State wants to revoke gaming license of Hawaiian Gardens casino after federal money laundering ...

State wants to revoke gaming license of Hawaiian Gardens casino after federal probe

In this file photo, Ron Sarabi, general manager, shows the interior of The Gardens Casino in Hawaiian Gardens. (File.) 

By Andrew Edwards, Press-Telegram

POSTED: 01/04/17

A grand reopening for The Gardens Casino — to show off the fruits of a $90 million renovation — could take place later this month, but state gambling regulators want to revoke the licenses that allow the casino’s principals to operate.

An accusation, dated Oct. 17, outlines California Bureau of Gambling Control officials’ contention that the casino and key figures there, including Chief Executive David Moskowitz, should be denied gambling licenses.

State officials allege that casino operators failed to disclose to California officials that the operators failed to comply with a federal anti-money laundering law, which in their view, would justify revoking the licenses that allow the venue and its trustees to operate. The Gardens Casino has already admitted to deficiencies in its ability to obey the federal law, according to state and federal officials.

“In view of that nondisclosure and admitted violations of federal and state laws, respondents continued licensure undermines the public trust that licensed gambling does not endanger the public health, safety and welfare,” the accusation reads.

A hearing to decide the casino’s fate has yet to be scheduled. In the meantime, Gardens Casino can remain open with a provisional license, said California Gambling Control Commission spokesman Eric Petosky. That license is valid through Nov. 30, 2018.

Gardens Casino personnel were not available to comment Wednesday. A woman in the casino’s legal department said comment from the casino’s general counsel may be available today.

The casino is a major employer and source of revenue to Hawaiian Gardens’ city government.

FEDERAL PENALTY

The Financial Crimes Enforcement Network, or FinCEN, is part of the Treasury Department and announced its issuance of a $2.8 million fine against Gardens Casino this past July. That fine followed Internal Revenue Service examinations and casino management’s admission of failures to abide by the Bank Secrecy Act that resulted, in the government’s words, in making the casino “susceptible to money laundering and terrorist financing activity.”

The Bank Secrecy Act is a 1970 law requiring business to keep records that enable law enforcement officials investigating money laundering to track illegal transactions. For example, the law mandates that businesses report single or related cash transactions whenever $10,000 changes hands.

FinCEN reported that Gardens Casino was in violation of this law over a period extending from September 2009 through July of last year. Gardens Casino’s managers did not implement controls needed to follow federal law despite a 2011 IRS examination and a 2013 consultant’s review that brought problems to light.

Those problems included casino personnel’s failures to keep track of exactly who was involved in cash transactions there, according to FinCEN. In one case, a woman known only as “Michelle” was referred to in 15 suspicious activity reports and five currency transaction reports, but casino personnel had no records of her actual identity.

The same “Michelle” and others believed to be her agents were able to continue activities at Gardens Casino even though she did not identify herself to casino employees on at least three separate occasions. According to FinCEN, casino managers told the IRS they did not think they had to prevent Michelle or others who refuse to provide identification from transacting business there and that doing so may result in customers switching to other Southern California casinos.

“Michelle” wasn’t the only the only case of someone doing business at Gardens Casino without sufficient records being kept.

Eighty percent of suspicious activity reports filed between Jan. 1, 2013, and Sept. 18, 2014, from Gardens Casino referred to at least one unknown subject being involved in transactions. What’s more, 347 cash transactions involving unknown parties between Oct. 1, 2013, and Dec. 31, 2013, were for amounts between $9,000 and $10,000, which FinCEN observed are just short of the level that triggers mandatory reporting.

The FinCEN’s consent agreement with Gardens Casino reports that casino operators admitted to those and other violations described within the document. In addition to the fine, the agreement also required the casino provide a risk assessment report to the government and to hire an external auditor.

STATE PROCEEDINGS

Gardens Casino’s license renewal request went before the California Gambling Control Commission during a mid-November meeting. Petosky, the commission’s spokesman, said commissioners issued the provisional license pending further proceedings.

The allegations against Gardens Casino are set to go before an administrative law judge at some point in the future, Petosky said. A provisional license allows Gardens Casino to stay open through Nov. 30, 2018, depending upon when the licensing issue can be resolved.

Gardens Casino has nearly completed a $90 million renovation that involved the construction of an entirely new casino building. Gov. Jerry Brown visited the casino in December 2013 to help casino owners celebrate the beginning of their project.

At the time of the governor’s appearance, casino operators expected to spend $45 million on the project. The amount doubled over the course of renovations, which involved construction of a large kitchen, VIP area and gaming space large enough to accommodate 5,000 to 7,000 customers.

http://www.presstelegram.com/business/20170104/state-wants-to-revoke-gaming-license-of-hawaiian-gardens-casino-after-federal-probe

Now-Defunct South Bay Casino Partnership Ordered to Pay $2.4 Mil for Violating Anti-Money Laundering Laws

Normandie Casino owners hit with more than million dollar fine for protecting higher roller customers

 Renee Kingsley

 

 September 1, 2016

 

Former operators of the Normandie Casino in Gardena, California have been hit with more than a million dollar penalty after the casino admitted to violating the Bank Secrecy Act in an attempt to protect its high roller customers from reporting their winnings as per federal law. The casino will now have to turn over $1.4 million which it did not report in high-value transactions to the government and also pay a fine of $1 million for its violations. The casino was sold in July after pleading guilty to the charges in January.

