Opinion
02 CR 0400
March 4, 2004
MOTION
The indictment in this matter is the result of a joint investigation conducted by the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), and the Illinois Department of Revenue relative to the illegal operation of the Grand Palace Bingo Hall, 121 E. Grand Avenue in unincorporated Cook County. The bingo hall commenced operations in 1994, and from then until the end of 1997, the defendants and their coconspirators allegedly illegally profited in excess of $3,200,000, The alleged victims of the defendants' criminal conduct were individual local posts of the Italian American War Veterans organizations, organizations made up primarily of veterans of World War II and the Korean War. Under Illinois law, veterans organizations can operate bingo and pull tab games for charitable and fraternal purposes so long as they comply with state requirements. The defendants, using the posts as fronts, allegedly ran illegal bingo, pull tabs and raffle games in the name of the veterans' posts. As a result, all of the proceeds generated were illegal gambling proceeds emanating from an illegal gambling business. The Government claims that the evidence will show that all of the charged defendants had significant ongoing ownership and/or managerial positions in the illegal gambling business.
All raffles were per se illegal because Cook County does not have an ordinance authorizing raffles.
Count II of this indictment involves a claim of operating an illegal gambling business in violation of 18 U.S.C. § 1955. In order to establish a violation of § 1955, the government must prove that defendants 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. United States v. Cyprian, 23 F.3d 1189, 1199 (7th Cir. 1994). The state laws that the defendants allegedly violated are three felonies — 720 ILCS 5/28-1 (gambling), 720 ILCS 5/18-1.1 (syndicated gambling), and 720 ILCS 5/28-3 (keeping a gambling place) — and three misdemeanors — 230 ILCS 15/1, et seq. (the Raffles Act), 230 ILCS 20/1, et seq. (the Pull Tabs and Jar Games Act), and 120 ILCS 25/1, et seq. (the Bingo License and Tax Act). Defendant Phillip Cozzo has moved to dismiss Count II or, in the alternative, to strike reference to the latter group of alleged state violations on the grounds that the Count makes charges related only to various misdemeanor violations, and that, therefore, § 1955 is unconstitutional as applied to this case, one exclusively involving alleged misdemeanors.
Even if Count II did exclusively involve allegations of misdemeanor violations (and I withhold judgment on this argument), Cozzo's argument regarding the constitutionality of § 1955 nonetheless fails. The Seventh Circuit has considered the question of Congress's authority to regulate local gambling operations under the Commerce Clause, and concluded that "[b]ecause Congress rationally determined that large-scale illegal gambling operations are also often tied to organized crime . . . § 1955 properly reaches even 'purely local' gambling businesses." United States v. Zizzo, 120 F.3d 1338, 1350-51 (7th Cir. 1997); United States v. Dote, 150 F. Supp.2d 935, 942 (N.D. Ill. 2001). In addition, the statute is not unconstitutional in elevating state misdemeanors into federal felonies. United States v. Cerone, 452 F.2d 274, 286 (7th Cir. 1971). Therefore, applying § 1955 to only misdemeanor state law violations is not unconstitutional. See Dote, 150 F. Supp.2d at 942 (misdemeanor violation sufficient for § 1955 violation).
For the reasons above, Gozzo's Motion for an Order of Court Dismissing Count II of title Indictment or, in the Alternative, Striking Any Reference in this Count to Violations of 230 ILCS 15/1, et seq. (the Raffles Act), 120 ILCS 20/1, et seq. (the Pull Tabs and Jar Games Act), and 230 ILCS 25/1, et seq. (the Bingo License and Tax Act) is DENIED.