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United States v. Variano

decided: March 14, 1977.


Appeal from judgments, entered in the United States District Court for the Southern District of New York, Honorable Robert L. Carter, Judge, convicting appellants of conducting an illegal gambling business in violation of 18 U.S.C.§ 1955. All convictions affirmed.

Moore, Anderson and Feinberg, Circuit Judges.

Author: Moore

MOORE, Circuit Judge:

Peter Variano, Henry Bucci, Anthony Russillo, Michael DeMichaels, John Monaco and Michael Evangelista appeal from judgments convicting them of conducting an illegal gambling business in violation of 18 U.S.C. § 1955.

Appellants and seven other defendants were initially charged in a two-count indictment, dated April 14, 1976, with conducting an illegal gambling business in violation of 18 U.S.C. § 1955 (Count II) ("the substantive count") and with conspiring to conduct an illegal gambling business in violation of 18 U.S.C. § 371 (Count I) ("the conspiracy count"). On April 26, 1976, an evidentiary hearing was held before Judge Carter of the Southern District of New York, to resolve various motions to suppress made by several of the defendants. Judge Carter denied all of the motions. On April 27 appellant Evangelista and three of the other defendants pleaded guilty to the substantive count of the indictment. Evangelista reserved his right to appeal the denial of his motion to suppress.

The trial before Judge Carter and a jury commenced on that same day. At the close of the Government's case, Judge Carter dismissed the conspiracy count on the ground that there was a variance between the Government's theory and its proof: the Government's evidence made out a case of multiple conspiracies, rather than the single conspiracy alleged in the indictment. The defendants had also moved to dismiss the substantive count, and they now asserted that this dismissal was required by Judge Carter's dismissal of the conspiracy count. Judge Carter denied the motion.

None of the defendants offered any evidence. The substantive count went to the jury. On May 6 the jury returned guilty verdicts as to appellants Variano, Bucci, Russillo, DeMichaels, and Monaco, and one of the other defendants. Judge Carter entered judgments of conviction as to Evangelista on June 8, and as to the other five appellants on July 8.

Each of the appellants raises several issues on appeal - the "spillover" of evidence from the dismissed conspiracy count to the remaining substantive count, a variance in the proof as to the substantive count, insufficiency of the evidence as to certain of the appellants, prejudice resulting from a Government witness' invocation of the Fifth Amendment and his citation for contempt in front of the jury, an illegal search and seizure, improprieties in wiretap procedure, and prejudicial remarks by a Government witness and by the prosecutor.

We have considered each of the issues raised very carefully and discuss several of them below. We find all of the issues to be without merit and we affirm the convictions.


The Government's evidence established the existence of numbers, sports and horse gambling operations in the Bronx and Westchester beginning in 1968 and continuing until 1975. The cast of characters varied, but the pyramidal set-up remained essentially the same: Customers placed their bets with "runners" in the local candy store, soda shop, or bar. "Pick up" men collected the wagers for the runners and brought them into the "bank" - the nerve center of the operation. The wagers were in envelopes bearing the runner's code on the outside. Each runner was referred to as an "account". At the bank, the wagers were tallied and when the results of the numbers, sports or horse events in question came in, the "hits" were also tallied. A "tape" was then made recording each account's total tally of wagers and hits. The bank determined how much money each account owed its customers, and placed this amount in an envelope. The envelopes were delivered to the individual runners who then paid off their winning customers, after deducting their own commissions.

Michael Yannicelli*fn1 was the "bank" of the operation here in question from 1968 until 1972. Michael Calise*fn2 testified that he worked as a "runner" and as a "pick-up man" for the operation during this period. He stated that appellant DeMichaels was one of Yannicelli's accounts. DeMichaels was what was known as a "half-sheet dealer." Rather than taking bets from customers himself, he had several runners working for him. In each week that he came out ahead - i.e., the wagers placed with his runners were greater than his customers' hits - he split his profits with Yannicelli. Conversely, when hits exceeded wagers, Yannicelli paid the customers and recovered the amount paid from DeMichaels the next time he came out ahead. Calise stated that Francis J. Millow*fn3 was one of DeMichaels' runners.

The evidence showed that DeMichaels and Millow continued collecting wagers after 1972, but that in this later period, their accounts were with appellant Variano, rather than with Yannicelli. Variano's operation was broader than Yannicelli's - it encompassed gambling on football games, as well as on numbers and horses. Variano's one-time girlfriend, Angelina David, testified that, at Variano's request, she did the bookkeeping for the football end of the operation. David stated that she accompanied Variano to various motels where he met his pick-up men and collected their wagers and money. Each Saturday Variano gave David bags containing the money and wagers. David tallied the wagers and delivered her computations to Variano. Variano received the results of the football games on Sunday night and he and appellant Bucci then determined which bettors, if any, had made "hits". They made a master tape of each account's wagers and hits and delivered envelopes to each account containing the money it owed its bettors.

There was evidence that Millow, and appellants Bucci, Russillo and DeMichaels all had accounts with Variano. The "pick-up" network appears to have been slightly more complicated than the one during the earlier "Yannicelli" period. Bucci, Russillo and DeMichaels apparently delivered some of their wagers to Millow, who in turn phoned them to appellant Evangelista.*fn4 Evangelista placed the wagers on coded slips of paper and gave them to several people, including appellant Monaco. The Government's evidence establishing this network included gambling records and paraphernalia ...

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