Opinion ID: 3001485
Heading Depth: 3
Heading Rank: 3

Heading: Tax Conspiracy

Text: 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 conspiracy. 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 corporate 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 employees. 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 anything 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 concluded 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 pulltab games.