of the conspiracy,

direct evidence need not be shown since “an agreement

can be inferred from the circumstances.” United States v.

Campione, 942 F.2d 429, 438 (7th Cir. 1991). However,

“mere association with conspirators, knowledge of a

conspiracy, and presence during conspiratorial discus-

sions is not sufficient to convict a person of conspiracy.”

United States v. Percival, 756 F.2d 600, 610 (7th Cir. 1985).

The government has to show that the defendant was

aware of the essential nature and scope of the enterprise

and intended to participate in it. United States v. Stephens,

46 F.3d 587, 592 (7th Cir. 1995).

9

To the extent that Useni and Cozzo also challenge their

convictions for engaging in an illegal gambling operation under

18 U.S.C. § 1955 on the same grounds, such an argument is

foreclosed by this court’s opinion in United States v. Cyprian,

23 F.3d 1189, 1199 (7th Cir. 1994). In Cyprian, we stated that

knowledge that an activity is illegal is not a necessary element

of a § 1955 offense. Furthermore, even if knowledge were

necessary, our analysis of their challenges to the sufficiency

of the evidence to support their convictions under § 1955

would be essentially the same as the analysis we employ for

their challenges to their convictions for conspiring to commit

racketeering offenses; thus, there is no need to address those

challenges separately.

Nos. 06-1978 & 06-2107 19

The government has presented sufficient evidence to

show that both Useni and Cozzo were aware of the scope

of the enterprise and intended to participate in it. The

evidence the government presented of the planning

before the Grand Palace even commenced operation

supported the jury’s finding that Cozzo was aware of the

scope of the enterprise and the illegalities that the enter-

prise was prepared to perpetrate. These illegalities in-

cluded the submission of false and misleading license

applications to the state and the routine, systematic viola-

tion of Illinois gambling laws. The evidence clearly showed

that Cozzo intended to actively participate in

their perpetration. Cozzo was present at the initial meet-

ing with Marotta and was represented to Marotta as

Shlifka’s “partner.” He was also present when Shlifka

offered Mariani $100 for each gaming session hosted by

an IAWV post recruited by Mariani. And he was present

at the two initial planning meetings in 1994, including

the meeting where the IAWV veterans were instructed

to deny that they were getting paid for working the games.

From Cozzo’s presence at those meetings, a jury could

rationally conclude that Cozzo could not possibly have

been unaware of how the Grand Palace was going to be

doing business. Moreover, Cozzo had his sisters and

girlfriend sign the application representing that they

were IAWV members, even though they obviously

were not. A reasonable jury could have interpreted

Cozzo’s falsification of that bingo license application as

a sign of Cozzo’s willingness to participate in the illegal

enterprise.

The jury also had before it further evidence of Cozzo’s

active participation in the enterprise once the gambling

commenced. After the Grand Palace opened its doors,

Cozzo played a leading role; he was no bit player. Acting

20 Nos. 06-1978 & 06-2107

as a de facto manager of the hall, Cozzo had access to the

back room, the control center of the gambling operation. He

determined which games would be played, participated in

the operation of the games, handled the gambling pro-

ceeds, and paid the veterans for their work—all in violation

of Illinois law as well as § 1955. See Cyprian, 23 F.3d at 1199

n.14 (to establish a violation of § 1955, the government

must show that the defendant conducted, financed,

managed, supervised, directed, or owned a gambling

business that: (1) violated state law; (2) involved five or

more persons; and (3) was either in substantial continuous

operation for more than 30 days or had gross revenue of

$2,000 or more in a single day).

And Cozzo remained a prominent figure in the enter-

prise even after the ownership of the Grand Palace was

transferred to Useni. After the sale, Useni and Cozzo told

Mariani, Levitansky, and Marotta that they would take

orders from Cozzo and Useni. Additionally, Useni’s

girlfriend Johnson testified that Cozzo and Useni were

in charge of the hall. A rational jury easily could con-

clude from all this that Cozzo agreed to facilitate the

illegal enterprise.

But even if that were not enough, the jury had further

evidence of Cozzo’s guilty intent in the form of the shred-

ding of the winning and losing pull-tab tickets prior to

the sale of the hall to Bingo Partners and the placing of

the shredded remains in opaque bags. Furthermore,

Marotta testified that Cozzo had attempted to get unregis-

tered pull-tabs from him. Finally, the jury had before it

Cozzo’s threats to Marotta as well. Cozzo told Marotta

he was a “dead man” if he talked to the FBI, and reit-

erated that threat to Marotta after Marotta had been in

contact with the FBI. Those threats were made more

Nos. 06-1978 & 06-2107 21

than a year after Cozzo had ceased active involvement

in the Grand Palace. When viewed in conjunction with

the other evidence, they allowed the jury to find that

Cozzo was aware of the scope of the enterprise and in-

tended to participate in it.

The evidence supporting the jury’s finding that Useni

agreed to participate in the illegal gambling enterprise

is similar to the evidence presented against Cozzo. While

Useni’s participation in the preparations for the opening

of the Grand Palace was not as extensive as Cozzo’s, there

was evidence before the jury that Useni was also in on the

illegal plan from the start. Shlifka introduced Useni to

Mariani shortly after the plan for the Grand Palace

was presented to Mariani. Useni also attended the two

planning meetings in 1994 and therefore was present

when Shlifka discussed concealing the fact that the veter-

ans were getting paid. Moreover, like Cozzo, Useni was

heavily involved in the illegal gambling occurring at the

Grand Palace. Useni had access to the back room. By

assisting in the operation of the games and the paying

of the veterans, he directly participated in the systematic

violation of the Illinois gambling laws occurring at the

Grand Palace.