The Normandie Casino was one of the oldest casinos in California and opened in the 1940s. The casino admitted that it did not record a number of high-value transactions in 2013 and also was guilty of not adopting and following an effective program to countermoney laundering activities in the casino. During a six-week period in 2013, one of the casino’s VIP patrons is reported to have won $1 million from another customer and the casino management did not report these transactions and shielded the identity of the high-roller.

The acting special agent responsible for the IRS criminal investigations, Anthony J. Orlando stated that the fines imposed on the Normandie Casino are proof of the government’s seriousness to enforce anti-money laundering laws and ensure that VIP gamblers will not be encouraged to hide their winnings.

Casinos are required as per Federal law to collect identity proof, social security numbers, addresses and taxpayer information from any gambler who withdraws more than $10,000 in prize money. VIP players managed to conceal their winnings as Normandie Casino staff assisted them by breaking down their large transactions into smaller amounts and listing some of the high-rollers as independent gaming promoters. Federal prosecutors have also alleged that the casino did not properly monitor cash transactions which was “tantamount to money laundering” activities.

In a statement, Eileen M. Decker, U.S. Attorney said “The United States has an array of anti-money laundering statutes designed to prevent criminals from using the American financial system to launder the large sums of cash generated by illegal activity such as organized crime, drug trafficking, and human trafficking. Casinos and card rooms such as Normandie are cash-intensive businesses that are particularly attractive for use by criminals seeking to launder their ill-gotten gains, so they must be vigilant in meeting their obligations under those laws.”

Mark Werksman, a legal representative for the Normandie Casino, stated in January 2016 after the casino operator’s guilty plea that they have worked with the government to resolve the issues.

The Normandie casino has faced stiff competition from a number of newer casinos in the region such as the Commerce Casino and the Hollywood Park Casino in Inglewood.  The Normandie Casino was purchased in July 2016 by adult entertainment tycoon Larry Flynt who renamed the casino to Larry Flynt’s Lucky Lady Casino.

https://news.worldcasinodirectory.com/normandie-casino-owners-hit-with-more-than-million-dollar-fine-for-protecting-higher-roller-customers-33590

Now-Defunct South Bay Casino Partnership Ordered to Pay $2.4 Mil for Violating Anti-Money Laundering Laws

Under the Bank Secrecy Act, casinos are required to implement and maintain programs designed to prevent criminals from laundering money.

By PATCH SOCAL (Patch Staff) - August 30, 2016

LOS ANGELES, CA — The partnership that ran the Normandie Casino were ordered to Tuesday about $2.4 million to settle federal charges that the now- defunct Gardena club violated anti-money laundering provisions of the Bank Secrecy Act, court papers show.

As part of an agreement with federal prosecutors, the four partners agreed to pay a $1 million fine and to forfeit nearly $1.4 million for failing to report large cash transactions to federal authorities.

Sentencing took place Monday in Los Angeles before U.S. District Judge S. James Otero.

The Normandie partnership pleaded guilty in January to two felony offenses — failing to maintain an effective anti-money laundering program and conspiring to avoid reporting to the government the large cash transactions of some of the casino's "high-roller" gamblers.

Adult entertainment mogul Larry Flynt bought the gaming license for the Rosecrans Avenue card club in July for an undisclosed price. Flynt, who already owns the nearby Hustler Casino, said he planned to spend at least $60 million over the next four years to renovate the aging facility, which he renamed Larry Flynt's Lucky Lady Casino.

Under the Bank Secrecy Act, casinos are required to implement and maintain programs designed to prevent criminals from using the clubs to launder the large sums of cash that illegal activity can generate.

For example, casinos must record and report to the government the details of transactions involving more than $10,000 by any one gambler in a 24- hour period.

The card club at 1025 W. Rosecrans Ave. recently celebrated its 64th anniversary.

The casino remained a family business with original owner Russ Miller's sons, Lee, Larry, Greg and Steve overseeing operations, and granddaughter Michelle Miller Wahler serving as casino president.

http://patch.com/california/redondobeach/now-defunct-south-bay-casino-partnership-ordered-pay-2-4-mil-violating-anti

Hawaiian Gardens Casino levied $2.8m fine by FinCEN for AML lapses

 Marie Kelley

 

 July 18, 2016

 

The United States Financial Crimes Enforcement Network announced this past Friday that they were able to reach an agreement with the owners of the Hawaiian Gardens Casino, a card club of California, for violations the venue faced based on the Bank Secrecy Act. The casino will have to pay a $2.8m fine for being in violation of anti-money laundering regulations.

The Financial Crimes Enforcement Network reported that the casino was investigated by the Internal Revenue Service in regards to the Bank Secrecy Act back in 2011 and three years later, in 2014. The IRS were able to uncover several violations from 2011 that had still not been dealt with by 2014. An independent consultant from the Hawaiian Gardens Casino identified the same issues a year earlier, in 2013.

