BERWYN BUSINESSMAN ARRESTED ON FEDERAL ILLEGAL GAMBLING AND
TAX FRAUD CHARGES; ADDED AS EIGHTH DEFENDANT IN NEW INDICTMENT
CHICAGO – A Chicago man who allegedly helped a criminal organization run its illegal gambling activities was arrested today on federal gambling and tax fraud charges, federal law enforcement officials announced.
The defendant, Casey Szaflarski, acting through his Berwyn business, Amusements, Inc., was charged with conducting an illegal gambling business since 2002, along with two other men, among seven total, who were charged previously.
The gambling and tax charges against Szaflarski were brought in a superseding indictment that was returned by a federal grand jury last week and unsealed today following his arrest. The charges allege that Szaflarski failed to report more than $255,000 of business income between 2004 and 2006, and that he failed to file a federal income tax return for 2007.
Szaflarski, 52, was scheduled to be arraigned at 2:30 p.m. today before U.S. Magistrate Judge Nan Nolan in Federal Court in Chicago.
He was charged with one count of conducting an illegal gambling business, three counts of filing a false federal income tax return and one count of failing to file a federal income tax return, for a total of five counts in the 16-count superseding indictment.
The new indictment was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Andrew L. Traver, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Federal officials commended the assistance of the Berwyn Police Department and the Cook County Sheriff’s Department.
The charges against Szaflarski were brought in a superseding indictment in United States v. Polchan, et al., 08 CR 115, in which seven other defendants were indicted in May 2009 on racketeering conspiracy charges alleging eight years of
- criminal activity, including
- armed robberies and thefts,
- illegal gambling,
- obstruction of justice and
- arson, including the pipe-bombing of a competing Berwyn video and vending machine business in 2003.
Szaflasrki was not charged in the racketeering conspiracy or arson counts. He was charged with conducting an illegal gambling business, ongoing since at least 2002, with co-defendants Michael Sarno and Mark Polchan.
Today’s indictment adds a new forfeiture allegation seeking at least $3,607,201 from Szaflarski, Sarno and Polchan as proceeds of the alleged illegal gambling activity. The indictment results, in part, from federal search warrants that were executed at more than two dozen suburban locations, including bars and restaurants, on May 27, 2009.
The three counts of filing false federal income tax returns allege that Szaflarski failed to report the following income from his closely-held business, Amusements, Inc.:
- at least $78,417 for 2004 when he reported total income of $373,736;
- at least $82,355 for 2005 when he reported total income of $262,842; and
- at least $94,593 for 2006 when he reported total income of $286,071.
The indictment further alleges that Szaflarski failed to file a federal income tax return for 2007 when he received gross income of at least $95,911.
The government is being represented by Assistant U.S. Attorneys T. Markus Funk and Amarjeet S. Bhachu.
The counts against Szaflarski alone carry the following maximum terms of incarceration: operating an illegal gambling business — 5 years; filing false federal income tax returns — 3 years; and failing to file a federal income tax return — 1 year. In addition, each count carries a maximum fine of $250,000, except the failing to file count, which is a misdemeanor and carries a maximum fine of $100,000. Defendants convicted of tax offenses must be assessed mandatory costs of prosecution and remain liable for any back taxes, interest and penalties owed. If convicted, the Court must determine a reasonable sentence under the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. Szaflarski and the defendants charged previously are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
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Below are the paragraphs that mention video gambling. The machines, of course, are really slot machines:
THE SPECIAL JANUARY 2009 GRAND JURY charges:
I. THE ENTERPRISE
The illegal activities of the enterprise included, but were not limited to:
- committing armed robberies and thefts from jewelry stores, businesses, and private residences;
- transporting stolen goods across state lines;
- committing thefts, and obtaining stolen items, from interstate shipments of goods;
purchasing, possessing, and selling stolen goods;
- using threats, violence and intimidation to advance the interests of the enterprise’s illegal activities;
- committing arson;
- operating and facilitating illegal gambling businesses, which included the use of video gambling machines;
- obstructing justice and criminal investigations by tampering with and intimidating witnesses;
- obstructing justice and criminal investigations by gathering information concerning the fact of, and extent of, ongoing federal criminal investigations from, among other sources, corrupt local law enforcement officers and law enforcement databases; and
- traveling in interstate commerce to further the goals of the criminal enterprise…
THE SPECIAL JANUARY 2009 GRAND JURY further charges:
Beginning no later than 2002 and continuing through the date of the return of this indictment , in the Northern District of Illinois, Eastern Division, and elsewhere,
MICHAEL SARNO, also known as,
“Big Mike,” “Mikey,” “Large,”and “the Large Guy,” and
defendants herein, together with other persons known and unknown to the Grand Jury, knowingly conducted all or part of an illegal gambling business, that is, a business involving the use of video gambling machines and devices, which business was in substantially continuous operation for a period in excess of thirty days, which involved five or more persons who conducted, financed, managed, supervised, directed and owned all or part of the business, and which was a violation of the following laws of the State of Illinois: 720 ILCS 5/8-2, 5/28-1(a)(3) and (5)…
DEFENDANT MICHAEL SARNO
Defendant MICHAEL SARNO, also known as, “Big Mike,” “Mikey,” “Large,” and “the Large Guy,” oversaw, directed and guided certain of the enterprise’s illegal activities. Among other things, SARNO caused members of the enterprise, including defendants MARK POLCHAN and SAMUEL VOLPENDESTO, to bomb “C & S Coin Operated Amusements,” a video gaming device business located in Berwyn, Illinois, for the purpose of eliminating business competition, and for the purpose of protecting and enhancing the enterprise’s own business relationships. SARNO oversaw the enterprises’s illegal gambling ventures, and received a share of the enterprise’s profits from POLCHAN…
DEFENDANT MARK POLCHAN
7. Defendant MARK POLCHAN also occupied a leadership role in the enterprise. He supervised the activities of the enterprise, identified targets for robbery and other illegal enterprise activity, and directed the activities of others employed by and associated with the enterprise. POLCHAN, moreover, utilized his business, a sole proprietorship operating under the names “M. Goldberg Jewelers,” and “Goldberg Jewelers,” located at 1203 South Cicero Avenue in Cicero, Illinois, to
- conduct meetings with various criminal associates, as well as to
- obtain, store, and sell stolen goods, including stolen goods transported in interstate commerce, stolen goods obtained through robbery, goods obtained from theft from interstate shipments, and goods obtained through the fraudulent use of access devices, including goods obtained through such illegal activities by defendants SAMUEL VOLPENDESTO, JAMES FORMATO, MARK HAY and ANTHONY VOLPENDESTO.
POLCHAN further used Goldberg Jewelers as a location to
- plan the enterprise’s illegal gambling activities with SARNO, and to
- temporarily house video gambling devices obtained from Casey Szaflarski prior to their distribution to various locations, including to clubhouses operated by the Outlaws Motorcycle Club, an organization of which POLCHAN was a member.
POLCHAN also used Goldberg Jewelers as a location to meet and confer with corrupt local law enforcement officials, including but not limited to defendant DINO VITALO, a Cicero police officer who POLCHAN utilized to perform counter surveillance and to advise him of on-going federal law enforcement activity in the vicinity of Goldberg Jewelers.
Further, POLCHAN was also responsible for making on-going payments to SARNO, from cash derived from the enterprise’s illegal activities. At times, POLCHAN used his residence, located in Justice, Illinois, to meet with members of the enterprise in furtherance of their joint illegal activities and to store unlawfully-obtained items.