While Useni’s claim of ignorance of the criminal enter-

prise he was supporting is very weak, after he purchased

the Grand Palace the claim is totally without merit. The

undisputed testimony at trial was that Useni, along

with Cozzo, was in charge of the hall after the sale.

Despite Useni’s certification on his provider application

that he had read the charitable gambling rules and that

none of his employees would manage or operate the

games, the games continued to be run illegally. The

evidence clearly showed that Useni both knew and in-

22 Nos. 06-1978 & 06-2107

tended to further the illegal gambling occurring at the

Grand Palace on his watch.

Other substantial evidence of Useni’s guilty knowl-

edge buttresses that conclusion. Useni, like Cozzo, partici-

pated in shredding the used pull-tabs and placing them

in opaque bags. Useni told Johnson that the money from

the games was going into a “slush fund” that would allow

him to retire early. Right before he sold the Grand Palace,

Useni also told Johnson that he thought the Grand Palace

was bugged and that she should not talk to anyone

who appeared to be an FBI agent. From this evidence

(that Useni was trying to cover his tracks), a rational jury

could conclude that Useni knew he was implicated in the

illegality underpinning the whole Grand Palace operation.

Given the volume of evidence against Useni and Cozzo

on the racketeering conspiracy count, it is not surprising

that Useni and Cozzo try to shift the focus away from the

evidence on the record and concentrate their argument on

what evidence was not presented at trial. They point to

the absence of evidence that they ever skimmed any of

the proceeds from the gambling and argue that the gov-

ernment has therefore failed in its evidentiary burden. That

argument is a red herring. The government did not have to

show that Cozzo and Useni purloined even one penny to

convict them on the racketeering count. Instead, all

the government needed to show was that they were

aware of an enterprise involved in, among other things,

gambling that was purposely and continuously in viola-

tion of the Illinois gambling laws, and that they intended to

participate in it. As the preceding discussion shows,

the government met that burden.

Nos. 06-1978 & 06-2107 23

2. Mail Fraud Counts

Next, both Cozzo and Useni challenge their convic-

tions on the seven mail-fraud counts. The mail-fraud

counts involve bingo and pull-tab license applications that

Bingo Partners submitted via the mails to the state of

Illinois in 1997. Cozzo and Useni argue that they cannot

be held liable for any mail fraud based on actions taken

by Bingo Partners in 1997 because their involvement

with the Grand Palace ceased in May 1996 when Useni

sold the hall to Bingo Partners. Furthermore, they argue

that there was no evidence that they knew of the mailing

of any of the applications in 1997.

A conviction for mail fraud must be supported by

evidence that a defendant participated in a scheme to

defraud and caused the mails to be used in furtherance

of that scheme. United States v. Barger, 178 F.3d 844, 847

(7th Cir. 1999). A defendant need not actually have used

the mails himself to be liable for mail fraud. Instead,

the evidence is sufficient to support a conviction for

mail fraud if the defendant acted “with the knowledge

that [the use of the mails] would ‘follow in the ordinary

course of business, or where such use [could] reasonably

[have been] foreseen.’ ” Am. Auto. Accessories, Inc. v.

Fishman, 175 F.3d 534, 542 (7th Cir. 1999) (quoting United

States v. Alexander, 135 F.3d 470, 474-75 (7th Cir. 1998))

(second alteration in original).

The jury in this case had sufficient evidence before it

to convict Useni and Cozzo on the mail-fraud counts. As

was outlined in the discussion of the racketeering con-

spiracy count, the jury could have reasonably found

that Useni and Cozzo were willing participants in the

scheme to defraud both the IAWV posts of gambling

proceeds raised in their name and the state of Illinois of

24 Nos. 06-1978 & 06-2107

tax revenue. There was also evidence from which a rea-

sonable jury could conclude that the mailing of the license

applications by Bingo Partners was in furtherance of the

same fraudulent scheme, and that Useni’s and Cozzo’s

participation in the scheme continued on into the time

period in which Bingo Partners mailed the applications.

The Grand Palace continued to be operated in the same

manner after it was sold to Bingo Partners as when Useni

and Cozzo were in charge. Indeed, Useni and Cozzo

ensured that Bingo Partners would be able to continue

operation of the hall. They left the money to operate

the games for Bingo Partners to use until Bingo Partners

got on its feet. Useni agreed to lend Bingo Partners the

use of his provider’s license in exchange for $1000 a

week. And Bingham, a stalwart in the previous regime,

helped explain to the veterans comprising Bingo Partners

how to run the Grand Palace.

Moreover, Useni and Cozzo had a financial incentive

to make sure the Grand Palace did not fold under

Bingo Partners’s watch. The terms of the sale of the Grand

Palace to Bingo Partners required Bingo Partners to make

monthly payments to both Cozzo and Useni. Those

monthly payments were made from the proceeds of the

gambling; they were taken directly from the pull-tab

machine. Both Cozzo and Useni demonstrated their interest

in those payments, as they called Bingo Partners on

different occasions inquiring about the money owed

them. In short, because of the aid they provided to Bingo

Partners and the money they continued to receive from the

gambling, both Cozzo and Useni continued to participate

in the illegal scheme even after the Grand Palace was

sold to Bingo Partners.

