Rick Heidner.

Rick Heidner.

Jessica Reilly / Telegraph Herald via AP

Illinois video gambling mogul Rick Heidner leased space for years to crooked bingo operation

He says he knew nothing of the skimming that sent two men to prison. Illinois Gaming Board officials won’t say whether they knew of the illegal operation when they gave Heidner a video gambling license.

Years before Rick Heidner became a major force in video gambling in Illinois, he was the landlord of a west suburban bingo palace whose operators went to federal prison for skimming $2.9 million in profits from veterans charities.

Federal agents busted the operation in Northlake, and 10 men were indicted in 2002 on charges of racketeering, operating an illegal gambling business and money-laundering.

Heidner, who wasn’t charged with any crime, says he had no involvement in the bingo operation.

“I was just the landlord,” he says.

Heidner did stand to collect $594,000 in rent, though, from the crooked bingo operation, according to the five-year lease signed in December 1993.

Two former investigators in the case say they don’t remember whether investigators interviewed Heidner or whether he testified before the grand jury.

Heidner’s spokesman won’t talk about that.

And Illinois Gaming Board officials won’t say whether they were aware of the illegal operation that leased from Heidner when the state agency gave him a license in February 2012 allowing him to operate video gambling machines in bars, gas stations and restaurants.

“We cannot speculate on whether the [board] knew about this criminal matter and related building ownership issues,’’ gaming board spokeswoman Beth Kaufman says. “Materials submitted, reviewed or considered by the [board] in connection with its investigation, consideration and determination of an applicant’s suitability for licensure . . . are confidential under Section 6(d) of the Illinois Gambling Act.”

Heidner’s Gold Rush Amusements is the third-largest video gambling terminal operator in Illinois. It has 4,000 machines placed in 748 businesses across the suburbs and downstate. People placed more than $3 billion in bets during the past year on Gold Rush machines, state records show. Heidner’s machines raised $275 million in net income that state law requires him to split with businesses that have Gold Rush machines.

Video gaming is banned by the city of Chicago, though Mayor Brandon Johnson has said he would support lifting the ban. That potentially could provide a windfall for City Hall, from its share of taxes, and for licensed video gaming operators including Heidner, who has given $25,000 to Johnson’s campaign since he was elected in April.

Former Ald. Richard Mell, Heidner’s lobbyist, says he has spoken with Johnson but only to urge the mayor to crack down on sweepstakes machines. Those are similar to video gambling terminals but aren’t allowed to legally provide payouts.

Johnson’s office didn’t respond to questions regarding Heidner.

The Grand Palace bingo parlor at 121 E. Grand in Northlake in April 2002.

The Grand Palace bingo parlor at 121 E. Grand in Northlake in April 2002.

Richard A. Chapman / Sun-Times file

Heidner still owns the building at 121 E. Grand Ave., Northlake, where the crooked bingo parlor operated. He now leases space in the building to Celine’s Cafe, and Gold Rush has a deal with its operators to provide six video gambling machines. Over the past year, gamblers wagered more than $2 million on those six machines, generating more than $191,000 in net terminal income for Heidner to split with Celine’s.

Rick Heidner’s building at 121 Grand Ave. in Northlake today. He leases space there to Celine’s Cafe, to which his Gold Rush Amusements provides six video gambling terminals.

Rick Heidner’s building at 121 Grand Ave. in Northlake today. He leases space there to Celine’s Cafe, to which his Gold Rush Amusements provides six video gambling terminals.

Ashlee Rezin / Sun-Times

Now 60 and living in Barrington Hills, Heidner was 27 and living in Elmwood Park when he bought the Grand Avenue property, a former grocery store, in July 1988. He paid $150,000, according to documents filed with the Cook County clerk’s office.

Heidner landed a tenant on Dec. 16, 1993, when Laura Dostal, president of The Grand Palace Inc., signed a five-year lease to host bingo games on the property. Her stepmother Anna Shlifka also served as an officer of the company, according to court records.

William Shlifka (center).

William Shlifka (center).

Sun Times file

The bingo scheme, according to federal court records, was the “brainchild” of Dostal’s father William B. Shlifka, who once served as the Republican Party’s 33rd Ward committeeman in Chicago. According to court records, William Shlifka had teamed with Phillip Cozzo, whose father Vincent Cozzo was a reputed Chicago mobster, to organize the scheme in which 11 posts of the Italian American War Veterans hosted weekly bingo games in Heidner’s building.

Dostal died last month in a motorcycle accident. Her father and Cozzo died several years ago.

Under the lease, Grand Palace had to give Heidner a $17,000 security deposit and start paying rent on March 1, 1994.

“As landlord of the property, Mr. Heidner entered into an arm’s-length, market-rate lease 30 years ago with individuals he had no pre-existing relationship with,” Heidner spokesman Randall Samborn says.

He says Heidner had no role in the bingo operation.

In June 1995, Grand Palace transferred 98% of its stock to Fuat “Frank” Useni, who started as a kitchen employee and then helped run the bingo games. Useni also assumed the lease for Heidner’s building. Useni couldn’t be reached for comment.

Soon after Useni took majority ownership of Grand Palace, federal prosecutors charged William Shlifka with holding a ghost payroll job on the Chicago City Council’s traffic committee.

At the time Shlifka was charged, he was on disability leave from his job as chief of investigations for the Illinois Department of Professional Regulation. Shlifka pleaded guilty in September 1995 and was sentenced to six months of home confinement thanks to his cooperation with ghost-payrolling investigations while his bingo scam continued.

On May 31, 1996, Useni sublet Heidner’s property to the Italian American War Veterans, operating as Bingo Partners Inc. The sublease included non-compete agreements with Useni and Cozzo, who were to “continue to be paid,” court records show. Heidner consented to the sublease, the records show.

A week later, federal investigators began looking into the bingo games at Heidner’s building, according to court records.

Six years later, on April 25, 2002, a grand jury indicted Cozzo, Shlifka, Useni and seven other men connected with the veterans’ posts, charging them with running the illegal gambling operation between 1994 and 1999.

Shlifka died a few days before the indictment came out.

Cozzo and Useni were convicted and sentenced to prison, and six others also pleaded guilty. Prosecutors dropped the charges against another defendant who died before facing trial.

Cozzo, Useni and most of the defendants were ordered to pay a total of $2.9 million in restitution to the veterans. But most of that money never was recovered.

Ater the criminal case was resolved, Heidner sued the Italian American War Veterans, saying they moved out in 2008 after failing to pay rent for several months. They agreed to settle the civil case in 2012, with the veterans group agreeing to pay Heidner $107,000 plus interest — but only if they received restitution from those found guilty in the scheme.

So Heidner ended up losing out, according to Samborn, who says: “Mr. Heidner was also a financial victim of his tenant at this Northlake property. After four years of incurring attorney fees, the case was settled in 2012, but Mr. Heidner received only a fraction of the rent he was owed.”

READ MORE

Sun-Times’ July 16 Watchdogs report on Rick Heidner.

Click here to read the Sun-Times’ July 16 Watchdogs report.

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