The violations against the Hawaiian Gardens are in relation to several issues with the Bank Secrecy Act. The venue did not have an effective anti-money laundering program in place that was implemented and maintained. The venue did not report large cash transactions and did not file activity reports that were found to be suspicious. Required records were not always kept in regards to game play.

Financial Crimes Enforcement Network collected the information of customers at the venue by using player club cards and have stated that 80% of the suspicious activity reports that were filed by the venue from early 2013 to late 2014 included at least one unknown subject. The Financial Crimes Enforcement Network stated that the investigation shows a lack of interest by the casino to use all the tools available to them which allowed transactions to be anonymous and ‘frustrated record keeping’.

During investigations, it was found that staff of the Hawaiian Gardens were involved in helping customers to create transactions that could be kept from the reporting thresholds set by the federal government. It was found that the venue continued to work with individuals who had been identified as suspicious, by the actual casino, even when the individuals would not show identification. According to CalvinAyre, one suspect was able to take part in gaming at the Hawaiian Gardens even after 15 suspicious activity reports were filed against the player.

Jamal El-Hindi is the Acting Director of the Financial Crimes Enforcement Network who commented on the matter, stating that the Hawaiian Gardens was lacking a culture of compliance and had allowed these violations to go on for years after ignoring the findings by the IRS as well as their own consultant.

On a side note, the Hawaiian Gardens is partnered with PokerStars, the online poker brand who is trying to be involved with online poker gaming within the state of California if regulations are put in place. PokerStars, owned by Amaya Gaming, partnered with the card room, along with other cards rooms and certain Indian tribes in the state to be ready for when online poker legislation passed.

However, legislation efforts have stalled and PokerStars is a hot point of contention as certain groups do not want to see the brand being able to operate once legislation is put in place. The violations of the card room may be a further deterrent for the online poker brand as they try to be included in the online poker operations in California.

Hawaiian Gardens opened a $90 million renovation and expansion earlier this year.

https://news.worldcasinodirectory.com/hawaiian-gardens-casino-levied-2-8m-fine-by-fincen-for-aml-lapses-31100

Money Laundering Closes Normandie Casino

Normandie Casino to close after nearly 70 years

   Sat May 21, 2016

- See more at: http://www.gardenavalleynews.org/article/normandie-casino-close-after-nearly-70-years#sthash.0qgVY9N4.dpuf

The Normandie Casino, which started as the Western Club in 1940 before being purchased by Russ Miller in 1947, ends it legacy as the oldest poker club in the state as it closes its door when earlier this year its four owners where charged with money-laundering. In late April, the California Gambling Control Commission revoked the casino’s license to operate, but granted the business a four-month reprieve for the sale the casino, the Daily Breeze reported. 

The card club at 1045 W. Rosecrans Ave., Gardena was a family business, operated by the Miller Family for nearly 70 years. 

Russ Miller changed the casino name from the Western Club to the Normandie. It is speculated that among those bidding to purchase the Normandie is Larry Flynt, who owns the Hustler Casino, Gardena’s remaining card club that operates at the corner of Vermont and Rosecrans avenues. Flynt, a source said, would be interested in the spacious Normandie property to turn into a Vegas-style resort, complete with a hotel and shops. 

The timing of such a business venture would coincide with the arrival of the Los Angeles Rams football team, and the completion of a stadium construction in nearby Inglewood in 2019. Flynt did not comment on the rumored transactions.

Reports say the Miller family notified the state’s Employment Development Department in late April of the Normandie’s 380 employees, who face pending permanent layoff. 

Reports said the four Miller sons, who ran the casino operation, spurned selling the business in recent years. The casino came under investigation and in January 2016, the four partners pled guilty to federal charges that the Gardena club violated anti-money laundering provisions of the Bank Security Act, it was reported. 

The casino hid the winnings of several high rollers by failing to properly record and report a series of huge cash transactions in 2013, according to the court documents. 

The Normandie club agreed to forfeit $1.3 million in illegal earnings, documents show. It’s managing partners also agreed to pay $1 million in federal fines, as mentioned in the plea agreement. 

Court records showed that the casino failed to record information for one player who had racked up more than $1 million in winnings during a six-week span. 

“The United States has an array of anti-money laundering statutes designed to prevent criminals from using the American financial system to launder the large sums of cash generated by illegal activity such as organized crime, drug trafficking and human trafficking,” U.S. Atty. Eileen M. Decker said in a statement. “Casinos that fail to follow these rules are particularly vulnerable to criminals who seek to disguise illegal cash as gambling winnings.” 

Mark Werksman, the attorney representing the Normandie Casino, said that his client has cooperated in resolving this case. He added that no individual managing partners or owners are facing criminals charges or jail time. - See more at: http://www.gardenavalleynews.org/article/normandie-casino-close-after-nearly-70-years#sthash.0qgVY9N4.dpuf

Casinos Asked to Help Fight Money Laundering

Casinos Asked to Help Fight Money Laundering

By MIKE HEUER 

LAS VEGAS (CN) - Nationwide proliferation of casinos feeds a $300 billion annual money laundering industry, the federal government says, and it's asked the gambling industry to help stop it.

     In its 2015 National Money Laundering Risk Assessment report , the Department of the Treasury says fraud and drug trafficking account for most of the $300 billion laundered each year, with fraud greatly outweighing drug trafficking.