Finally, the jury had sufficient evidence to conclude

that Useni and Cozzo reasonably could have foreseen

Nos. 06-1978 & 06-2107 25

the mailing of the bingo and pull-tab applications by

Bingo Partners. The jury could reasonably have con-

cluded that Cozzo was well aware that the continuing

viability of the gambling at the Grand Palace depended on

the annual renewal of the licenses, since he had attempted

to have a bingo license application submitted using the

names of his sisters and girlfriend. Similarly, Useni had

submitted a provider application when he was owner of

the Grand Palace and could therefore have anticipated

that the bingo and pull-tab licenses had to be renewed

annually as well. Accordingly, the jury’s convictions on

the mail fraud counts were supported by the evidence.

3. Tax Conspiracy

Useni and Cozzo also challenge their conviction for

conspiring to commit tax fraud in violation of 18 U.S.C.

§ 371 by concealing income from the gambling at the

Grand Palace.10 They argue that the evidence was not

sufficient to show that they participated in the tax con-

spiracy.

To prove a violation of § 371, the government must

establish: (1) an agreement to commit an offense against

10

Useni also challenges his two convictions under 26 U.S.C.

§ 7206(1) for wilfully understating the Grand Palace’s corpo-

rate income on the July 12, 1995, return and the May 20,

1998, amended return for the Grand Palace. (Useni was

charged with those offenses because he signed those returns.)

Because the analysis is essentially the same for those two

counts as for the § 371 offense, Useni’s sufficiency challenge

to his convictions on those counts does not merit separate

discussion.

26 Nos. 06-1978 & 06-2107

the United States, in this case to defraud the United

States by wilfully concealing assets resulting in a failure

to report income in violation of 26 U.S.C. § 7206(4);

(2) an overt act in furtherance of the conspiracy; and

(3) knowledge of the conspiratorial purpose. United States

v. Soy, 454 F.3d 766, 768 (7th Cir. 2006). The evidence

presented at trial, viewed in the light most favorable to

the government, was sufficient to allow a reasonable jury

to conclude that each of those three elements was met.

Specifically, the government satisfied its burden with

respect to two overt acts alleged in the indictment: the

filing of a fraudulent Employer’s Quarterly Federal Tax

Return (“Form 941”)11 for the Grand Palace on October 31,

1995, and the filing of a false Corporation Income Tax

Return (“Form 1120”) on behalf of the Grand Palace on

July 12, 1995.

Cozzo and Useni were in charge of the Grand Palace

during the time period in which those two documents

were filed. The Grand Palace’s accountant, Levitansky,

testified that Cozzo and Useni told him that he was to

direct any questions to them. Cozzo and Useni knew that

the veterans were being paid, since they attended the

planning meeting where the payment of the veterans

was discussed and even paid the veterans themselves

on occasion. It is also undisputed that while Useni and

Cozzo were in charge of the hall, the number of pull-tab

games being played—and thus the revenue generated

from the games—was massively under-reported on the

quarterly pull-tab returns for the IAWV. Given that non-

11

A Form 941 is the document on which an employer reports

to the Internal Revenue Service the wages it has paid to employ-

ees. See 26 C.F.R. § 31.6011(a)-1.

Nos. 06-1978 & 06-2107 27

veterans like Bingham controlled the reporting on the

bingo and pull-tab returns submitted on behalf of the

IAWV posts, a reasonable jury could conclude that any-

thing not reported as revenue for the IAWV posts was

going into the Grand Palace’s coffers. And, as outlined

in the first section, the jury could have reasonably con-

cluded from the ample evidence of guilty intent that

Cozzo and Useni were aware of the unreported pro-

ceeds, even if they did not personally profit from the

purloined proceeds themselves. Finally, it is undisputed

that neither Cozzo nor Useni reported to Levitansky the

money being paid to the veterans or the unreported

revenue from the pull-tab games. A reasonable jury

could therefore conclude that Useni and Cozzo were

participants in the conspiracy to defraud the United States

of tax revenue by under-reporting both the amount of

wages paid to employees of the Grand Palace, as well

as the earnings of the Grand Palace from unreported pull-

tab games.

B. Useni’s Trial Challenges

Besides his challenges to the sufficiency of the evidence,

Useni makes several objections to the manner in which

the trial was conducted. First, Useni argues that he

should have been granted a new trial because statements

made by the prosecutor at closing improperly shifted the

burden of proof. A district court’s decision not to grant a

new trial is reviewed for an abuse of discretion. United

States v. Emerson, 501 F.3d 804, 812 (7th Cir. 2007). When

Useni’s lawyer raised this issue at trial, he did not direct

the trial court to any specific comment by the prosecutor.

In his brief on appeal, Useni directs this court to a span

of five pages of the trial transcript, although he still

28 Nos. 06-1978 & 06-2107

does not specify the exact comments that he finds prejudi-

cial.

After reviewing those pages of the trial transcript, we

do not find anything improper. Some of the comments

made by the prosecutor were about the defense’s failure to

ask questions of government witnesses.12 In United States v.

