Prosecutors argue a Florida couple convicted of illegal gambling and money laundering for fleecing charities out of nearly $6 million should have also been found guilty of wire fraud conspiracy.
ATLANTA (CN) – A Florida couple who swindled nearly $6 million from charities through an illegal bingo operation asked an 11th Circuit panel Tuesday to reject the government’s appeal seeking to reverse their acquittal on charges of conspiracy to commit wire fraud.
An attorney for former spouses Larry and Dixie Masino told a three-judge panel of the Atlanta-based appeals court that the government failed to prove during an eight-day trial that the couple ever had any intent to defraud the charities.
The Masinos rented a bingo hall in northwest Florida to local charities and ran bingo games for them in exchange for a large portion of the proceeds. The operation continued for over two decades before they were convicted of illegal gambling and money laundering in 2018.
Florida’s bingo law does not allow a non-charitable organization to keep any profits from conducting bingo games or to share in the profits with a charity sponsor. Rather than turning over all bingo proceeds to players in the form of prizes as Florida law requires, the Masinos held onto millions for themselves. Between 2006 and 2015, the couple received and laundered $5.8 million in profits.
Arguing on behalf of the couple Tuesday, attorney David McGee of Beggs & Lane conceded that the Masinos netted millions by charging charities inflated rent and fees for bingo sessions, but argued that “the charities lost nothing, took no risk, and made a substantial amount of money.”
According to court documents, the couple made over $1 million annually by charging charities fees. Charities benefitted from the arrangement because they were able to receive approximately $80,000 in bingo proceeds annually without putting in the work to organize fundraisers.
Larry Masino was sentenced to one year in prison and Dixie received four months of house arrest as part of a five-year probation term. The couple was also ordered to pay a forfeiture judgment of $5.8 million.
“Their [actions] were suggestive not of fraud, but suggestive of maybe deceit,” McGee told the 11th Circuit judges.
The attorney told the panel that the arrangement between the parties was mutually beneficial because the charities “knew they were going to be paid handsomely for making no effort at all.”
“Did the Masinos have an intent to harm [the charities]? No, they had an intent to pay them a substantial amount of money. The truth is, the Masinos made money too but the condition of them making money is the charities had to make money also,” McGee said.
But Assistant U.S. Attorney Alicia Forbes said the evidence definitively showed the Masinos “conspired and intended to defraud the charities,” arguing that the couple actively harmed the charities by keeping excess bingo proceeds.
U.S. Circuit Judge Charles Wilson, a Bill Clinton appointee, questioned whether the charities “got what they bargained for” with the couple.
“They knew what was going on and they chose to participate in this scheme. If they had not chosen to participate they would’ve made no money,” the judge said. “Instead they made millions that they would not have otherwise made. So it seems like that’s the reason the court granted the motion for judgment of acquittal, because there was an absence of an agreement to intend to harm the charities.”
In her ruling granting the Masinos’ motion for acquittal, U.S. District Judge M. Casey Rodgers found that minutes from the charities’ meetings showed they knew the rental fees were inflated and that “volunteers” were illegally being paid to run the bingo games out of the bingo proceeds.
But Forbes said whether the charities suffered actual harm by the Masinos’ actions is “essentially irrelevant” to a charge of conspiracy to commit wire fraud.
“The evidence the court should be looking at is the defendants’ intent to defraud the charities out of money that they believed belonged to the charities,” the prosecutor argued.
“The defendants acted willfully in making their unlawful agreement,” Forbes added. “What [the charities] bargained for was a lawfully run bingo operation.”
Wilson was joined on the panel by Senior U.S. Circuit Judge Frank Hull, a fellow Clinton appointee, and U.S. Circuit Judge Robin Rosenbaum, a Barack Obama appointee. The panel did not indicate when it would reach a decision in the case.