     Fraud against federal programs accounts for more than twice as much money laundered as drug trafficking, and drug trafficking generates about $64 billion in sales each year in the United States, according to the Treasury report.

     Unlike banks, which answer to multiple federal regulators, casinos answer only to the federal Financial Crimes Enforcement Network (FinCEN), and state regulatory bodies, and the FinCen director says casinos must work harder to comply with the U.S. Bank Secrecy Act.

     Addressing casino executives during the 2014 Bank Secrecy Act Conference in Las Vegas, FinCEN Director Jennifer Calvery described casinos as "complex financial institutions with intricate operations that extend credit, and that conduct millions of dollars of transactions every day. They cater to millions of customers with their bets, markers, and redemptions.

     "While the vast majority of these transactions are purely for entertainment purposes, casinos can serves as a vehicle for the use, movement, and concealment of ill-gotten gains," Calvery said.

     The Bank Secrecy Act aimed to thwart criminal activity, such as money laundering, by making large financial transactions more transparent. It requires casinos to report any combination of transactions amounting to more than $10,000 and file reports on any suspicious activity.

     Casinos filed nearly 20,000 financial transaction reports in 2012, and that doubled to about 40,000 in 2014, according to FinCEN.

     Las Vegas Sands in 2013 paid nearly $47 million to end a federal money laundering investigation involving a Mexican drug dealer. In the 13 years before that, the Treasury Department had collected only $4.2 million in fines from casinos across the country.

     In September last year, Caesars Entertainment paid a $9.5 million fine to settle a money laundering investigation, and Caesars admitted it let wealthy patrons gamble in private room in the Caesar Palace VIP suites, which primarily serve Chinese guests.

     "Caesars allowed a blind spot to exist in its compliance program - private gaming salons - enabling some of the most lucrative, and riskiest, financial transactions to avoid the scrutiny of Caesars' compliance program," FinCEN said of the settlement.

     The Trump Taj Mahal in Atlantic City last year paid a $10 million fine for violating the Bank Secrecy Act's reporting requirements.

     Casinos can be ideal tools for criminals to launder money, as they have more lax reporting requirements than banks and other financial institutions, and a guest buying tens of thousands of dollars in chips and cashing them in later on will not raise alarms. A similar transaction at a bank would result in numerous questions to ascertain the money's origin.

     "You can walk into a casino with 100 grand and turn it into chips," DEA spokeswoman Erica Curry told the Arizona Daily Star in October last year.

     The DEA and state investigators in 2013 prosecuted drug traffickers accused of using a Tucson casino to launder money from a $1.6 million drug-trafficking ring.

     Sharing a border with Mexico and its drug cartels, Curry said, Arizona's tribal casinos are vulnerable to money laundering by drug traffickers.

     "The geographic location of casinos in Southern Arizona probably makes it ideal for anybody coming from south of the border to exploit," Curry told the Daily Star.

     Curry said the most common way to launder money at a casino is to buy a large number of chips, spend a few on "minimal" betting, then cash out.

     Though drug traffickers use casinos to launder money, a federal report indicates that most criminal proceeds laundered through casinos and other financial institutions comes from fraud.

     Income tax returns, Medicaid and Medicare reimbursements, and food and nutrition subsidies are among the more common ways people and organizations commit fraud against federal programs, according to the report.

     Also contributing to money laundering is human trafficking, organized crime and public corruption. The report identifies the five most common types of money laundering as cash, banking, money services businesses, casinos and securities.

     To fight money laundering, FinCEN Director Calvery says, casinos need to assess where people get their money, particularly in high-risk jurisdictions where criminal activity and money laundering are common, and learn more about customers who make large transactions.

     Casinos also need to pay close attention to international money transfers to see if third parties or unregistered money service businesses are involved.

     Casinos also need to pay close attention to gaming accounts, Calvery says, to ensure they are not used to park money and hide it from federal regulators or to pass large sums of money through accounts with little indication of gambling.

     Casinos can share information with other casinos, banks and financial institutions to help prevent money laundering that might be used to finance international terrorism and crime, Calvery said.

     The American Gaming Association published a 24-page report on "Best Practices for Anti-Money Laundering Compliance" in December last year. 

http://www.courthousenews.com/2016/03/04/casinos-asked-to-help-fight-money-laundering.htm

Lip-Service to MONEY LAUNDERING

Speaker: Casino industry can take steps to trace high roller's bankroll

12 June 2014

By Howard Stutz

The head of the federal agency assigned to investigate money laundering crimes told a Las Vegas audience Thursday the casino industry can discover the origins of a high roller’s bankroll in the same way a casino host determines that customer’s favorite wine or music preferences.

Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network, known as FinCEN, said the casino industry has the same responsibility as traditional financial institutions to police and report any suspicious customer activity, which includes investigating the source of large gambling funds.

During her keynote address at the Bank Secrecy Act Conference at Red Rock Resort, Calvery said the casino industry can employ investigative measures used to determine the social needs and desires of a high-end customer to that same player’s large bankroll.

“Casinos invest heavily in sophisticated monitoring tools to track a wide range of customer activities and to understand their customers’ preferences,” Calvery said. “These same kinds of monitoring and customer service capabilities can and should be leveraged for (anti-money laundering) purposes.”