Kelly, 991 F.2d 1308, 1314 (7th Cir. 1993), we held that a

prosecutor may comment on a defendant’s failure to call

or ask particular questions of a witness so long as he does

not tax the defendant’s right not to testify. Useni did not

testify at trial. However, the prosecutor’s comments, like

the comments by the government lawyer in Kelly, were

confined to responding to specific arguments defense

lawyers had made about the credibility of two of the

government’s witnesses. Cf. id. at 1313-14. The com-

ments did not come close to “invit[ing] the jury to infer

guilt from the defendant’s decision not to testify,” and

therefore did not tax Useni’s right not to testify. United

States v. Sblendorio, 830 F.2d 1382, 1391 (7th Cir. 1987).

Useni’s challenge to those comments is without merit.

Useni’s second objection suffers a similar fate. Useni

argues that he was deprived of a fair trial by a state-

ment Cozzo’s attorney made at closing about Cozzo’s

decision to testify. Unlike Useni, Cozzo testified during

trial, and Cozzo’s attorney sought to highlight that fact

during closing. The statement by Cozzo’s attorney to

which Useni objects is the following: “Now, a defendant

12

For example, Useni’s lawyer at closing had suggested that

Carole Johnson, Useni’s ex-girlfriend, was biased against him

because they had broken up. In response, the prosecutor

pointed out that Johnson had never been asked about her

current feelings for Useni while she was on the stand.

Nos. 06-1978 & 06-2107 29

has a right not to testify. If Phil [Cozzo] didn’t testify,

you couldn’t hold it against him. But he took the stand.

He opened himself up to any of their questions and any

of their rebuttal witnesses.”

There is nothing improper about that statement. See

United States v. Petullo, 709 F.2d 1178, 1182 (7th Cir. 1983).

In Petullo, we held that a similar statement by counsel,

asking the jury only to draw favorable inferences from

his client’s willingness to testify, was not unfairly prejudi-

cial to a nontestifying codefendant because the state-

ment was limited and counsel concurrently stressed the

right not to testify. Id. Petullo controls here, and Useni is not

entitled to a new trial because of the comments by Cozzo’s

lawyer.

Next, Useni argues that the district court improperly

prevented his counsel from impeaching Mariani, a high-

ranking IAWV member and the organizer of Bingo Part-

ners, by omission13 when the court excluded the testi-

mony of Agent Michael Cole of the FBI and Agent Mark

Lischka of the IRS. The district court’s evidentiary deci-

sions are reviewed for an abuse of discretion. United States

v. Cunningham, 462 F.3d 708, 712 (7th Cir. 2006). Further-

more, “when reviewing evidentiary errors, we will only

reverse and order a new trial provided that the improper

13

“The theory of impeachment by omission is that ‘if [a] former

statement fails to mention a material circumstance presently

testified to, which it would have been natural to mention in the

prior statement, [then] the prior statement is [considered]

sufficiently inconsistent’ to be admitted to impeach the pre-

sent testimony.” Moylan v. Meadow Club, Inc., 979 F.2d 1246,

1249 (7th Cir. 1992) (quoting 1 John W. Strong, McCormick on

Evidence § 34 at 114-15 (4th ed. 1992)) (first alteration in original).

30 Nos. 06-1978 & 06-2107

admission was not harmless, which is to say ‘only if

the error had a substantial influence over the jury, and

the result reached was inconsistent with substantial

justice.’ ” United States v. Owens, 424 F.3d 649, 653 (7th

Cir. 2005) (quoting United States v. Hernandez, 330 F.3d 964,

969 (7th Cir. 2003)).

Mariani testified that Useni at first demanded Bingo

Partners pay cash for the Grand Palace. On cross-examina-

tion, Useni’s lawyer asked Mariani if he told Agent Cole

of the FBI about the cash demand at their June 9, 2003,

proffer meeting, to which Mariani responded, “I probably

was never asked.” Useni’s lawyer also asked Mariani if

he told Agent Lischka about the cash demand at their

March 10, 2004, proffer meeting. This time Mariani re-

sponded, “I would have to say ‘yes.’ ” After the conclusion

of the government’s case, Useni’s lawyer made an offer

of proof outside the presence of the jury and elicited

testimony from Cole and Lischka in an attempt to impeach

Mariani by omission. Cole testified, consistent with

Mariani, that Mariani did not mention the cash demand

when they discussed the purchase of the Grand Palace

at their June 9, 2003, meeting. Lischka, on the other

hand, contradicted Mariani’s testimony and testified that

the subject of the cash demand did not come up at their

March 20, 2004, meeting. The district court excluded the

testimony of both agents; Useni challenges that decision.

The district court acted well within its discretion when

it excluded Cole’s proffered testimony. That testimony

just reiterated what Mariani had already implicitly

admitted—that he did not mention the cash demand at

his June 9, 2003, meeting with Cole. It did not aid in

establishing the point, crucial for impeachment by omis-

sion, that the cash demand ought to have come up at that

Nos. 06-1978 & 06-2107 31

meeting and therefore its omission was suspect. In fact,

Cole’s testimony suggested just the opposite: that it

would not have been natural for the cash demand to have

come up during the proffer meeting.14 Thus, while Useni

was free to argue to the jury that the cash demand was

the type of information that should naturally have come

up during the proffer meeting with Cole, and thereby

impeach Mariani by omission, Cole’s testimony was not

helpful for establishing impeachment by omission and

the district court did not abuse its discretion by ex-

cluding it.

