"The lifeblood of the Chicago Outfit is illegal gambling and the money and profits that it generates," Byram Tichenor, special agent in charge of the IRS in Chicago, said Monday at a news conference announcing criminal charges against 12 alleged local mobsters and two former police officers.
The indictments offer a unique glimpse into the inner workings of a video gambling ring that netted millions of dollars in proceeds inside bars and private clubs in Cicero and Berwyn over and eight-year period that ended last April.
Authorities did not say how much money was taken in by M&M Amusement Inc. of Cicero, but the business is reportedly very profitable. Proponents of a bill to legalize video gambling in Illinois two years ago estimated the state could rake in $375 million from the 47,000 machines operating in the state.
M&M Amusement, operated by James Marcello and his brother Michael Marcello, allegedly installed an unspecified number of video gambling machines inside Cicero and Berwyn bars, restaurants and fraternal clubs beginning in January 1996.
To the uninitiated or outsiders, these machines were just time-killing amusements like a pinball machine or jukebox. But to bar regulars and other trusted people, the video gambling machines allowed players to accrue electronic credits that could be cashed in for real dollars, the indictment alleges.
Two indicted M&M Amusement employees, Joseph Venezia and Thomas Johnson, allegedly taught bar, restaurant and fraternal group representatives how to pay off winners and how to clear accumulated credits off the machines after the cash payments were made, the indictment alleges.
Venezia and Johnson further "warned the owners, managers and representatives only to pay money to winning customers whom they knew well, and to beware of law enforcement efforts," the indictment says. "Those customers who were not known were to be told that the video gambling machines were for amusement only."
Electronic counters inside the machines kept track of the number of games played, winning credits accrued and total number of credits cleared off each machine. M&M Amusement allegedly divided the proceeds from the machines with bars, restaurants and fraternal groups and reimbursed them for payouts.
The federal indictment does not indicate exactly how much money M&M took in between January 1996 and April 2004, but officials are seeking the forfeiture of $10 million from the defendants. Officials are also seeking to seize M&M Amusement's Cicero office building, which is owned by Michael Marcello.
Authorities gave few details about a sports bookmaking operation allegedly run between 1992 and 2001 by defendants Frank Calabrese Sr. and Nicholas Ferriola. The indictments state it was run in northern Illinois, involved five or more people and was in continuous operation for more than 30 days.
According to previous court filings, M&M Amusement served 44 clients, primarily in the west suburbs. A listing of the customers was found on the body of mobster Anthony Chiaramonti after he was gunned down in Lyons in 2001. Several of the customers were called before the grand jury that handed down Monday's indictment.
According to the previous court filing, one video poker customer said he received between $150 and $400 a week from his machines.
No one answered the door Monday at M&M Amusement's 5533 W. 25th St. property, where there are no business signs. A neighbor said he has not seen anyone working at the property since December.
Thanks to Brett McNeil, Ray Gibson, and Matt O'Connor
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