The gaming industry has come under fire by FinCEN, which is overseen by the U.S. Treasury Department, to comply with anti-money laundering regulations found in the act. Calvery said casinos have the capability and technology needed to investigate the source a gambler’s funds.

The daylong conference was organized by the State Bar of Nevada, but the audience of 500 included more that just attorneys. Casino executives and gaming regulators also listened to the Calvery’s opening remarks. The speech was her second public appearance in Las Vegas since September, when she delivered similar remarks at the Global Gaming Expo.

Casino leaders have worried that subjecting the industry to the same requirements as banks and other financial institutions could keep certain high rollers away from the gaming tables.

“Unfortunately, there is no one-size-fits-all approach to (anti-money laundering laws),” Calvery said.

She also warned the casino operators not to jeopardize their reputations or violate the law in order to “please” a customer.

“A casino’s capability for knowing its customers’ preferences and credit information, combined with your security technology, can and should be leveraged to piece together relevant information to understand your customers’ source of funds,” Calvery said.

The American Gaming Association, which co-sponsored the conference, has held meetings between casino leaders and FinCEN representatives, which Calvery acknowledged during her talk as being “productive.”

AGA President Geoff Freeman introduced Calvery and said after the talk that her remarks “were a big step forward” from the comments she made at G2E.

He said FinCEN is developing a “clearer understanding” of how the industry operates. The interaction with the gaming leaders, Freeman said, has been helpful to both sides.

“One senior-level casino official said to me today a single customer is not worth our license,” Freeman said.

Calvery said in September the industry was being watched.

In August, Las Vegas Sands Corp., struck a deal with federal prosecutors and paid a $47.4 million settlement to avoid criminal charges in connection with a 2006 and 2007 investigation into money laundering by a customer at The Venetian.

Caesars Entertainment Corp. disclosed in October that Caesars Palace was being investigated for possible money laundering allegations.

Calvery said Thursday casinos weren’t “simple cash-intensive businesses.” She called casinos “complex financial institutions” that extend credit and conduct financial transactions worth millions of dollars every day.

“Casinos must continue their progress in thinking more like other financial institutions to identify (anti-money laundering risks),” Calvery said.

Under the Bank Secrecy Act, casinos are required to report currency transactions by any person of more than $10,000 in cash each day. In addition, casinos are required to report suspicious customer activity when it comes to those financial transactions.

She said the buying and cashing in of chips by customers are not always simple transactions.

“While the vast majority of these transactions are purely for entertainment purposes, casinos can serve as the vehicle for the use, movement, and concealment of ill-gotten gains,” Calvery said.

“This is a risk inherent in all financial institutions.”


http://www.casinocitytimes.com/article/speaker-casino-industry-can-take-steps-to-trace-high-rollers-bankroll-63315

Caesars lied? NO! Say it isn't so!

Posted December 13, 2013 

Gaming advisement firm disputes Caesars' assertion of suitability

By HOWARD STUTZ
LAS VEGAS REVIEW-JOURNAL

A New Jersey gaming advisement firm disputed a claim raised in a lawsuit by Caesars Entertainment Corp. that it told Massachusetts regulators the casino operator should be found suitable to operate a Boston-area resort complex.

Spectrum Gaming Group, which conducted a suitability background investigation of Caesars Entertainment for the Massachusetts Gaming Commission, said in a statement it did not make any recommendation in its draft report.

In a federal lawsuit Caesars filed this week against Massachusetts Gaming Commission Chairman Stephen Crosby, company attorneys wrote that Karen Wells, director of the state’s Investigations and Enforcement Bureau, failed to disclose to the commission that Spectrum recommended Caesars be found suitable.

The bureau, relying on Spectrum’s report, told the commission in October that investigators found four areas of concern about the company’s potential suitability. Caesars was eventually dropped from a partnership with the Suffolk Downs Race Track in a proposed $1 billion hotel and gaming development.

In a statement, Spectrum vice president of legal and regulatory services Steve Ingis said the company conducted a suitability background investigation of Caesars in conjunction with the Suffolk Downs project. He said Spectrum worked in conjunction with the Massachusetts State Police and the Investigations and Enforcement Bureau.

“At the conclusion of our investigation, Spectrum submitted a draft report to the IEB recommending that certain specified issues pertaining to Caesars’ suitability be addressed at an adjudicatory hearing, at which Caesars would be required to establish its suitability by clear and convincing evidence,” Ingis said in the statement. “Notably, Spectrum did not recommend a finding of suitability or a finding of unsuitability in its draft report.”

A Caesars spokesman declined comment on the Spectrum statement.

In its lawsuit, Caesars said Crosby interfered in the company’s now-dissolved partnership with Suffolk Downs, saying his conflict of interest and actions caused the break-up.

Caesars spent $100 million in the failed effort to win a Massachusetts gaming license.

Attorneys wrote in the 33-page complaint that Crosby violated Caesars’ “contractual rights to fair consideration” in the Massachusetts gaming license application process. The company had a 4 percent ownership stake in the partnership and an agreement to manage the facility.

The company sued Crosby both individually and in his role as chairman of the gaming commission. The company is seeking unspecified monetary damages and wants Crosby, who had a 45-year career in state policymaking and entrepreneurship before being named gaming commission chairman, removed from the process.