The exclusion of Lischka’s testimony is more problem-

atic. Mariani’s testimony that he told Lischka of the cash

demand was directly contradicted by Lischka himself,

who said that the cash demand was not mentioned. The

government argues that Lischka’s testimony was not

14

As to why he did not ask Mariani about the form of payment

for the Grand Palace, Cole testified:

We had the contracts and everything and we saw that they

were paid by check. I didn’t—I guess at the time none of us

really thought to ask him. You know, if you are drawing

up a legal contract it is probably going to be fairly difficult

to be paid in cash and not have that.

The district judge appeared to reach the same conclusion:

Now, I don’t want to leap to anybody’s defense here, but

if Useni is, in fact, paid by check, there is a contract

which looks like it is payment by check, why would some-

body ask the question—why would it necessarily be, or

even likely to be the question asked[?] . . . Why would

anybody say—did he ask for another form of payment[?]

Somebody might ask that question, but why is it so incredi-

ble that no one would?

32 Nos. 06-1978 & 06-2107

necessary because the district court perfected Mariani’s

impeachment by permitting Useni’s lawyer to argue at

closing, without contradiction from the government, that

Mariani did not tell Lischka about the cash demand. But

Lischka’s impeaching evidence was not before the jury,

and—as the court instructed the jury—lawyer’s arguments

are not evidence. Mariani’s testimony that he thought

he did tell Lischka thus stood unrebutted on the record.

Nevertheless, any error that occurred from the exclusion of

Lischka’s testimony was harmless. That Useni wanted to

be paid in cash for the bingo hall, though relevant to

show Useni’s guilty intent, was hardly the centerpiece

of the government’s evidence on that point. As was

outlined in the discussion of the sufficiency of the evid-

ence on the racketeering conspiracy count, the govern-

ment had overwhelming evidence to prove Useni’s guilty

intent without the evidence of the cash demand even

being considered.

Besides his challenge to the exclusion of Lischka’s and

Cole’s testimony, Useni also challenges the admission of

certain testimony from several other witnesses. Those

challenges do not merit extended discussion. Rather, it

suffices to say that those objections relate to arguments

we have already rejected, such as Useni’s contention that

he did not participate in either the racketeering or tax-fraud

conspiracies, or his contention that he had no part in the

illegal scheme after Bingo Partners bought the

Grand Palace.15 Because the evidence supported the

15

Useni also argues that evidence as to whether a particular

witness was a veteran was not relevant and should not have

been elicited by the government’s attorney. But that evidence

(continued...)

Nos. 06-1978 & 06-2107 33

contrary of what Useni is contending, the district court

did not abuse its discretion in admitting the evidence

to which Useni now objects.

Moving on, Useni argues that the district court erred by

failing to give his proffered theory of defense instruction.16

15

(...continued)

was very relevant, considering that the jury had to know

who was or was not a veteran in order to determine if the

Illinois gambling laws were being violated. Consequently,

we see no error in the district court having admitted such

testimony.

16

Useni proposed the following instruction:

It is defendant Frank Useni’s theory of defense that he

began working at the Grand Palace Bingo Hall in May 1994

as the kitchen manger [sic] and the janitor in effect, which

were his main and almost exclusive duties continually

during the entire time he was there; that he was later offered

the opportunity to buy the Hall which appeared to offer a

purchaser the opportunity to earn additional money by

selling bingo supplies, which were then being sold to the

veterans at the Grand Palace and by keeping the profits

generated by the kitchen;

That, while present at the Grand Palace Bingo Hall, he

never knowingly directly or indirectly joined any con-

spiracy, scheme to defraud or criminal enterprise to com-

mit any illegal acts of any kind;

In that regard, at no time was he aware that volunteering

to help veterans in any way with the Bingo or related games

on occasion violated any federal or state laws or that the

mere existence of any of these games at the Hall violated

any such laws;

(continued...)

34 Nos. 06-1978 & 06-2107

We review de novo a district court’s refusal to give a theory

of defense instruction.17 United States v. Eberhart, 467 F.3d

659, 666 (7th Cir. 2006).

A defendant is entitled to a jury instruction as to his or

her particular theory of defense provided: (1) the

instruction represents an accurate statement of the

law; (2) the instruction reflects a theory that is sup-

ported by the evidence; (3) the instruction reflects a

theory which is not already part of the charge; and

(4) the failure to include the instruction would deny

the appellant a fair trial.

United States v. Prude, 489 F.3d 873, 882 (7th Cir. 2007). The

district court refused to give the proffered instruction “as

drafted” because it believed that the instruction was

“basically the defendant testifying without being subject

16

(...continued)

Further, that, he neither was involved in nor aware of the

preparation and/or filing of any of the Bingo Applications

and/or Tax returns and Pull-tab Returns that were filed on

behalf of the Grand Palace, Inc. were materially false.

Finally, that the only payments he received from his

employment with the Grand Palace Bingo Hall—his wages

and his payments for the sale of the Hall—were lawful

under state, and thus, federal law, and that he never

knowingly participated in any scheme, conspiracy or

criminal enterprise to receive or allow others to receive any

unlawful monies.

17

Although the government argues that this issue should be

reviewed for plain error due to Useni’s failure to object, we

find that Useni did properly preserve the issue for the same

reasons given in United States v. James, 464 F.3d 699, 707 n.1 (7th

Cir. 2006).

