EAST CHICAGO | The case of East Chicago's illegal "bolita" lottery, which once raked in hundreds of thousands of dollars in annual profits from city taverns, might wind up helping the nation's prosecutors define money laundering.
The U.S. Supreme Court agreed Monday to take up the case of Efrain Santos, also known as "Puerto Rican Frankie," the organizer of an illegal lottery that Santos admits broke ties with Chicago organized crime in the late 1960s.
Santos admits running the lottery and did not appeal his five-year prison sentence on that charge. But he disputes that any money laundering was involved and is appealing his 17-year sentence for that conviction.
The case the Supreme Court has agreed to hear stems from the varying definitions of money laundering employed by federal prosecutors in different parts of the country. Though Santos' activities are considered money laundering within Chicago's Seventh Circuit, the same activities do not fit the same crime in circuit courts on the East Coast.
The Supreme Court grants oral arguments in fewer than 1 percent of the 7,000 appeals it receives each year. The exact date of the arguments in Santos' case has not been set.
Santos claims his "bolita" operation was simple. Numbers were drawn in legal lotteries in Illinois and Puerto Rico, and Santos would allow bettors to place wagers through runners who worked at East Chicago bars and restaurants.
The runners would collect up to 20 percent of the bet as a commission before delivering the money to collectors, who then gave the money and bet papers to Santos. The collectors often paid people who won $100 or less, while Santos paid the big winners himself.
Prosecutors said Santos' profits grew from $250,000 in 1989 to $410,000 in 1994.
Santos admitted the game was once linked to Chicago-based organized crime, but he said the connection ended in 1966 when "everyone went their own way."
According to prosecutors, Santos committed money laundering in two ways: by paying his runners out of the illegal lottery bets and then by paying the big winners with proceeds of the operation. The payments "laundered" the illegal profits, prosecutors allege.
Santos disagrees, arguing that "reinvesting" illegal profits into an enterprise was part of the overall business.
"A (bolita) operation that fails to collect bet money ... and which does not 'pay winners' is not an illegal gambling business," Santos' brief to the Supreme Court argues.
If the court agrees with prosecutors, Santos still has a decade left to serve on his money laundering sentence. But he said he was confident he would not return to jail no matter what the high court justices decide.
"I'm 70 years old. If I was to get sick in (prison), would they want to spend the money to take care of me?" Santos asked. "What would they gain by sending me back?"