Crosby told the Boston Herald he wasn’t fazed by the lawsuit.

“There’s big money involved here, there are big personalities involved here, and big passion involved here,” Crosby said. “I knew that there was going to be a lot of losers, as well as some winners. This sort of goes with the territory.”


http://www.reviewjournal.com/business/gaming-advisement-firm-disputes-caesars-assertion-suitability

 

David and Goliath

Grass Roots activists have proven they can provide the FACTS, educate their neighbors and defeat the Big Money of the Gambling Industry, the misguided leadership of unions and the abandonment of political leaders who failed to protect their constituents!

Massachusetts residents should be proud of what these communities have accomplished and what will be accomplished when REPEAL THE CASINO DEAL passes.

 

 

Gambling foes ride wave of momentum

By George Brennan

gbrennan@capecodonline.com

November 25, 2013

 

"Sal obviously has a role, but we've got a number of ideas that we put on the table to create jobs and to generate revenue. If those aren't the best ideas, then it's incumbent on the Legislature to tell us what better ideas there are. Just saying no is no good."

 

Gov. Deval Patrick, 2007, talking about House Speaker Sal DiMasi's opposition to his casino bill.

Impact statement available

The Draft Environmental Impact Statement, a step in the process toward a $500 million Taunton casino for the Mashpee Wampanoag Tribe, is now available for view in libraries and online. The report, which is hundreds of pages, was released last week. The public comment period through Jan. 17 also includes two public hearings - one at 5:30 p.m. Dec. 2 at Mashpee High School and a second at 5:30 p.m. Dec. 3 at Taunton High School.

 

The tribe is proposing to have 140 acres in Mashpee taken into federal trust for housing and government offices, which faces little-to-no scrutiny in the report. The 155 acres in an East Taunton industrial park proposed for a casino, hotels and a water park make up the bulk of the report.

 

The report offers three possible scenarios in Taunton, based on sizes of the casino development. It also outlines proposed mitigation by the tribe, including road improvements, sewer and water mains.

 

There are no rare or endangered species identified on the Taunton land, a factor that can sometimes be a stumbling block. Some parcels are identified as having possible historic significance. Those could require review by historic preservation officers, according to the report.

 

At full build-out, the tribe casino is expected to generate 3,500 full- and part-time jobs, which would reduce the region's unemployment rate by 0.5 percent, according to the report. The casino complex is expected to lure 5.3 million visitors a year. The full report is available at tribal council headquarters, Mashpee Library and Taunton Library, as well as online at http://mwteis.com.

 

GEORGE BRENNAN

"This is not the centerpiece of our growth strategy or economic future by any means. This is an entertainment option. And there will be some jobs that come with it, I'm certain, with the facilities that communities decide they want."

 

Gov. Deval Patrick, November 2013 on WGBH radio about the growing opposition to casinos in Massachusetts.

The contrast in those two statements by Gov. Deval Patrick is striking to former Massachusetts Attorney General Scott Harshbarger, probably the highest-profile casino critic in the Bay State.

 

Harshbarger remembers it was Patrick, carrying the political clout of tremendous popularity after his first election, who, in 2007, introduced the idea of building three casinos, projected to bring $2 billion in revenue and thousands of jobs.

 

By 2011, when the Expanded Gaming Act finally passed, the projected revenue was down as low as $1.2 billion, but the enthusiasm in state government, including the Patrick administration, never wavered.

 

Fast forward two years later and the state's once-robust competition for casino licenses is now better described as an endurance test, with a gantlet of referendum votes and scrutiny by the Massachusetts Gaming Commission.

 

"I think we are 50-50 chance toward no one left standing, pressing the reset button and starting over," Clyde Barrow, a casino expert at the University of Massachusetts-Dartmouth's Center for Policy Analysis, said Friday.

 

In Western Massachusetts, which once had the largest number of casino developers seeking a license, there is only one developer left — and MGM has yet to be found suitable by the gaming commission.

 

In the Greater Boston region, known as Region A, all three of the proposed projects have faced hiccups.

 

On Tuesday, voters overwhelmingly rejected Foxwoods' plans to build a casino in Milford. That deal is dead.

 

A proposal by Suffolk Downs to build a casino is on life support. Voters in East Boston rejected the idea, which opponents say should have killed it, although Revere voters supported it. Developers are now trying to shift the project into Revere, though on Thursday, the gaming commission punted on making a decision over whether that can happen.

 

Steve Wynn's proposals for Everett still must pass a commission background check — no slam dunk.

 

Suffolk Downs dumped Caesars Entertainment when the background check revealed a relationship with a hotel company that has alleged ties with Russian mobsters. [in addition to massive debt, federal grand jury investigations into money laundering and Bank Secrecy Act violations]

 

"It's going to depend on what happens with MGM and Wynn suitability hearings," Barrow said.

 

[Wynn is being investigated for Foreign Corrupt Practices Act violations - bribing foreign officials. MGM has ties to Pansy Ho and Asian organized crime, was asked in New Jersey to sever ties and instead, left New Jersey.]

 

"Given the standard that was set by the gaming commission with Caesars, there are major red flags with both of them."