Nos. 06-1978 & 06-2107 35

to cross-examination.” In addition, the district court

believed that the proffered instruction was more akin to

argument than to a presentation of the defense’s theory.

We find no error in the exclusion of Useni’s proffered

instruction. The proffered instruction was not a typical

theory of defense instruction. Cf. United States v. Paters,

16 F.3d 188, 190 (7th Cir. 1994); see also United States v.

Josleyn, 99 F.3d 1182, 1194 (1st Cir. 1996). The district court

was correct when it observed that a good portion of Useni’s

proposed instruction was better suited for closing argu-

ment than a theory of defense instruction. Argument is not

the purpose of a theory of defense instruction, see United

States v. Scott, 19 F.3d 1238, 1245 (7th Cir. 1994), yet Useni’s

proposed instruction contained a string of arguments,

couched as factual statements about Useni’s state of mind.

The statements were argumentative because they were

more about the evidence the government had failed to

produce than what evidence was actually before the

jury. Furthermore, one of those statements—that Useni

was not aware that helping run the games violated

state law—was completely unsupported by the evidence.

To the extent that Useni’s proposed instruction did

convey his theory of defense, that theory was already

adequately covered in the charge to the jury. United States

v. Irorere, 228 F.3d 816, 826 (7th Cir. 2000) (“[A] defendant

is only entitled to such an instruction when his theory of

defense is not already adequately captured by the prof-

fered instructions.”). Useni’s theory at trial was that he

was just a grunt worker at the Grand Palace, a janitor

and kitchen manager who had no idea what was really

going on there. The instructions read to the jury empha-

sized in several places that the jury had to find that

Useni knew about the illegal activity occurring at the

36 Nos. 06-1978 & 06-2107

Grand Palace and willingly participated in it before the

jury could convict him. The jury was instructed that Useni

had to “knowingly” join the racketeering conspiracy,

as well as “knowingly” participate in the scheme to

defraud. The jury was also instructed that “knowingly”

meant “the defendant realized what he was doing and

was aware of the nature of his conduct, and did not act

through ignorance, mistake or accident.” The jury was

further instructed that “the Government must prove

beyond a reasonable doubt that the defendant was aware

of the common purpose and was a willing participant

in the charged conspiracy.” Finally, the jury was in-

structed that

[a] defendant’s presence at the scene of a crime and

knowledge that a crime is being committed [are] not

alone sufficient to establish the defendant’s guilt.

A defendant’s association with conspirators or per-

sons involved in a criminal enterprise or a scheme

to defraud is not by itself sufficient to prove his par-

ticipation or membership in a conspiracy, scheme to

defraud and/or a criminal enterprise.

If a defendant performed acts that advanced a crim-

inal activity, but had no knowledge that a crime

was being committed or was about to be committed,

those acts alone are not sufficient to establish the

defendant’s guilt.

Those instructions, along with the closing argument of

Useni’s counsel, clearly conveyed Useni’s theory of de-

fense to the jury. Cf. United States v. Hendricks, 319 F.3d

993, 1006 (7th Cir. 2003) (finding that the charge given,

which included an instruction that the jury had to find

that the defendant knowingly and intentionally possessed

Nos. 06-1978 & 06-2107 37

the firearm in order to convict, coupled with the defen-

dant’s ability to argue his theory in front of the jury,

fully presented the defense’s theory in a prosecution for

illegal possession of a firearm). Consequently, Useni

was not deprived of a fair trial by the exclusion of his

theory of defense instruction.

Finally, Useni asserts that the cumulative effect of all

the errors he alleges occurred at trial amounts to reversible

error. Although an error by itself may be harmless

and insufficient to taint a jury, the combined effect of

multiple erroneous rulings may result in significant harm

necessitating another trial. United States v. Smith, 502 F.3d

680, 690 (7th Cir. 2007). However, in this case we have

discerned, at most, one trial error—and that error was

harmless. See Alvarez v. Boyd, 225 F.3d 820, 824 (7th Cir.

2000). Useni’s cumulative effect argument therefore fails.

C. Dismissal of the Indictment

In addition to his challenges to the sufficiency of the

evidence, Cozzo also asserts that the district court erred in

refusing to dismiss the indictment.18 On appeal, Cozzo

focuses on three grounds upon which he believes the

district court ought to have dismissed the indictment. First,

Cozzo claims that the district court erred in denying

his motion to dismiss the indictment on the ground that

the five-year statute of limitations, prescribed in 18

U.S.C. § 3282(a), had run when Cozzo was indicted on

April 25, 2002. “We review de novo whether the limita-

tions period has run, giving deference to necessary

18

In his brief, Useni adopts all of Cozzo’s arguments concerning

the dismissal of the indictment.

38 Nos. 06-1978 & 06-2107

factual determinations by the district court.” United

States v. Are, 498 F.3d 460, 464 (7th Cir. 2007).