 

In Southeastern Massachusetts, known as Region C, only one commercial company, KG Urban Enterprises, has ponied up the $400,000 to become an applicant, though the gaming commission has said it will allow losers in other parts of the state to apply if they can find willing land owners.

 

And now, the waters are muddied in Southeastern Massachusetts by the prospect of one, possibly two Indian casinos.

 

The Mashpee Wampanoag Tribe has a compact with Patrick that is now awaiting approval by the federal Bureau of Indian Affairs. The tribe is also seeking federal approval to have its land taken into trust, a complicated and time-consuming process filled with potential legal pitfalls. Meanwhile, the Wampanoag Tribe of Gay Head (Aquinnah) threw the gambling industry a curveball, saying it might build a Martha's Vineyard casino on land the National Indian Gaming Commission says is eligible.

 

"We have come a long way from 2007 when the Mashpee Wampanoag Tribe first came to (our) community and said, 'We are coming, and there is nothing you can do to stop us,'" said Allin Frawley, a selectman in Middleboro where the Mashpee tribe once had a deal to build a $1 billion casino. The tribe walked away amid a leadership scandal and a downturn in the economy.

 

"I personally find the votes against these proposed casinos by host communities extremely validating," Frawley said. "I sincerely hope the residents of Massachusetts do get the opportunity to vote on expanded gaming next November, and judging by the recent community votes, I look forward to the results."

 

Casino opponents filed 90,000 signatures for the ballot question this week. They are currently under review, John Ribeiro, chairman of the committee to Repeal the Casino Deal, said Friday. The committee needs 70,000 to be certified for the November ballot.

 

"We've come a long way," Harshbarger said. "I'm pleased that these citizen efforts in these communities have been so successful. It's a little `not in my backyard,' but the more people know, the more facts gathered, the less they accept the promises being offered."

 

It's a boost of momentum not felt by casino opponents in recent years.

 

But "it's still David versus Goliath," Harshbarger said.

 

In most cases, with the exception of Palmer which has a recount Tuesday, the referendums that that went against gaming weren't close, despite the opponents being significantly outspent. In Milford on Tuesday, a proposal backed by Foxwoods failed by a vote of 6,361-3,480, or 64 percent to 35 percent, according to the Associated Press.

 

Barrow said statewide polls, including the most recent one released last week by Western New England College, show that a majority of Bay State residents want casinos. It's when they're close to home that the support wanes.

 

The problem isn't legislators or Patrick overestimating the appetite for casinos but rather developers targeting the wrong cities and towns, Barrow said. He pointed to the gaffe made by Steve Wynn to initially seek a casino in Foxboro.

 

"I wonder every day why isn't there more going on in New Bedford, Fall River or Salisbury," Barrow said. There is a common theme in the places like Springfield, Everett and Taunton where voter support has been high.

 

"The theme is distressed urban areas," Barrow said.

 

Southeastern Massachusetts has had strong casino support in past polls done by UMass-Dartmouth, he said.

 

"It's important to not just look at overall statewide support, but look at those pockets where support is the strongest," he said. "It's always been unevenly distributed."

 

Only the lone slot parlor license still has active competition. Plainridge Racecourse in Plainville and Raynham Park in Raynham both won approval from voters. Both already offer gambling on racing. They are competing against Cordish Gaming, which is seeking the license in Leominister. The commission expects to award that license next month.

 

With a ballot question likely, casinos could become an issue in the upcoming governor's race, Peter Ubertaccio, a political professor at Stonehill College, said. He has hosted all of the announced candidates at the school's Martin Institute for Law and Society and none has brought up casinos without prompting, he said.

 

"We're in a different place and I don't think candidates will be enthusiastic supporters of casinos," he said.

 

To Harshbarger and other opponents of expanded gambling in Massachusetts, the rejection of the larger-scale casinos by communities represents hope.

 

"My common cause belief is that people trump money," Harshbarger said. "When they see it and learn about experiences in other states and impacts that can happen, that really starts to cut into casino support."

 

Barrow said there's no question opponents have some momentum coming off recent wins. "Whether that translates into a victory statewide, I don't think so," he said.

 

Harshbarger and Ribeiro are ready to take their chances. "We've shown that when people have the facts, they reject casinos outright," Ribeiro said. "When we have the discussion statewide, we'll find the same thing statewide."

 

 

http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20131125/NEWS/311250308/-1/NEWSLETTER100

 

 

Caesars: Distracting from other issues

Capital markets have expressed concern with Caesars $23 BILLION debt, SEC investigations, money laundering, Bank Secrecy Act violations.....why is Caesars continue to conduct their public relations campaign?



Posted November 7, 2013

Caesars executive cited by Mass. regulators says he has nothing to hide

Mitch Garber, CEO of Caesars Interactive, poses at the World Series of Poker Wednesday, June 26, 2013. (Samantha Clemens/Las Vegas Review-Journal)

By HOWARD STUTZ
LAS VEGAS REVIEW-JOURNAL

Caesars Interactive Entertainment CEO Mitch Garber said he has never hidden his past employment as the chief executive of two foreign-based Internet gaming operations that took wagers from U.S. customers almost a decade ago.

So Garber, 49, was more surprised than anyone that his background was one of four concerns cited by the Massachusetts Gaming Commission when it said last month that Caesars Entertainment Corp. would not be suitable to operate a casino in the state.

The suggestion caused Caesars Entertainment to withdraw from a proposed $1 billion hotel-casino development in the Boston area. Meanwhile, other statements attributed to Massachusetts gaming regulators drew ire from Wynn Resorts Ltd. Chairman Steve Wynn and cautious concern from MGM Resorts International Chairman Jim Murren. Both companies are bidding to build casinos in Massachusetts.

The online gaming companies that Garber oversaw both signed nonprosecution agreements with the U.S. Department of Justice and paid hefty fines for their activities before the enactment of the Unlawful Internet Gambling Enforcement Act in October 2006.

Garber’s role in the agreements were included within a seven-page section of a nearly 600-page investigative report filed with the Massachusetts Gaming Commission by an outside investigative firm.

“We believe, as a company, that Massachusetts is trying to establish a standard that is inconsistent with the last 40 years of regulation in gaming,” Garber said in an interview this week. “Our interpretation is that Massachusetts is creating standards that are almost impossible to meet.”

Garber’s history is well-documented. It’s a large portion of his gaming industry career that spans more than two decades and is something that he has never shied from. He was vetted by Caesars’ compliance committee before joining the company in 2009.

Garber, a resident of Montreal, was licensed by Nevada gaming regulators this year and is participating in the licensing process in New Jersey and Maryland. As head of Montreal-based Caesars Interactive, Garber is responsible for the World Series of Poker, the pay-to-play WSOP.com in Nevada and the company’s social gaming division.

Caesars on Oct. 18 withdrew from a partnership with the Suffolk Down Race Track for the proposed gaming venture near Logan International Airport after the report cited issues with Garber, the company’s $23.7 billion debt, Caesars’ business ties with the Gansevoort Hotel Group — which had an investor accused of Russian mob ties — and the company’s treatment of a Las Vegas high roller.

On Tuesday, East Boston voters rejected the Suffolk Downs casino plan, leaving the project in limbo.
Garber said the report unearthed no new facts or broke new ground. Frankly, he didn’t understand why his previous work gave investigators any trouble.

“I’m always happy to talk about my past and my career,” said Garber, who is also CEO of the company’s newly created spinoff, Caesars Growth Partners.

Investigators questioned Garber’s time as CEO of Optimal Group, a Canadian-based Internet gaming payment company, and as CEO of PartyGaming, a Gibraltar-based online casino company that was traded on the London Stock Exchange. Garber, an attorney involved in gaming since 1992, grew both businesses.

Before the Unlawful Internet Gambling Enforcement Act, Garber said Internet gaming activities in the United States “were unsettled” in the opinion of many “highly intelligent bankers, lawyers and auditors.”

Things changed when the act became law in 2006. Garber, who was CEO of PartyGaming at the time, pulled the plug on the company’s U.S. business, refunding money Americans had on account with PartyGaming.

“I was the first CEO to turn off the U.S. business,” Garber said. “That’s what a public company CEO should have done. So that part of my history was well- known.”

The move cost PartyGaming some $8 billion of market capitalization in one day. Garber set about to re-grow the business, acquiring three Europe-facing Internet gaming companies.

A few years later, when the Justice Department began investigating the Internet gaming industry, Garber and the company’s board of directors decided to approach federal prosecutors about a settlement. In 2009, PartyGaming signed the nonprosecution agreement and forfeited $105 million.
Garber left PartyGaming as CEO in 2008, returned home to Canada and became a consultant to Caesars. His departure was unrelated to the settlement.

“My family wanted to move back to Canada,” Garber said. “I had done the restructuring, and it was announced that I would leave in a year. I agreed with the board, however, that once we identified a new CEO, I would leave.”

Optimal, which Garber left in 2006, signed a nonprosecution agreement in 2009 and forfeited $19.1 million.

Garber said PartyGaming, which has merged with Bwin International to become Bwin.party, signed the agreement and admitted to violating the law “in order to get out from under a cloud.” The company, he said, did not believe it was violating the law before the Unlawful Internet Gambling Enforcement Act was signed.

In December 2011, the Department of Justice came out with a new interpretation of the Federal Wire Act, which said the law only pertained to sports wagering.

Garber said the change matched the opinion of many European gaming operators before the Unlawful Internet Gambling Enforcement Act.

Garber said the public may not understand the differences between PartyGaming and a company like Full Tilt Poker, which continued to accept wagers from Americans after the Unlawful Internet Gambling Enforcement Act and was forced to close by prosecutors in the April 2011 “Black Friday” crackdown on illegal Internet gaming.

“One is a London Stock Exchange company with corporate governance that is audited and has sophisticated board members,” Garber said. “The other is a private company with an unsophisticated management team with no board and no governance that didn’t turn off their U.S. business after UIGEA passed.”

Garber said he was contacted by many of his co-workers to express their support after the Massachusetts report surfaced.

“I’m proud to work at Caesars, and I’m proud of what I did at Party,” Garber said. “Not a single new fact will arise.”

http://m.reviewjournal.com/news/caesars-executive-cited-mass-regulators-says-he-has-nothing-hide