At the outset, we note that Cozzo’s argument that the

statute of limitations had run when he was indicted

requires this court to conclude that Cozzo’s involvement in

the illegal activity occurring at the Grand Palace ceased

when Bingo Partners took over the hall. The indictment

charged Cozzo with multiple conspiracies, as well as

conducting an illegal gambling business. Although

the indictment alleged that the conspiracies and the

operation of the illegal gambling business began in 1994,

well outside of the statute of limitations period, it also

alleged that they continued on until 1999, well inside the

statute of limitations period. To stay within the statute

of limitations period, Cozzo would have to have con-

tinued his involvement in the conspiracies and the illegal

gambling business after Useni sold the hall to Bingo

Partners, or at least the government would have to show

that Cozzo did not withdraw from participating in any

of them after the sale of the Grand Palace. United States

v. Curry, 977 F.2d 1042, 1058 (7th Cir. 1992). If either of

those were the case, the statute of limitations posed no

barrier to Cozzo’s prosecution since Bingo Partners con-

tinued to engage in illegal activity—including operating

the illegal gambling business and committing the con-

duct underlying the substantive mail-fraud counts—into

the statute of limitations period. See United States v. Yashar,

166 F.3d 873, 875 (7th Cir. 1999) (noting that conspiracies,

such as the RICO and tax conspiracy charged here, are

“continuing offenses” that continue for purposes of the

statute of limitations so long as any action is taken in

furtherance of the conspiracy); see also United States v.

Jeffers, 532 F.2d 1101, 1108-09 (7th Cir. 1976), vacated in

Nos. 06-1978 & 06-2107 39

part on other grounds, 432 U.S. 137 (1977) (noting that the

offense of conducting an illegal gambling business under

18 U.S.C. § 1955 necessarily entails conspiring to conduct

an illegal gambling enterprise, thus making a § 1955

violation a continuing offense). Because we have already

found in the context of discussing Useni’s and Cozzo’s

liability for the substantive mail-fraud counts that there

was sufficient evidence from which a jury could con-

clude that Useni and Cozzo continued to participate in the

illegal activity occurring at the Grand Palace even after

it was sold to Bingo Partners, Cozzo’s statute of limita-

tions argument fails. Thus, the district court properly

ruled that § 3282(a) was not an obstacle to Cozzo’s prosecu-

tion.

Next, Cozzo takes issue with the district court’s denial of

his motion to dismiss the indictment based on prosecuto-

rial misconduct in front of the grand jury. Cozzo argues

that the government improperly elicited testimony from

witnesses who testified that Cozzo was an owner of the

Grand Palace. Cozzo asserts that those references to him

as the owner of the Grand Palace were untrue and improp-

erly influenced the grand jury’s decision to indict him.

We review a district court’s denial of a motion to dismiss

an indictment based on prosecutorial misconduct for

abuse of discretion. United States v. Burke, 425 F.3d 400,

412 (7th Cir. 2005).

The government’s knowing use of false testimony

violates due process. Id. at 412. For an indictment to be

dismissed on account of false testimony presented to

the grand jury, the defendant must show prejudice

amounting to either “proof that the grand jury’s decision

to indict was substantially influenced, or that there is

‘grave doubt’ that the decision to indict was substan-

40 Nos. 06-1978 & 06-2107

tially influenced, by testimony which was inappropri-

ately before it.” United States v. Feurtado, 191 F.3d 420, 424

(4th Cir. 1999) (citing Bank of Nova Scotia v. United States,

487 U.S. 250, 256 (1988)). Cozzo has failed to make that

showing. He offers no evidence or argument that counters

the district court’s finding that whether or not Cozzo

owned the Grand Palace was irrelevant to the grand jury’s

decision to indict him because ownership was not an

element of any of the charged offenses. Thus, the district

court did not abuse its discretion by denying Cozzo’s

motion.

Lastly, Cozzo argues that the district court erred in deny-

ing his motion to dismiss count two of the indictment.

Count two charged the defendants with operating an illegal

gambling business in violation of 18 U.S.C. § 1955. Cozzo

argues that § 1955 was meant to combat large-scale illegal

gambling used to fund organized crime, not the type of

“technical” violations of Illinois gambling law involved

in this case. Cozzo cites United States v. Zizzo, 120 F.3d

1338 (7th Cir. 1997), as an example of the factual scenario

to which § 1955 was meant to apply. Zizzo involved an

illegal sports-betting organization, the proceeds from

which were used to fund the Chicago Outfit, a notorious

crime syndicate. 120 F.3d at 1343-44. In contrast to the

gambling operation in Zizzo, Cozzo argues that, by ap-

plying § 1955 to this case, the government is allowed to

bring racketeering charges against people whom Congress

never intended the racketeering laws to prosecute.

Cozzo’s argument is without merit. Nothing in the text

of § 1955 prevents its application to misdemeanor viola-

tions of state gambling law. Section 1955 makes it a crime

to “conduct[ ], finance[ ], manage[ ], supervise[ ], direct[ ]

or own[ ] all or part of an illegal gambling business.”

Nos. 06-1978 & 06-2107 41

18 U.S.C. § 1955(a). To prove the existence of an illegal

gambling business, the government must demonstrate that

the business violated “the law of [the] State or political

subdivision in which it is conducted.” 18 U.S.C.

§ 1955(b)(1)(i). The text of § 1955 does not distinguish

between state misdemeanor and felony law. Rather, all

it requires is that the gambling violate state law, re-

gardless of whether the violation amounted to a felony

or simply a misdemeanor.

Cozzo fails to point to any case law that undermines

our reading of § 1955. Indeed, case law appears contrary

to his position. The Eighth Circuit rejected a similar

challenge to § 1955 in United States v. Matya, 541 F.2d 741

(1976). The defendants in Matya argued that Congress did

not intend for § 1955 to be used to elevate a state law

misdemeanor into a federal felony. In rejecting that argu-

ment, the Eighth Circuit noted that violation of state law

is not the sole element of a § 1955 offense, which also

requires the involvement of five or more persons in a

gambling business either in substantial continuous opera-

tion for a period of thirty or more days, or involving

gross revenues of $2,000 in any single day. Id. at 748. Thus,

it was inaccurate to characterize § 1955 as simply “elevat-

ing” a state misdemeanor into a federal felony.19 Id. Fur-

thermore, the Eighth Circuit found it significant that the

19

The Eighth Circuit agreed with the Ninth Circuit’s conclusion

that it was constitutionally permissible for Congress to define

a federal felony partially in terms of a state misdemeanor. See

id. at 749 n.16 (“Congress’s power to proscribe conduct carries

with it the power to impose appropriate penalties without

attempting to match them to varying state punishments

for similar conduct.” (quoting United States v. Kerrigan, 514

F.2d 35, 37 n.1 (9th Cir. 1975))).

42 Nos. 06-1978 & 06-2107

House Report which accompanied the Organized Crime

Control Act of 1970, of which § 1955 is a part, made no

mention of any distinction between state felonies and

state misdemeanors in the application of § 1955. Id.

Finally, because “[m]ajor gambling activities were a

principal focus of congressional concern,” the Eighth

Circuit found that it could not conclude that Congress

had ruled out the use of state misdemeanors as a predicate

to a § 1955 violation. Id. (quoting Iannelli v. United States,

420 U.S. 770, 787 (1975)) (alteration in original).

We agree with the Eighth Circuit. This case, in fact, offers

a perfect example of why Congress did not distinguish

between misdemeanor and felony violations of state

gambling laws for purposes of § 1955. To operate the

Grand Palace in the manner that Cozzo and his cohorts did,

the Illinois gambling laws had to be systematically flouted.

Though each violation of the Illinois gambling laws in this

case, considered individually, may have been a mere

“technical” or “minor” violation, in the aggregate they

allowed the operators of the Grand Palace to divert from

the games almost $3 million in illegal proceeds, a figure

which represented the government’s conservative estimate

of the illegal proceeds.

Cozzo has presented nothing to persuade us, in contra-

vention of the case law and clear text of § 1955, that § 1955

was meant to apply only to felony violations of state

gambling law with an organized crime nexus. We therefore

do not find any error in the district court’s failure to

dismiss the § 1955 count because it was predicated on

misdemeanor violations of the Illinois gambling laws.

Nos. 06-1978 & 06-2107 43

D. Sentencing

While both Useni and Cozzo mention their sentencing

in their briefs, neither provides argument substantial

enough to warrant appellate review. “We have repeatedly

warned that perfunctory and undeveloped arguments,

and arguments that are unsupported by pertinent author-

ity, are waived . . . .” United States v. Holm, 326 F.3d 872,

877 (7th Cir. 2003) (internal quotation omitted); see also

330 W. Hubbard Restaurant Corp. v. United States, 203

F.3d 990, 997 (7th Cir. 2000) (“In order to develop a legal

argument effectively, the facts at issue must be bolstered

by relevant legal authority; a perfunctory and undevel-

oped assertion is inadequate to raise a separate basis for

appeal.”). Cozzo’s opening brief does not contain any

argument concerning his sentencing. It simply states,

“Cozzo seeks leave to supplement the record with the

sentencing transcript and to supplement this brief with

an argument concerning sentencing should it be appropri-

ate.” Consequently, he has waived any appellate review

of his sentence. United States v. Hook, 195 F.3d 299, 310

(7th Cir. 1999) (“A party’s failure to address or develop

a claim in its opening brief constitutes a waiver of that

claim . . . .”).

Useni’s discussion is hardly better. Useni only devotes

a page and a half to his sentence in his opening brief.

In that space, Useni does no more than provide the stan-

dard of review for sentencing decisions, list three unsup-

ported factual assertions, and claim that his sentence was

per se unreasonable. Cf. Hook, 195 F.3d at 310 (broad

language and unsupported assertions insufficient to

merit review). Useni does not cite to relevant authority

to support his argument. See Sanchez v. Miller, 792 F.2d

694, 703 (7th Cir. 1986) (failure to cite relevant authority

44 Nos. 06-1978 & 06-2107

constitutes a waiver). Because Useni has failed to develop

his reasonableness argument in any meaningful way, he

has waived appellate review of his sentence. See Sere v. Bd.

of Trs. of Univ. of Ill., 852 F.2d 285, 287 (7th Cir. 1988) (“It

is not the obligation of this court to research and con-

struct the legal arguments open to parties, especially

when they are represented by counsel.”) (quoting Sanchez,

792 F.2d at 703).

III.

The evidence was sufficient to support Useni’s and

Cozzo’s convictions for racketeering conspiracy, mail

fraud, and tax fraud. The district court did not commit any

error that deprived Useni of a fair trial, nor did it err in

refusing to dismiss the indictment. Finally, because both

Useni and Cozzo failed to develop any arguments as to

why their sentences were unreasonable, they have

waived any appellate review of the same. We AFFIRM.

USCA-02-C-0072—2-21-08